Why Are The Indian Farmers Protesting?
In this episode of Ekalavya Chaudhuri's blog...
Good morning. Afternoon. Evening. Whichever it is where you're from.
In today's instance of just generally discussing things on my blog, I, Ekalavya Chaudhuri, am going to take a short look at the issues around the three farm bills which have been passed recently by the Indian Parliament and received approval from the President of India. There is a lot of hue and cry around these bills because of huge farmer protests. I'll also look at why that is.
As a necessary part of all this, I'm going to try to briefly analyze both the pros and the cons here, looking at both the constructives as well as the not-so-constructives of the litigation. Since in a following article I am going to look tangentially at one specific non-constructive pertaining to the issue, I felt the requirement for a more balanced and nuanced discussion first.
In today's instance of just generally discussing things on my blog, I, Ekalavya Chaudhuri, am going to take a short look at the issues around the three farm bills which have been passed recently by the Indian Parliament and received approval from the President of India. There is a lot of hue and cry around these bills because of huge farmer protests. I'll also look at why that is.
As a necessary part of all this, I'm going to try to briefly analyze both the pros and the cons here, looking at both the constructives as well as the not-so-constructives of the litigation. Since in a following article I am going to look tangentially at one specific non-constructive pertaining to the issue, I felt the requirement for a more balanced and nuanced discussion first.
The Three Farm Bills
The President of India gave assent, on September 27 2020, to three bills related to the agricultural sector which had earlier been cleared by the Parliament. There are three of these agricultural reforms.
These are:
These are:
- Farmers' Produce Trade and Commerce (Promotion and Facilitation Act)
- Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act
- The Essential Commodities (Amendment) Act
What Are The Bills For?
The government of India contends that these bills (which have all now become acts) will boost a robust growth in the agricultural sector through the private sector's investment. That would happen through the investment being used to build better infrastructure as well as supply chains for agricultural produce in India. Naturally, this would be something providing a fillip to both the national as well as global market.
In particular, the Indian government has asserted, the reforms are targeted at helping small farmers. This is because such farmers are individuals who do not have the means to bargain for a better price for their produce or to invest in big tech by themselves in order to improve the productivity levels of their farms.
The specific bill (now act) related to the agri-market would see such farmers in India being permitted to sell their agricultural produce outside of the grasping hold of the middleman-controlled APMC 'mandi's to whosoever they saw fit to sell it to. Following such an occurrence and as a natural consequence of it, it is judged, farmers would be able to get both better prices because the entire process would become competitive. Moreover, in another major factor, they would be able to save/cut costs on transportation. Subsequent to all of this, of course, in a different variable that should be noted at this juncture, one would see states losing out on such things as commissions and mandi fees.
The part of the legislation that pertains to contract farming would permit Indian farmers to enter into contracts, with agri-business companies, conglomerates and firms or–in general–large retailers, on pre-agreed prices for their agricultural produce. Apart from this, the Essential Commodities (Amendments) Bill, 2020 (now act), removes cereals, pulses, oil seeds, edible oils, onions and potatoes from the list of essential commodities in India. The move ends the imposition of stock-holding limits, except under extraordinary circumstances, in an attempt to introduce efficiency into the agricultural sector as a sector of the Indian economy. As I will go into in another article below, even while presenting a significant con to the scenario at present at hand, it would be bootless to deny that there is serious inefficiency in the agriculture sector in India.
In particular, the Indian government has asserted, the reforms are targeted at helping small farmers. This is because such farmers are individuals who do not have the means to bargain for a better price for their produce or to invest in big tech by themselves in order to improve the productivity levels of their farms.
The specific bill (now act) related to the agri-market would see such farmers in India being permitted to sell their agricultural produce outside of the grasping hold of the middleman-controlled APMC 'mandi's to whosoever they saw fit to sell it to. Following such an occurrence and as a natural consequence of it, it is judged, farmers would be able to get both better prices because the entire process would become competitive. Moreover, in another major factor, they would be able to save/cut costs on transportation. Subsequent to all of this, of course, in a different variable that should be noted at this juncture, one would see states losing out on such things as commissions and mandi fees.
The part of the legislation that pertains to contract farming would permit Indian farmers to enter into contracts, with agri-business companies, conglomerates and firms or–in general–large retailers, on pre-agreed prices for their agricultural produce. Apart from this, the Essential Commodities (Amendments) Bill, 2020 (now act), removes cereals, pulses, oil seeds, edible oils, onions and potatoes from the list of essential commodities in India. The move ends the imposition of stock-holding limits, except under extraordinary circumstances, in an attempt to introduce efficiency into the agricultural sector as a sector of the Indian economy. As I will go into in another article below, even while presenting a significant con to the scenario at present at hand, it would be bootless to deny that there is serious inefficiency in the agriculture sector in India.
Why Are There Being Protests?
The opposition as well as the longtime ally of the ruling party at the Centre in India (the government-running Bharatiya Janata Party), the Shiromani Akali Dal, have termed the reforms 'anti-farmer' ones. Farmers have attempted to, in essence, lay siege to the central government in Delhi. As of the time of writing this blog post, meetings between the central government and farmers have failed to come up with any sort of amicable resolution.
The farmers have a serious question about whether the mechanism of the Minimum Support Price, by which the government procures agricultural produce from farmers in India at a minimum assured compensation if required and necessary, is going to stay. In an emphatic declaration, Agriculture Minister Mr. Narendra Singh Tomar has stated his assurance that it will. There will be, he has also asseverated, adequate protection of land ownership in place to protect the interests of farmers.
The government laid out a plan to amend the agricultural laws after meeting with farmers, but farm union leaders have since scrapped the idea, stating they would settle for nothing less than a complete and utter rejection of the farm laws. Opposition parties to the government at the Centre, such as the Trinamool Congress, the Congress, the Dravida Munnetra Kazhagham, and the Bahujan Samaj Party, have repeatedly slammed these bills stating that they are against the interests of small and marginal farmers, perhaps referring to the factor that the agriculture sector acts as a social security net for many of them, as I will argue below, even though on the opposite side of the coin this could be seen as disguised unemployment. As well as these, there have been allegations of crony capitalism levelled against the central Government.
What You Need to Know About Agriculture as a Sector of India’s Economy
Probably no one would argue that there is optimal efficiency in India’s agricultural sector. However, one wonders if it is not a fact that the inefficiency here is not a bad inefficiency as it were but a good inefficiency, contradiction though that might seem in terms: something beneficial serving an important purpose.
One is wondering here if it is not a fact being missed out that the agricultural sector in India in giving scope to so many workers than are strictly speaking ‘needed’, provides an enormous net for social security. It affords a potentiality for a life and a livelihood to be kept up for people in times of great catastrophic events causing shocks to a country’s economy where if the country has opted for a market-oriented plan for growth, such shocks can cause severe problems for a chunk of the country’s people.
The people being spoken of here are individuals who don’t have savings per se that they can rely on in the event of a ‘shock’ of the nature described. To take an instance, the outbreak of the Covid-19 virus was a catastrophic event, the lockdown instituted as a policy in response to it by the government of India caused a shock to the economy. The factor or variable in this equation that made livelihoods continue to exist for the many migrant wage-a-day workers who took the long walks back was the agricultural sector that took them in again and gave them opportunities.
In the Philippines one can see the kind of destitute, poverty-stricken squatter ‘camps’ that are a feature due to the large-scale farming that is a key element of the country. Again, in the region of southern Africa, there is a practice of large scale commercial agriculture with power solely with large farm/plantation owners that operates in a way such that there isn’t any safety net. Due to the ensuing rampant joblessness for a great many, there are enormous rates of looting and mugging in the cities of the region.
Commercialization will inevitably mean that there need to be larger farms because any large scale conglomerate will only want to deal with such for ensuring optimal efficiency of costs. It is a fact that in India’s milk sector, farmers have formulated organizations for the purpose of collective bargaining and these serve as base points of collection for corporates. However, it is unlikely that the model could be replicated at scale in such a vast and diverse area as agriculture. Rather, what looks likely is that as farms require to increase their sizes, there will not be space for a great many of those for whom agriculture still as of now acted as a security net.
There is a problem here. Probably, there is not scope for an argument against commercialization in the agricultural space to be made as such if the problems of inefficiency need to be corrected for India’s economy. If growth needs to be there, a transition of some such nature is ultimately inevitable. However, a practical plan in terms of policy for this vision arguably definitely necessitates putting in place some kind of alternative security net mechanism that is at a scale commensurate to what exists at this point. Without this, the factor of alternative non-agricultural employment demand will be a sudden variable introduced into the equation that may be ferocious to such an extent that it is a beast the Indian economy will balk at being able to tame.