Farmers protest might maintain again India’s financial restoration from Covid, minister says

The ongoing protest by Indian farmers cannot go on indefinitely or it will hold back the country’s economic recovery from the Covid-19 pandemic, an Indian minister told CNBC on Monday.

Thousands of Indian farmers have protested for weeks against three farm reforms that came into force this year. The protesters claimed the new measures would lower harvest prices and affect their revenues.

The protests have harmed agriculture and related industries. According to Indian Trade Union Minister for Civil Aviation, Hardeep Singh Puri.

“This affects not only agriculture but other related areas as well, and there is certainly harm,” Puri told CNBC’s Tanvir Gill when asked how the protests disrupted agricultural production.

“We have to move on. And after the Covid, when the economy slowly returns to pre-Covid levels, there will be a revival in demand, production, etc. We should not allow (the protests) to continue indefinitely, to be another setback to our resuscitation efforts, “he said on Tuesday.

Farmers gather on the Delhi-Uttar Pradesh border to protest against new farming laws.

Sakib Ali | Hindustan Times | Getty Images

The minister, who also works in the Ministry of Housing and Urban Development, defended the agricultural reforms. He reiterated the government’s position that the measures will benefit farmers and accused the parties with “reasonable interest” of fueling farmers’ concerns about the reforms.

Puri said key measures such as minimum support prices will remain. Minimum Support Prices, or MSPs, are prices set by the Government of India for the purchase of certain crops, which guarantees farmers a minimum profit on their harvest regardless of market conditions. Unions fear that farmers will be paid less for their crops if the system is removed.

Agricultural reforms necessary

Economists generally agree that the Indian agricultural sector needs reform. Agriculture is the main source of livelihood for around 58% of the Indian population, but it accounts for around 15% of GDP.

The government has met farmers’ representatives several times to try to resolve any maladministration in the reforms – and is determined to do so again, Puri said. The minister said he thought the government’s message to farmers was starting to “trickle home”.

I am sure that the farmers, who are a very productive segment of our society, will sit down with the government and we will find a way forward.

Hardeep Singh Puri

India’s Civil Aviation Union Minister

“Any problem, no matter how serious, can always find a solution. And the government is determined to find the solution,” he said.

“And I am sure that the farmers, who are a very productive segment of our society, will sit down with the government and we will find a way forward.”

The protests come at a time when the Indian economy is being hit by the effects of the Covid-19 pandemic. India’s economy contracted 23.9% year over year from April to June after a strict statewide lockdown to contain the spread of coronavirus was implemented. The economic decline slowed in the quarter ended September, with the economy contracting 7.5% year over year.

Still, the International Monetary Fund forecast in October that the Indian economy would shrink by 10.3% in the current fiscal year, which ends in March 2021.

– Saheli Roy Choudhury contributed to this report.