The recently-enacted agriculture laws in India have the potential to increase farmers’ income, but there is a need to provide a social safety net to the vulnerable cultivators, IMF’s chief economist Gita Gopinath has said.
For Indian agriculture, there are multiple areas where the reforms are needed, including infrastructure, the chief economist of the Washington-based global financial institution said on Tuesday.
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 said.
“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,” she said.
Many other economists have also back the government’s farm laws, but thousands of farmers, mostly from Punjab, Haryana and western Uttar Pradesh have been protesting against the farm laws for the past two months.
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.