New agri laws spell catastrophe for Indian farmers
There seems to be no end to the woes of crisis-ridden farmers as the Modi regime introduces agriculture laws that jeopardise their future and could even lead to food shortages.
Author:
5 November 2020
Seething with anger, farmers in India have taken to the streets to protest against new agriculture laws that critics argue could lead to the exploitation of small-crop growers by large corporations and deliver a deathblow to the country’s ailing agricultural sector. While Prime Minister Narendra Modi’s government insists that the changes will empower farmers and boost growth by attracting private investment, many believe these laws will put them at the mercy of big agribusinesses.
Over the past month, thousands of farmers have held massive protest rallies across the country, especially in the northern states of Punjab, Uttar Pradesh and Haryana. They have been occupying railway tracks and highways after both the upper and lower houses of Parliament passed three controversial agriculture bills on 20 September.
More than 265 farmer organisations held countrywide rallies on 25 September at about 20 000 locations to stage protests against the passing of the bills. Trade unions across several states, including Bihar, Madhya Pradesh, West Bengal, Odisha and Karnataka, also voiced their support for the farmers.
Modi’s government has been accused of using the majoritarian mandate of the ruling Bharatiya Janata Party (BJP) to push through the laws in Parliament. Questioning the manner in which the bills were passed, opposition parties termed it “unconstitutional”. They said the government had passed the “black bills” without consultation and ignored requests for a parliamentary committee review of the ordinances.
Anti-farmer bills
The first bill passed is the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, which aims to end the monopoly of the Agricultural Produce Market Committee (APMC). Essentially a marketing board, each state has an APMC that was meant to safeguard farmers from exploitation by large retailers. It allowed the first sale of agricultural products to take place only at APMC market yards (mandis), thereby controlling farm-to-retail prices. But now the market has been thrown open for private players to enter the agriculture sector and deal directly with the farmers.
The two other bills that have drawn criticism are the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Service Bill, which creates a framework for contract farming and provides a template for farming agreements at the national level, and the Essential Commodities (Amendment) Bill, which deregulates items such as cereals, pulses, oilseeds, edible oils, onion and potatoes.
The three laws together specifically aim to loosen regulations that have for decades protected India’s farmers from the free market. They seek to open up farming at both ends: production (through contract farming) and sale (through complete deregulation). They will allow private buyers to hoard essential commodities for future sales, which only state-authorised agents could do until now, and outline the rules for contract farming, where farmers tailor their production to suit a specific buyer’s demand.
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One of the major implications of these laws is that the mandis – where farmers sell their produce through auction to traders – can be bypassed. This will allow farmers to sell to private players elsewhere, physically and online, thereby undermining the regulatory role of the public sector. In trade areas open to the private sector, no fees will be levied. This could incentivise the corporate sector operating outside of the mandis to offer better prices to farmers, at least initially. But eventually, as the mandi system is run down completely, these corporations will monopolise trade, capture the sector and dictate prices to farmers.
The protesting farmers have echoed the fears that powerful investors will bind them to unfavourable contracts, drafted by big corporate law firms, with liability clauses that will be beyond the understanding of poor farmers in most cases. Farmers contend that this will eventually lead to the end of wholesale markets and assured prices, leaving them with no backup option.
Pretext for the laws
But Modi’s populist government, which has largely pursued aggressive neoliberal economic policies that aim to increase privatisation, claims that the farmers will enjoy greater flexibility and independence when selecting buyers, reducing their dependence on the APMC. Defending these laws, Modi called the passing of the “reforms” a “watershed moment” for Indian agriculture.
“For decades, the Indian farmer was bound by various constraints and bullied by middlemen. The bills passed by Parliament liberate the farmers from such adversities. These bills will add impetus to the efforts to double income of farmers and ensure greater prosperity for them,” he tweeted.
Union Agriculture Minister Narendra Singh Tomar said the legislation would reform India’s deeply stressed agriculture sector and potentially double farmers’ income by 2022.
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Opposition parties and farmers’ groups across the political spectrum, however, have dubbed the changes “anti-farmer” and expressed concern that they could corporatise agriculture, threaten the current mandi network and state revenues, and dilute the system of government procurement at guaranteed prices.
A major concern raised by regional state governments, which are worried about their loss of revenue from mandi taxes and fees, is that agriculture is a state issue that falls under the state list in the Constitution. The federal government, they argue, should not be making laws on the subject at all. The Punjab state government has already passed its own bills to counter the new farm laws, while the states of Chhattisgarh and Rajasthan are also looking at passing news bills at state level to pacify farmers.
High-level defiance
The party Shiromani Akali Dal (SAD), an old ally of the BJP, decided to quit the government alliance over the issue, arguing that the changes were crafted to benefit the BJP’s capitalist allies at the cost of poor farmers. SAD’s president, Sukhbir Singh Badal, said the bills are “lethal and disastrous” for farmers. “The government’s decision on farm bills is deeply injurious to the interests not only of the farmers, but also of khet mazdoor [farm workers], traders, and the Dalits who depend on the wellbeing of agriculture,” the party said in a statement.
The leader of the Communist Party of India, Sitaram Yechury, used SAD’s move to criticise the laws. “This resignation of Akali Dal, the oldest ally of BJP, reflects rejection of the anti-farmer, anti-people policies of the Modi government. These legislations destroy Indian agriculture, undermine food security and ruin our ‘annadaatas [food providers]’. Scrap them,” he wrote in a tweet.
Rahul Gandhi, leader of the principal opposition party, the Indian National Congress, accused Modi of allowing “farmers to be slaves of the capitalists”. Congress spokesperson Randeep Surjewala asserted that the three “draconian ordinances are a death knell for agriculture in India” that will “subjugate the farmer at the altar of a handful of crony capitalists”.
Farmers’ associations have also noted that the legislation does not guarantee acquisition of farm produce at the minimum support price, leaving them at the mercy of corporations that are now expected to enter India’s troubled farming sector.
Protest, debt and suicide
In previous years, farmers across India have risen to protest against the agrarian crisis and their mounting debt that escalated farmer suicides in some states. An analysis noted that the number of farmer protests are increasing over time. Between 2014 and 2016, they rose from 628 to 4 837.
Modi came to power in 2014 on the promise of doubling farmers’ income by 2022, but their conditions and those of rural workers have only worsened. Millions of small-scale farmers continue to lose their incomes owing to falling prices for their crops and rising transportation and storage costs. The rise in the price of fuel and fertilisers has also continued, while farm incomes and rural wages have decreased.
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Scholars have highlighted that these dynamics have increased rural indebtedness – a dynamic that many consider one of the key reasons behind the suicide crisis in rural India. According to the National Crime Records Bureau, more than half of India’s farmers are reportedly in debt, and 20 638 committed suicide in 2018 and 2019. They also argue that the Modi regime not only failed to respond in an adequate manner to demands for loan waivers for farmers, but his demonetisation blitzkrieg in November 2016 wreaked havoc on the agricultural sector by disrupting cultivation, crop sales and credit networks.
Agriculture, one of the oldest and most important industries in the Indian economy, contributes 18% to the country’s GDP and employs 60% of its population. But studies show that 20% of farmers live below the World Bank poverty line of $3.10 (about R51) a day. The slew of new rules and regulations may only exacerbate the pre-existing agrarian distress and problems for farmers.
Modi’s neoliberal push
Writing in The Wire, an independent Indian news website, farmer leader Vijay Jawandhiya and historian Ajay Dandekar emphasise that the new legislation only accentuates the crisis for farmers who are debt ridden, starved of funding and in need of an assured price mechanism. “We need to understand that if the country has to come out of her grave economic crisis, the answer does not lie in the economies of the urban or the extractive economies of the capital. The answer decisively lies in the revival of the rural with dignity and respect,” they add.
In an article for Peoples Dispatch, prominent Indian Marxist economist and political commentator Prabhat Patnaik writes: “The peasants, in short, are being thrown, as under colonialism, to the mercies of a market where price fluctuations have a notoriously high amplitude, and they are rightly putting up a fight against their descent into debt and destitution.”
He adds: “What has been striking about the agricultural arrangement till now is that while looking after (however inadequately) the interests of the peasants, it has prevented the large-scale diversion of land use towards non-food grains and export crops. The dismantling of that arrangement will not only hurt the peasantry, but also lead to a diversion of area from foodgrains to non-foodgrains and export crops, thereby undermining the country’s food security.”
Colin Todhunter, an independent writer and analyst, further underscores that the Modi administration is fully on board with the World Bank’s pro-corporate “enabling the business of agriculture” and other such policies aimed at further incorporating nation states into the neoliberal fold while equating neoliberal policies with “development”.
“By bringing the full force of liberalisation to the farm economy and in the process fundamentally restructuring Indian society (around 60% of the population still rely on agriculture for their livelihoods), any remnants of economic sovereignty and sovereign state status will be hollowed out and India will become a fully incorporated subsidiary of global capitalism and its fundamentally flawed and exploitative food regime,” he concludes.
