Indian Prime Minister Narendra Modi said on Friday that he would repeal three agricultural laws against which farmers have been protesting for more than a year, a significant downturn for the militant leader during major elections threatening.
The legislation, introduced in September last year, aimed to deregulate the sector, allowing farmers to sell produce to buyers beyond government wholesale markets, where farmers are assured of a minimum price.
Farmers, fearing the reform will reduce the prices they receive for their crops, staged nationwide protests that attracted activists and celebrities from India and beyond, including climate activist Greta Thunberg and pop singer Rihanna.
“Today I came to tell you, the whole country, that we have decided to withdraw all three agricultural laws,” Modi said in an address to the nation.
“I urge farmers to return to their homes, their farms and their families, and I also ask them to start again.”
The government will repeal the laws in the new session of parliament, starting this month, he said.
The surprising concession of laws that the government has said are essential to address chronic waste and inefficiencies comes ahead of elections early next year in Uttar Pradesh (UP), India’s most populous state, and two other northern states. with large rural populations.
However, Modi’s capitulation leaves an unresolved complex system of farm subsidies and prices that critics say the government cannot afford.
It could also raise questions for investors about how economic reforms risk being undermined by political pressures.
Protestant peasants who were encamped in their thousands on main roads around the capital, New Delhi, celebrated Modi’s back road.
“Despite many hardships, we have been here for almost a year and today our sacrifice has finally paid off,” said Ranjit Kumar, a 36-year-old farmer at Ghazipur, a major protest site in Uttar Pradesh.
Jubilee peasants handed out sweets in celebration and chanted “Hello the farmer” and “long live the peasant movement.”
Rakesh Tikait, a group leader of peasants, said the protests were not canceled. “We will wait for parliament to repeal the laws,” he said on Twitter.
Vulnerable to big business
The government of Bharatiya Janata Party (BJP) of Modi said last year that it is not about repealing the laws. It tried to break the deadlock by offering to dilute the legislation but lengthy negotiations failed.
The protests took a violent turn on January 26, the Republic Day of India, when thousands of farmers overwhelmed police and stormed the historic Red Fort in New Delhi after tearing down barricades and driving tractors across roadblocks.
One protester was killed and scores of farmers and police officers were injured.
Small farmers say the changes make them vulnerable to competition from large businesses and they could eventually lose price support for commodities like wheat and rice.
The government says a reform of the sector, which accounts for about 15% of the $ 2.7 trillion economy, means new opportunities and better prices for farmers.
Modi announced the repeal of the laws in a speech marking the birthday of Guru Nanak, the founder of Sikhism.
Many of the Protestant farmers are Sikhs.
Modi acknowledged that the government failed to win the argument with small farmers.
Farmers also demand minimum support prices for all their crops, not just for rice and wheat.
“We need to know the government’s stance on our other key demand,” said Darshan Pal, a leader of another farmer, on the new demand that has gained strength among farmers across the country, not just in the northern grain zone.
Rahul Gandhi of the main opposition Congress Party, said the “arrogant” government was forced to concede.
“Whether it was for fear of losing UP or ultimately confronting the conscience, BJP government repeals estate laws. Just the beginning of many more victories for the votes of the people,” Mahua Moitra, a member of the Trinamool Congress Party and one of the most loyal critics of Modi, he said on Twitter.
But some food experts said Modi’s back road is unfortunate because the reforms would bring new technology and investment.
“It is a blow to India’s agriculture,” said Sandip Das, a researcher and analyst on agricultural policy based in New Delhi.
“The laws would have helped attract a lot of investment in agricultural and food processing – two sectors that need a lot of money for modernization.”