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Mainstream, VOL LIX No 11, New Delhi, February 27, 2021

History Justifies the Mistrust of Farmers on New State Legislation in Indian Agriculture | Mohd Shahwaiz

Saturday 27 February 2021

by Mohd Shahwaiz *

In September 2020, Parliament of India brought three acts in order to newly legislate or we can say reform the agriculture sector of India. This reform is nothing but another move in the direction of Liberalization, Privatization, and Globalization (LPG) policy of the 1990s. The ultimate purpose of the latest reform in agriculture, according to government, is to ’doubling the farmer’s income’ by 2022. Prime Minister Narendra Modi envisages the new farm laws as historic and a "watershed moment" in respect to the future of Indian agriculture. Because he believes, that new farm laws aim to empower Indian farmers by "a complete transformation of the agriculture sector" (Hindustan Times, 20 September). Moreover, Modi’s new legislation in Indian agriculture has also appreciated by the International Monetary Fund (IMF). According to IMF, new farm laws are essential and can transform Indian agriculture into a "right direction" and Indian farmers can be able to get a greater amount of ’surplus’ [1] of their produce since these laws wipe out the role of middlemen or mediators. However, Gita Gopinath, the chief economist at IMF, has also inquisitiveness for providing ’social safety net for vulnerable cultivators’.

The farmers have been continuing their protests against new three new farm laws. However, the farmers of Punjab, Haryana, and UP are at the forefront. Farmers allege that these new laws have been formulated and tried to implement without the consultation of Indian farmers and their implementation is against the deliberate interest of farmer’s community. In additions, farmers also allege that these new farm laws allow the entry of giant corporates that would further marginalize farmers and increase miseries in the Indian agriculture sector. For more than two months despite chilling winter days, farmers are protesting with the demand of repealing new farm laws and legal protection of Minimum Support Price (MSP). On the other hand, the government ensures any possible amendment in new laws instead of revoke. Still, eleven meetings have been held between government and farmers but remain unsuccessful and ‘deadlock’ continues. In respect of many aspects, the current protest of farmers has been considered as the most significant and historic. Why are farmers so suspicious and in fears over the latest state legislation in agriculture?

Farmers’ lack of trust over new state legislation in the agriculture of India is far enough justifiable as far as the history of the relationship between the state and peasant community is concerned. Since independence, farmers have been less regarded, neglected, and, to some extent, even excluded from the policy framework in India’s path of economic development. Under the state legislation, reforms, development planning, or new economic policy, farmers have often been felting betrayed or unrewarded. However, I do not mean here that the state’s legislation is harmful or enemy for the farmers. Indeed, I never wish to see ‘anarchy’ that is often promulgated by ‘neo-liberal’ proponents in order to better management of market affairs. Rather I mean here is that state has remained futile to deal with agrarian affairs in India as far as deplorable conditions of farmers are concerned, particularly the wretchedness which lead to farmers to commit suicide and ineffective response of state over such plight for more than two decades. Since independence, every state’s legislation on Indian agriculture has deepened inequality and led farmers in a more challenging situation. First, we recall major reforms and their consequences on Indian farmers then we will try to interpret the nature of new farm laws and their possible outcomes.

From Land Reforms to WTO’s Agreement on Agriculture

In post independence period, Land Reform is one of the initial state’s legislations on Indian agriculture. This reform aimed to abolish the feudal system in agriculture that created and encouraged during the British rule in India. Under this act, India strongly determined to transfer the lands from the feudal lords to the landless poor and marginal farmers of India by which farmers could be empowered and strengthened agrarian community. The land reform supposed to be a major institutional reform in India since it aimed at the redistribution of lands, tenancy registration, and a strong move towards democratic decentralization in India. However, the majority of farmers who were ensured to get lands from government remained landless and those who got land faced challenges to sustain it. According to Agricultural Census 2011, about 5 per cent of India’s farmers control 32 per cent of farmland [2]. In a nutshell, the process of land reform regulation could not breed a successful result because of its ineffective implementation.

Another important state’s legislation on Indian agriculture was ‘Green Revolution’. It prescribed reform for bringing ‘technicalization’ and modernization in Indian agriculture that could maximize agricultural productivity and prospering agrarian community. This reform proposed modern techniques of farming along with the support of modern technologies. ‘High Yielding Variety Seeds (HYVs) designed for generating a greater amount of crops’ productivity. On the other hand, the technical equipments — such as tractors, irrigation, etc. — offered to farmers for better management of crops and minimize labour force in the field. However, the adoption of techniques and methods were challenging task for Indian farmers since modern techniques prescribed under the green revolution were too expensive for farmers and the majority of farmers were poor. Secondly, most of the farmers were not educated to use those modern techniques in agriculture. So, big rich farmers were able to get those techniques and methods prescribed by the green revolution which led to the emergence of “Bullock Capitalist” [3]. Therefore, the Green Revolution further segregated the farming community by ‘haves’ and ‘have-nots’.

In the post liberalization period of India, India agreed to WTO’s Agreement on Agriculture (AoA). Agreement on Agriculture is an ’international treaty’ framed by the World Trade Organization (WTO) in order to boost up liberalization of world trade. Under the Agreement on Agriculture, WTO has liberalized the agriculture market and prevents state to impose the tariff on import or follow ’protectionist measure’ for the interest of local producers. Agreement on Agriculture, however, opens gates for new markets for Indian farmers. But, except few crops, Indian farmers do not have enough and potential production to get the benefits of global markets. On the other hand, the exports items of other countries have started ’dumping’ in local markets which create more challenges for the local producers than opportunities. Another important change that has made under the AoA is that the inputs materials — such as seeds, fertilizers, pesticides etc. — have started manufactured by the business corporations. The introduction of Genetically Modified seeds and their protection under new patent by the WTO brought major challenges for farmers in India that directly has hampered the liberty of farmers regarding the preservation of seeds or reuse of seeds for next crops. In respect to the profiteering of seeds and fertilizers, Vandana Shiva finds it as the emergence of ‘monoculture of the mind’ in the agriculture sector [] [4]. However, India remained unsuccessful to protect the rights and interest of farmers. Farmers have to arrange more amount of money to buy these inputs and, hence, farming has become a matter of greater investment after WTO’s AoA.

New Farm Laws

The triplet of farm laws is "The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, and The Essential Commodities (Amendment) Act.

(a) The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act broadens the market for farmers that earlier confined to Agriculture Produce Market Committees (APMCs). This act enables farmers to sell their crops outside the APMCs. On the other hands, any registered private trader or corporations can directly deal with farmers for purchasing the harvest at mutually negotiated prices. In this way, the mandi tax that is being imposed by the state government will not be needed to pay by farmers if they do business outside the APMCs.

From this act, many important points can be outlined. First, APMC [5] was made in order to fulfill two major objectives: (a) protection of farmers from the exploitation of big retailers that ensured farmers to claim a considerable amount of their produce. (b) On the other hand, APMC also responsible for the protection of consumers from the unnecessary rise of food price that could not become a hurdle in getting ‘Right to Food’. The inefficient working of APMCs, along with laden corruption, is responsible for undue rights of farmers and economic backwardness of agriculture sector that ultimately justifies the government’s decision to abolishing APMCs and freed farmers. But the fear of exploitation of farmers and threat on right to food to all continues in new farms laws if APMCs dissolve. Secondly, APMCs have been regulated by the state governments in India with the purpose of proper management of the largest sector of India’s economy which strengthens the decentralization and federal system in India. New farm laws, in this way, will lead to centralization of agricultural affairs in India and the abolishment of mandis will also impact the power of state and revenue collected under mandi tax.

(b) The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act encourages contract farming and farmers can freely decide to whom they want to sell their crops according to the best available price in the market. Farmers are no longer bounded with the APMCs for selling their produce. They can expand their market and get a chance to work or contract directly with buyers on mutually negotiated prices and conditions.

Though new laws emphasize the contract farming for benefitting farmers but the practice of contract farming has already been in the practice even before the independence of India. The practice of contract farming has become more prevalent than ever after the liberalization in India. Private companies make a contract with farmers to produce and sell produce. Generally, the agreement between farmers and private companies take place verbally in which many instances of ‘breach’ contract have been seen. In case of failure of crop or low quality of the harvest, farmers cheated by the private companies. In the post-liberalization period, the overall experience of contract farming in India is not remarkable. In order to the systematic operation of contract farming, India faces many challenges [6]. The capital intensive contract farming of cash crops needs more money to invest. In case of the failure of crops or the breach of contract, farmers face unbearable losses that lead them indebted. So, without legal protection and proper institutionalization of contract farming for both farmers and private firms, the objective of new farm laws may hurdle in getting the desired outcome.

Under this act, freedom has been granted to farmers to sell crops anywhere they want. But the farmers are in more fears than excitements over the granted freedom by the state that has resulted in one of the historic protest of farmers since the independence. According to the protesting farmers, the foremost reason for fear among the farmers is exploitation by private business firms or corporations. Therefore, they (farmers) demand legal assurance over the Minimum Support Price (MSP) from the state. However, the demand for MSP is not new. MSP has been demanded by farmers for many decades. In fact, the Swaminathan Committee Report in 2006 has strongly recommended MSP for protecting farmers during the government headed by Manmohan Singh. But Shanta Kumar Committee (2015) has found that only 6 per cent of farmers could get MSP in India [7]. If the government believes that new farm laws have been formulated in keeping in mind the objective of doubling the farmers’ income, then the demand of farmers for MSP as social security seems to be prerequisite and justifiable.

(c) The Essential Commodities (Amendment) Act amends in the existing Essential Commodities. By this amendment act, some items, such as food grains, pulses, edible oils, and onion, have been omitted out from the essential commodities, which were earlier regulated with a concern of welfare schemes and poverty alleviation, and allowed their marketization. However, the main objective of this amendment is to make ensure to the investors that their money would bring possible profitable outcome along with the least interference of the government in the agriculture market in India. The government has a firm belief that private investment is the finest way of improving the techniques and methods of farming. Privation and liberalization help in better utilization of agricultural surplus that can lead to a new age of transformation and development in the agriculture sector in India.

As far as the purpose and objectives of these new farm laws are concerned, many important points come out that need to be outlined. First, the government has agreed that there are many inadequacies and lack of investment in Indian agriculture sector in which public institutions and mechanism remained unsuccessful. Secondly, if the government is confident enough over the strategy — such as increasing investments and improving infrastructure — and its possible fruitful outcomes, then why not the government itself takes initiative for the same reform that could increase the income of the country, help in making budget surplus, and, consequently, farmers will be more cooperative in this way. Or like western countries, India too believes over one of the existing fallacies of our times that their visible hands have become ineffective and “invisible hands” are better in managing the market affairs for making prosperous society.

Conclusion 

The government ensures that these farm laws made according to the economic reform of the 1990s. These laws, according to the government, will bring a new dawn of development in Indian agriculture that will boost up farmers’ income. Government has also a firm belief that new laws will bring private investment which can improve the infrastructure of agriculture sector and strengthen the agrarian economy. However, private investment and liberalization have dominated over the two sectors — the manufacturing and sector — out of three basic sectors of the Indian economy. These laws are nothing but a deliberate step to complete the process of LPG by incorporating primary sector that would carry forward India into a complete process of privatization and heavy liberalization of the agriculture market. The major concern behind the new transformation of the agriculture sector is that the people of this sector are the most vulnerable ones which comprise the majority of small and marginal farmers and poor farm labourers. The majority of India’s population still lives in the rural area and they depend on the agrarian economy for their day to day survival. It would be a glorious future for India if the expectations from these new laws fulfill. I wish it would happen. But what will happen if they don’t? The hegemony of private bulky giant corporations and economic elites has nothing to do with anything, but the profit return of their investment. They can destabilize the economic livelihood of the majority of the population and impact the ’food security’ in our country if the government would not seriously create a mechanism for protecting Indian agriculture. Therefore, farmers’ protest justifies the lack of trust in these new laws and their demands of safety nets, particularly, MSP and due process of law, is absolutely justifiable.

(Author: Mohd Shahwaiz is a research scholar at the Department of Political Science. His PhD thesis title is “Globalisation and its Consequences: A Study of Farmer’s Suicide in Maharashtra Since 1995. He can be reached at: mdshahwaiz2012[at]gmail.com )


[1Outlook Web Bureau. “India’s New Farm Laws A Step Forward, Need To Strengthen Social Safety Net: IMF”, Outlook (15 January 2021) https://www.outlookindia.com/website/story/india-news-indias-new-farm-laws-a-step-forward-need-to-strengthen-social-safety-net-imf/370596

[2Agricultural Census 2010-11. “All India Report on Number and Area of Operational Holdings, Ministry of Agriculture, (Government of India, 2014)

[3The term “Bullock Capitalist” was used by Lloyd Rudolph and Sussane Rudolph in their book “In Pursuit of Laxmi: The Political Economy of Indian State”, (University of Chicago, Chicago Press, 1987)

[4Shiva. Vandana. Monoculture of the Mind: Perspectives on Biodiversity and Biotechnology, (London: Zed Books, 1993)

[5Model Act - The State/UT Agricultural Produce and Livestock Marketing (Promotion&Facilitation) Act, 2017 http://agricoop.nic.in/sites/default/files/APLM_ACT_2017_1.pdf

[6Sharma, Smriti. “The Government’s role in Contract Farming,” Livemint (2018) https://www.livemint.com/Opinion/oqHoahbLsnFSa74cuuqIIP/The-governments-role-in-contract-farming.html

[7Shanta Kumar Committee was set by the Government of India in August, 2014. See briefing and recommendations of the committee’s report at https://pib.gov.in/newsite/PrintRelease.aspx?relid=114860

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