NEW DELHI — As the protests over new farm laws in parts of north India continue, the government says that domestic and international outcry over its reform measures is based on half-truths and lacks understanding about the exigencies of the Indian agriculture sector, which is facing a plethora of problems due to lack of reforms.
The government claims that three new laws — the Farmers' Produce Trade and Commerce (FPTC) Act, 2020, the Farmers Agreement of Price Assurance and Farm Services (FAPAFS) Act, 2020, the Essential Commodities Act, 2020 (ECA) — were enacted with the aim of removing market limitations, barriers and intermediaries, promoting the participation of the corporate sector in procurement and storage of agricultural produce to make the farming occupation more remunerative in line with the government’s commitment to double farmer’s income by 2022.
The FPTC Act intends to open up opportunities for farmers to sell their produce in any market in the country by ending the monopoly of the existing less competitive, additional tax demanding, centralized mandi (local market) system in order to ensure that the farmers get a bigger share of the price paid by the consumer with a view to improving agricultural income.
The FAPAFS Act, while allowing limited corporate farming within the legal framework that protects farmer’s rights on land, enables small and marginal farmers to engage with agri-business companies, retailers, exporters for service and sale of produce at a pre-agreed price.
The ECA ACT removes items such as cereals and pulses from the list of essential commodities to reduce excessive regulatory interference to attract FDI in the production of such crops.
The government’s claim on new laws is backed by many eminent economists, including IMF Chief Economist Gita Gopinath, who has emphasized that agriculture is one of the areas where India needs holistic reforms.
She said these laws will help widen the market for farmers and allow them to sell to multiple outlets besides mandis without having to pay tax, adding that this had the potential to raise farmers’ income.
US President Joe Biden’s administration has also said that it supports any reform that improves market efficiency and attracts investments for the benefit of the country.
Ever since the protests began, the government has been putting in all efforts to allay all undue apprehensions among some sections of farmers due to the politicization of the issue.
Indian Prime Minister Narendra Modi in his recent speech to the parliament during the budget session highlighted that any discrepancy and apprehension pertaining to these three bills could very well be addressed by discussion among various stakeholders with the intent to find a solution and the government is open to it.
As part of its efforts to address the concerns of the protesters, the government has had 11 meetings so far with farmers’ leaders.
Despite repeated government attempts to break the deadlock, the protesting farmers remain adamant on their demand and are calling for a complete rollback of the agricultural reform measures.
