For almost seven months now, Indian farmers have been protesting three laws that the Indian parliament passed in September 2020. They have blocked highways, organized a nationwide strike, and have continued with the protests through the current, deadly COVID-19 crisis.
Farmers’ protests are not uncommon in India. In 2018, over 40,000 farmers marched over a hundred miles to Mumbai in Maharashtra to demand better support for farmers from the state government. The current protests, however, have been remarkable for many reasons: The protests have occasionally become violent and have attracted widespread international attention from lawmakers and celebrities alike. After an initial offer to negotiate, the federal government, against whose laws the farmers are protesting, reacted by arresting a young climate activist and with a crackdown against protestors.
The laws are designed to deregulate existing restrictions on marketing farm produce and promise farmers the opportunity to market their produce without restrictions. The Modi government has argued that the laws will increase farmers’ incomes. If the laws look out for their interest, why are farmers protesting?
Quite simply, the farmers are afraid that the laws will throw them at the mercy of corporate interests without adequate safeguards and necessary infrastructure. They are also afraid that these laws are a precursor to the government’s retreat from the farm sector: In the past, the government has been a source of investment and has provided a safety net to some of them.
Under the existing farm policy infrastructure — a legacy of the 1960s when India was food insecure — the government buys grains and a few other commodities for public distribution. The government regulated the price of these by announcing floors called minimum support prices (MSP). Farmers with medium to large farms, who produced surpluses, benefited most from these policies. To protect farmers against powerful traders, governments in many states allowed the buying and selling of grains and other produce in regulated markets only. In addition, the government’s role in providing seeds, fertilizers, and investment in research and infrastructure development, benefitted many more, including owners of small and marginal (tiny) farms who make up 86% of Indian farmers.
Quite simply, [India’s] farmers are afraid that the laws will throw them at the mercy of corporate interests without adequate safeguards and necessary infrastructure.
The 1960s policy framework came under scrutiny in the 1990s in response to a prolonged period of stagnation in farm incomes. As a result, a larger debate on reforms in the farm sector has been raging in India for at least two decades. That debate broadly acknowledges the need for changes in the set of legislations from the 1950s and 1960s: One side in the debate argues for market-oriented reforms, which the current laws represent, and the other side argues in favor of more government support to farmers. The marketing rules came under close scrutiny in the early 2000s. Since India’s states have jurisdiction over policymaking in agriculture, the federal government in India began the reform process in agricultural marketing by proposing a model reform act in 2003, expecting states to adopt it. Different states adopted different parts of the model act, creating a patchwork of laws across states, which led to a fragmentation of markets, eventually leading the Modi administration to pass the 2020 farm laws.
The new, “reformed” laws were designed to create a national market by creating uniform laws across all states. The laws have made three important changes. The first is that farmers can now sell directly to supermarkets, food processors, exporters and others. Second, the corporate sector can now set up private wholesale markets and contract farming agreements. Finally, the laws eliminate restrictions on movement of farm produce across state borders. Critics argue that some of these reforms have already failed and that debates on farm policy require rethinking the role of the government rather than eliminating it.
The current protests are primarily led by farmers from the northern states of Haryana and Punjab, the chief beneficiaries of the government’s food procurement and public distribution system, set up in response to the 1960s food shortage. Farmers from other states, however, have been organizing protests since the laws were passed and have joined in the current protest to air grievances about low produce prices, lack of effective markets, inability of legal services for redress, and a host of other problems.
The farmers have three main concerns. The first is that they are afraid that these laws signal a withdrawal of the government from the farm sector — a withdrawal that removes existing protections and the promise of public investment. As part of the 1960s policy framework, the government-guaranteed floor prices or MSP for 23 commodities is one of the protections farmers enjoy against price fluctuations in commodity markets. Even though the new laws do not mention MSP removal anywhere, it has emerged as a central concern. Every year, the government announces MSP for these commodities and buys grains from farmers for India’s public food distribution system to make food accessible for India’s burgeoning poor. Farmers fear that the government will substantially reduce its purchase of grain, leading to a crash in prices. The same recent government study that has recommended marketing reforms has also recommended reforms in reach and coverage of MSP.
The second concern that the protesting farmers have is that given India’s weak legal institutions, they will have little negotiating power vis-à-vis corporate players under complete deregulation. Admittedly, farmers have been at a disadvantage even under the 1960s regime, where middle-men purchase from them in government-designated markets. Since the farmers are many, relatively poor, and have little infrastructure for storage —which deeply impacts those farmers who cultivate perishable produce — the playing field has never been level. That said, the proposed deregulation under the new laws is akin to going from the frying pan into the fire, and the farmers are unsure how they will fight corporate power in case of legal battles.
Finally, past experience has shown that private markets have not replaced government-designated markets where deregulation took place. Bihar, another northern state, embraced full deregulation in 2006: The results have not been promising. New private markets did not emerge after deregulation and the government’s role in buying from farmers remained low. Farmers suffered as a result of low and unstable prices.
THE NEED FOR A LARGER DISCUSSION ON FARM REFORM
There is considerable consensus in India that the policies governing the farm sector, including those on produce marketing, need reform. While the current administration has elected to move in the direction of deregulation, farmers and scholars point to the need for a government role in facilitating these changes and for building some safeguards. The protests have resonated because of two factors: One, the government passed the laws without much deliberation in the legislature; and two, the protests reflect dissatisfaction over many aspects of the rural, agricultural economy. At the very least, there is a need for a fuller discussion of the direction and content of farm reforms in India.
The farm sector provides livelihood to over 40% of India’s population. Farmers in India have a history of success in making governments listen to them. The farmers did not call off their protests even as a deadly second wave of the COVID-19 pandemic swept through India recently. Instead, the farmers are gearing for a bigger battle: They have recently reinforced the protest site to protect themselves against the monsoons and are planning on taking the protest to state executives. These protests will likely occupy a central place in state elections in Punjab next year. Engaging in deliberations and following a more democratic policymaking process, however difficult, will serve the interests of all involved.
Surupa Gupta is professor of Political Science and International Affairs at the University of Mary Washington. She has been researching and writing about the domestic politics of agricultural policy in India for over a decade.