Farmers protest sabotaging India’s economic recovery : Industry

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Farmers’ protests against three key laws for reforms has disrupted business worth up to 50 billion rupees and likely to hurt India’s economic recovery from the pandemic, traders and industry officials said.

The Confederation of All India Traders (CAIT) called upon farmer leaders to resolve their issues with the government in a spirit of cooperation. At the same time, they called upon the government to listen to the farmers’ concerns with an open mind.

It would be wrong to call farm laws as related only to farmers as they would also impact transporters,  traders in agricultural commodities,  food grains,  consumers, industries besides those supplying crop inputs like fertilizers and pesticides, CAIT said.

“Many classes of people, including the big industry concerned, will be affected. Therefore, there is a need to protect the interests of all stakeholders through these laws,” the traders body said.

Earlier in September, the government had approved three key legislations to drive through farm reforms —  Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020.

While the aim of these laws are to facilitate barrier-free trade of produce outside the markets notified under the various state Agriculture Produce Marketing Committees (APMC) laws, farmer groups especially from northern India have railed against them over concerns that minimum support prices (MSPs) will be dismantled. 

Farmers say that the new laws would strengthen the hands of private traders and enable them to manipulate market prices, but the government has said that these concerns are misplaced and MSPs won’t be removed.

Wide impact on the economy

It would be wrong to call farm laws as related only to farmers as they would also impact transporters,  traders in agricultural commodities,  food grains,  consumers, industries besides those supplying crop inputs like fertilizers and pesticides, CAIT said.

“Many classes of people, including the big industry concerned, will be affected. Therefore, there is a need to protect the interests of all stakeholders through these laws,” the traders body said.

They said that the traders will try to mert farmer leaders to press upon them to break the cureent impasse which was affecting a wide section of the country’s economy.

Farmers have blockaded boundaries of the national capital Delhi to press for the repeal of the new farm laws.

“Delhi is neither an agricultural state nor an industrial state, but Delhi is the largest commercial distribution center of the country, where goods from different states of the country arrive,” CAIT said.

About 30 to 40% of the goods coming to Delhi have been affected by the movement of farmers, which is adversely affecting the trade and other activities in the capital and neighboring states, the traders’ body added.

The Confederation of Indian Industry said that around two-thirds of consignments in transit are taking 50% more time and urged for a resolution of the farmers’ dispute. Transport vehicles are also taking 50% more time to reach their destinations in Punjab, Haryana, Rajasthan and Delhi-National Capital Region, it added.

“Given the challenge to get the economy back on the growth trajectory, Confederation of Indian Industry urges all stakeholders to urgently seek ways to end the ongoing protests and reach an amicable solution,, in the interest of industry and the economy,” the industry body said.

The transport disruption may not only push up the cost of logistics by 8-10%, but also exacerbate a labour shortage in industries surrounding Delhi that they have been experiencing in the wake of pandemic. 

“The ongoing farm agitation requires an immediate amicable solution as it is impacting not only the economic growth, but also putting a huge dent to the supply chain which is affecting the large and small industries alike,” said Nikhil Sawhney, chairman, northern region for CII.   

Industry and officials also urged action to combat the problem of low farm incomes. They highlighted that it was high time for farmers to be able to convert their occupation that yields a solid income rather than the age-old practices that yield little or no profits, and frequent losses.

Covid-related disruptions have already caused a huge loss of business in the national capital, which were showing signs of recovery post Diwali.

Even tourism revenue had been affected with traffic to states like the hill state of Himachal Pradesh, Uttarakhand and Jammu and Kashmir affected by the ongoing agitation.

“Tourism, a major revenue and livelihood source in these states, is likely to get adversely impacted at a crucial time when the sector is looking forward to regaining some momentum following the unlocking of the economy,” said CII.

Farmer leaders have shown no signs of backing down despite several rounds of talks with the government. Rather, they have hardened their stance and pledged to extend their protests across different geographies and modes of transport including railways.

Biman Mukherji is a columnist and consulting editor at Indoasiancommodities.com. He has worked for international news organisations such as Reuters, The Wall Street Journal as well as for newspapers like The Times of India. He can be reached at biman.mukherji@indoasiancommodities.in

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