Cameron Miranda
In 2020, the Indian government passed three farm laws that were met with fierce opposition from farmers, who referred to them as black laws. The laws were intended to liberalize agriculture, allowing farmers to sell crops directly to food processors and giving them freedom to sell in different states. However, farmers were concerned that this would lead to the end of government-guaranteed minimum prices (MSPs) for their produce, leaving them at the mercy of corporations. The protests gained national and global attention, with farmers demanding the repeal of these laws. In November 2021, Prime Minister Narendra Modi announced the government's decision to repeal the three farm laws, marking a significant U-turn before the elections in several states, including agricultural powerhouses Punjab and Uttar Pradesh.
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What You'll Learn
Deregulation of government-run wholesale markets
In 2020, the Indian government introduced three agricultural acts, commonly referred to as the Farm Bills. These acts were intended to deregulate the system of government-run wholesale markets, allowing farmers to sell their produce directly to food processors and engage in barrier-free intra- and inter-state trade. The laws also enabled contract farming, allowing farmers to enter into direct agreements with agri-firms, exporters, or large buyers to produce a specific crop for a pre-agreed price.
The deregulation of government-run wholesale markets was intended to benefit farmers by providing them with more market options and eliminating middlemen, resulting in higher prices for their crops. However, many farmers opposed these laws, arguing that they would lead to the end of government-guaranteed price floors, reducing the prices they receive for their crops. They also feared the 'corporatisation of agriculture', where large corporations could use their financial power to force unreasonably low prices on farmers, especially small and marginal landholders.
The protests against the Farm Bills were fierce and widespread, with farmers from various states, particularly Punjab, Haryana, and Uttar Pradesh, participating. The protests continued for 14 months before the government finally announced the repeal of the three laws in November 2021, with the formal repeal taking place in December 2021.
The Indian government's decision to introduce and subsequently repeal the Farm Bills highlights the complexities of agricultural reforms in a country where agriculture is a vital source of livelihood for a significant portion of the population. While the intention behind the deregulation of government-run wholesale markets was to benefit farmers and transform the agricultural sector, the lack of trust between the farming community and the government, coupled with concerns over potential negative consequences, led to widespread opposition and protests.
Previous attempts at deregulating agricultural markets in India, such as the privatisation of the sugarcane industry in 1998 and the deregulation of Bihar's Agriculture Produce Market Committee in 2006, have also failed to bring about significant positive changes. This uninspiring record of deregulating farming has likely contributed to the concerns and skepticism among farmers regarding the Farm Bills.
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Fears of the end of government-guaranteed price floors
In 2020, the Parliament of India initiated three acts known as the Indian agriculture acts, or Farm Bills. The laws would have deregulated the system of government-run wholesale markets, allowing farmers to sell directly to food processors. However, farmers feared that this would result in the end of government-guaranteed price floors, reducing the prices they would receive for their crops. This concern sparked protests against the new acts, with farmers worried about the potential elimination of the Minimum Support Price (MSP) for their produce. The MSP is a guaranteed minimum price for agricultural goods, and farmers feared that without it, they would be vulnerable to corporates forcing unreasonably low prices on them.
The Farm Bills were also criticised for their potential impact on small and marginal landholders, who may not have the same negotiating power as larger farmers when dealing directly with agri-companies. The laws would have allowed barrier-free intra- and inter-state trade, with the government claiming that farmers could sell in-demand crops at the highest possible prices. However, farmers were concerned that allowing prices to be settled outside regulated spaces would make it challenging for the government to ensure fair prices.
The protests against the Farm Bills gained significant traction, with Prime Minister Narendra Modi announcing in November 2021 that his government would repeal the laws. The laws were formally repealed in December 2021, marking a victory for the protesting farmers. The concerns about the end of government-guaranteed price floors played a significant role in the backlash against the Farm Bills, highlighting the importance of price support policies for India's agricultural community.
While the Farm Bills were ultimately repealed, the issues surrounding agriculture and pricing in India are complex and multifaceted. Despite India's self-sufficiency in food production, nutrition and hunger remain endemic issues. Farmer suicides and incomes are also serious challenges that have persisted for decades. The controversy surrounding the Farm Bills brought these issues to the forefront of political discourse, prompting discussions about the role of the government in supporting farmers and ensuring fair prices for their produce.
The Indian government has acknowledged the need for reforms in the agricultural sector, and efforts have been made to address the concerns of farmers. However, the Farm Bills episode underscores the delicate balance between economic liberalisation and ensuring the protection of vulnerable groups, such as small-scale farmers. It remains to be seen what alternative policies will be proposed to address the challenges facing Indian agriculture while safeguarding the interests of farmers.
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Farmers' concerns about the wording of Section 8
Farmers in India have expressed concerns about the wording of Section 8 of the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020. This Act is one of the three controversial farm laws, often referred to as the "black laws," that were at the heart of fierce protests by Indian farmers in 2020 and 2021.
Section 8 of the aforementioned Act states that in the event of a dispute, a farmer or trader can approach a Sub-Divisional Magistrate (SDM) for a solution through conciliation proceedings. Farmers have voiced their dissatisfaction with this clause, arguing that they, especially small-scale farmers, lack the necessary power and influence to access SDM offices for dispute redressal. They believe that this clause favours those with more significant means and resources, making it challenging for them to seek timely and equitable solutions to their issues.
Additionally, critics have likened this clause to a usurpation of judicial powers, as it grants magistrates the authority to mediate and resolve disputes that traditionally fall within the domain of the judiciary. This concern underscores the farmers' worries about the potential erosion of their rights and the concentration of power in the hands of administrative officials.
The protests against the farm laws, including the contentious Section 8, gained widespread attention and support, both domestically and internationally. Several rounds of talks between the Indian government and farmers' union leaders failed to yield a resolution, leading to a prolonged stalemate. The issue even reached the courts, with the Supreme Court of India temporarily suspending the implementation of the three farm laws until further orders in January 2022.
In November 2021, Prime Minister Narendra Modi announced the withdrawal of the three farm laws, including the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, which contained the disputed Section 8. This decision was made ahead of elections in several states, including agricultural strongholds like Punjab and Uttar Pradesh.
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The impact on the 'corporatisation of agriculture'
In September 2020, the Parliament of India initiated three acts known as the Indian agriculture acts, or the Farm Bills. These acts were met with fierce protests from farmers across India, who referred to them as the "three black laws". The laws were eventually repealed in December 2021.
The Farm Bills were controversial because they were seen as a step towards the corporatisation of agriculture. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act would have allowed "contract farming", enabling farmers to enter into direct agreements with agri-firms, exporters, or large buyers to produce a certain crop for a pre-agreed price. This would have removed the need for middlemen and allowed farmers to sell directly to corporates or big factory owners.
The impact of this law would have been felt most severely by small and marginal farmers. Without middlemen, small farmers would have struggled to access the corporates or large buyers with whom they would now have to deal directly. The law would also have made it difficult for small farmers to appeal to a court in the case of a dispute, as they would have to approach a sub-divisional magistrate (SDM) first.
In addition, the Farmers Produce Trade and Commerce (Promotion and Facilitation) Act would have deregulated the system of government-run wholesale markets, allowing farmers to sell directly to food processors. Farmers feared that this would result in the end of government-guaranteed price floors, leaving them vulnerable to international price fluctuations and allowing large corporates to force unreasonably low prices on them.
The corporatisation of agriculture could have led to the consolidation and centralisation of agrarian capital, with a few rich farmers owning the maximum amount of land. This would have been detrimental to small and marginal farmers, who may have been forced to leave their land or sell it at a loss.
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The removal of certain goods from the essential food items list
In 2020, the Parliament of India initiated three acts, often referred to as the Farm Bills, which were approved by the Lok Sabha and the Rajya Sabha in September of that year. These acts were intended to liberalize agriculture, allowing farmers to sell crops to anyone and deregulating crop pricing, procurement, and storage. However, these acts faced fierce opposition from farmers, who argued that they would result in the end of government-guaranteed price floors, reducing the prices they would receive for their crops. This sparked protests that grew into a historic, politically polarizing movement, with hundreds of thousands of farmers demanding the repeal of what they called the "'black laws'".
The three acts, or "black laws", at the heart of these protests are:
- The Farmers' Produce Trade and Commerce (Promotion and Facitation) Act, 2020: This law would enable farmers to engage in barrier-free intra- and inter-state trade of all farm produce, which they could sell at markets of their choice, even in other states. It would also eliminate the need to pay taxes collected by the state.
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Service Act, 2020: This law would allow "contract farming", permitting farmers to enter into direct agreements with agri-firms, exporters, or large buyers to produce a certain crop for a pre-agreed price.
- The Essential Commodities (Amendment) Act, 2020: This law would scrap the government's power to limit stocks of essential food items, except under extraordinary circumstances. Notably, it removed certain goods, such as edible oil and onions, from the list of essential food items. This aspect of the law gave the government the power to regulate the supply of such commodities and re-include them on the list if needed.
In response to the widespread protests, Prime Minister Narendra Modi announced in November 2021 that his government would repeal the three farm laws. On December 1, 2021, the laws were formally repealed.
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Frequently asked questions
The black laws refer to the three Indian agriculture acts of 2020, also known as the Farm Bills.
The three acts are: The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Service Act, 2020, and The Essential Commodities (Amendment) Act, 2020.
The black laws were intended to liberalize agriculture, allowing farmers to sell crops to anyone and deregulating crop pricing, procurement, and storage.
Farmers were concerned that the laws would result in the end of government-guaranteed minimum prices (MSPs) for their produce, reducing the prices they would receive for their crops. They also feared the 'corporatization of agriculture', with large corporations forcing unreasonably low prices on farmers.
The protests gained national and global attention, with Prime Minister Narendra Modi announcing in November 2021 that his government would repeal the three black laws. The laws were formally repealed on December 1, 2021.
