New Farm Acts and Emerging Market Forms: Implications for Farmers

Abstract

This article examines the implications of new farm laws enacted by the Government of India in 2020 (now repealed) on farming and farmers. There are divergent opinions of experts and of the Government of India and the farmers’ unions on the expected benefits/losses to farmers. This article seeks guidance from economic theory on determination of prices of inputs and outputs under different market forms. The farm laws raise concerns about their potential to alter the organizational forms of production, marketing and storage of agricultural produce involving big private corporate agencies leading to changes in the market forms for determining prices and output level. These issues need to be examined in the context of emerging monopsony/oligopsony market forms, agricultural produce markets and final consumer level food markets. The discussion is supplemented by empirical evidence from the United States on the impact of similar laws in the 1980s on small farmers, together with limited evidence on the abolition of APMC market regulation in Bihar in 2006, so as to draw some lessons for reforms and their implications of future of farming and farmers in India.