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New farm laws threaten India's ability to impose high tariffs on imported agri-produce

The three controversial farm laws have diluted India's stance against liberalising agriculture before the WTO; this threatens livelihood of 60 per cent workforce in the country

twitter-logoJoe C Mathew | September 29, 2020 | Updated 03:57 IST
New farm laws threaten India's ability to impose high tariffs on imported agri-produce

India's recently legislated farm laws, meant to liberalise agricultural trade and allow businesses to directly procure agri-produce from farmers and stock and sell it within India and abroad without any government regulation, may pose new challenges for the country at the international level.

The new agression towards agri-business is a shift from the past where India had defended its agriculture policies - subsidies, government procurement, and release of stocks to contain agri-produce prices in the retail market - as something driven by the need to protect its small and marginal farmers and provide food security to the vulnerable population of India. The liberalisation in agriculture and freeing up markets and exports as a means to double farmers' income will thus increase the pressure on India to open up its market to agri-produce imports from other countries too. If that happens, Indian agriculture market can be flooded with imported agricultural produce, thereby adding to the worries of Indian farmers.

The three Bills which are being opposed by several sections of farming community at the moment are The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 (which allows farmers and traders to sell and purchase farmers' produce through alternate channels outside regulated APMC markets, without paying fees or levies to the state government); The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 (which draws up a national framework for contract farming agreements with agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce at a mutually agreed remunerative price); and The Essential Commodities (Amendment) Bill, 2020 (which takes out most food items, including cereals, pulses, potato, onion, edible oilseeds and oil from list of essential commodities and hence from government control over its stock, price, sale etc).

Biswajit Dhar, a trade expert who teaches at Jawaharlal Nehru University (JNU), Delhi, says that in future negotiations for bilateral free trade agreements (FTAs) and at the World Trade Organisation (WTO) level, negotiating partners and member countries are not going to accept India's export-oriented stance.

"You will not be allowed to export without opening up your domestic market to imports. It will have an impact on the livelihood of 60 per cent of India's workforce who are either directly or indirectly dependent on agriculture," Dhar says.

In fact, India has been opposing liberalisation in global agricultural trade and thereby give up its right to impose high import tariff on agricultural goods, for long. "India's stance on agricultural trade was clearly articulated by the then Commerce Minister Pranab Mukherjee in 1994 at the launch of WTO itself. The country refused to liberalise agriculture trade as it was firmly committed to protect the interests of Indian farmers," Dhar points out. The new laws have diluted this stance, he believes.

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