A Raw Deal

A Raw Deal

Indian farmers have been slowly garnering international attention since late Fall 2020, as they staged growing protests in reaction to three bills easing restrictions on private players in the agricultural market. These bills, approved by Prime Minister Narendra Modi via circumvention of the parliamentary process, would leave the farmers that rely on agriculture as a livelihood at the mercy of a free market that would be subject to corporate pricing and corruption, essentially driving prices for crops into the ground. In contrast, Modi's government believes otherwise, that the new laws are supportive and will give the farmer’s more freedom to sell to whomever they want, and not just the government as it currently stands. After nearly three months of steadfast demonstrations and heightened discontent, emotions are coming to a head–can this impasse be peacefully resolved?

Since November 2020, more than two million farmers have assembled at multiple entry points around Delhi’s border in a massive protest. The immediate trigger for the protests was the government’s hasty enactment of three new farm laws that were introduced during the COVID-19 pandemic without the consultation of farmers or state governments, who are responsible for agriculture under India’s Constitution. Having been raised in Punjab for the first few years of my life and coming from a family of multigenerational farmers, I have been driven to understand the root issues that have sparked widespread social interest in these protests occurring halfway across the world.

The facts to date are deplorable. On Republic Day in late January 2021, tensions reached a new fever pitch, as the western hemisphere woke up to the devastating news of peaceful protests turning bloody as the farmers defiantly stormed the Red Fort, a historic site where their ancestors staged similar demonstrations once upon a time. Yet again, another all too familiar headline of police firing tear gas and water cannons to disperse the crowds. As protests turned deadly, farmers were savagely beaten with bamboo rods and authorities temporarily restricted internet access in some parts of the capital, a blatant display of censorship that overshadowed the irony of a democratic nation celebrating the day it commemorated its Constitution.

Malcom Forbes, famed American entrepreneur and publisher of Forbes magazine, was once quoted, “It’s never a good a deal when only one party thinks it is.” The misfortune experienced by the farmers continues to evolve after farm unions refused the latest offer by the Indian government, calling for an eighteen-month suspension of the three agriculture laws until a permanent compromise could be reached. In the eyes of the farmers, the only solution would be an agreement to a permanent repeal of the laws, allowing both groups to reach an initial compromise while opening a path to constructive agricultural reforms. In my experience, a good deal is reached when both parties are left feeling like they gave up a little more than they were comfortable. However, this only works when both parties are working off a similar understanding and structure. The fundamental challenge before proposing any new law is to get everyone working off the same blueprint so they can address the kinks in India’s agriculture economy.

India is a country made up of over 1.4 billion people, where agricultural workers constitute half of the labor force. The repercussions of the new laws would be devastating; this is an exponential issue potentially affecting the lives of at least 110 million people, if you go by the number of farmers with landholdings of less than two acres.[i]

In the 1960s, India, recently granted independence from British rule, was struggling to produce enough food for its citizens. A string of droughts compounded the issue, causing devastating famines. At that time, the government stepped in to modernize farming and increase the food supply in what was called the Green Revolution, bringing in US advisors to help boost their production of rice and wheat. The Green Revolution was not without a series of challenges, including the overuse of chemical fertilizers, pesticides, and irrigation, which caused large plots of land to become infertile. A variety of crops nearly disappeared, but rice and wheat production soared and soon, India transitioned from a food crisis to a food surplus. At this point in time, India developed a nationwide food marketing system to ensure fair prices. It is a complex system, differing from state-to-state, but a few of the vital components can be summarized as follows:

  • farmers would bring their crops to wholesale markets, locally known as “mandis”
  • the farmers would then sell the crops to traders through open auctions with transparent pricing
  • prices can also be informed by the “minimum support price” or MSP, a set government price for crops such as rice, cotton, and wheat
  • the Food Corporation of India (FCI) and the applicable public state food-procurement agency would buy a few of these crops at the set prices in certain states, with the prices still serving as a benchmark for the market
  • the crops would then go to the secondary market or would be stored by the buyers before they are sent out for future sales

Though it has worked so far, it is not a perfect system and the money in farming continues to disappear, leaving farmers vulnerable. If MSP prices continue to be lowered by the government, the margins will also lower synergistically. Since the days of the Green Revolution, agriculture has gone from accounting for nearly 50% of the national economy to just 15%.[ii] Farmers continue to mitigate issues when they arise in order to survive, but these are merely short-term measures that do not solve the heart of the problem–farmers need governmental aid in order to be given a fair shake. For example, local traders often collude with each other and the open auctions appear to involve competitive bidding but are actually predetermined to prevent the prices from dropping too low. For the most part, the system works on a large scale because the set governmental prices aim to protect farmers by granting them market standards.

When you look at the existing system in depth, the fact that farmers are the weakest link become readily apparent. They continue to be exploited in numerous ways. Over the years and through various laws, state-to-state reforms have gradually redefined and regulated the mandis and pricing markets in different ways across India. In Punjab, for example, the agriculture economy is a vital part of the industry and farmers here have the highest incomes in the country. In contrast, in the eastern state of Bihar, the mandis were eliminated in 2006, leading to crop prices falling well below MSPs, causing the farmers in this state to be ranked as the poorest in India by income. The economic facts are justification for the farmers to suspect that the new laws do not serve their best interests, but rather the corporations will have everything to gain in this so-called “free market”. The farmers believe the MSPs and the public food-procurement system, though imperfect, would at the very least provide them with the basic protections against the vagaries of the market. They would rather cling to the status quo, knowing the odds are stacked against them, before even considering the proposition of the three new bills, which would set them up for inevitable poverty.

“Agenda 2030 and its action plan for a centrally planned economy has put India’s farmers in a position where they have nothing left to lose. Their livelihoods have been put into jeopardy with the three farm bills which essentially privatize and or corporatize Indian agriculture. The implementation of these laws is catastrophic for the everyday farmer in India.” – Shinder Johal, Canadian Activist

Looking at the human dimension, farmers in India are by no means a homogeneous category. Their plight can be oversimplified, ignoring the atrocious conditions the hundreds of millions of landless workers and peasants, who come under the broad rubric term ‘farmers,’ face. What is common across the board, however, is their shared experience of indebtedness, which is primarily due to their crops not selling for the MSP set out by the government.[iii] Millions of farmers already have trouble making ends meet in this shrinking economy. More than half of India’s farming households are in debt and this debt has contributed to a suicide crisis. In 2019 alone, more than 10,000 farmers have died by suicide, accounting for 7.4% of total suicides in the country. [iv]

Because of this economic hardship, farmers have been asking for reforms for decades. In June 2020, instead of providing more protections for this vulnerable community, the central government went in the opposite direction. In November, several thousand farmers from the neighboring states of Punjab and Haryana drove their tractors toward Delhi and covered at least five different highways around the city in the hope of publicizing their grievances, as they slowly made their way to the city center. Based on the outrage seen in worldwide activism, and perhaps feeling the pressure from a system that does not serve them, farmers old and young, men, women, and even children are camping on open roads in the bitterly cold Delhi winter in order to have their voices heard. With more than 500 farmers’ organizations across India supporting the protesters’ demands, the farmers have abandoned their concerns about COVID-19, preparing for the long haul and bringing enough food to last them well into the Spring. They are planning detailed contingency plans in the event these protests last longer than they anticipate, determined to stay as long as it takes until their demands are met. A sign of their resilience, or simply because they have nothing left to lose–the proposed reforms are threatening an already fragile structure. There needs to be a better way.

On the surface, the laws may appear harmless and if you are looking through the lens of a developed country, perhaps even beneficial to the farmers. The laws relax restrictions on the purchase and sale of farm produce, remove constraints on stockpiling under the 1955 Essential Commodities Act, and enable contract farming based on written agreements. The government’s declared purpose to create “an ecosystem where farmers and traders enjoy freedom of choice,” with “competitive alternative trading channels” that “promote efficient, transparent, and barrier-free” trade sound fair, but when one digs deeper, it becomes very clear that these laws only benefit the corporations that will have total control of the market.[v]

Together, the three laws invite big corporations into a fragmented and deregulated market that could lead to volatile prices for farmers. Adam Smith’s notion of a free market may be welcoming in a thriving economy with robust structure, but it is not practical for a developing country. The government, while trying to create protections for farmers, has in the same breath created mistrust by imposing a complex system with no room for negotiation.

Farmers fear that these “modernizing” laws will pave the way for the predatory corporate commercialization of Indian agriculture, which has been lobbied and led by politically well-connected industrialists. Others argue that the laws effectively deregulate farm-produce transactions, contract farming, and stock holding in ways that will harm farmers. Small and marginal farmers fear they will be the most adversely affected. Upon this analysis, it is pretty clear why India’s farmers view the new legislation very differently from the government.

Farm incomes were already declining continuously before Prime Minister Modi came to power in 2014. In fact, farmers played a crucial role in Modi’s initial election triumph after he promised to double their incomes in five years by offering MSPs for their produce that were 50% above total cultivation costs. But the central government has failed to keep that promise, among others, and farmers instead received prices that were even lower relative to their costs than they had been under the previous government.

As the protests gain attention and support from world leaders and other notable figures, it will be interesting to see at what point the government will agree to productive and peaceful talks that will lead to a mutual solution. Perhaps they will simply concede to the farmers and recognize the solutions they are offering need to take a back seat to building a framework for a fair market in order for agricultural commerce to have any chance of success. In other developed countries, such as the United States, there are stakeholders involved that may help the ‘small farmer’ to amplify the success of the free market. There are also specialized cooperatives for crops, consortiums, subsidies, laws, and stakeholder-sponsored public interest campaigns, creating a sustainable structure for agriculture to thrive. The revered “Got Milk?” campaign of the 1990’s was created by a high-profile advertising agency and paid for by the California Milk Processor Board in 1993, which was funded by California dairy farmers and administered by the California Department of Food and Agriculture. The ads were later licensed for use by milk processors and dairy farmers.[vi] Although the campaign was specifically targeted for California, it was a national success and demonstrated a coordinated effort between state government, farming organizations, and farmers to bolster a flagging industry.

India may have a populous of agricultural workers, but the industry itself lacks any coordinated agriculture structure. Today, the farmers were forced to climb down from the ramparts of the Red Fort, but they did not go home. This is their livelihood, their life. Before the next planned march and before we read another headline of police using violence to subdue a significant movement, a total repeal the new laws must occur before both parties can begin again. The government needs to take a hard look at this industry that sorely needs a rehaul–with input from the farmers themselves–in order to create a new order for the agriculture industry in India.

Photography by: The Sikh Collective

[i] https://thewire.in/agriculture/narendra-modi-farmers-protest-promises-trust-msp

[ii] https://economictimes.indiatimes.com/news/politics-and-nation/view-farm-distress-cannot-be-resolved-without-letting-farm-prices-rise-to-global-benchmarks/articleshow/68070328.cms?from=mdr

[iii] https://economictimes.indiatimes.com/news/politics-and-nation/ncrb-data-shows-42480-farmers-and-daily-wagers-committed-suicide-in-2019/articleshow/77877613.cms

[iv] https://thewire.in/agriculture/punjab-farmers-suicides-debt

[v] https://pib.gov.in/PressReleasePage.aspx?PRID=1656929

[vi] https://are.berkeley.edu/~sberto/2009Got_Milk.pdf

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A Raw Deal

Indian farmers have been slowly garnering international attention since late Fall 2020, as they staged growing protests in reaction to three bills easing restrictions on private players in the agricultural market. These bills, approved by Prime Minister Narendra Modi via circumvention of the parliamentary process, would leave the farmers that rely on agriculture as a livelihood at the mercy of a free market that would be subject to corporate pricing and corruption, essentially driving prices for crops into the ground. In contrast, Modi's government believes otherwise, that the new laws are supportive and will give the farmer’s more freedom to sell to whomever they want, and not just the government as it currently stands. After nearly three months of steadfast demonstrations and heightened discontent, emotions are coming to a head–can this impasse be peacefully resolved?

Since November 2020, more than two million farmers have assembled at multiple entry points around Delhi’s border in a massive protest. The immediate trigger for the protests was the government’s hasty enactment of three new farm laws that were introduced during the COVID-19 pandemic without the consultation of farmers or state governments, who are responsible for agriculture under India’s Constitution. Having been raised in Punjab for the first few years of my life and coming from a family of multigenerational farmers, I have been driven to understand the root issues that have sparked widespread social interest in these protests occurring halfway across the world.

The facts to date are deplorable. On Republic Day in late January 2021, tensions reached a new fever pitch, as the western hemisphere woke up to the devastating news of peaceful protests turning bloody as the farmers defiantly stormed the Red Fort, a historic site where their ancestors staged similar demonstrations once upon a time. Yet again, another all too familiar headline of police firing tear gas and water cannons to disperse the crowds. As protests turned deadly, farmers were savagely beaten with bamboo rods and authorities temporarily restricted internet access in some parts of the capital, a blatant display of censorship that overshadowed the irony of a democratic nation celebrating the day it commemorated its Constitution.

Malcom Forbes, famed American entrepreneur and publisher of Forbes magazine, was once quoted, “It’s never a good a deal when only one party thinks it is.” The misfortune experienced by the farmers continues to evolve after farm unions refused the latest offer by the Indian government, calling for an eighteen-month suspension of the three agriculture laws until a permanent compromise could be reached. In the eyes of the farmers, the only solution would be an agreement to a permanent repeal of the laws, allowing both groups to reach an initial compromise while opening a path to constructive agricultural reforms. In my experience, a good deal is reached when both parties are left feeling like they gave up a little more than they were comfortable. However, this only works when both parties are working off a similar understanding and structure. The fundamental challenge before proposing any new law is to get everyone working off the same blueprint so they can address the kinks in India’s agriculture economy.

India is a country made up of over 1.4 billion people, where agricultural workers constitute half of the labor force. The repercussions of the new laws would be devastating; this is an exponential issue potentially affecting the lives of at least 110 million people, if you go by the number of farmers with landholdings of less than two acres.[i]

In the 1960s, India, recently granted independence from British rule, was struggling to produce enough food for its citizens. A string of droughts compounded the issue, causing devastating famines. At that time, the government stepped in to modernize farming and increase the food supply in what was called the Green Revolution, bringing in US advisors to help boost their production of rice and wheat. The Green Revolution was not without a series of challenges, including the overuse of chemical fertilizers, pesticides, and irrigation, which caused large plots of land to become infertile. A variety of crops nearly disappeared, but rice and wheat production soared and soon, India transitioned from a food crisis to a food surplus. At this point in time, India developed a nationwide food marketing system to ensure fair prices. It is a complex system, differing from state-to-state, but a few of the vital components can be summarized as follows:

  • farmers would bring their crops to wholesale markets, locally known as “mandis”
  • the farmers would then sell the crops to traders through open auctions with transparent pricing
  • prices can also be informed by the “minimum support price” or MSP, a set government price for crops such as rice, cotton, and wheat
  • the Food Corporation of India (FCI) and the applicable public state food-procurement agency would buy a few of these crops at the set prices in certain states, with the prices still serving as a benchmark for the market
  • the crops would then go to the secondary market or would be stored by the buyers before they are sent out for future sales

Though it has worked so far, it is not a perfect system and the money in farming continues to disappear, leaving farmers vulnerable. If MSP prices continue to be lowered by the government, the margins will also lower synergistically. Since the days of the Green Revolution, agriculture has gone from accounting for nearly 50% of the national economy to just 15%.[ii] Farmers continue to mitigate issues when they arise in order to survive, but these are merely short-term measures that do not solve the heart of the problem–farmers need governmental aid in order to be given a fair shake. For example, local traders often collude with each other and the open auctions appear to involve competitive bidding but are actually predetermined to prevent the prices from dropping too low. For the most part, the system works on a large scale because the set governmental prices aim to protect farmers by granting them market standards.

When you look at the existing system in depth, the fact that farmers are the weakest link become readily apparent. They continue to be exploited in numerous ways. Over the years and through various laws, state-to-state reforms have gradually redefined and regulated the mandis and pricing markets in different ways across India. In Punjab, for example, the agriculture economy is a vital part of the industry and farmers here have the highest incomes in the country. In contrast, in the eastern state of Bihar, the mandis were eliminated in 2006, leading to crop prices falling well below MSPs, causing the farmers in this state to be ranked as the poorest in India by income. The economic facts are justification for the farmers to suspect that the new laws do not serve their best interests, but rather the corporations will have everything to gain in this so-called “free market”. The farmers believe the MSPs and the public food-procurement system, though imperfect, would at the very least provide them with the basic protections against the vagaries of the market. They would rather cling to the status quo, knowing the odds are stacked against them, before even considering the proposition of the three new bills, which would set them up for inevitable poverty.

“Agenda 2030 and its action plan for a centrally planned economy has put India’s farmers in a position where they have nothing left to lose. Their livelihoods have been put into jeopardy with the three farm bills which essentially privatize and or corporatize Indian agriculture. The implementation of these laws is catastrophic for the everyday farmer in India.” – Shinder Johal, Canadian Activist

Looking at the human dimension, farmers in India are by no means a homogeneous category. Their plight can be oversimplified, ignoring the atrocious conditions the hundreds of millions of landless workers and peasants, who come under the broad rubric term ‘farmers,’ face. What is common across the board, however, is their shared experience of indebtedness, which is primarily due to their crops not selling for the MSP set out by the government.[iii] Millions of farmers already have trouble making ends meet in this shrinking economy. More than half of India’s farming households are in debt and this debt has contributed to a suicide crisis. In 2019 alone, more than 10,000 farmers have died by suicide, accounting for 7.4% of total suicides in the country. [iv]

Because of this economic hardship, farmers have been asking for reforms for decades. In June 2020, instead of providing more protections for this vulnerable community, the central government went in the opposite direction. In November, several thousand farmers from the neighboring states of Punjab and Haryana drove their tractors toward Delhi and covered at least five different highways around the city in the hope of publicizing their grievances, as they slowly made their way to the city center. Based on the outrage seen in worldwide activism, and perhaps feeling the pressure from a system that does not serve them, farmers old and young, men, women, and even children are camping on open roads in the bitterly cold Delhi winter in order to have their voices heard. With more than 500 farmers’ organizations across India supporting the protesters’ demands, the farmers have abandoned their concerns about COVID-19, preparing for the long haul and bringing enough food to last them well into the Spring. They are planning detailed contingency plans in the event these protests last longer than they anticipate, determined to stay as long as it takes until their demands are met. A sign of their resilience, or simply because they have nothing left to lose–the proposed reforms are threatening an already fragile structure. There needs to be a better way.

On the surface, the laws may appear harmless and if you are looking through the lens of a developed country, perhaps even beneficial to the farmers. The laws relax restrictions on the purchase and sale of farm produce, remove constraints on stockpiling under the 1955 Essential Commodities Act, and enable contract farming based on written agreements. The government’s declared purpose to create “an ecosystem where farmers and traders enjoy freedom of choice,” with “competitive alternative trading channels” that “promote efficient, transparent, and barrier-free” trade sound fair, but when one digs deeper, it becomes very clear that these laws only benefit the corporations that will have total control of the market.[v]

Together, the three laws invite big corporations into a fragmented and deregulated market that could lead to volatile prices for farmers. Adam Smith’s notion of a free market may be welcoming in a thriving economy with robust structure, but it is not practical for a developing country. The government, while trying to create protections for farmers, has in the same breath created mistrust by imposing a complex system with no room for negotiation.

Farmers fear that these “modernizing” laws will pave the way for the predatory corporate commercialization of Indian agriculture, which has been lobbied and led by politically well-connected industrialists. Others argue that the laws effectively deregulate farm-produce transactions, contract farming, and stock holding in ways that will harm farmers. Small and marginal farmers fear they will be the most adversely affected. Upon this analysis, it is pretty clear why India’s farmers view the new legislation very differently from the government.

Farm incomes were already declining continuously before Prime Minister Modi came to power in 2014. In fact, farmers played a crucial role in Modi’s initial election triumph after he promised to double their incomes in five years by offering MSPs for their produce that were 50% above total cultivation costs. But the central government has failed to keep that promise, among others, and farmers instead received prices that were even lower relative to their costs than they had been under the previous government.

As the protests gain attention and support from world leaders and other notable figures, it will be interesting to see at what point the government will agree to productive and peaceful talks that will lead to a mutual solution. Perhaps they will simply concede to the farmers and recognize the solutions they are offering need to take a back seat to building a framework for a fair market in order for agricultural commerce to have any chance of success. In other developed countries, such as the United States, there are stakeholders involved that may help the ‘small farmer’ to amplify the success of the free market. There are also specialized cooperatives for crops, consortiums, subsidies, laws, and stakeholder-sponsored public interest campaigns, creating a sustainable structure for agriculture to thrive. The revered “Got Milk?” campaign of the 1990’s was created by a high-profile advertising agency and paid for by the California Milk Processor Board in 1993, which was funded by California dairy farmers and administered by the California Department of Food and Agriculture. The ads were later licensed for use by milk processors and dairy farmers.[vi] Although the campaign was specifically targeted for California, it was a national success and demonstrated a coordinated effort between state government, farming organizations, and farmers to bolster a flagging industry.

India may have a populous of agricultural workers, but the industry itself lacks any coordinated agriculture structure. Today, the farmers were forced to climb down from the ramparts of the Red Fort, but they did not go home. This is their livelihood, their life. Before the next planned march and before we read another headline of police using violence to subdue a significant movement, a total repeal the new laws must occur before both parties can begin again. The government needs to take a hard look at this industry that sorely needs a rehaul–with input from the farmers themselves–in order to create a new order for the agriculture industry in India.

Photography by: The Sikh Collective

[i] https://thewire.in/agriculture/narendra-modi-farmers-protest-promises-trust-msp

[ii] https://economictimes.indiatimes.com/news/politics-and-nation/view-farm-distress-cannot-be-resolved-without-letting-farm-prices-rise-to-global-benchmarks/articleshow/68070328.cms?from=mdr

[iii] https://economictimes.indiatimes.com/news/politics-and-nation/ncrb-data-shows-42480-farmers-and-daily-wagers-committed-suicide-in-2019/articleshow/77877613.cms

[iv] https://thewire.in/agriculture/punjab-farmers-suicides-debt

[v] https://pib.gov.in/PressReleasePage.aspx?PRID=1656929

[vi] https://are.berkeley.edu/~sberto/2009Got_Milk.pdf