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Business News/ News / India/  Govt backtracks on farm laws, announces repeal

In a surprise climb-down, Prime Minister Modi decided to repeal three contentious farm laws—something his government had vowed not to do.

In an unscheduled address to the nation on Friday morning, Modi said his government will start to repeal the laws in the Parliament session that begins later this month, handing a significant victory to farmer groups in the election-bound states of Punjab and Uttar Pradesh after year-long protests.

Policy Rollback
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Policy Rollback

“I have come to tell you that we have decided to withdraw all three agricultural laws. In the Parliament session starting later this month, we will complete the constitutional process," the Prime Minister said. “Despite our efforts, we could not explain to some farmers (the benefits of the laws)," Modi said.

The policy roll-back comes ahead of crucial state elections in Uttar Pradesh and Punjab early next year, where farmers constitute an influential electoral cohort.

The result of the assembly elections in Uttar Pradesh can also potentially influence national elections.

Thousands of farmers have been protesting against the law for more than a year.

In his address, Modi added that the government will set up a panel to find ways to change cropping patterns, make support prices effective and promote natural farming. He said the objective of the farm laws was to ensure better prices for farmers and provide more options when they sell their produce.

Farmers in Punjab began protesting against the reform bills when they were promulgated as ordinances in June last year. In November that year, tens of thousands of farmers from Punjab, Haryana and western Uttar Pradesh assembled at Delhi’s borders, demanding a repeal of the laws.

They are still continuing their sit-in.

Before the latest decision, the government insisted over several rounds of talks with farmers unions that it had nothing more to offer but to suspend the laws and amend some provisions to allay farmers’ fears.

On Friday, farmer unions welcomed the decision but said they have unmet demands. “We will wait for the announcement to take effect through due parliamentary procedures... when this happens, it will be a historic victory of the year-long farmers’ struggle. However, nearly 700 farmers have been martyred. The central government’s obstinacy is responsible for these avoidable deaths, including the murders at Lakhimpur Kheri," the Samyukt Kisan Morcha (SKM), the umbrella body of farm unions leading the agitation, said in a statement.

It added that the ongoing agitation is not just for the repeal of the three laws but also for a legal guarantee for minimum support prices for all farmers. “This important demand of farmers is still pending. So is the withdrawal of the electricity amendment bill. SKM will take note of all developments, hold its meeting soon and announce further decisions," the statement said.

The union leaders are expected to meet on Saturday morning. Meanwhile, the unions are mobilizing farmers to various protest sites at entry points to the national capital to mark the first anniversary of the agitation on 26 November.

The farm laws were brought to pave the way for market reforms, giving farmers the right to sell their produce outside state-regulated market yards without paying any taxes or market fees.

Farmers, however, feared that the laws—including one on contract farming and another amending the essential commodities Act—would expose them to market risks and weaken the existing minimum support price (MSP) regime. In addition, several states ruled by parties opposed to the central government objected because they were not consulted.

The retraction of the laws reinforces the constitutional position that agriculture is a state subject at its core, said Siraj Hussain, former agriculture secretary and senior fellow at ICRIER, Delhi. “But this does not mean an end to the reform process. States can open up their markets to private players and frame provisions relating to contract farming," Hussain added.

In January, the Supreme Court stayed the implementation of the laws and constituted an expert committee to look into the laws. During discussions with farm unions, the government also proposed diluting certain provisions, but farmer unions stood their ground and demanded a repeal.

It is unfortunate that the laws had to be repealed, and the government bowed down to protesters, said Anil Ghanwat, president of Shetkari Sanghatana, a farmer’s organization from Maharashtra and member of the apex court panel. “This will tie the hands of future governments to undertake reforms. Our report and recommendations (submitted in March) were neither released nor discussed before taking this step."

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Updated: 19 Nov 2021, 11:13 PM IST
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