A seventh round of talks between the Indian government and farmer groups are set to be held today. Farmers have been protesting for over a month demanding the repeal of three controversial laws and a minimum support price guarantee. If their demands aren’t met, farmers warn they will shut down the country with a tractor rally on Wednesday. Haris Zargar reports that 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.
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 two months, 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 2020. 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.
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.
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.
Haris Zargar’s article, “New agri laws spell catastrophe for Indian farmers”, was first published on New Frame, a not for profit social justice media project. It is republished by Food For Mzansi under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International Licence.