India’s agriculture laws have potential to increase farm income, says Gita Gopinath

While IMF Chief Economist Gita Gopinath agreed that agriculture is one of the areas where India needs holistic reforms and backed the recent farm laws, she added that there is a need to provide social safety to the vulnerable farmers as well.

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India’s agriculture laws have potential to increase farm income, says Gita Gopinath
IMF Chief Economist Gita Gopinath. (Photo: Reuters)

International Monetary Fund (IMF) Chief Economist Gita Gopinath has said that the three farm laws introduced by the Centre have the potential to increase farmers’ income.

While Gopinath agreed that agriculture is one of the areas where India needs holistic reforms and backed the recent farm laws, she added that there is a need to provide social safety to the farmers as well.

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When asked about the reforms, Gopinath said these laws will help widen the market for farmers and allow them to sell to multiple outlets besides the Mandis without having to pay tax. “And this had the potential to raise, in our view, farmers’ incomes,” Gopinath told news agency PTI.

Read | Farmers' protest over farm bills: Let's decode MSP puzzle

However, she added an important caveat. “That said, every time reform is put in place, there are transition costs. One has to make sure and pay close attention that it’s not harming vulnerable farmers, to make sure that the social safety net is provided. Clearly, there is a discussion right now and we’ll see what comes out of it,” the IMF chief economist said.

It may be noted that the three farm laws were introduced by the government in September last year and have touted as major reforms in the agriculture sector, as it will remove middlemen and allow farmers to directly sell their products anywhere in the country.

Many other economists have also back the government’s farm laws, but thousands of farmers in India, mostly from Punjab, Haryana and western Uttar Pradesh have been protesting against the farm laws for the past two months.

They have been asking the government to withdraw the farm laws and offer a legal guarantee on Minimum Support Price (MSP) for their crops. So far, 11 rounds of talks have taken place between the government and farm leaders, but the matter remains largely inconclusive.

The situation is likely to get even more complicated after the farmers’ tractor rally in the national capital dissolved into anarchy on the streets of Delhi on Tuesday — the same day when India celebrated its 72nd Republic Day.

Also Read | Farmers in protest: An angrier trend beyond new farm bills