The deadlock between farmers and the government over the three new agriculture legislations is still continued. While the BJP-led NDA is claiming the new legislations to be farmer-friendly, farmers are claiming it is against their interests. Farmers are under the fear that new legislations will limit their negotiation power and leave them vulnerable to big business houses. The new legislation permits corporate buyers to directly buy farm-produce from the farmers. They are afraid that their livelihood will be snatched away. To protest against the new legislations, they had called for two state-wide bandh on September 25 and December 8.
The ongoing protests will affect the economy of the country because agriculture is a crucial sector that supports the economy. The importance of the agriculture sector can be understood with its contribution to GDP. In the first quarter (Q1) of FY21, the agriculture sector was the only sector that grew at the rate of 3.4%, while the overall economy shrank by 23.9% during the same period. In the second quarter (Q2) of FY21, when the GDP again secured negative growth of 7.5%, the agriculture sector once again registered a 3.4% growth rate.
The majority of farmers protesting are from Punjab, Haryana, Himachal Pradesh, Jammu & Kashmir and Rajasthan. The combined economy of the first four states is Rs 18 lakh crore. The government and farmers should resolve their issues because the protest has its own cost. As per an analysis by Assocham, the country is incurring an economic loss of Rs 3,000-3,500 crore per day due to the value chain and transport disruption. The already broken supply chain which was recovering from the 68-days long lockdown due to Covid-19 pandemic is now under severe stress. As per the Confederation Of All India Traders (CAIT ), the trade and other activities loss of Delhi and nearby areas is about Rs 5,000 crore as yet.
The protest is not only affecting economically- it is affecting lives too. As per PTI, on average one farmer has died every day and around 20 farmers have become shaheed during protests so far. The new legislation has political loss too. The ruling party BJP has lost its very old and trusted ally Shiromani Akali Dal. The party had pulled out of the NDA in protest against the new legislations.
The opposition parties are supporting the farmers’ protests and also opposing the new legislations. They are raising the issue that in the new laws there is no assurance of Minimum Support Price (MSP) for the farmers. They are not happy with the way the legislations were passed in the Rajya Sabha by a dubious voice vote. The demand for voting by members of the upper House was not considered. The opposition parties are blaming the government for drafting a policy that favours corporate houses. However, the ruling party has defended the legislations and is arguing that the farmers are under the influence of opposition parties. The new laws will be a game changer for the agriculture sector.
The Minimum Support Price is a big issue in the new laws. However, the government is assuring the same. But we have a number of live examples where farmers do not get MSP for their farm produce. The new laws also permit farmers to sell their produce anywhere in the country. But due to the logistic problems, they are not able to sell their farm produce even in the urban market. The huge farm production also leads to a fall in the revenue of farmers because they do not have a market.
Farmers are asking for repeal of new laws and sticking with their demand. However, the government is ready to amend the controversial new farm legislations. They proposed eight amendments in the existing legislations and decided to provide the same in writing. But farmers have rejected the proposal of the government and argued that the proposal is inadequate. The current agitation by farmers will impact the economy in the coming days and may affect the ongoing economic recovery due to Covid-19. The RBI has already predicted the economy will contract by 9.5% in the current fiscal year. The ongoing protest could further upset the already brittle economic situation. To get the economy back on the track, it is important that both the government and farmers seek ways to end the ongoing protest.
The government should have consulted all political parties and representatives of farmers before making the new legislations. The government should make a law that ensures Minimum Support Price and the purchase of farm produce less than the MSP a punishable act. It is the right of farmers to get at least MSP. We can expect that the new legislations will be changed as required and will become a milestone in the history of agriculture reforms.
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