A farmer cuts paddy crop in the Medak district, near Hyderabad, India on November 11, 2021.

Noah Seelam | AFP | Getty Images

India will scrap three laws that farmers have protested against since last year, Prime Minister Narendra Modi announced Friday.

“Today, I am here to tell you, and the whole country, that we have decided to take back, to repeal, the three agriculture laws,” Modi said, according to a CNBC translation of his remarks in Hindi.

He added that the government will begin the constitutional process in parliament later this month to repeal the laws. Modi also urged protesters to return home in his address to the nation.

The Indian parliament passed those laws in September 2020. The reforms would have chipped away at some of the rules that have protected India’s farmers for decades and would subject them to unfettered free-market mechanisms where competition would be high.

Agriculture is the primary source of livelihood for about half of India’s 1.3 billion population but accounts for only around 15% of GDP. Economists generally agree that India’s agricultural sector needs reforms, in part to promote faster growth and deploy more sustainable use of scarce resources like water.

But farm reform policies also tend to be politically sensitive in nature.

Indian farmers have been struggling for years due to low crop prices, rising costs, demonetization and widespread droughts even though there have been generous government subsidies and income tax exemptions. Many farmers have fallen into debt and that’s led to a rise in farmer suicides in recent years.

Since last year, the Indian government has met farmer representatives several times to try and resolve their concerns, but the negotiations did not lead to any breakthroughs.

Thousands of farmers have protested the measures for more than a year. Media reports say many demonstrators from northern states like Punjab, Haryana, Uttar Pradesh and others have been camping in the outskirts of Delhi since November 2020.

Farmers argue that the new laws would have lowered crop prices and hurt their earnings. In January, protesters clashed with police in New Delhi which resulted in the death of at least one demonstrator, Reuters reported.

India’s supreme court stayed the implementation of the farm laws this year.

Modi’s Bharatiya Janata Party will be contesting in local elections next year in places like Uttar Pradesh and Punjab, which are some of the country’s biggest farming states. This year, the national ruling party failed to win the state election in West Bengal — another top agrarian state.



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