PM Modi withdraws all three farm laws; what were the laws, why was it important, explained

Addressing the nation, Prime Minister Narendra Modi on November 19 announced the three controversial farm laws introduced by the government will be repealed in the upcoming Parliament Session. Modi announced the decision on the day of Guru Nanak Jayanti and it was a stunning announcement ahead of key state elections. After the decision, Modi urged the protesters to return to their homes.

After Modi’s announcement,  Bharat Kisan Union leader Rakesh Tikait said the agitation will not be lifted immediately and the farmers will wait for the day when the laws are repealed in Parliament. “Our government is committed to farmers’ welfare, especially small farmers. We are committed to serving them fully. We brought in farm laws with good intentions,” he said.

Three Farm Laws

In the last monsoon session of Parliament, three new agricultural bills were passed, and then President Ram Nath Kovind gave his assets to them on September 27, which were the law of the land. Thousands of farmers from Punjab, Haryana, Uttar Pradesh, and Rajasthan have been camping outside Delhi since November 2020, demanding that the laws be withdrawn. On 12 January 2021, the Supreme Court stayed the implementation of the farm laws and appointed a committee to look into farmer grievances related to the farm laws. Here are the key points on the three farmers laws, the laws are:

  1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act: The first law seeks to give freedom to farmers to sell their produce outside of the notified Agricultural Produce Market Committee (APMC) market yards. Any licensed trader can buy produce from farmers at mutually agreed prices. This trade in agricultural products will be exempt from the mandi tax levied by the State Governments.
  1. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020: It allows farmers to do contract farming and market their produces freely. It defines a dispute resolution mechanism.
  1. The Essential Commodities (Amendment) Act is an amendment to the existing Essential Commodities Act. This law now frees items such as foodgrains, pulses, edible oils, and onion for trade except in extraordinary (read crisis) situations. If there occurs a steep increase in price, then it requires the imposition of any stock limit on agricultural produce.

The government said this will help loosen the chain on farmers and help them get better prices. However, the protest was going on even amid the Covid-19 waves, and many farmer deaths were reported when they camped in the capital during the frozen climate. It has been India’s longest-running farmer’s protest against the government.

The minimum support price assurance has emerged as the main sticking point in the farmers’ protest. Farmer unions in Punjab and Haryana said the recent laws enacted at the Centre will dismantle the minimum support price (MSP) system.  Farmers said, new laws would make the MSP system irrelevant and they would not have any assured income from their farming.

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So far the government announced fixed MSP for around two dozen crops. However, paddy, wheat, and some pulses are the ones that are procured by the government agencies at the APMC ‘mandis’. Farmers fear that with the virtual disbanding of the mandi system, they will not get an assured price for their crops, and the “arthiyas”, commission agents who also pitch in with loans for them, will be out of business. It was thus important to take back the laws imposed by the Modi government and farmers meant it.

Opposition and farmers alleged that the government had passed all three laws without much discussion in Parliament. Further, Farmers’ unions argued that the rules expose them to unfair competition with corporates and cost them their guaranteed income.