Farmers’ protest: India’s farm sector needs bolder reforms, not the three contentious laws that leave room for distrust

As the country gets closer to state assembly elections next year, the farm agitation will be an important and emotive electoral issue

Ajit Ranade Oct 10, 2021
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Farmers’ protest

It was a little over a year ago that the three farm laws were passed rather hastily in Parliament. The laws were issued as ordinances in June and then converted into bills for passage in Parliament. That was rushed through without much discussion or debate.  For laws described as far-reaching reforms, surely some discussion should have been allowed. The government responded that the underlying issues were known and thrashed for a long time as if implying there was no use wasting any more time debating them.

Since the ruling BJP-led National Democratic Alliance has a majority, the bills passed and got the President’s assent. The government’s supporters claimed the farm laws were examples of bold reforms and applauded the ability of the ruling coalition to take the risk. This is a narrow and misguided assessment. Reforms by consensus are better than reforms by stealth or by the brute force of the majority. This is especially true for a sector that affects half the population of the country directly. Besides, agriculture is a state subject as per the constitution; so consensus building is imperative. Opposition to the ordinance had already begun in June. And then in September, from the very day they became laws, wider protests and agitation started.

Just like the laws, the agitation against them is over one year old too. It has survived a cold winter, rains and floods, internet blockade and much police action. There have been more than eight rounds of negotiations between the government and farmers’ representatives to find some middle ground. All these rounds have failed. In January, the Supreme Court stayed the implementation of the laws and appointed an expert committee to suggest the way forward for implementation.  

By December much of the global media was describing the outcry as the biggest farm protest in the world.  During that month, an estimated 250 million people across the country responded, showing solidarity with the protest. One CNN columnist wondered, with such massive support, if Black Lives Matter or MeToo could be globally trending protests, why were India’s farm protests not trending globally?

Government intimidation, analyzing legislations

One young activist was arrested because she was disseminating a “toolkit” for organizing protests! The internet was occasionally shut down to make it difficult for farmers to spread their message. The government threatened Twitter to block dozens of accounts, which the American social networking service complied with.

A recent rally at Muzaffarnagar in Uttar Pradesh attracted a million-plus participants. The agitation is not dying down, and positions have hardened. The repeal of the three farm laws is their demand, nothing less. The detractors of the agitation claim that its support base is pretty small, and represents only the interests of big farmers and entrenched lobbies of middlemen in the northern states of Punjab and Haryana

So, what are the three farm laws? Very simply put, they relax shackles on the farmers. The first one allows the farmer to sell produce outside the premises of the designated yards (mandis); the second one allows the farmers to directly negotiate and enter into contracts with the corporates; the third one relaxes the restrictions of the Essential Commodities Act, i.e. relaxes the restriction on storage and transportation of farm produce. All three farm laws are thus relaxation of constraints on the farmers. They give new freedoms to the farmers. One may wonder how that can be a bad thing. Well, that is because the concern is about what happens next.

The road is slippery from these laws to their implications. If government procurement through designated mandis drops, then the Minimum Support Price (MSP) assurance to farmers is lost. The government is currently under no statutory obligation to purchase any minimum quantity. The assurance of MSP can be vacuous if no quantity is purchased. The mandi taxes collected on the mandi transactions help build and maintain infrastructure. Is the government planning to dismantle mandis eventually?

Secondly, on contract farming, the farmer is not allowed to seek recourse to courts, in case of a breach of contract. How will a small farmer fight the might and muscle of large corporations? He is supposed to take help from the local district magistrate (DM). But the recent video of a young DM instructing police to break the skulls of protesting farmers does not inspire confidence that the bureaucracy will stand by the small farmer.

On the dilution of the essential commodities law also, there is no guarantee that the government will not intervene when food inflation spikes up. The farmers fear that whenever their crops start fetching a higher price, the “reform” law will be suspended to their detriment, and prices will be forcibly capped. This was indeed done for sugar, and export controls and stocking limits were imposed soon after the September passage of the laws.

Rebuilding trust

So, all three laws leave room for farmers to be distrustful of the government. And it is here that much action is needed to rebuild the trust and confidence of the farmer. As the country gets closer to state assembly elections next year, the farm agitation will be an important and emotive electoral issue.

India’s farm sector needs to be unshackled, but elsewhere. For instance, land leasing laws should be liberalized and greater play for money lenders allowed. Tenant farmers should be able to access formal credit and the fitful export and import bans on food products need to be removed. Animal husbandry, the fastest-growing part of agriculture income, has to be encouraged. The government should also encourage land consolidation, at least of the bulk of the 140 million small parcels of land across the country. Digitization of land records and removing ambiguity totally in ownership should go a long way.

The country has very diverse agro-climatic regions, and hence the one-size-fits-all approach will not work. Modifying the Public Distribution Systems to include millets and local varieties will help farmers as well as the nutritional needs of people. Steps should be taken to enable forward and futures markets for farm produce, which can eventually complement, if not eliminate the need for MSP.

Activate and energize the linkage between agriculture universities and extension services. Hybrid varieties at least for non-food crops can vastly increase productivity and incomes. The success of BT cotton is a stark example. Farming needs intellectual and scientific knowledge inputs much more than subsidized water, electricity, credit, or fertilizers. On September 3, India celebrated the 86th birth anniversary of late Sharad Joshi, one of modern India’s dynamic, firebrand, indefatigable campaigners for farm reforms and the uplift of farmers.

Following his writings and advocacy would be a good place to start.

(The writer is an economist and Senior Fellow, Takshashila Institution, Bengaluru. The views expressed are personal. By special arrangement with The Billion Press - editor@thebillionpress.org)