Law & Governance

Why Are Farmers Protesting Against Three New Laws?

BP World Bureau | Nov 29 2020 10:43:48 AM
Image credits: Twitter

Farmers based from Punjab and Haryana are currently protesting against three new farm laws laid by the central government. 

Farmers organisations are protesting against three contentious laws; 

  1. Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, 
  2. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020,
  3. The Essential Commodities (Amendment) Ordinance, 2020.

Recently, Union Home Minister Amit Shah reached out to thousands of farmers who have been camping in and outside Delhi, saying that government is ready to deliberate on every problem and demand of the farmers.

However, Bharatiya Kisan Union, one of the largest farmers' bodies in India, said that they are unmoved by the centre's suggestion for talks. 

Farmers' organisation further stated that Minister Shah should be ready for talks without conditions. 

Why Are The Farmers Protesting? 

The three farm bills aim at;

Break the government regulated mandi system and this will permit farmers to sell directly to private buyers. 

Provide a legal framework for farmers to get into contracts with private companies to produce for them.

Permit agro-businesses to stock food supplies and remove the government's ability to impose restrictions on them. 

The biggest protest is against the removal of mandi system which will affect the middlemen. 

In Bihar,  Agricultural Produce Market Committee (APMC) system was abolished in 2006. 

There were several complaints against APMC like excessive politicization, which has resulted in cartelization and price fixing.

At the time, critics stated that abolition of APMC would ensure better prices for farmers of the state and attract large sums of private investment in its market infrastructure, something that the three bills are promising. 

As it turns out, Bihar’s repeal of the APMC system and consequent increase in price volatility could be one of the reasons for low growth of agriculture, according to National Council for Applied Economic Research.

Farmers are at the mercy of traders who fix a lower price for agricultural produce unscrupulously. Inadequate market facilities and institutional arrangements are responsible for the same. 

When it comes to the Mandi system, it brings in revenue to the state government and the removal of mandi will affect the government. 

Middlemen will be affected and farmers are afraid that this will lead to the end of minimum support prices (MS).

Farmers will be left to the mercy of big companies for their produce, added that they don't have the necessary bargaining capabilities. 

The three laws will give farmers the freedom to sell but they might have the ability or knowledge to negotiate the best terms with a private company.