FAQ

Cabinet approves Farm Laws Repeal Bill after 1 year of protest by farmers

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The Union Cabinet has approved a proposal to repeal three contentious farm laws that resulted in tens of thousands of farmers protesting for over a year.

Highlights:

• In his address to the nation, Prime Minister Narendra Modi announced that his government will repeal the three farm bills.
• He also requested farmers who are protesting, to return back to their homes.
• The decision to repeal the farm laws was taken one year after farmers started their protest against it, across the country.
• These laws will be repealed in the Winter Session of Parliament.

What were those three farm laws

• Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020: 
• The law aimed at giving freedom to the farmer to sell their produce outside APMC(Agriculture Produce Marketing Committee) mandis.
• The farmer can sell their product to anybody and anywhere in India.
• It removed all barriers on the Inter-state trade barrier and barred the state government from interfering in it.
• Essential Commodities (Amendment) Act, 2020:
• The Essential Commodities Act 1955 enabled the state governments to impose stock limits and restrict movement of essential commodities. The 2020 Amendment removes restrictions on stocking of certain essential commodities. 
• It provides that the central government can regulate the supply of food stuff only under extraordinary circumstances such as war, famine, exceptional price rise and grave natural calamities.
• It further specifies that stock limit can only be imposed if there is 50 per cent rise in retail price of non-perishable agricultural foodstuff over the price prevailing in the preceding 12 months or average retail price of the last five years, whichever is lower.
• Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020:    This law creates a national framework for contract farming through an agreement between a farmer and a buyer before the production or rearing of any farm produces.

Background to the issue 

The New Economic Policy of the Narasimha Rao government in 1991 has brought a structural reform in the Indian economy. The New Economic Policy emphasized the increased participation of the private sector in the economy ,integration with the world economy and gradually scaling down of the role of the state in the Indian economy .

Significant changes has been made in the Industrial, financial and external sectors but the agriculture sector and labour sector  has remained almost untouched.

To reform the agriculture sector  and attract private investment, the Modi government  announced major economic reform in the agriculture sector by passing three laws.

It was opposed by the farmer organisation.

They feared that :

• Government will close the existing mandis and they  will not get MSP(Minimum Support Price) on their produce if they sell to private buyers.
• It will lead to discontinuation of MSP in future.
• Contract farming will lead to loss of the land by the farmers if they fail to deliver the crops as per the agreement .
• Some state governments opposed it as Agriculture was a state subject and these laws were interference in the power of the state government.
• Middle men who benefit from the mandi system fear that they will lose their business.

Supreme Court Intervention 

• Numerous petitions were filed in the Supreme Court seeking the removal of protesting farmers at the Delhi borders.
• The Bench headed by the  Chief Justice of India, S.A.Bobde ordered the suspension of the farm law on 11 January 2021,and set up a Committee to study the three farm laws.
• The members of the committee were Anil Ghanvat, Ashok Gulati, and Pramod Joshi. Bhupinder Singh Mann, president, Bharatiya Kisan Union, and All India Kisan Coordination Committee was also initially part of the committee but resigned later.
• The committee submitted its report on March 19 ,2021.