The cost of protectionism on farmers in India

Indian farmers stock

India’s state and central government’s COVID-19 relief efforts have provided farmers with funds to maintain stable livelihoods during the current health and financial crisis. However, India’s Centre for Civil Society (CCS) argues that India’s policy approach towards the COVID-19 crisis, while well-intended, has been proven to cost farmers labor and income.

CCS has worked tirelessly to combat government-imposed trade practices that bar farmers from selling and transporting produce. While the state and the central government of India attempted to remedy this through monetary relief, the aid provided has proven inefficient because farmers still do not have access to necessary storage and markets for fresh produce. In response, CCS spearheaded policy changes that will reduce restrictive trade practices in India and ensure produce does not go to waste by removing barriers to the agricultural market in India.

Overall, government-funded relief packages have had an adverse effect on India’s agricultural market. In 2020, CCS successfully convinced policymakers to amend India’s Essential Commodities Act that previously allowed the government to set price and stock limits on specific agricultural goods and criminalized warehouses—destroying farmer’s ability to effectively preserve their products.

CCS has helped implement three laws that will reduce barriers in India’s agriculture sector: the Farmers Produce Trade and Commerce Act, Farmers Agreement on Price Assurance and Farm Services Act, and the Essential Commodities Amendment Act. These three acts help liberalize domestic markets by legalizing the creation of private markets for the sale of agricultural goods, creating a framework for the purchase of future produce, and limiting government intervention in regulating the price and storage of produce.

Additionally, CCS published a policy brief entitled Unfree to Sell: How Trade Restrictions Hurt Farmers as part of their advocacy effort. CCS’ research, advocacy, and advising efforts have led to the Government of India amending the Essential Commodities Act and producing two new farm laws which liberalize the agricultural sector in India.

As a result of CCS’s work, incoming policy changes will not only liberalize the agriculture sector of the economy in India, but allow for innovation in the field of agri-buisness and increased methods to reduce loss in the product supply chain.

The policy changes as a result of CCS’s work will allow for farmers, agricultural experts, and warehouse owners to participate more freely in the agricultural market.

Atlas Network supported this initiative with a grant.