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What is so controversial about India’s new farm laws

Hundreds of thousands of Indian farmers are protesting against the controversial farming laws introduced by the ultranationalist BJP government.

The farmers started their demonstrations in their own provinces but in late November last year they trudged to Indian capital Delhi. They have set up three protest camps, in the Delhi’s surrounding areas of Ghazipur, Tikri and Singhu.

For nearly three months, the protesting farmers, joined by their relatives aged between 85 to 6 years, have endured the Police brutality, war like fortification, water cannons, tear gas and maligning propaganda against them.

This grass-root protest of farmers is unique as it has brought together farming communities of India across religions, regions, and ethnic backgrounds. The protest is not driven by politics, religion, or foreign motivation. Nearly half of the India’s population is related to farming sector in one way or other.

These ongoing protests have received international attention of World leaders i.e Canadian Prime Minister Justin Trudeau, UN Secretary General Antonio Guterres and various Members of United States Congress and Members of British Parliament.

Over a dozen rounds of negotiation of Indian Government has failed with the representatives of the thirty-one farmers’ organizations and unions. Modi Government is not in a mood to accept the demands of the farmers who on their part accept nothing less than repealing of the three laws.

While various world leaders and organisations have endorsed the right of peaceful protest of Indian farmers a very little have been written or said about the controversial nature of the farming laws introduced by Modi government namely ‘The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act 2020, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act 2020 and Essential Commodities (Amendment) Act 2020.

These laws enact some of the most controversial changes to Indian agricultural sector.

The first piece of legislation namely, “The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, permits the farmers, traders and virtual trading businesses to sell the agricultural products liberally anywhere in India. Only the bigger corporations are likely to be benefited from such arrangements, as due to shrinking size of land holding, most farming families have as small as one hectare of land per family.

About 68% of farmers own less than one hectare of land. Only 6% of them receive guaranteed price support for their crops, and more than 90% of the farmers sell their produce in the market. Such small farmers neither have the funds nor the capacity to carry their farming produce to any distant place.

The major controversy surrounding this act is also the way the agricultural markets have been restructured. The legislation allows any individual having Income Tax Permanent Account Number to set up a market for purchase of agricultural produce at any place outside the markets which will be exempted from all the State taxes, market fee and commission of the market agents as applicable in the local markets.

Farmers opines that due to this restructuring of market system big agricultural corporations will exploit the poor and small famers and will purchase agricultural products on their own terms and conditions. For majority of Indian farmers, incomes are diminishing. According to the 2016 Economic Survey, the average annual income of a farming family in more than half of India’s states was a paltry 20,000 rupees ($271; £203).

The decrease in the government purchase through the Food Corporation of India will also affect the public distribution system which as claimed by the Government of India supplies food items free or at subsidized rates to 800 million poor and needy people of India. Along with the reduction of budget for the Food Corporation of India, a decrease of 8% in budget allocation for agriculture sector and 10% increase in allotment for farmer loans in the Indian Government budget of 2021-22 is a clear indicative of the ill-intentions of the Government of India.

Another act namely “Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Practices Act 2020” pacts with the agreements between the farmers and the companies.

The well founded anxiety of the farmers regarding this Act is that the contracting companies whether in contracts of purchasing crops or carrying out farm practices will abide by these practices only till they suit them and the farmers will not be in a position to get the contracts fulfilled when they stand to their advantage as the dispute resolution is only through committees formed the Sub-Divisional Magistrate(SDM) comprising a government official appointed by the SDM and one or two representatives each of the farmers and the company.

In case of contract disputes the small farmers will not be able to arrange an effective and costly legal representation on their behalf whereas the companies can recruit highly paid legal professional for this purpose. Secondly, mostly government officials are vulnerable to bribes and political influence, the contracting companies will be in a much better position than the farmers in getting decisions in their favour through technical jugglery.

Furthermore, the dispute resolution process stipulates a time of one month each for the committee, the SDM and the District Magistrate, totalling three months. A farmer needs a great percentage of the amount of the sale proceeds of his crop to sow and raise his next crop. Therefore, in case of such delay, he will not be in a position to raise his next crop.

Another problem relating to this contract system is that the contracting companies will be able to use such chemicals which increase the yield of crops considerably for a short time but in long term it decreases fertility of the land.

In this way, they will get profits during the contract period and the farmers will have to bear the loss of fertility of land in the post contract period.

Similarly, the contracting companies can take loan on the crops but when they vacate the land on expiry of the contract period without repaying the loan amount then the landowner farmers will ultimately be held liable for the loan as the lien for such loan will be on the particular land.

Third piece of legislation is “Essential Commodities (Amendment Act) 2020”. Before this law was enacted food stuffs including Mueslis, Pulses, Onions, Potato, Edible Oil seeds and Oils were considered as essential commodities and therefore there were strict restrictions on storing and holding of these products and the traders were not in a position to inflate the rates of these goods as per their will.

Through this Amended Act, these food items have been excluded from the list of essential goods and as a result the traders can now freely stock and withhold them in any amount resulting in steep rise in prices.

This will be harmful not only for the farmers but also for the consumers in general.

 

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