Explained: As tractor rally turns violent in Delhi, what farmers want

As far as negotiations with the government are concerned, the agenda of the farmers is to focus the discussions only on ways in which the new laws can be scrapped.

The farmers protesting against the three laws passed by Parliament unleashed a fury on Delhi's roads on Tuesday.

Protesting farmers remove the barricades after breaching the routes during their tractor rally, at Ghazipur border near Delhi on Tuesday.(ANI Photo)

The farmers have been protesting at various border points near Delhi for more than two months. The anger finally spilled on the streets, as the police tried to stop their march towards central Delhi.

So what exactly do these farmers want?

As far as negotiations with the government are concerned, the agenda of the farmers is to focus the discussions only on ways in which the new laws can be scrapped. The government has, however, refused to roll back the pro-reform laws farmers say will hurt their livelihoods.

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It has instead offered to hold the implementation of the three contentious laws for 18 months. The government has asked the farmers to reconsider the offer which Union agriculture minister Narendra Singh Tomar said is the "best offer".

The Supreme Court had on January 12 ordered to keep the three laws in abeyance and ordered the formation of a committee, but its intervention backfired as farmer unions alleged that the panel is “pro-government”.

Out of the three central laws, the primary area of concern for farmers is the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, or FPTC Act in short. The law allows buying and selling of farm produce outside the APMC mandis without any tax. These regulated market places are being used by the farmers for years to sell their produce. But if the system is scrapped, they will find it difficult to negotiate with large buyers - hence putting them at the mercy of large corporate houses.

The government, on its part, says that this act will give more freedom to farmers to choose who to sell their produce to. It has termed the three laws historic saying they will change the way agriculture trade is done.

A related issue is that of the Minimum Support Price or MSP - the price at which the government purchases farm produce directly from the farmers. The farmers say that once they stop selling in APMCs, the big corporate houses may not honour the MSP. So, they want the government to make MSP a legal right.

A recent study by the University of Pennsylvania Institute for the Advanced Study of India (UPIASI) said that farmers in fully regulated agriculture markets in Punjab got 30 per cent more price for their produce in 2018-19 than those in totally unregulated markets in Bihar and partially regulated ones in Odisha, terming MSP as only risk-management instrument available for farmers. (Click here to read the full study)

However, there is a need to consider the economic aspect before taking a decision on the MSP. The government sets MSPs for 23 crops, but effectively, it is applicable only in cases of wheat and rice as these are bought in sufficiently large quantities. MSPs are an assurance that the government will intervene if market rates fall below that threshold. And it was a good step in cases where India faced acute food shortages. But the laws to will have to be different while dealing with surpluses.

Moreover, higher MSPs could upend the Reserve Bank of India’s inflation targets, hurting economic growth. Mandatory MSPs will also render India’s agri-exports non-competitive because the government’s assured prices are way higher than both domestic and international market prices.

The government, meanwhile, says that it is not right to include in the agenda the demand related to MSP as it is out of the purview of the new farm laws. It highlighted the plight of the small and marginal farmers and said they will benefit from the new reforms in the agriculture sector.