The measures will enable farmers to directly contract with sellers and allow them to retain a greater share of the surplus, the IMF said

The International Monetary Fund (IMF) believes the farm bills passed by the Indian government have the potential to represent a significant step forward for agricultural reforms.

However, there is a need to strengthen the social safety net for those who might be adversely affected by the transition to the new system, the Director of Communications at IMF Gerry Rice, said at a news conference in Washington on Thursday.

"We believe the farm bills do have the potential to represent a significant step forward for agricultural reforms in India," Rice said, according to a PTI report published by Business Standard.

Further supporting the farm bills, he said, "The measures will enable farmers to directly contract with sellers, allow farmers to retain a greater share of the surplus by reducing the role of middlemen, enhance efficiency and support rural growth.”

"However, it is crucial that the social safety net adequately protects those who might be adversely impacted during the transition to this new system," the spokesperson said responding to a question on the ongoing protests by farmers against the laws in the country.

This can be done by ensuring that the job market accommodates those that are impacted by the reforms, he said.

"And of course, the growth benefits of these reforms will depend, critically, on the effectiveness and the timing of their implementation, so need to pay attention to those issues as well with the reform," Rice said.

Thousands of farmers, mostly from Punjab and Haryana, have been camping at several Delhi border points, demanding a complete repeal of the three farm laws and legal guarantee of minimum support price for their crops.

Enacted in September last year, the three laws have been projected by the Centre as major reforms in the agriculture sector that will remove middlemen and allow farmers to sell their produce anywhere in the country.