An employee of Indian Agricultural Research Institute walks next to a tractor over stubble in a farm field during the introduction of a newly developed bio-decomposer solution to prevent stubble burning at Hiranki village in New Delhi on Oct 13, 2020. (PHOTO / AFP)

New Delhi’s enactment of three farm bills has triggered a debate whether India can follow China’s agricultural reforms, policies and technology to boost up its agricultural productivity.  

The bills--Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020,  and Essential Commodities (Amendment) Bill, 2020—were passed by Upper House in Parliament in September and enacted on Sept 27 after President Ram Nath Kovind’s assent.

Introduced by Bharatiya Janata Party-led government, the moves have split the opinion among the economists and experts whether it will usher a new reform in Indian agriculture or invite more trouble for farmers, apart from evoking protest among farmers largely in Punjab and Haryana supported by Congress and other opposition parties.

“The Acts will provide greater choice and freedom for farmers to sell their produce and to buyers to buy and store, thereby creating competition in agricultural marketing,” said Ashok Gulati, Infosys Chair Professor for Agriculture at Indian Council for Research on International Economic Relations.

According to a report prepared by Ashok Gulati and Sakshi Gupta, a research assistant of the council, India and China started to employ technology to boost agriculture by using HYV seeds, optimizing irrigation and usage of pesticides

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According to a report prepared by Ashok Gulati and Sakshi Gupta, a research assistant of the council, India and China started to employ technology to boost agriculture by using HYV seeds, optimizing irrigation and usage of pesticides.

“China, however, took a significant lead over India in agricultural sector by efficient agriculture reforms, policies and technology. Strict rules, strong reforms, incentives and ambitious investments in R&D have helped China,” the report stated.

Estimates put China’s total sown area at 166 million hectare compared to India’s gross cropped area of 198 million hectare. However, China produces agricultural output valued at US$1,367 billion—more than three times that of India’s US$407 billion.

China spends a lot more on agriculture knowledge and innovation system, which includes agri R&D, and extension. It invested US$7.8 billion on agri-system in 2018-19—5.6 times the amount spent by India (US$1.4 billion), the report claimed.

“India can learn these three lessons from China,” Prof Gulati suggested, and that is to invest more in agri-R&D and innovations, improve incentives for farmers by carrying out agri-marketing reforms, and break input subsidies into direct income support on a per hectare basis, which can benefit its farmers and put agriculture on a high growth trajectory.

“Highlights of China’s agriculture system are collectivization, high R&D investment and innovations. Collectivization is not possible in India, considering its democratic system,” said Debesh Roy, economist and former deputy general manager of National Bank for Agriculture and Rural Development.

According to International Labour Organization and World Bank Data, agriculture occupies very small component in overall GDP in both China and India. In China in 2019 the contribution of agriculture to GDP is just 7.1 percent and this percentage is very low for the US also.

However, Prof Chandralekha Ghosh, an agricultural economist of West Bengal State University and Prof Samapti Guha, a development economist of Tata Institute of Social Science, pointed out: “It is quite a different environment for India. India will not be able to attain that productivity level by simply following the strategy and policy of US and China.”

Agricultural productivity is very high in both China and the US, one of the reasons is huge technology use and huge investment in agriculture. India needs to pay attention to capital investment in agriculture production as a significant share of the population still depends on it, they suggested.

According to data from the United Nations Food and Agriculture Organisation (FAO), spending on agricultural research in China was 0.62 percent of its value added in agriculture, while this number was just 0.3 percent for India.

Understandably, India’s new Acts on agricultural reform could go in that direction.

The first act allows farmers to sell their harvest outside the Agricultural Produce Market Committees mandis without paying any state taxes and fees. The second act facilitates contract farming and direct marketing. The third takes away cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. It will do away with the imposition of stockholding limits on such items except in the case of extraordinary circumstances.

Yet farmers’ protests continue despite Prime Minister Narendra Modi’s repeated assurance that the existing mechanism of minimum support price won’t be altered and the acts will give greater freedom to farmers to sell their agriculture produce anywhere. Many farmers are not convinced.

“If we are not satisfied with the price offered by new buyers then we should have the option to return to our mandis and should get MSP of our produce,” said Dharamveer Bidhuri, a farmer in Greater Noida from western Uttar Pradesh.

Congress party and its allies alleged that the government passed the three bills hurriedly giving no chance to the opposition MPs to express their views.

Prof Ghosh pointed out positive insights like eradication of middle men from the supply chain in the market, creation of national market, removal of Cess and levies. Economist Roy said government mandis will not pack up, rather, they will be reformed

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Congress leader Adhir Ranjan Chowdhury alleged that the Farm Act would lead to the corporate takeover of farming and would be the death warrant for farmers.

Dispelling fear among the farmers, Gopal Krishna Agarwal, national spokesperson of the BJP on economic affairs said, “A misinformation campaign has been let loose. On the other hand the legislation will give options of new markets, attract private investments to build infrastructure, help in better price discovery and provide price assurance to the farmers.”

Prof Ghosh pointed out positive insights like eradication of middle men from the supply chain in the market, creation of national market, removal of Cess and levies. Economist Roy said government mandis will not pack up, rather, they will be reformed.

Prof Guha said that bringing new bills is not enough to improve the condition of farmers in India. “Besides, introducing new bills, India should try to invest in agriculture research and development to increase India’s crop yield,” she suggested.

The writer is a freelancer for China Daily