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KEY TAKEAWAYS 

Prime Minister Narendra Modi made a major announcement on Friday morning, stating that the Central Government will take steps to repeal three contentious farm laws. Despite the fact that the laws were enacted to benefit farmers, the

Prime Minister stated that the government was unable to persuade them, and a section of the farming community was opposed to the laws.

"We have decided to repeal three farm laws. We will finish the constitutional process to repeal the law in the upcoming Parliament session”, Prime Minister Modi said during a special address to the nation on Guru Nanak Jayanti.

INTRODUCTION

(1) Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; (2) Essential Commodities (Amendment) Act, 2020; and (3) Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, all of which were to be enacted by the Parliament in September 2020, have been vehemently opposed. For over a year, several farmer groups across the country have held widespread protests and agitations demanding that these laws be repealed.

Except in times of war or famine, the three laws prohibited farm produce stock limits, allowed farm produce trading outside wholesale markets without state levies, and established a legislative framework for contract farming. In order to facilitate a process of negotiation between the Centre and the protesting groups, the Supreme Court stayed the implementation of these laws until further orders were issued in January 2021. The Supreme Court had also formed a committee to help with the negotiations. Farmers' union leaders, on the other hand, boycotted the committee.

The main complaint of the farmers is that the laws will result in the dismantling of the state-run Agricultural Produce Marketing Committees and the disruption of the Minimum Support Price mechanism. Farmers who are protesting are concerned that the laws will allow for corporate exploitation. A slew of petitions have been filed in the Supreme Court, calling into question the legality of these farm laws as well as the Parliament's authority to enact them. According to a news report from October 2021, nearly 600 people were killed during the year-long farmers protests. Protesters organised a tractor parade in Delhi on Republic Day as part of the protests, which resulted in violent events in the national capital and at the Red Fort.

ABOUT THE 3 FARM LAWS

In 2020, the Farmer's Produce Trade and Commerce (Promotion and Facilitation) Act of 2020, also known as the FPTC Act, was enacted. This law allowed farmers to trade their produce outside of the physical markets established by state Agricultural Produce Marketing Committee laws (APMC Acts). It superseded all APMC Acts at the state level. Farmers objected to all three farm laws, but this Act, also known as the 'APMC Bypass Bill,' was the main source of contention. Cultivators were worried that its provisions would jeopardise the APMC mandis. Farmers were concerned that the new rules would lead to a lack of demand for their produce in local markets. They claimed that due to a lack of resources, transporting the produce outside of mandis would be impossible. This is why they sell their produce in local markets at prices lower than MSP.

Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020.Sections 3 through 12 of the law attempted to create a legal framework for contract farming. Farmers could enter into a direct agreement with a buyer to sell their produce at predetermined prices prior to the sowing season. It made it possible for farmers and sponsors to enter into farming contracts. The law, on the other hand, made no mention of the MSP that buyers are required to provide to farmers. Despite the fact that the Centre claimed that the law was intended to liberate farmers by allowing them to sell anywhere, farmers were concerned that it would lead to the corporatisation of agriculture. They were also concerned about the removal of the MSP. Critics also claimed that the contract system would expose small and marginal farmers to exploitation by large corporations unless sale prices remained regulated as they had been prior to the implementation of the new law.

Essential Commodities (Amendment) Act, 2020.This law removed the Centre's authority to impose stock holding limits on food items, except in exceptional circumstances, by amending the Essential Commodities Act of 1955. It also took edible oil, onions, and potatoes off the list of necessities. Section 1 (A) of the new law stated that the government could regulate their supply or reinstate these items on the list only in "extraordinary circumstances." According to experts, this will have little impact on farmers. Stock limits on agricultural products would be based on market price increases under this law. They could have been imposed only if the retail price of horticultural products rose by 100% and the retail price of non-perishable agricultural food items rose by 50%.

According to experts, the laws will liberate farmers from monopolistic APMCs and middlemen. Farmers were concerned that the new laws would encourage corporatisation of agriculture, resulting in insufficient demand for their products. 

REACTION OF THE OPPOSITION 

Most opposition political parties applauded Prime Minister Narendra Modi's announcement on November 19, that all three farm laws would be repealed. Their leaders, however, claimed that the BJP-led Union government had only bowed to the demands of the farmers, who had been protesting the laws for more than a year due to upcoming elections in five states, including Uttar Pradesh and Punjab. They also expressed regret that the decision was made after "more than 700 farmers died" during the protests.

In response to the announcement, Congress leader Rahul Gandhi tweeted that the "arrogance of the government" had finally had to yield to the Satyagraha, or farmers' struggle. The Congress is the ruling party in Punjab, where the first protests against the laws began last year with a train blockade. Other Congress leaders hoped that the Union Government would learn from the whole ordeal. While welcoming the repeal of the farm laws, Anand Sharma, Deputy Leader of the Congress in the Rajya Sabha, expressed hope that the government would not bypass the Parliament and would engage meaningfully with the opposition before enacting laws with far-reaching consequences.

Former Union Minister and senior Congress leader P. Chidambaram stated, "What democratic protests cannot achieve, fear of impending elections can." He claimed that the prime minister's announcement to repeal the three farm laws was not motivated by a shift in policy or a change of heart. "It is motivated by election fear," he tweeted. "In any case," Chidambaram added, "it is a great victory for the farmers and for the Congress party, which has been unwavering in its opposition to the farm laws."

Arvind Kejriwal, leader of the Aam Aadmi Party (AAP) and Delhi Chief Minister, expressed his delight at the good news about Prakash Divas. However, he added that over 700 farmers died in the previous year and that future generations would remember how the farmers risked their lives to protect their interests. The AAP won the second most seats in the 2017 Punjab election and is hoping to do even better this time. Former Punjab Chief Minister Amarinder Singh, who recently launched the Punjab Lok Congress party after leaving the Congress, thanked the Prime Minister for granting every Punjabi's wish and repealing the three black laws. West Bengal Chief Minister Mamata Banerjee congratulated farmers on their unwavering fight against three farm laws, saying they were unafraid of the BJP's "cruelty."

Sitaram Yechury, general secretary of the CPI (Marxist), praised the farmers for their "brave struggle," crediting them with forcing the Modi government to repeal the three farm laws. "We must not forget the sacrifice of over 750 farmers who have died in this struggle." They have become our martyrs. "The search for justice for those falsely accused by the government and its agencies will continue," he said. Yechury also demanded that Prime Minister Narendra Modi apologise "for the hardship and trouble caused by his dictatorial step of farm laws to benefit his crony business partners." He chastised Modi for expressing no remorse for farmer deaths and for continuing to justify the laws. "[He] refuses to learn from this historic, spirited, inspiring, and brave struggle," said Yechury. He stated that while repealing farm laws, the Parliament must enact a legal right to sell at the minimum support price (MSP).

The Shiv Sena and the NCP, which share power in Maharashtra, said the government had no choice but to cave in to the farmers' demands. "For the first time, the mannkibaat of people has come out of PM Modi's mouth," Shiv Senaleader Sanjay Raut said. BJP leaders openly referred to these farmers as Khalistanis and Pakistanis, but the Union government was forced to cave in response to farmer pressure.

Meanwhile, some farmer leaders have expressed regret that the Union government delayed repealing the farm laws, causing many farmers to lose their lives unnecessarily. AvikSaha, a farmer leader, was quoted as saying, "Very late at the cost of 700+ farmers.We regret to report that the government has yet to admit that this was anti-farmer, pro-corporate legislation; perhaps this is a temporary truce." 

REACTION OF OTHERS

"The step was necessary at the time. While the laws were progressive and had the potential to bring about new changes in terms of channels and increase transparency in the trade ecosystem, the implementation was lacking," says Ankit Chauhan, CTO and co-founder of agri-tech start-up InfyU LABS. "If the three repealed laws had been implemented, it could have opened up new trading channels for farmers, and start-ups like InfyU Labs could have assisted in making such an ecosystem more transparent, providing better returns directly to farmers.However, we will now try to benefit farmers by collaborating with APMCs," Chauhan adds. According to KalyanGoswami, director-general of the Agro Chem Federation of India (ACFI), the industry welcomes the government's decision because it will help break the current impasse. "We also thank the Prime Minister for his commitment to providing farmers with high-quality seeds, making it simple to file claims for damages, and paying farmers a fair price for their produce. While agriculture budget allocation has increased five times since 2014, we expect farmers' financial situation to improve steadily," Goswami says.

Swadeshi JagranManch (SJM), an RSS affiliate, also applauded the PM's decision, saying it put an end to the controversies surrounding them. "The Swadeshi JagranManch believes that the intent of the farm laws was good.However, we agree with the Prime Minister that the government was unable to persuade the agitating farmers of the laws' benefits. We also appreciate the government's initiatives to improve the conditions of farming and farmers in the country, such as raising the minimum support price [MSP] to cost plus 50% and bringing more agriculture items under MSP arrangement, as well as opening new avenues of marketing agricultural produce through electronic channels and other steps taken by the government to improve the condition of farmers," says Ashwani Mahajan, national president of the National Farmers Union. 

The RSS-affiliated BharatiyaKisanSangh (BKS) said that Prime Minister Narendra Modi's decision to repeal the three farm laws "appears to be correct" in order to avoid "unwarranted controversies and conflicts." It, on the other hand, slammed the farmer leaders, saying their "arrogant attitude" in continuing with their protest was detrimental to small farmers.

The SamyuktKisanMorcha, an umbrella body of farm unions that has led the agitation against the three agriculture laws, has welcomed the Prime Minister's decision but has stated that they will wait for the announcement to be implemented through proper parliamentary procedures. According to A. Lazar, State President of the All India Agricultural Workers Union, Prime Minister Narendra Modi's announcement to repeal three farm laws was a major victory for farmers' relentless protests in New Delhi.

The unexpected announcement by Prime Minister Narendra Modi on Friday to repeal three controversial farm laws — largely seen as guided by political compulsions due to upcoming elections in northern States — appears to have come "a little too late" for Haryana's ruling coalition to reclaim the farming community, primarily the Jats. According to political analysts, the "damage has already been done".

POLITICAL EFFECTS 

The most intriguing implication of the PM's announcement, however, will be political. There is speculation that this tactical "retreat" is a political gamble. There is a strong possibility that the BJP will join forces with former Chief Minister Amarinder Singh — he has openly discussed this in the media — to reclaim power in Punjab. The BJP may benefit from the turmoil within the Punjab Congress in this quest. Another possibility is that the party will mend its strained relationship with the Akalis in Punjab. In Punjab, the coming days will produce some interesting results. Overall, if the Congress is dethroned in Punjab and another party, backed by the BJP, comes to power, Modi may feel that his tactical retreat on farm laws has paid off handsomely.

However, the BJP's stakes in the UP elections are significantly higher than in Punjab. The U-turn on farm reforms could be intended to halt Rakesh Tikait's rise in Western UP. It's difficult to say whether the BJP will be able to achieve this goal. But one thing is certain: agitating farmer leaders and opposition parties will be emboldened as a result of this "victory." Farmer leaders have already requested that MSPs be legally guaranteed for 23 agri-commodities. Their demand could expand to include a broader range of commodities. Similarly, there may be calls to halt privatisation reforms of public-sector enterprises — such as Air India — or to halt any other reform. As a result, economic reforms that are desperately needed to propel growth are likely to be slowed. Instead, we may see freebies in the run-up to state elections, followed by more freebies before the 2024 General Election.

ECONOMICAL EFFECTS

Agriculture will continue on the same path it has been on for the past decade or so. In the first seven years of the Modi government, agri-GDP growth has been 3.5 percent per year, the same as in the first seven years of the Manmohan Singh government. This trend is expected to continue; minor changes in agri-GDP may occur depending on rainfall patterns. Cropping patterns will remain skewed in favour of rice and wheat, with grain stocks at the Food Corporation of India at an all-time high. The food subsidy will continue to balloon, and there will be significant leakages. The groundwater table in the northern states will continue to recede, and methane and nitrous oxide will continue to pollute the environment. Unless the promised committee produces more meaningful solutions, agri-markets will remain rigged and farm reforms will remain elusive for some time. 

According to the NSO's most recent Situation Assessment Survey, the average agri-household in India earned only Rs 10,218 per month in 2018-19. In today's prices, and assuming a 3.5 percent annual growth rate in real incomes, the average agri-income households would be around Rs 13,000 today. Add another Rs 500 per month under the PM-KISAN scheme, and this is roughly the level of monthly family income in rural areas for the largest segment of our workforce (approximately 45%), which is engaged in agriculture. This is not a happy situation, and all efforts must be made to increase rural incomes in a sustainable manner.

CONCLUSION 

I believe, on the plus side, the BJP's experience with farm laws may teach it valuable lessons. The most important lesson is that the economic reform process must be more consultative, transparent, and better communicated to potential beneficiaries. This inclusiveness is at the heart of India's democratic functioning. Given our society's argumentative nature, implementing reforms takes time and humility. However, doing so ensures that everyone benefits.
 


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