On 19 November, Prime Minister Narendra Modi announced that the three farm laws promulgated last year would be repealed by Parliament when it meets later this month. Mint explains why this happened and what it really means:
What was the basic idea behind the laws?
The farm laws were first promulgated as an ordinance in June 2020 with the basic idea of freeing up agricultural trade by allowing farmers to sell produce outside markets regulated by Agricultural Produce Market Committees (APMCs), without having to pay any taxes, and to create a legal framework for contract farming in India. On paper, the idea was to increase competition through the removal of any cess charged by state-level APMCs, remove the barriers of entry for new purchasers and thus help farmers. Farmers, however, did not accept this.
Why didn’t farmers buy this theory?
Farmers in Punjab started protesting in June 2020. By November 2020, the ordinances had become laws and the protests had moved to the Delhi borders, with farmers from Haryana and western Uttar Pradesh joining in. A lack of trust emerged because farmers had seen the way the Bills were pushed through Parliament without any discussion with them. The fear was that the government would next get rid of the minimum support price (MSP) that it offers on 23 crops. The government primarily buys rice and wheat directly from the farmers at MSP.
What are the pluses and minuses of MSP?
MSP was put in place during the Green Revolution to encourage？ farmers to grow wheat. Later, rice was brought under it. It incentivized？farmers？in？Punjab？and？ Haryana to grow rice, causing the depletion of water levels.？India？now？grows？more？ rice？ and？ wheat than it needs and not enough pulses and oilseeds. Nonetheless, MSP makes the lives of many medium and large farmers better.
Why have the laws been withdrawn?
Elections are scheduled in Punjab and Uttar Pradesh in 2022. The protests were seen by many as impacting the political prospects of the Bharatiya Janata Party (BJP), particularly in western Uttar Pradesh. Other than the MSP removal, farmers had other fears as well. They could not challenge disputes arising under these laws in civil courts. The adjudicating powers lay with bureaucrats such as the sub-divisional magistrates and additional district magistrates. This lead to fears of subversion of justice.
What is the way forward?
The diversification of crops away from rice and wheat has become very important. Modi spoke of setting up a government panel to find ways to change cropping patterns. Also, it is important that the government pays attention to what Vijay Kelkar and Ajay Shah write in In Service of the Republic: “The safe strategy in public policy is to incrementally evolve—making small moves, obtaining feedback from the empirical evidence, and refining policy work in response to evidence."
Vivek ？Kaul？ is？ the？ author？ of？ Bad？ Money.
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