Fri, 19 November 2021
Indian Prime Minister Narendra Modi said on Friday he would repeal three agriculture laws that farmers have been protesting against for more than a year, a significant climb-down for the combative leader as important elections loom.
The legislation, introduced in September last year, was aimed at deregulating the sector, allowing farmers to sell produce to buyers beyond government-regulated wholesale markets, where growers are assured of a minimum price.
Farmers, fearing the reform would cut the prices they get for their crops, staged nationwide protests that drew in activists and celebrities from India and beyond, including climate activist Greta Thunberg and pop singer Rihanna.
"Today I have come to tell you, the whole country, that we have decided to withdraw all three agricultural laws," Modi said in an address to the nation.
"I urge farmers to return to their homes, their farms and their families, and I also request them to start afresh."
The government would repeal the laws in the new session of parliament, starting this month, he said.
The surprise concession on laws the government had said were essential to tackle chronic wastage and inefficiencies, comes ahead of elections early next year in Uttar Pradesh (UP), India's most populous state, and two other northern states with large rural populations.
Nevertheless, Modi's capitulation leaves unresolved a complex system of farm subsidies and price supports that critics say the government cannot afford.
It could also raise questions for investors about how economic reforms risk being undermined by political pressures.
Protesting farmers, who have been camped out in their thousands by main roads around the capital, New Delhi, celebrated Modi's back-track.
"Despite a lot of difficulties, we have been here for nearly a year and today our sacrifice finally paid off," said Ranjit Kumar, a 36-year-old farmer at Ghazipur, a major protest site in Uttar Pradesh.
Jubilant farmers handed out sweets in celebration and chanted "hail the farmer" and "long live farmers' movement".
Rakesh Tikait, a farmers' group leader, said the protests were not being called off. "We will wait for parliament to repeal the laws," he said on Twitter.
Vulnerable to big business
Modi's Bharatiya Janata Party (BJP) government said last year that there was no question of repealing the laws. It attempted to break the impasse by offering to dilute the legislation but protracted negotiations failed.
The protests took a violent turn on Jan. 26, India's Republic Day, when thousands of farmers overwhelmed police and stormed the historic Red Fort in New Delhi after tearing down barricades and driving tractors through roadblocks.
One protester was killed and scores of farmers and policemen were injured.
Small farmers say the changes make them vulnerable to competition from big business and they could eventually lose price support for staples such as wheat and rice.
The government says reform of the sector, which accounts for about 15% of the $2.7 trillion economy, means new opportunities and better prices for farmers.
Modi announced the scrapping of the laws in a speech marking the birth anniversary of Guru Nanak, the founder of Sikhism.
Many of the protesting farmers are Sikh.
Modi acknowledged that the government had failed to win the argument with small farmers.
The farmers are also demanding minimum support prices for all of their crops, not just for rice and wheat.
"We need to know the government's stand on our other key demand," Darshan Pal, another farmers' leader, said of the new demand, which has gained traction among farmers across the country, not just in the northern grain belt.
Rahul Gandhi of the main opposition Congress party, said the "arrogant" government had been forced to concede.
"Whether it was fear of losing UP or finally facing up to conscience BJP govt rolls back farm laws. Just the beginning of many more victories for people’s voices," Mahua Moitra, a lawmaker from the Trinamool Congress Party and one of Modi's staunchest critics, said on Twitter.
But some food experts said Modi's back-track was unfortunate because the reforms would have brought new technology and investment.
"It's a blow to India's agriculture," said Sandip Das, a New Delhi-based researcher and agricultural policy analyst.
"The laws would have helped attract a lot of investment in agricultural and food processing - two sectors that need a lot of money for modernisation."
(REUTERS)
Elections trump economics in Modi's farm reforms U-turn
The rural reforms infuriated many farmers, who feared they would leave them at the mercy of big agribusiness corporations (AFP/Money SHARMA)
Bhuvan BAGGA
Fri, November 19, 2021
Elections trumped the urgency for agricultural reform in Indian Prime Minister Narendra Modi's surprise decision on Friday to repeal new farm laws, economists and political analysts said.
Although far from perfect, the three laws passed in September 2020 which Modi now plans to scrap would have made a start at liberalising India's enormous but hugely inefficient farming sector.
"The government has made an electoral calculation," Professor Harsh V Pant, an Indian author and analyst, told AFP.
Modi "instinctively, intuitively" felt the political costs of his reforms were higher than their economic benefit, he added -- making the subject "untouchable" going forward.
"If even Modi, with his electoral mandate, is struggling, then I don't think anyone in the near future will be able to get the same mandate or tackle these issues," he said.
India's agriculture sector is vast, with two-thirds of the 1.3 billion population relying on farming for their livelihood. But it is a mess.
Several hundred thousand Indian farmers have been driven to suicide in the past three decades by crippling poverty, debt and ever more erratic weather patterns caused by climate change.
Huge volumes of produce rot before they reach consumers and experts say that in many areas farmers are growing unsuitable crops, guzzling up groundwater at unsustainable rates.
In northern India, farmers burn the residue from rice paddy across huge areas, blanketing the capital New Delhi and other towns and cities in a sickly cloud of toxic pollution every year.
The new laws aimed to allow farmers to sell their produce directly to private companies at mutually agreed prices, and anywhere they could find a buyer.
The government said it would open up competition and encourage farmers to not just rely on subsidies, but to become more competitive by adopting more efficient farming methods.
But that meant breaking up the decades-old monopoly of state-controlled agricultural markets that buy at set minimum prices.
And the prospect struck fear into the hearts of many farmers, who saw the reforms as leaving them at the mercy of big agribusiness corporations who would squeeze them for every last rupee.
- Election fight -
Last November tens of thousands of them, egged on by opposition parties, headed for Delhi and -- after ugly clashes with police -- camped out on the outskirts of the capital where they remain today.
In January they gatecrashed Indian Republic Day celebrations, running riot in Delhi on their tractors and raising a flag at the historic Red Fort. Hundreds of police officers were injured.
Suddenly Modi -- voted in on a platform of supporting ordinary people but also as a reformer -- was facing his biggest political challenge since his Hindu nationalist government came to power in 2014.
After taking a beating in May elections in the eastern state of West Bengal, Modi's Bharatiya Janata Party (BJP) started to worry about votes due in five more states early next year.
They include Punjab, governed by the Congress party of the Gandhi dynasty, and the currently BJP-run bellwether state of Uttar Pradesh. Both are home to enormous numbers of farmers.
And analysts say that Modi's move was unashamedly driven by his party's political interests.
"Obviously, this decision puts electoral politics front and centre," Nistula Hebbar, political editor with The Hindu, told AFP. "The BJP under Modi is willing to be very pragmatic for its electoral success."
"If they lose UP everything will be bad for them going forward –- from the morale of the party supporters, the opposition's morale, the election of next Indian president and Modi's 2024 reelection bid," she added.
It is only the second major U-turn the firebrand Modi has carried out since his election, after he dropped plans to reform rural land titles in 2015, also following huge protests by farmers and other countryside-dwellers.
Satish Nambardar, an official with one of the farmers' unions behind the current demonstrations, said: "He took a one-man decision to introduce the laws and now he's taken a one-man decision to take them back."
bb/stu/slb/leg
The rural reforms infuriated many farmers, who feared they would leave them at the mercy of big agribusiness corporations (AFP/Money SHARMA)
Bhuvan BAGGA
Fri, November 19, 2021
Elections trumped the urgency for agricultural reform in Indian Prime Minister Narendra Modi's surprise decision on Friday to repeal new farm laws, economists and political analysts said.
Although far from perfect, the three laws passed in September 2020 which Modi now plans to scrap would have made a start at liberalising India's enormous but hugely inefficient farming sector.
"The government has made an electoral calculation," Professor Harsh V Pant, an Indian author and analyst, told AFP.
Modi "instinctively, intuitively" felt the political costs of his reforms were higher than their economic benefit, he added -- making the subject "untouchable" going forward.
"If even Modi, with his electoral mandate, is struggling, then I don't think anyone in the near future will be able to get the same mandate or tackle these issues," he said.
India's agriculture sector is vast, with two-thirds of the 1.3 billion population relying on farming for their livelihood. But it is a mess.
Several hundred thousand Indian farmers have been driven to suicide in the past three decades by crippling poverty, debt and ever more erratic weather patterns caused by climate change.
Huge volumes of produce rot before they reach consumers and experts say that in many areas farmers are growing unsuitable crops, guzzling up groundwater at unsustainable rates.
In northern India, farmers burn the residue from rice paddy across huge areas, blanketing the capital New Delhi and other towns and cities in a sickly cloud of toxic pollution every year.
The new laws aimed to allow farmers to sell their produce directly to private companies at mutually agreed prices, and anywhere they could find a buyer.
The government said it would open up competition and encourage farmers to not just rely on subsidies, but to become more competitive by adopting more efficient farming methods.
But that meant breaking up the decades-old monopoly of state-controlled agricultural markets that buy at set minimum prices.
And the prospect struck fear into the hearts of many farmers, who saw the reforms as leaving them at the mercy of big agribusiness corporations who would squeeze them for every last rupee.
- Election fight -
Last November tens of thousands of them, egged on by opposition parties, headed for Delhi and -- after ugly clashes with police -- camped out on the outskirts of the capital where they remain today.
In January they gatecrashed Indian Republic Day celebrations, running riot in Delhi on their tractors and raising a flag at the historic Red Fort. Hundreds of police officers were injured.
Suddenly Modi -- voted in on a platform of supporting ordinary people but also as a reformer -- was facing his biggest political challenge since his Hindu nationalist government came to power in 2014.
After taking a beating in May elections in the eastern state of West Bengal, Modi's Bharatiya Janata Party (BJP) started to worry about votes due in five more states early next year.
They include Punjab, governed by the Congress party of the Gandhi dynasty, and the currently BJP-run bellwether state of Uttar Pradesh. Both are home to enormous numbers of farmers.
And analysts say that Modi's move was unashamedly driven by his party's political interests.
"Obviously, this decision puts electoral politics front and centre," Nistula Hebbar, political editor with The Hindu, told AFP. "The BJP under Modi is willing to be very pragmatic for its electoral success."
"If they lose UP everything will be bad for them going forward –- from the morale of the party supporters, the opposition's morale, the election of next Indian president and Modi's 2024 reelection bid," she added.
It is only the second major U-turn the firebrand Modi has carried out since his election, after he dropped plans to reform rural land titles in 2015, also following huge protests by farmers and other countryside-dwellers.
Satish Nambardar, an official with one of the farmers' unions behind the current demonstrations, said: "He took a one-man decision to introduce the laws and now he's taken a one-man decision to take them back."
bb/stu/slb/leg
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