NS Narendra Modi The government, known for its determination and determination to pursue various economic reforms aimed at boosting productivity and growth, on Friday backed down and announced three reform-oriented, but highly controversial, laws governing agricultural marketing. announced its withdrawal. Strong and prolonged opposition by a large section of the peasantry. In a televised address to the nation on the occasion of the birth anniversary of famous Sikh guru Guru Nanak, Modi said that the laws brought in the form of an ordinance in early June 2020 and enacted by Parliament in September 2020 will be repealed, saying That the necessary constitutional process would be completed in the winter session of Parliament starting from November 29.
The announcement came amid a feeling that agricultural legislation could be electorally costly for farmers. BJP, which faced some setback in the recent by-polls as state assembly elections are due in five states, including Punjab and Uttar Pradesh, in February-March next year.
While the opposition described the decision to put the Center on the mat variously – as a shameful climb, the victory of democracy over arrogance, the late onset of enlightenment and so forth –, the peasant leaders, who have been almost at the forefront of the movement . One year, insisted that protests at the borders of Delhi would not be called off until Parliament actually repealed the laws. He said the government should accede to the other key demands of farmers, including legislative support for the Minimum Support Price (MSP) system and withdrawal of clauses of the Electricity (Amendment) Bill, 2020, which allegedly curtailed subsidized power supply. threatens to undermine. Agriculture, through the perceived centralization of tariff policy.
Apart from the May 2015 decision, there are some instances of Modi government withdrawing its key policies. Land Acquisition Bill omission; The aim of that bill was to facilitate land availability for various industrial and infrastructure projects under the PPP mode through relaxation of consent requirements.
Experts have been a staunch supporter of agricultural laws, as they believe the changes would have freed farmers from the clutches of notified APMC market yards, given them freedom to sell their produce anywhere in the country and allowed them to earn more. enabled. “It is a very unfortunate decision (to repeal agriculture laws). Peasants were given some freedom but now they will be exploited as they have been exploited since independence or after British rule. Shetkari Sangathan president Anil J Ghanwat, a member of the Supreme Court-appointed panel on the controversial laws, said.
Modi’s decision also casts doubt on his government’s ability to deliver on the resolution and other key reforms set out recently, including sweeping changes to labor rules through four codes passed by Parliament. Along with steps to promote labor welfare and rights, these codes also include provisions to reduce the harshness of the labor market for the benefit of industry, but their implementation requires the support of state governments and the larger political spectrum. .
Modi said: “We tried our best to convince the farmers (about the usefulness of agricultural laws for them), but could not. The matter even reached the Supreme Court… we are withdrawing the law.”
In view of the prolonged farmers’ agitation on Delhi’s borders, though the winter of 2020, the Supreme Court had on January 12, 2021, stayed the laws and constituted a four-member panel to talk to stakeholders, to discuss their views. and suggested amicable solutions. In a subsequent round of talks with the farmers, the Center proposed to suspend the laws for one-and-a-half years and constitute a joint committee to discuss the legislation to end the impasse, but the farmers stuck to their demand. that the laws be completely withdrawn. And insisted that their ‘homecoming’ from the borders of the national capital is subject to the repeal of laws.
In 11 rounds of formal talks with farmers’ organisations, the Center strongly opposed the demand for repeal of the laws, accepting some grounds for accepting some of the other demands raised by farmers. While the Center said that the law is pro-farmer, the protesters feel that they will be left at the mercy of the corporations because of the law.
Among the three laws, the Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, seeks to give freedom to farmers to sell their produce outside the notified APMC market yards without any levy. This was supposed to ensure remunerative prices to farmers by facilitating competitive alternative trade channels. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Agricultural Services Act, 2020, proposes to empower farmers to enter into contracts with firms to sell their produce on the crop at a pre-agreed price. The objective of this law was to transfer the risk of market volatility from farmers to companies and to provide farmers access to modern technology and better quality inputs.
Through the Essential Commodities (Amendment) Act, 2020, the Center wanted to remove items like cereals, pulses, oilseeds, onions and potatoes from the list of essential commodities and impose stock-holding limits on such items except in “extraordinary circumstances”. Wanted to have. The aim was to attract large scale private investment and FDI in the agriculture sector.
Modi in his address also announced the formation of a committee to promote zero budget based agriculture, which will focus on natural fertilizers and local seeds to change the cropping pattern according to the changing needs of the country and to make the MSP more effective. A term for based farming. and transparent.
A recent research paper by ICRIER for the UN Food Systems Summit pointed out that agricultural commodities in India lose their global competitiveness due to the presence of a large number of middlemen in agricultural marketing, leading to higher transaction costs (retail consumers). 30-50% of the value. The study said that through forward and backward linkages, the government can not only reduce volatility in prices, but also ensure remunerative prices to farmers and lower prices for consumers. Those who are stuck due to lack of understanding of farmers and political reasons.”
The Modi government had accelerated MSP operations in the 2020-21 agricultural marketing year to pacify the agitating farmers, especially in Punjab and Haryana, who have traditionally been the biggest beneficiaries of the MSP system. As this has increased the grain stocks with the Food Corporation of India to an unbearable level, as FE recently reported, MSP procurement has been regulated in the recent kharif season and the paddy procurement target for the current year 50 million tonnes has been earmarked, against last year’s all-time high of 60 million tonnes.
The present government has also come out with a policy that the MSP for the crops shall be at least 50% more than the Full Payment Cost (A2+FL). In 2018, the year in which the cost-linked criterion was introduced before the last general elections, the MSP increase was more dramatic – in the range of 50-97%, but has been relatively moderate since then.