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Farm laws repeal: What lies ahead

Farmers victorious but to continue protests until formal repeal; agritech players look at contract losses, higher prices

Mansvini Kaushik
Published: Nov 19, 2021 05:08:59 PM IST
Updated: Nov 26, 2021 05:56:05 PM IST

Farm laws repeal: What lies aheadFarmers celebrate at Singhu border, Delhi after India's Prime Minister announced to repeal three agricultural reform laws that sparked more than a year of protests by farmers across the country on November 19, 2021.
Image: XAVIER GALIANA/AFP via Getty Images

Prime Minister Narendra Modi on Friday morning announced that the three farm laws, which have been a point of contention between the farmers and the Centre for more than a year, will be repealed.

“Despite our best intention to support our farmers, especially the small farmers, we could not take them into confidence. I apologise to our fellow citizens. The Union government has decided to repeal all three farm laws,” Modi said in a televised address to the nation ahead of the elections in states like Uttar Pradesh and Punjab where the protests have been most dominant.

Since September 2020, farmers throughout the country have been protesting the three farm laws—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—that they believe would have benefitted private players and adversely impacted their livelihood. In January 2021, the Supreme Court had stayed the implementation of these laws until further orders, to facilitate a process of negotiation between the Centre and the farmers.

The announcement came on the occasion of Guru Purab that marks Sikhism founder Guru Nanak's birth anniversary. “The word going around was that BJP will witness massive electoral losses in UP in the upcoming elections. This announcement on Guru Purab and close to the election is to soften the blow, but even then this was bound to happen—if not today they’d have had to repeal the laws sometime,” says cardiologist Swaiman Singh who has been treating the protesting farmers at the Delhi borders since December 2020. The laws are now set to be repealed in Parliament in the winter session starting November 29.

“As the three agriculture laws have been enacted but not implemented, the laws will have to undergo the repealing process in the Parliament and finally would require an assent from the President,” says Satya Muley, advocate, Bombay High Court, adding that the process of repealing a law is the same as enacting it under the Constitution of India. “The government has an option to either bring a bill in the Parliament to repeal the farm laws, or promulgate an ordinance which will then have to be subsequently replaced by a bill to that effect within six months,” he adds.

The protesting farmers who are stationed at the Delhi borders since November 26, 2020, say that they would continue the protests till the farm laws are formally repealed. “We will keep protesting till the laws are repealed in Parliament. The scheduled rallies will take place. We will only leave when we have the absolute certainty that we won’t be cheated,” says Kulwant Singh Sandhu, a farmer from Jalandhar, Punjab, who has been part of all the 11 rounds of discussions that farmer organisations have had with the Centre till date.

In addition to the repeal of the three farm laws, the protesting farmers have put forth a set of demands that they want the government to address before they end their protest. The Samyukta Kisan Morcha (SKM), which has been at the forefront of the protests, wrote to the PM listing six demands. Their major concern is a guaranteed Minimum Support Price (MSP) based on a comprehensive cost of production for all agricultural produce so that farmers throughout the country could be legally entitled to justified MSP for their entire crop.

Their other demands include withdrawal of the draft Electricity Amendment Bill 2021, a memorial for the protesters who lost their lives during the agitation, compensation and rehabilitation support for the families of the farmers who died during the agitation, and withdrawal of cases against farmers. The letter also seeks removal of penal provisions against farmers in the 'Commission for Air Quality Management in the National Capital Region and Adjoining Areas Act, 2021', and the arrest of Minister of State for Home Ajay Mishra whose son Ashish Mishra is accused of running over protesting farmers at Tikunia in Lakhimpur Kheri district, Uttar Pradesh on October 23. 

 While farmers have been protesting the laws well before they were passed in Parliament, it was on November 26, 2020 that tens of thousands of farmers, majorly from Punjab and Haryana, marched to the borders of Delhi demanding that the laws be abolished. When the government refused to take back the laws during the initial rounds of discussions between the farmers and the Centre, farmers built temporary houses at the borders of Delhi and have been campaigning for the cause, weathering hail, rain, blazing heat, and even bone-chilling cold ever since.

As per news reports, more than 600 farmers have lost their lives in the protests so far. One contributor being the violent events following a tractor parade organised by protesting farmers on January 26 in the national capital.

Staunch on their demand for a guaranteed MSP, farmers demand dialogue with the Centre. “The government will have to address the problems with MSP, if they can’t guarantee MSP on crops, they need to hold discussions with us on the possible alternatives. We would not end the protests till farmers’ miseries are addressed,” says Sandhu.

“Currently 23 crops are covered by MSP but the government does not have the wherewithal to purchase the output of all these crops,” says Sanjeev Sabhlok, economist and former IAS officer adding that two ideas have been floated by protesting farmers; the scope of crops under MSP to be expanded and a legal guarantee be imposed by which private traders will be compelled to buy at that price. 

“A legally guaranteed MSP is not implementable,” he lets on, “Traders would lose if they purchase food grains at a price higher than what the market, including consumers, can bear. The farmer could then be forced to undertake distress sale in the black market or, if traders are jailed for not purchasing at MSP, the food distribution chain would collapse. The government could then be forced to take over the purchase and distribution of the entire agricultural output for these crops or to declare a lower MSP that is closer to the market price. Open-ended procurement of all crops is impossible, not only because funds are not available to do so, but there is no capacity to store such vast amounts of food.”

The repeal of the farm laws doesn’t bode well for many agritech players. Krishna Agro & GDCA, an agritech startup in Gonda District, Uttar Pradesh, was part of the One District One Product (ODOP) scheme that aims to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products. The company was to be granted 85 percent of the cost for improvised crop processing where farmers would have been direct shareholders. “Based on the new farm laws we signed multiple MOUs with many foreign buyers who will directly buy from us but as these three farm laws are repealed, we will now have to sell these foreign companies our processed goods with an old method which will make the goods 20 percent costlier to the buyer and there is a chance they may now buy the same agriculture produce from China, Thailand, and Vietnam and not us,” rues Parth Tripathi, Director of Krishna Agro & GDCA, an ODOP project.

“If the three repealed laws were implemented, it could have brought new channels for trading for the farmers, and startups like ours could have helped such an ecosystem to be more transparent, providing better returns directly to the farmers,” says Amit Srivastva, co-founder and CEO, InfyU labs, an agritech startup dealing with quality assurance of fruits and vegetables. “However, we will now try to provide benefits to the farmers by working with APMCs,” he adds.

Hemendra Mathur, an agritech investor, believes that a new policy formulation is necessary, “I hope that each state can have an agritech policy that provides farmers access to new emerging innovations which can solve typical farming challenges of access to markets, inputs, data, advisory, credit, and insurance. States like Karnataka, Telangana, Uttar Pradesh are already engaging with startups in agriculture and allied industries such as dairy and fisheries.”

Dr Singh says that any new policy being considered by the government needs to be discussed with the farmers first. “Whatever the government plans to do next, it’s very important that they take farmers’ perspective into account. With the repeal of the laws, the situation doesn’t improve, it just doesn’t get worse. We still need to figure out ways to strengthen the agriculture practices in India. The mandi system is in shambles, an MSP guarantee needs to be established, but at least the worst is over and now we can work towards improving the lives of our farmers,” says Singh.

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