The Covid 19 Pandemic has been throwing up new challenges every single day. Just as the nations are grappling with vaccines and their efficacy in a multitude of environments, the news is here that the UK is battling a new strain of a genetically mutating virus. that was also found in Australia and South Africa. Theoretically said, mutations spread faster between people. Speculation is that it is 70% more transmissible than the original, forcing several countries to shut their borders or ban travel to and from UK including India. Will these mutations fan fears of further economic disruptions? The Sensex crashed almost 1500 points in a day and investors lost more than 6 lakh Cr Rupees.
That in India the virus has been most benevolent is a commentary on the untiring efforts of our doctors and health care workers in part, the other part being tropical conditions. The past 10 months have been disastrous for economies of most of the countries. India too suffered a downturn, small businesses closed with several job losses. Just when a few green shoots are beginning to be seen, several states talking about partial lockdowns can be completely ravaging. The thought that a second wave or a third wave is lurking somewhere too can be devastating. So how do we revive a sagging economy and also tame the new challenges? Can we afford a farmer crisis in the midst of such calamities?
Reviving the economy and sustaining it are important in the immediate. In the long run, it must thrive and be competent to face future shocks. Add the challenge, protecting people from the virus and its long-term effects, the government plate would be full. Balancing the two, will not only need political acumen but will also need strong fundamentals of economics and fiscal prudence. The virus taming However, will need effective vaccines.
Since we are a predominantly consumer driven economy, people spending is a must to drive it. However, the job losses, and pay cuts have literally squeezed out money from the hands of people which is now spent only on essentials. Whatever remains is saved for an uncertain future. Many have lost jobs, and have no money to spend. This has resulted in a steep reduction in consumption of many goods creating a revenue deficit for the government. Compulsory spending on health care and measures required to revive the economy just compounded the problem.
Amidst all this, we have the farmer distress overflowing on the borders and entry points to Delhi. A month of their protests have not made any headway, with both the government and the farmer unions standing their ground. The farmers want the three laws repealed. The Government wants them to believe the laws are for their benefit and hence wants them to peacefully go back to their fields.
Whereas the farmers have questioned the constitutional validity of agricultural reform laws, it must be said that the government is constitutionally within its rights to enact such laws. However, farmer’s fear that the mandis set up by the mandi committees will be weakened and the farmers will be in the clutches of private mandis is not without basis. Technically farmers still could sell it to the committee mandis and not so much to the private mandis if they so wish, which any case is happening. If anything, it opens up additional channels for them to sell their produce. Then what is hurting them? The private mandis may indulge in cartelisation and render committee mandis redundant forcing them to sell to private mandis for ever.
PepsiCo introduced contract farming in Punjab three decades back. Initially when tomatoes and chillies were sold the farmers were happy producing them. Their problems compounded when the company shifted to potatoes. Quality alone sells in contract farming which means any and every farmer cannot sell their produce even after a contract is signed. Several farmers lost out in the process. Farmers fear contract farming will benefit private companies more and that they will hijack the agriculture sector forcing farmers to work as manual labourers on their own lands. It is not as if the farmers are wary for nothing.
They also fear large industrialists taking over their land. This may be misplaced, because of the provision that no recovery of any amount could be initiated against agricultural land. In fact, even the sponsor can be fined to an extent of 150%, if it happens, under Section 15 of the Farming Agreement Act. Can MSP be made legal? It amounts government underwriting farmer losses forever and may not be tenable.
That our agricultural sector could withstand the coronavirus pandemic is as much due to our farmers self-belief and resilience as much as it is to their hard work. This sector too needs structural reforms rather than temporary fixes. That some bills were brought about in the form of reforms without adequate discussion with the farmers is unfortunate. That they have ended up being contested most vociferously is doubly unfortunate.
What is the way out of the impasse? What if, the government with an ordinance keeps in abeyance limited to Punjab, the implementation of the three laws? What it would do is, return the farmers to their villages without the government actually bowing, claiming that it was in response to the suggestion by the Supreme Court, and leaving the farmers with the thought that they won, assuage frayed tempers, give some breathing time for both itself and the protestors to think, reflect and debate and discuss in much more conducive environs. People in Delhi too will feel relieved in these Covid times. Intervening six-month period can also be used by both the government and the private players to showcase the positives that accrue to farmers elsewhere in the country. Opposition can neither celebrate nor criticise. Is this not a win-win to both the government and the farmers? Can the government afford escalation of the agitation throughout the country especially when international media is watching?
Any government must be wary of the ‘WARD’ syndrome. Women anguish, Agriculture pain, Rural distress and Dalit angst for each one of it can bring it down. History is witness to one of these four bringing down powers that be to their knees every single time. Can we afford to be a welfare state that is not really about the welfare of the masses but about the egos of the elites?