Assure farmers of minimum procurement: Economists tell Modi govt

Ask government to tap rising financial savings

Economists have suggested that the Narendra Modi government give a legal guarantee on minimum quantity of procurement to farmers and put in place an institution to regulate contract farming to end their agitation against three agricultural laws.
 

In a pre-Budget interaction with Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and officials of the PMO, finance ministry and NITI Aayog, economists also stressed on tapping the financial savings, which have risen these times of subdued demand by coming out with long-term papers.
 

Economists said the government should put a quantity clause in the laws to break the impasse with agitating farmers, officials said.
 

“The government procures a specified amount every year. Put a clause that the government would procure at least the same amount as was procured last year. If you give quantity guarantee instead of price, it would solve a lot of problems,” an official said while talking about the suggestions.
 

Historically, wheat procurement constitutes 25-35 per cent of the total production, while paddy accounts for 30-40 per cent.

Currently, there is a huge asymmetry in crop procurement by the government. For instance, the percentage of paddy procurement from Punjab was a staggering 55 per cent for kharif crops till December 11 even though the state ranks third in this crop cultivation. Top producing states such as West Bengal and Uttar Pradesh witnessed nil and 8 per cent procurement during this period, respectively.
 

Economists also suggested that an institution should be set up to regulate contract farming and make a price discovery on the lines of The Federal Land Development Authority (Felda) in Malaysia. Felda was established on July 1, 1956, under the Land Development Ordinance of 1956 for the development of land and relocation with the objective of poverty eradication through the cultivation of oil palm and rubber.
 

There is no clause of this nature in the current contract farming law. The eighth round of talks between protesting farmers and the Centre was inconclusive on Friday, with the two seemingly looking towards the Supreme Court for a way out and deciding to meet again on January 15. The apex court in all probability will hear all the issues concerning the legality of the legislation and the protests next week.
 

Both the protesting farmers and the Central government might look at the various alternatives and options on the two sticking issues of repeal of the laws and legal guarantee for MSP before coming for the next round of negotiations, sources said.

In the pre-Budget meeting, economists talked about incorporating tele-visit by doctors in the Ayushman Bharat scheme. They also discussed about free or subsidised distribution of computer tablets to spread digital education.