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Indian Prime Minister’s decision to repeal controversial farm laws after year of protests hits edible oil sector’s plans

Posted by Eduardo Moreno

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The announcement by India’s Prime Minister Narendra Modi to repeal three controversial farm laws could hit the edible oil industry’s National Mission on Oilseeds, The Economic Times reported on 23 November.

In a huge victory for India’s farmers, who had fought hard for the repeal of what they called the “black laws”, the prime minister announced in an address on 19 November that “we have taken the laws back”, according to a report by The Guardian.

Modi said he would start the constitutional process to repeal all the three laws in the parliament session that was due to begin at the end of November.

While Modi remained adamant in his speech that the laws were necessary reforms, he acknowledged that they were unfeasible given the strong opposition from farmers, The Guardian wrote.

However, the announcement was not welcomed by the edible oil sector as it left a question mark over its National Mission on Oilseeds, The Economic Times wrote.

The programme is aimed at increasing local production of mustard, groundnut and soybeans to reduce dependence on imported edible oils and decrease the import bill, according to the report.

While the farm laws had been expected to encourage farmers to switch from grain to oilseed farming, The Economic Times wrote, their repeal might mean farmers would continue growing wheat and other cereal crops and the government would still be forced to purchase the grains at the minimum support price (MSP).

According to a guest columnist in the Hindustan Times, the assured procurement of only cereal crops has resulted in an overflowing buffer stock more than three times the mandated norm.



Solvent Extractors’ Association president Atul Chaturvedi told The Economic Times that India’s agriculture sector needed “massive reforms” if it was to become competitive and improve farm incomes.

“We will have to see whether the government’s decision to repeal the farm law will have an impact on the launch of the mission,” he was quoted as saying.

“With the country moving towards normalcy and edible oil consumption picking up, any delay on this count will compound the problems.”

Modi had passed the three farm laws last year in a bid to overhaul India’s outdated agriculture sector by rolling back farm subsidies and price regulation on crops, The Guardian report said.

However, the laws quickly became a major source of conflict among India’s millions of farmers, who accused the government of passing the laws without consultation, according to the report.

The farmers said the reforms put their livelihoods and farms at risk and handed control over the pricing of their crops to private corporations, which could crush smallholder farmers, The Guardian wrote.

After the government refusal last year to repeal the laws, hundreds of thousands of farmers marched to Delhi’s borders and set up protest camps along the main highways into the capital, the report said.

Since then, tens of thousands of farmers had remained at the several camps around Delhi’s borders, maintaining one of the most sustained challenges to the Modi government, The Guardian wrote.

The protests turned violent in February when the farmers stormed into the centre of Delhi and briefly took over the historic Red Fort in the old city centre.

Over the past year, the government had made concerted efforts to crush the farmer protest movement with arrests and threats to clear the protest camps, the report said.

Following several rounds of failed negotiations, the government agreed to suspend the laws earlier this year, but the farmers, who have the backing of powerful unions, said they would not move on until the laws were repealed entirely.

The Modi government had previously said it would not give in to pressure from the farmers over the farm laws, The Guardian wrote.

However, it was thought that Modi’s decision to repeal the laws was linked to upcoming crucial state elections in Uttar Pradesh and Punjab, where farmers make up a crucial proportion of the electorate and farmers’ unions hold significant power and influence, according to the report.

Source: Oils & Fats Internacional (OFI)