© Reuters. FILE PHOTO: Indian Prime Minister Narendra Modi in New Delhi, India, January 29, 2021. REUTERS / Adnan Abidi / File Photo
NEW DELHI (Reuters) – Indian Prime Minister Narendra Modi said on Friday he would repeal controversial farm laws that farmers have been protesting for more than a year, a significant drop for the combative leader.
The sudden concession on all three laws comes ahead of elections early next year in Uttar Pradesh, India’s most populous state, and two other northern states with large rural populations.
“Today I came to tell you, the whole country, that we have decided to withdraw the three agricultural laws,” Modi said in a speech to the nation.
“In the parliamentary session that begins later this month, we will complete the constitutional process to repeal these three farm laws.
The legislation, introduced in September last year, aimed to deregulate the sector, allowing farmers to sell their produce to buyers beyond government-regulated wholesale markets, where producers are assured of a minimum price. .
Farmers, fearing the revision could lower the prices they get for their crops, staged nationwide protests that drew activists and celebrities from outside India, including the activist for the climate Greta Thunberg and American singer Rihanna.
Modi’s surrender leaves a complex system of farm subsidies and price support open that critics say the government cannot afford. It could also raise questions for investors about how economic policy is overwhelmed by political interests.
Most of the biggest protests are centered around the capital New Delhi, where farmers have camped by the side of the road since last November, demanding the repeal of the laws.
Rakesh Tikait, a farmer group leader, said the protests were not canceled. “We will wait until parliament repeals the laws,” he said on Twitter (NYSE :).
Modi’s Bharatiya Janata Party (BJP) government said last year that there was no question of repealing the laws. He tried to break the deadlock with farmer groups by offering to water down the legislation, but protracted negotiations failed.
The protests took a violent turn on January 26, Republic Day of India, when thousands of farmers overwhelmed police and stormed New Delhi’s historic Red Fort after demolishing barricades and driving tractors to through roadblocks.
A protester was killed and dozens of farmers and police were injured.
Smallholder farmers say the changes make them vulnerable to competition from large companies and could potentially lose price support for basic commodities such as wheat and rice.
The government says reforming the sector, which accounts for about 15% of the $ 2.7 trillion economy, means new opportunities and better prices for farmers.
The government has failed to convince small groups of farmers of its intentions, Modi said in a speech after greeting the country on the birthday of Guru Nanak, the founder of Sikhism.
Many of the protesting farmers are Sikhs.
“We welcome the Prime Minister’s announcement, but we need to know the government’s position on our other key demand of making (minimum support prices) mandatory for all crops,” said Darshan Pal, a another farmer leader.
Minimum support prices are state-set prices at which the government purchases rice and wheat from farmers.
The increased demand for minimum prices for all crops has gained ground among farmers across the country, not just in the northern grain belt.
Opposition parties praised the farmers. Rahul Gandhi of Congress, India’s main opposition party, said his tough stance forced the “arrogant” government to give in.
“Whether it’s the fear of losing UP or finally facing conscience, the BJP government is overturning agricultural laws. This is just the start of many more victories for people’s voices. Mahua Moitra, a Congress Party lawmaker from Trinamool and one of Modi’s most vocal critics, said on Twitter