Farmer’s Protest: Failed Negotiations

AGRICULTURE / GOVERNANCE/ FEDERALISM

Topic: General Studies 2,3:

• Issues and challenges pertaining to the federal structure 
• Government policies and interventions for development in various sectors and issues arising out of their design and implementation

Farmer’s Protest: Failed Negotiations

Context: The farmers’ protest against the new farm laws has been continuing without any signs of abatement. 

International Reaction to Farmer Protest

• Initially, Canadian Prime Minister Justin Trudeau expressed sympathy with the Punjab farmers
• Comment by Stéphane Dujarric, Spokesperson for the Secretary General of the United Nations that “people have a right to demonstrate peacefully, and authorities need to let them do so”.

What are the major concerns of farmers and how is government negotiating it?

1. Fear of erosion of MSP

• The core demand of farmer groups protesting is to safeguard the mechanism of MSP which they fear will be weakened by new farm bills. They are demanding for a legal right to MSP
• The government has repeatedly assured that the laws would make no changes to the MSP system, but the farmers fear these will effectively lead to abolition of the prevailing arrangement, which offers them a modicum of security.
• Government Offer: The Central government has agreed to give a written assurance regarding the existing MSP-based procurement system. However, it is not clear whether the written assurance will be provided through an amendment or an executive order.

2. Taxation in Trade Areas

• Presently, all purchases of paddy and wheat undertaken through government-regulated mandis in Punjab currently attract 3 per cent APMC market fee and 3 per cent rural development cess. In Haryana, the same levies amount to 2 per cent each. 
• Section 6 of the FPTC Act, 2020, prohibits State governments from collecting market fee, cess or levy for trade outside the APMC market
• The farmers have been saying that the absence of such a fee would encourage trade outside mandis, eventually rendering APMC Mandis insignificant.
• Government Offer: By amending the new Act, it can be provided that the state government can implement the system of registration of private mandis. Also, the state government can fix the rate of cess / fee, to be collected from such trade areas, up to the rate of cess / fee applicable to the existing APMC mandis

3. Court process

• The new Farm Acts put a bar on jurisdiction of civil courts and say disputes have to be referred to conciliation boards and appellate authorities, appointed by the local sub-divisional magistrates and district collectors.
• Government Offer: If any dispute arises under the new farm laws, farmers can be allowed to approach civil court

4. Other Issues

• Farmers also withdrawal of the Electricity (Amendment) Bill, 2020; withdrawal of cases registered against activists and protesters; and implementation of Swaminathan Commission report to fix MSP with C2+50 percent formulae.
• Other assurances made by the Centre include resolution of grievances related to a new air quality management ordinance, which calls for steep penalty in case of stubble burning. Union Government has also said that the existing arrangement on subsidy on electricity usage by farmers will not be modified.

Have the farmers accepted government offer?

• No. Protesting Farmer groups have rejected the offers made by Union Government and has stuck to their demand of complete repeal of new Farm Acts.