The two Armed Reserve Police sub-inspectors were suspended after a political row erupted following the farmers' production in court in handcuffs.
The ten chilli farmers had been arrested for "vandalising" Khammam Agriculture Market Yard office on April 28 during an agitation triggered by sudden fall in chilli prices.
Following their production in the court, the farmers were eventually granted bail and released.
After suspending the SIs for "breaching" the handcuffing norms, an inquiry too was ordered into the incident, said IGP (North Zone) Y Nagi Reddy.
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"Handcuffing was not necessary. There are clear guidelines and if the handcuffing of the accused is required, necessary magisterial permission has to be taken," he added.
An Additional DCP rank-officer has been appointed as the inquiry officer, Reddy told PTI.
The Telangana Pradesh Congress Committee and Telugu Desam Party, meanwhile blamed the TRS government for the incident.
TPCC president N Uttam Kumar Reddy said the TRS government had committed the grave mistake of handcuffing the farmers.
Terming it as an act of "high-handedness" of the state government, TDP legislator Sandra Venkata Veeraiah said the handcuffing of farmers was not justified.
He said his party will hold dharna (sit-in) for the next two days to protest against the cases filed against farmers.
According to the police, they had vandalised the market yard office and damaged the furniture.
The farmers in the state have been demanding better price for chilli as the price has dipped to around Rs 6,000 per quintal this season as against Rs 12,000 per quintal last year.
According to the Telangana marketing department, bumper production of chilli coupled with slackening exports has resulted in drop in the price.
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