Repealing Farm Laws

Context:

Prime Minister Narendra Modi in his address to the nation on November 19 announced the repeal of three contentious farm laws.

He assured farmer groups protesting against these laws that the legislative process for the repeal would be completed in the upcoming Winter Session of the Parliament.

Three farm laws are as follows

1. The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, which is aimed at allowing trade in agricultural produce outside the existing APMC (Agricultural Produce Market Committee) mandis;
2. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, which seeks to provide a framework for contract farming;
3. The Essential Commodities (Amendment) Act, 2020, which is aimed at removing commodities such as cereals, pulses, oilseeds, edible oils, onion and potato from the list of essential commodities.

What is the process for repealing a law?

• Repealing a law is one of the ways to nullify a law.
• A law is reversed when Parliament thinks there is no longer a need for the law to exist.
• Legislation can also have a “sunset” clause, a particular date after which they cease to exist.
• For example, the anti-terror legislation Terrorist and Disruptive Activities (Prevention) Act 1987, commonly known as TADA, had a sunset clause, and was allowed to lapse in 1995.
• For laws that do not have a sunset clause, Parliament has to pass another legislation to repeal the law.

(Sunset Clause: A law shall cease to have effect after a specific date, unless further legislative action is taken to extend the law.)

How can the government repeal a law?

• Article 245 of the Constitution gives Parliament the power to make laws for the whole or any part of India, and state legislatures the power to make laws for the state.
• Parliament draws its power to repeal a law from the same provision.
• A law can be repealed either in its entirety, in part, or even just to the extent that it is in contravention of other laws.

What is the process for repealing a law?

• Laws can be repealed in two ways — either through an ordinance, or through legislation.
• In case an ordinance is used, it would need to be replaced by a law passed by Parliament within six months.
• If the ordinance lapses because it is not approved by Parliament, the repealed law can be revived.
• The government can also bring legislation to repeal the farm laws.
• It will have to be passed by both Houses of Parliament, and receive the President’s assent before it comes into effect.

Legislations required

• All three farm laws can be repealed through a single legislation.
• Usually, Bills titled Repealing and Amendment are introduced for this purpose.

Reason for Enacting the Laws:

• There has been a long-pending demand for reforms in agricultural marketing, a subject that comes under the purview of state governments.
• The Centre took the issue up in the early 2000s by pushing for reforms in the APMC Acts of the states.
• The Agriculture Ministry under the then government designed a model APMC Act in 2003 and circulated it among the states.
  • The subsequent government, too, pushed for these reforms. But given that it is a state subject, the Centre has had little success in getting the states to adopt the model APMC Act.
• It was in this backdrop that the government went for reforms in the sector by passing these laws.

Reasons Behind Farmers Protest:

• Repealing the farm laws: The first and foremost demand of the protesting farmers’ organisations is the repeal of three new agricultural laws.
  • As per the farmers the law is framed to suit big corporations who seek to dominate the Indian food and agriculture business and will weaken the negotiating power of farmers. Also, big private companies, exporters, wholesalers, and processors may get an edge.

• Minimum support price: The second demand of farmers is the guarantee of Minimum Support Price (MSP) to ensure procurement of crops at a suitable price.
  • The Farmers are also demanding to get a written assurance in the form of a Bill for the continuation of the MSP and conventional food grain procurement system.
  • The Farmers’ organisations want the APMC or the Mandi System to be protected.

• Electricity (Amendment) Bill: The third demand of farmers is the withdrawal of the Electricity (Amendment) Bill, as they feel that they won’t get free electricity due to this.

• Swaminathan Commission: The Farmers are demanding MSP as recommended by the Swaminathan Commission.
  • The Swaminathan Commission Report states that the government should raise the MSP to at least 50% more than the weighted average cost of production. It is also known as the C2+ 50% formula.
  • It includes the imputed cost of capital and the rent on the land (called ‘C2’ ) to give farmers 50% returns.

Impacts of Repealing the Law:

• Need of Consultation:
  • The repeal underlines that any future attempts to reform the rural agricultural economy would require a much wider consultation, not only for better design of reforms, but for wider acceptance.
  • The repeal would leave the government hesitant about pursuing these reforms in stealth mode again.
    • The government will doubtless have to walk the path of reform very cautiously.

• Low Farmers Income:
  • Given that the average holding size stands at just 0.9 ha (2018-19). Unless one goes for high-value agriculture — and, that’s where one needs efficient functioning value chains from farm to fork by the infusion of private investments in logistics, storage, processing, e-commerce, and digital technologies — the incomes of farmers cannot be increased significantly.
  • There is no doubt that this sector is crying for reforms, both in the marketing of outputs as well as inputs, including land lease markets and direct benefit transfer of all input subsidies — fertilizers, power, credit and farm machinery.

• Negative Impact on Industries:
  • Industries including logistics, cold chain, agri-related, and farm equipment would be impacted the most because they were supposed to be the direct beneficiaries of these laws.

• Constant Agri-GDP:
  • The agri-Gross Domestic Product (GDP) growth has been 3.5% per annum in the last 14 years. One expects this trend to continue — there might be minor changes in the agri-GDP depending on rainfall patterns.
  • Cropping patterns will remain skewed in favour of rice and wheat, with the granaries of the Food Corporation of India bulging with stocks of grain. The food subsidy will keep bloating and there will be large leakages.

Source: Indian Express

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