Since the independence, India has been an agrarian economy with approximately 72 per cent of its population engaged in agriculture, making up to 50 per cent contribution to GDP in the 1950s. With Five-year plans (FYP), economic structural adjustments and then 1991 reforms, the percentage of people dependent on agriculture has decreased to around 50 per cent, while its contribution to GDP has fallen to about 15-16 per cent. Evidently, there are too many people dependent on agriculture in proportion to the income earned and contributed towards GDP. This is an outcome of growth without proper resolution of the Agrarian Question (AQ)[i], i.e. resolving the issues of employment, productivity, remuneration, and land redistribution in agriculture. In India, agriculture is a sector in distress.
In this Neo-liberal age, capitalism makes it quintessential for government to reform sectorial policies and institutional structures to provide space for its expansion in the areas with limited access. Looking back at the history of reforms, it is evident that the anticipation of popular protest against reforms in sensitive sectors (such as agriculture, PDS, defence, education, environment) leads to backdoor entry reforms. Under this approach, the government machinery unconstitutionally (bypassing the democratic due process) undertakes the reforms and later attempts to justify its validity with vicious campaigns against the protestors and opposition. The protestors are maligned with the use of stereotypical presumptions such as urban Naxals, terrorists and anti-national. In contrast, the reforms are celebrated as a bold decision in the hour of need. The farm bills of 2020 are the latest addition to the backdoor entry style of governing. The present government promotes minimum governance on its face value, but in reality, it primarily serves the wealthy capitalists (top 1%).
Agriculture: A Sector in Protests?
Farmer protests have been happening in various part of India from more than six months, caused by the passing of Farm Bills 2020 by the Indian parliament in September 2020. The farmers from different states of India such as Punjab, Haryana, Rajasthan, Maharashtra etc. have been gathering on the outskirts of Delhi and around its borders, i.e., Singhu border, Tikri border, Gazipur border etc. Till date, eleven rounds[ii] of talks have happened between the farmers and government regarding various issues concerning this bill with no resolution in sight.
Farmer protest of this size and duration hasn’t happened in India from a while. However, farmer protests have been happening from sometimes; prominent protests include 45-day sit-in demonstration by dozens of Tamil Nadu Farmers (2017)[iii], 11-day strike called by farmers from several states for boycotting the sale of agriculture commodities in the market (2018)[iv], Long Kisan March by 40,000-50,000 farmers from Nashik to Mumbai for 7 days covering 180 km distance (2018)[v] and farmers and workers rally from Ramlila Maidan to Parliament (2018) in Delhi[vi] , the recent tractor rally by thousands of farmers on the Republic day of India, 26th January 2021 at various part of Delhi[vii]. The every-day protests include road blockade, dumping of agriculture and livestock produce on the road, the encirclement of government offices and market yards, suggesting the dire state of agriculture occupation.
Farm Bills 2020 and Issues of Concern
Farm bills (2020), are a combination of three farm acts namely the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act (FPTCA)[viii], the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act[ix], and the Essential Commodities (Amendment) Act-ECA. They are argued to be an important way out of the agrarian crisis, favouring private capital penetration with minimal or no regulation/interference by the state. The acts are hailed to be the panacea for the distress in agriculture. They are directed to reduce the role of middlemen, allow private stakeholders to engage in direct trade with farmers without paying licensing fees to Agricultural Produce Market Committee (APMC) ‘mandis’, promote ease of doing business by allowing private traders to trade in commodities and enter in contract agreement etc[x].
Farm bills are expected to unleash private investment in storage facilities, give assured returns to farmers via contract farming, and enhance farm-procurement competition to provide farmers with better prices. The acts aim to facilitate the growth of the market and reduce the state’s role in its procurement at Minimum Support Price (MSP); the guaranteed price offered by states for procurement. The burgeoning subsidy bill on the fiscal expenditure and the inefficiency of APMC mandis are some of the reasons why farm bills have been introduced.
But Acts passed in haste without proper discussion with farm unions, agriculture expert and states, as done in this particular case, can only compound the agriculture problems. The acts passed under the garb of facilitating and promoting trade, constitutionally fall in the state list. As per the seventh schedule of the Indian Constitution, the acts affect agriculture so much that they change the basic structure of the market in which agri-produce and agri-market stakeholders operate. In other words, the Centre is making legislation where the state prerogative lies. The farm bills erode the very spirit of cooperative-federalism. They work to the detriment of the farmers and consumers by leaving limited scope for regulation and supervision by the state. The dispute resolution mechanism too has been moved from civil court to the discretion of Sub-Divisional Magistrate, whose accessibility to farmers and their representatives is apprehensive and questionable at the least.
Vikas Rawal[xi], an agriculture expert, states that trade outside APMC yards had the considerable scope of private sector investment, yet the development of market didn’t happen on a respectable scale. APMCs have fared much better in entitling farmers with appropriate returns. Some Indian states like Bihar, which did not implement the APMC Act, lacked a sustainable agri-market forcing the local farmers to transport their produce to Haryana and Punjab. Maharashtra provisions’ of Direct Marketing License (DML) for private market stakeholders have also attracted a relatively shallow volume of transactions than the trade taking place in APMC.
Non-procurement of farm-produce by the state also implies non-selling of the same at ration shops via Public Distribution System (PDS), thereby threatening the poor’s food security in India. Majority of farmers who struggle to transport their produce, access finance for working capital, lack proper irrigation facility, hold lands less the 2 hectares[xii] and are vulnerable to crop-failure and monsoon dependency, can’t really be expected to invest in warehouses and storage facilities to compete with giant corporates and their legal teams. These bills represent a sustained push towards privatization in agriculture without any supervision or regulation by a regulatory body. The farm-bills missed any substantial mention of MSP, which fills the farmers with apprehensions regarding the floor price with which their products will be procured/ sold. As capital looks for newer avenues and markets for its sustenance, the needs of poor and marginalized get sidelined, and profit takes the centre-stage. The corporate sector is driven by the incentive of investment opportunity and profit generation with the least consideration to the needs of the marginal population.
There are growing interlinkages[xiii] and dependencies between agriculture and industry, but these two sectors differ in their composition. Agriculture, in India, largely consists of small and marginal landholding farmers who are unorganized, poor and have a low education level. A transaction between a scattered agriculture sector and a concentrated corporate sector is bound not to favour the farmer. There is a need for the government to regulate the agricultural market to protect the small and marginal land-holders from the adverse effect of privatisation. The imbalance in the market would be detrimental to the farmers and consumer.
Farm bills 2020 in such a socio-economic context is unlikely to deliver on its promise of efficiency, profit and appropriate returns to the farmers. Agrarian reforms made in haste and to profit private stakeholders will only worsen the farmers’ conditions. Deforms of such kind are unlikely to resolve the larger Agrarian Question[xiv] of land, labour, returns, investment and leave the agrarian sector in perpetual distress.
Anirudh Kumar is a PhD candidate at the Centre for Economic Studies & Planning (CESP), Jawaharlal Nehru University, India. His research is on Political Economy of Corporate Penetration in Indian Agriculture .
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[ii] PTI, New Delhi, (2021),“Centre, farmers hold 11th round of talks on farm laws”, Deccan Herald, accessed on Jan 22, 2021, https://www.deccanherald.com/national/national-politics/centre-farmers-hold-11th-round-of-talks-on-farm-laws-941949.html
[iii] Kumar, S. (2017) “The theatre of protest: Tamil Nadu farmers have got attention, but will they get results?”, accessed on Jan 22, 2021, https://scroll.in/article/834565/the-theattamil-nadu-farmers-unusual-protest-has-got-attention-but-will-it-get-results
[iv] Express Desk (2020), “Farmers’ stir Day 11: Congress supports nationwide strike call; Vijender threatens to return Khel Ratna; other developments” accessed on Jan 22, 2021, https://indianexpress.com/article/india/farmers-protest-top-developments-bharat-bandh-7093987/
[v] Tirodkar A. (2019), “Thousands of Farmers Gather at Nashik to Participate in Kisan Long March” , accessed on Jan 22 2021.
[vi] Aggarwal, K. (2018) “Over One Lakh Farmers and Workers Are Marching in Delhi. Here’s Why” ,accessed on Jan 22 2021, https://thewire.in/labour/farmers-workers-march-delhi-protest
[vii]Scroll Staff (2021), “In photos: As farmers begin tractor rally, India sees two parades on Republic day” ,accessed on Jan 22 2021, https://scroll.in/latest/985115/in-photos-as-farmers-begin-tractor-rally-india-sees-two-parades-on-republic-day
[viii] Bill no. 113 of 2020 “THE FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION) BILL, 2020”, The bills as introduced in Lok Sabha accessed on 13th September 2020 at 5:20 pm
[ix] PIB, GoI, (2020) “Parliament passes The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020” accessed on 23rd September 2020 , https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=1656929
[x] Express Desk, “Explained Ideas: Why the 2020 farm laws are a step in the right direction” Indian Express ,accessed on 1st January 2020 https://indianexpress.com/article/explained/farm-bills-protest-ashok-gulati-explained-ideas-6618594/
[xi] Rawal, V. Suvidya Patel and Jesim Pais ,(2020) “The Political Economy of Agricultural Market Reforms: An Analysis of the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act” in Society for Social and Economic Research(SSER) 16th October 2020.
[xii] Yadu, CR & B Satheesha (2016) “Agrarian Question in India : Indications from NSSO’s 70th Round”. April 16, 2016, vol II no. 16, Economic & Political Weekly
[xiii] Singh, K. & Saluja M.R. (2016), Input-output Table for India: 2013-14,NCAER working paper No. : WP 111, later published in: The Journal of Applied Economic research (2018), 12(2), 197-223.
[xiv]Lerche, J. (2013) “The Agrarian Question in Neoliberal India: Agrarian Transition Bypassed?”Journal of Agrarian Change, Vol. 13 No. 3, July 2013, pp. 382–404