Policy

Cabinet approves repeal of 3 contentious farm laws

Our Bureau New Delhi | Updated on November 24, 2021

Govt to present Farm Laws Repeal Bill 2021 in Winter Session of Parliament

The Union Cabinet has approved a Bill to repeal the three contentious farm laws which led to over a year-long protest by thousands of farmers at Delhi borders, five days after Prime Minister Narendra Modi announced to the nation the decision to revoke them.

The government will present the Bill in the Winter Session of Parliament starting on November 29 and action on the Bill will be prioritised, Union Minister for Information & Broadcasting Anurag Thakur said addressing the media following the Cabinet meeting on Wednesday.

The Minister, however, did not answer a question on whether the government was willing to consider the demand for giving a legal guarantee on MSP, as demanded by farmer groups. He also dodged a query on the proposed setting up of a committee to study MSP and other farm issues that was announced by the Prime Minister on the day of announcing the repeal of the farm laws.

What does the Bill seek

The Farm Laws Repeal Bill 2021 seeks to repeal the Farmers Produce Trade and Commerce (promotion and facilitation) Act 2020, the Farmers (empowerment and protection) Agreement of Price Assurance, Farm Services Act 2020 and the Essential Commodities (amendment) Act 2020.

“The Cabinet has completed the formalities to repeal the three farm laws. ...In the upcoming session of Parliament, it will be our priority to take back these three laws,” Thakur said.

The winter session of Parliament will begin on November 29 and conclude on December 23.

While the government holds the view that the three farm laws would benefit farmers as it would free them from the clutches of middle-men and provide a transparent pricing and trading mechanism, critics say that it would lead to further exploitation of small and resource-poor farmers.

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act allows farmers to sell their farm produce outside the Agriculture Produce Market Committees APMCs). It would allow license-holding traders to buy the produce from the farmers at mutually agreed prices and would be free of mandi-tax. While the mechanism is aimed at getting rid of middle-men, small farmers fear that they will not be in a position to negotiate with institutional buyers who have a better bargaining power than them. Critics say that reforming the operation of APMCs, rather than pushing them out of it, would be much more beneficial for small farmers.

Possibility of exploitation

The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act allows farmers to do contract farming and market their produces freely. While it seeks to protect farmers against price exploitation, critics say that due to the unorganised nature of the Indian farm sector, contracts won’t work towards protecting the resource-poor and illiterate farmer who will be exposed to manipulations by private corporate players. Many farmers are worried that this may also lead to dismantling of MSP if government purchases become irrelevant in the short run as private players may offer attractive prices initially to lure farmers and subsequently lower the prices.

The Essential Commodities (Amendment) Act proposes removal of several food items from the list of essential commodities. Critics say that easing regulations on food items may lead to hoarding of farm produce during harvest season by exporters, processors and traders and then releasing it later when prices go up.

Published on November 24, 2021

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