Why Modi’s Laws to Liberalize Farming Worry Farmers

New legislation in India aims to fundamentally overhaul the way farm goods are produced and sold in the country of 1.3 billion people, almost half of whom depend on agriculture for their livelihood. It would open up a decades-old system of state-run wholesale markets to more private sales, which Prime Minister Narendra Modi says would help them earn more cash and make India more self-reliant. Opposition parties say it would leave those working the land vulnerable to exploitation. Farmers, fearing the worst, have blockaded a major highway for months in protest. The country’s top court put the law on hold in January while it considers its constitutionality, adding to Modi’s woes.

Farming has remained relatively untouched by the push to modernize India; its growth has consistently lagged behind the overall economy for years -- often significantly. (The poverty rate in rural India is about 25% compared to 14% in urban areas, according to World Bank data.) Many farmers rely on the most basic of technologies and own small landholdings that preclude economies of scale. And the wholesale markets they sell their produce into are often disorganized at best, dysfunctional at worst. In some, the federal government’s buying program doesn’t operate, leaving private players as the only option.