Explained | The three laws that forced Indian farmers to hit the streets

PTI30-11-2020_000211A

India is currently witnessing one of the most aggressive protests by the farmers post Independence. The farmers have hit the streets against three key agriculture laws that were enacted by the Parliament of India a couple of months ago.

The three laws that have forced the farmers to organise massive protests, particularly in north India, are:

1) Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020

2) Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, and

3) The Essential Commodities (Amendment) Act, 2020

These laws took effect from September 27 after President Ram Nath Kovind gave assent. However, a few states where opposition parties are in power have decided not to enforce the laws. In October, the Punjab Legislative Assembly passed its three bills aimed at vetoing the contentious central laws.

The Kerala government has written to the central government making it categorically clear that the state would not implement the new farm laws.

Explained | The three laws that forced Indian farmers to hit the streets

What farmers fear

The farmers have expressed apprehension that the Centre's farm laws would pave the way for the dismantling of the Minimum Support Price (MSP) system, leaving them at the "mercy" of big corporates.

The government has maintained that the new laws will bring farmers better opportunities and usher in new technologies in agriculture.

Let's take a closer look at what the new laws are all about:

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1) The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020

Proclaimed Aims and Benefits:

• To give freedom to farmers to sell their produce outside the notified marketing yards (mandis) of the Agricultural Produce Market Committee.

• To facilitate remunerative prices through competitive alternative trading channels.

• No cess or levy on sale of agricultural produce under this Act.

• To allow more choices for farmers, reduce marketing costs, and help them get better prices.

• Help farmers of regions with surplus produce to get better prices.

Why The Opposition:

• Farmers and opposition parties fear the law will lead to the end of the MSP-based procurement system and may lead to exploitation by private companies.

• States will lose revenue in the form of ‘mandi fees’ if farmers sell their produce outside registered APMC markets.

• Commission agents stand to lose if the entire farm trade moves out of mandis.

2) The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020

Proclaimed Aims and Benefits:

• To give farmers the right to enter into a contract with agribusiness firms, processors, wholesalers, exporters, or large retailers for the sale of future farming produce at a pre-agreed price.

• To transfer the risk of market unpredictability from farmers to sponsors.

• To boost farmer income by reducing the cost of marketing by giving them access to modern tech and better inputs.

Why The Opposition:

• Farmer bodies and opposition parties say the law is framed to suit “big corporates who seek to dominate the Indian food and agriculture business”.

• They also fear the law will weaken the negotiating power of farmers.

• Farmers suspect big private companies, exporters, wholesalers, and processors may get an edge.

3) The Essential Commodities (Amendment) Act, 2020

Explained | The three laws that forced Indian farmers to hit the streets

Proclaimed Aims and Benefits:

• To remove commodities like cereals, pulses, oilseeds, onion, and potatoes from the list of essential commodities and to do away with the imposition of stock holding limits on such items except under ‘extraordinary circumstances’ like war, famine, extraordinary price rise and natural calamity.

• To attract private investment/FDI into the farm sector as well as bringing price stability.

Why The Opposition:

• Big companies will have the freedom to stock commodities, helping them dictate terms to farmers.

What the government says

Union Agriculture Minister Narendra Singh Tomar says the MSP mechanism for farmers will continue. Also, the proposed laws would not encroach upon the APMC Acts of the states.

These laws are aimed at ensuring better prices for farm produce without subjecting farmers to the regulations of mandis. The Acts will increase competition and promote private investment which will help in the development of farm infrastructure and generate employment, the minister says.

What next

Explained | The three laws that forced Indian farmers to hit the streets

One of the major contentions of the protesters is that either state governments or other stakeholders were not consulted before drafting the controversial legislations. It remains to be seen how the central government is going to address the concerns of the farmers. While it seems highly unlikely for the government to backtrack on the legislations the passage of which was hailed by Prime Minister Narendra Modi as “a watershed moment in the history of Indian agriculture!”, it will have to open discussions at some point.

As in the case of most of the laws, the intent of government looks fine on the paper here also. However, the real results of these new laws will come out only after few years.

Meanwhile, hordes of farmers are camping along the Delhi-Haryana border for the last few days as their bid to enter the national capital as part of the 'Delhi Chalo' campaign is being stalled by the police.

(With inputs from agencies)