Asia Readers' Contributions

Reaping what the Farm Bills sow: has Modi met his match?

According to the IMF, India has the 5th biggest economy in the world, behind the US, China, Japan and Germany. Leading its economic charge is Narendra Modi, India’s Prime Minister, a polarising Hindu nationalist running a country encompassing a multitude of faiths, languages and cultures. Modi has a reputation for immediate action, for example in 2016 he gave four hours’ notice to invalidate high value notes in the cash economy and, responding to the pandemic, he gave less than four hours’ notice ordering India’s 1.4bn population into strict lockdown with no warning or planning. Both were carried out without consultation. While Modi is divisive, here are two universal truths: there is a raging pandemic and the global economy is in free fall. As Covid-19 escalated, in the second quarter of 2020 the Indian economy contracted by nearly a quarter and the Reserve Bank of India expects it will contract by 9.5% for the fiscal year ending in March 2021. As well as this, the world’s largest protest, comprising Indian farmers mainly from Punjab and Haryana, has been ongoing at the Delhi border since November 2020 with no sign of abating.

India is one of the world’s largest agricultural producers and its farming industry has been in decline for decades. The World Bank estimates that 50% of the workforce depends on agriculture for their livelihood however it only accounts for approximately 15% of India’s economic output. The rate of growth is difficult to assess, however figures generally show it is either negative or in decline. This is accompanied by fragmentation of land ownership, increasing unemployment, and debt. These factors have produced further problems: Punjab, India’s “breadbasket”, has the country’s highest rates of cancer, suicide, drug and alcohol addictions. It is estimated that more than 900 Punjabi farmers killed themselves between 2017 and 2019 and as many as 65 have committed suicide since September.

In 2016, Modi promised to double farmers’ incomes by 2022. In September 2020, three Acts of Parliament, “the Farm Bills”, were forced through in controversial circumstances, without consultation, involving voice votes. These replaced old laws that badly needed updating so farmers could compete in global markets. Under the Farmers’ Produce Trade and Commerce Act, farmers have the freedom to sell produce on the open market, including online. Previously, their only option was to sell to wholesale markets controlled by a state monopoly, known as “mandis”, which had been open to abuse by those who ran them. The Farmers Agreement of Price Assurance Act supports famers contracting directly with customers, including large buyers and exporters, encouraging long term agreements and increasing security. Items, including pulses and cereals, are declassified as essential commodities under government control through the Farm Services and the Essential Commodities Act. Consequently, they can only be sold in the open market rather than under government directed prices.

However, farmers complained about the other consequences of these laws, due to their mistrust of market reforms, and began protesting locally, the majority in Punjab. As their efforts fell on deaf ears, they took their protests to Delhi. On 26 November 2020, 250 million people were involved in a national strike in support. Despite law enforcement blocking the farmers’ paths with barricades and using tear gas, water cannons and batons, approximately 300,000 farmers reached the Delhi border and blocked access. 50 farmers unions were joined by 14 million truck drivers disrupting supply chains. Enduring harsh climatic conditions of heavy rain and freezing temperatures, Delhi’s four main entry points have been choked and the now 500,000 peaceful protestors have created well organised mini settlements, ready to stay until the government repeals the Farm Bills.

Advocates for the Farm Bills state that farmers had become too used to subsidised seeds and fertiliser, using government supplied electricity to pump unlimited amounts of water depleting supplies, and that government purchasing of products at a minimum price had resulted in a “grain mountain”. Additionally, soil has been degraded and polluted while paddy stubble burning of excess, resulting from the old policy, was a major cause of air pollution.

While there is serious merit in all these points, they reflect an idealistic and simplistic scenario that does not exist in India where the Farm Bills are likely to disadvantage those who need reform the most. Farmers were struggling with the previous regulatory regime and fear that the progressive market friendly Farm Bills have removed the little protection they had. Initially, the open market system will offer better rates to attract farmers, eventually leading to the closure of mandis. Once closed, the only method of selling produce will be through the open market and inevitably the selling price will reduce as bigger corporations take control and competition increases, favouring the larger landowners. As farmers are forced to sell at lower prices, they will be unable to meet their overheads and no longer be able to afford the land rental costs. Small landowners will be forced to sell as their income will also be reduced further impacting unemployment. Approximately 86% of Punjabi farmers have less than 2 acres of land, and live hand to mouth existences. It is practically impossible for them to store crops and search for the best rates. Once again, this favours the large affluent farmers. The poor majority are subjected to “take it or leave it” offers, pressuring them to work greater hours with little benefit. Theoretically, farmers can refuse low offers. Practically, with the limited resources they have, farmers do not have the capacity for this. Some states where the legislation has been implemented have already felt the negative impacts of not having a minimum selling price, as demonstrated in Bihar where many farmers have now moved to Punjab, leaving their land and now working as labourers to avoid poverty as they had no resources for recourse to the courts.

Some view the Farm Bills as a political and sectarian strategy, appealing to wealthy BJP supporting corporations who want to invest in the agricultural market while silencing the mostly Sikh farming community. Modi worsened the situation by initially attempting to portray the farmers as ignorant, misguided Sikh separatists and terrorists, saying “some people” were spreading lies and rumours about farmers’ troubles, and dismissed the protests as motivated by political opponents.

“All these people who are protesting in support of farmers, what did they do when they were in power?” (referring to opposition politicians) “Those with political motives…are firing the gun from the farmers’ shoulders.”

Narendra Modi

The Indian population has observed how minorities have been silenced with force in Gujarat, Jammu and Kashmir, and are wary, but supportive of protestors. This is complicated by the dissemination of “fake news” on both sides and a state sponsored media. The active Sikh diaspora around the world has mobilised, raising donations and awareness. The global media is also paying attention as more world leaders raise their voices. It is now no longer just an issue of farming legislation and good economics but about a resilient Sikh community’s defiance against a perceived oppressive Hindu government.

The Supreme Court has now suspended the Farm Bills, expressing “displeasure” over the government handling of the protests and the state of the farmers. The farmers have said they will keep protesting until the legislation is repealed and not just suspended. Agricultural supply has unsurprisingly reduced and it is expected that this will lead to a ripple effect outside the agricultural sector, through inflation and a further contraction of the Indian economy. Modi is not known for backing down, but has he finally met his match?

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