Modi Reiterates Need For Agri Reforms, Indicating Rollback of New Laws Unlikely

Reforms will help better the income of farmers, the prime minister said, addressing a webinar on effective implementation of budget provisions for the agri sector.

New Delhi: Prime Minister Narendra Modi has reiterated the importance of agricultural reforms to better the income of farmers and pitched for setting up more farmer producer organisations (FPOs) across the country to help small and marginal farmers aggregate the produce with the help of better access to technology, input, finance and market.

“We have to expand our country’s agriculture sector into the global market for processed food. We must increase the number of agroindustry clusters near villages so that people in villages get employment related to farming in the village itself,” Modi said, according to news reports, while addressing a webinar on effective implementation of budget provisions for the agri sector.

According to the Times of India, though the prime minister did not make any direct reference to the Central farm laws that have sparked months-long protests by farmers, the “thrust of his address” aligned with the government’s position that “enhanced market access for farmers and incentives and opportunities for them to explore options beyond mandis would benefit the farm sector”.

This indicates that the government is unlikely to yield to the protesting farmers’ demand that the three Central laws should be repealed.

Emphasising on the importance of good storage facilities near villages and better logistics to carry farm produce to processing units, the prime minister stressed on the need for farmers to become part of FPOs. He added that this could help them gain bargaining power in markets, said news reports.

He was addressing a group of experts from agriculture, dairy, fisheries and other stakeholders at the webinar.

Also read: Farm Laws: Fate of Farmers in Bihar Points To What Those Across India Might Soon Face

An FPO is a group that is formed by small producers, allowing farmers to jointly access technology, inputs, credit, farm machinery and together sell in the markets. FPOs are set up under the Producer Companies Act of 2002.

These FPOs are mainly aimed at aggregating the produce better. Additionally, they also address contracting and adherences problems in contract farming with small farms.

According to a report by The Wire, these FPOs must be anchored by private sector players and could spread across multiple states for leveraging ‘economies of scales’, facilitated by government commodity boards for ‘end-to-end’ execution in the specific crop.


Last year, on February 29, the prime minister had launched a campaign to set up 10,000 new FPOs across the country in the next five years. He had said Rs 5,000 crore will be spent on this campaign in the next five years.

According to the Ministry of Agriculture and Farmers Welfare, “The goal is to achieve doubling of export by 2022.”

The report in The Wire explains how this ‘grand plan’ of doubling agricultural exports, deemed to double farmers’ income, may put at risk the already precarious food security rights of 90% of India’s citizens, including the small and landless farmers.

During 2020-21, a total of 2,200 FPO produce clusters have been allocated for formation of FPOs. These include specialised FPO produce clusters such as 100 for organic, 100 for oil seeds, etc. Of these, 369 FPOs will be formed during this year in 115 districts of the country, the ministry said, according to news reports.

Modi, in his speech, also spoke about the need to explore ways to leverage the ‘one district, one product’ scheme to take Indian products to global markets. Promoting them in a cluster will help increase the value of products, therefore increasing farmers’ income, the report added.

Also read: Getting the Investment-Subsidy Mix Right in Indian Agriculture

Critics say FPOs are not easy to set up everywhere because of the challenges starting with convincing the farmers to cooperate, registering the FPO and complying with the official requirements.

They also flag concerns with respect to the unregulated nature of private markets after the new farm laws. They suggest that respective state governments can better manage the agri-markets, which is such a diverse industry, and adopt farmer-friendly market approaches.

Since November 26 last year, farmers have been protesting on the different borders of the national capital, against the three newly enacted farm laws: Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; the Farmers Empowerment and Protection) Agreement on Price Assurance and farm Services Act 2020 and the Essential Commodities (Amendment) Act, 2020. They demand a complete repeal of the laws and a legal guarantee for minimum support price.

According to the data collected by Samyukt Kisan Morcha, as many as 248 farmers have died during the protests in just 87 days,