Affecting one out of six humans on our planet, India’s economic policy rightly has our attention. This time, a set of three bills seeking to deregulate and liberalize their agricultural sector have been met with some of the largest nationwide protests since independence to worldwide support. However, many mainstream right-wingers, conservatives, libertarians, and I support the Prime Minister’s effort to allow the market to run its course. Modi’s deregulation of agriculture is what India needs to jumpstart their agricultural industry into the 21st century by tackling an untenable status quo supported by the farmers’ protests.
One reform Modi champions is the deregulation of trade outside government markets, opening Indian agriculture to greater competition. The primary fear haunting protesters is the competitive edge that corporations suppliers and private investment would have over their lower rates of production. I don’t see this as the problem, but rather, the solution. When allowing competition to spur up, innovation or coexistence from the incumbent actors naturally follows to avoid failure. As unempathetic as it sounds, when domestic, small farmers fail, corporate and large scale investments could easily pick up the slack and actually improve production through introduction of new technologies and opportunities as seen throughout the developing world. Displaced laborers will find alternative work, as is the case with automation and general innovation. Either way, the market gets what it wants. The fears the protesters espouse of alternative markets are justified fears of a justified result.
The Farm Bills’ backlash calling for protectionist supervision or requiring consultation of agricultural interest groups flies in the face of agrarian stagnation as if decades more of the same government regulations would change something. Atop that, the inevitable development and growth of India through deregulation of certain sectors made it a powerhouse of industry, trade, and emerging markets while downplaying the snail-paced expansion of their heavily governed agriculture sector. The Indian labor market reflects a trend away from agriculture over the last decade.
In a nominally socialist country like India, which has tried to abruptly end traditions like dowries and caste divide, clinging to “agrarian tradition” with massive protests seems out of character unless paired with the desperate political market around it and the immense government powers checked by the 2020 Farm Acts. As the writing on the wall from other industries demonstrates, the pace of domestic farmers cannot fill current demand properly nor increase in importance without deregulation and private investment. As such, their political capital shrinks every dismal annual report. The outright demand for government consultation of farming groups demonstrates this underlying motive. When taking into account the demands and actions taken by these protests looking to maintain their government-backed amenities, these demonstrations act counter to the long-term national interest. These bills create an environment where the need to change is alive and concrete, not some telegraphed push from government bureaucracy. From a market perspective, not based on blind empathy or nostalgia for tradition, I support Modi’s Farm Bills for the wake-up call it is. The memory of past successful programs meeting opposition (Thatcher and the miners, Reaganomics, etc.) reinforces that these bills are steps in the right direction for India.