Agri market reforms ignore reality

A free market-based system does not reflect the diversity of the Indian agro-economy or the interests of small farmers

The new laws on agricultural marketing seem to be designed to make it easier for food processing companies and retail chains to deal directly with farmers. This has provoked strong protests from farmers who are not convinced that the laws are in their interest. However, many economists have been supportive because they believe a freer market-based system will ensure prices more reflective of the supply-demand balance and lead to more rational cropping patterns.

What this argument misses is the distributive dimension. Agricultural marketing systems should lead to fair prices for both producers and consumers and only normal profits for intermediaries. It