IMF’s Gita Gopinath Says India’s Farm Laws Have Potential to Increase Farmers’ Income

IMF's Gita 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.

New Delhi: A day after the violent tractor rally that claimed life of a farmer and injured many, International Monetary Fund (IMF) Chief Economist Gita Gopinath on Wednesday said that the three farm laws introduced by the Centre have the potential to increase farmers’ income. Extending support to the three farms laws enacted by the Centre, Gopinath agreed that agriculture is one of the areas where India needs holistic reforms and added that there is a need to provide social safety to the farmers as well.

Talking about reforms in agriculture sector, 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.

“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.

Touted as major reforms in the agriculture sector, these three farm laws were introduced by the government in September last year and meant to remove middlemen and allow farmers to directly sell their products anywhere in the country.

Apart from Gopinath, many other economists have also supported 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.

The agitating farmers have been asking the government to repeal 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.

In the last round of talks, the government offered to suspend the laws for 1-1.5 years and form a joint committee to find solutions, in return for protesting farmers going back to their respective homes from Delhi borders.