International Monetary Fund (IMF), the premier international agency, has endorsed the farm laws passed by the Modi government and said that such laws will reduce the role of middlemen, as well as, enhance efficiency. “We believe the farm bills do have the potential to represent a significant step forward for agricultural reforms in India,” Gerry Rice, Director of Communications at the International Monetary Fund (IMF) said.
“The measures will enable farmers to directly contract with sellers, allow farmers to retain a greater share of the surplus by reducing the role of middlemen, enhance efficiency and support rural growth,” IMF’s Director of Communication said.
“However, it is crucial that the social safety net adequately protects those who might be adversely impacted during the transition to this new system,” the IMF spokesperson said responding to a question on the ongoing protests by farmers against the laws in India.
With the help of farm laws, the Modi government is trying to increase the market value of the products. For decades, the focus of agriculture has been towards the grains and sugarcane and the majority of the power, irrigation, chemical, and MSP subsidies went to farmers of these agriculture producers whose producers are politically organised. But as suggested by Agricultural economists like Ashok Gulati, these subsidies have not only harmed soil heath and harmed the groundwater levels, but have also been harmful to small and marginal farmers.
Now the government will shift its focus to vegetable production, fisheries, flower production, animal husbandry and other products under the agricultural sector which had been traditionally ignored. The farm laws would connect the farmers directly to the market because the role of the government and middlemen would be reduced. Therefore, every right-thinking individual and organisation like the IMF is supporting the farm laws despite the protests from the players who were the beneficiary of the existing system, that too on the cost of the majority of the farmers.
The agriculture sector was hit hard due to successive drought for two years in the country just after the Modi government came to power. The drought in the fiscal year of 2014-15 hit the farmers badly across the country. There were many incidents of farmers’ suicide due to pressure from banks and Sahukars for loan repayment which they could not repay because agricultural produce was not sufficient.
However, since then, the Modi government has launched many schemes to fulfil the promise to double the farmers’ income by the year 2022. To make farmers financially secure in the case of poor crop growth, the government launched Pradhan Mantri Fasal Bima Yojna (PMFBY). To provide irrigation facilities to farmers across the country, PM Modi launched Pradhan Mantri Krishi Sinchai Yojna (PMKSY) and pumped money into the National Bank for Agriculture and Rural Development (NABARD) to increase credit penetration to farmers.
Last year, the Modi government announced the PM-KISAN scheme, under which the government will directly transfer cash benefits of 6,000 crore rupees per year to the bank accounts of all farmers.
The successive steps of the Modi government to double the farmer’s income by 2022. These positive steps will solve the problems of rural distress and revive rural consumption, which slumped after demonetisation. Thus, unlike many opposing the farm laws, IMF has endorsed them as a positive step towards agricultural reforms.