Agriculture contributes almost 15% of the total $2.9 trillion Indian economy
New Delhi:
Prime Minister Narendra Modi said three agricultural laws that have been at the heart of fierce protests by farmers over the past 14 months will be withdrawn. The turnaround comes a few months before elections in several states, including the agricultural belt Punjab and Uttar Pradesh.
“While apologizing to the nation, I would like to say with a sincere and pure heart that perhaps something is missing … that we cannot explain the truth to some of our peasant brothers. I … we have decided to repeal the three farm laws“, the Prime Minister said in a speech to the nation.
So, what are the three farm laws? And why are they so controversial?
Law 1: Farmer (Empowering and Protecting) Farm Service and Price Guarantee Act Agreement
This is supposed to allow for “contract farming”, or allow farmers to enter into direct agreements with agricultural companies, exporters or large buyers to produce a certain crop. at a pre-agreed price.
What the government says: The government has insisted that crop prices under this law will be determined by market forces – i.e. farmers will be paid more for sowing the required crops.
The government also invokes a law (which allows for barrier-free trade between countries and within the country) to say that farmers can sell the crop on demand at the highest possible price, thereby maximizing profits. profit.
Another benefit, the government claims, is that this will eliminate agricultural middlemen, as farmers will now deal directly with the ultimate buyer – agricultural companies.
What do the farmers say?: Farmers worry the new law will eliminate the MSP – the guaranteed minimum price for their produce). They also fear ‘agricultural corporatization’ – a scenario in which large companies use their financial power to price farmers unreasonably low.
Farmers worry that small and marginal landowners will be vulnerable to such adverse contracts unless selling prices are adjusted. Member of Parliament P Chidambaram highlighted that concern, calling for an MSP association clause with the lowest price offered by a private buyer.
The law did not explicitly end MSPs (and The Prime Minister has stated that he will not) but farmers are concerned that allowing prices to be settled outside of regulatory spaces – i.e. regulations – will make it difficult for the government to monitor each transaction and ensure fair prices .
According to the 2011 census, 52.7% of people in India work in agriculture-related activities
Law 2: Commercial Farmer and Trade Act (Incentive and Facilitation)
What the government says: The government says the legislation will allow farmers to trade without barriers in and out of the state in all agricultural products, which they could theoretically resell in markets of their choice, right away. even in other states. Farmers will also not have to pay taxes collected by the state.
Currently, produce is sold at notified wholesale markets, or mandis, operated by Agricultural Product Marketing Commissions or APMCs. Farmers take their produce to local markets, where licensed middlemen buy from them – at prices set by auctions – before selling to institutional buyers.
What do the farmers say?: However, farmers point out that in practice, it may be difficult for small and marginal farmers to achieve better potential prices in more distant markets because of travel and storage restrictions as well as related costs. That’s exactly why, they argue, are why some choose to sell at local wholesale markets even though prices are better elsewhere.
Farmers are also angry with the wording of Section 8 of the law, which says that farmers can go to a subdivision judge (SDM) to resolve disputes. They argued that they – especially the smaller farmers – did not have the power or influence to approach the SDM office.
Law 3: Essential Goods Act (amended)
The law is intended to remove the government’s power to limit stockpiles of essential food items, except in exceptional circumstances. It also removed some goods – like cooking oil and onions – from that list.
It further allows the government to regulate the supply of those items, or even list them. The stock limit will be based on the price increase in the market.
In the case of this law, there is no real disagreement between farmers and the government.
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