PM Modi Cancelling Farm Laws Is His Biggest Policy Reversal Yet

By Bloomberg

New Delhi- Indian Prime Minister Narendra Modi will scrap three controversial farm laws that led to angry street protests over the last year, his biggest policy reversal since assuming power in 2014.

In a televised address to the nation on Friday, PM Modi apologized for failing to convince a section of farmers and said the parliament will repeal the legislation by end of the month.

"The purpose of the new laws was to strengthen the country's farmers, especially small farmers," he said. "We have failed to convince some farmers despite all our efforts."

The announcement comes ahead of key provincial polls in the state of Uttar Pradesh and Punjab where farmers are an influential voting bloc. The long drawn protests by hundreds of thousands of farmers could have hurt his Bharatiya Janata Party's chances in both elections. The government had, so far, refused to budge from its position which the protesters claimed would ruin their livelihoods, making it the longest stand-off since PM Modi swept to power seven years ago.

While PM Modi has backtracked on policy moves by his government earlier, including on land laws, that move hadn't resulted in long drawn public protests.

"It's a very un-Modi-like act to take back a decision. And it is obviously because of the elections," said Nilanjan Mukhopadhyay, a New Delhi-based political analyst and PM Modi biographer. "This is about Uttar Pradesh and Punjab elections and the fact that a decision that brought farmers to the streets kept them there for an entire year."

The majority of the protesters come from Punjab and Uttar Pradesh, states heading to the polls in the first half of 2022 though dates have not been announced yet.

The government had insisted the new policy would benefit the growers and refused to withdraw the legislation. The Supreme Court too had ordered temporary suspension of the laws, but the protesting farmers had refused to compromise.

Election Pressure

Farmers represent a potentially huge vote bloc: Some 60% of India's nearly 1.4 billion people depend on agriculture in one way or another. Both Uttar Pradesh and Punjab have large farming communities. The announcement came on the day India is marking a holiday to celebrate the birth anniversary of the founder of Sikhism. The Sikh community is a significant vote base in Punjab.

The main contention about the agricultural reforms was the shift to a free market regime for sale of farm goods -- a move that farmers saw as a means to end a state price support system for crops and which they feared would leave them at the mercy of big corporations that would control the market.

Also, central to PM Modi's reforms was an amendment to the Essential Commodities Act, a 1955 law, that sought to cap prices during times of higher demand -- which discouraged investment to increase production.

Farm leaders have reacted cautiously to the news, with Rakesh Tikait, a senior leader from Uttar Pradesh tweeting to say his supporters will wait to roll back the agitation until the day the laws are actually repealed.

"Just because the prime minister announced a repeal doesn't mean that we will pick up our tents and walk away from the protests," Mr Tikait said. "750 farmers have lost their lives in this agitation. We need to discuss all the issues." The protesting farm unions will meet and decide their next move, he added.

Rahul Gandhi, a leader of the opposition Congress party said that those "who feed the nation have peacefully defeated arrogance." He also linked to an earlier comment where he had said, "Mark my words, the govt will have to take back the anti-farm laws."

The latest move by PM Modi "will require some new calculations by the farmers' movement and opposition parties," said Yamini Aiyar, president and chief executive of the New Delhi-based Centre for Policy Research. "Although it's difficult to say how much this will help the BJP in the upcoming elections, it does send exactly the wrong message to all political parties: That power political lobbies are best left untouched."  (Bloomberg)

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