Indian Farm Laws - Why are the farmers protesting?
By Nishtha Singh
I woke up this morning, not feeling warm. Delhi winters can be punishing. It’s 5oC, and all I can think about is how hundreds of thousands farmers have been sleeping under an open sky for weeks.
Indian government passed three farm laws in the middle of a pandemic. On 20th September 2020, amidst strong resistance from the opposition parties, the three ordinances were passed undemocratically in India’s legislative assembly. The government passed these laws via voice votes despite opposition MPs asking for a division vote. Farmers across India, especially in Punjab and Haryana have been protesting since. But, In India, your voice is seldom heard unless you march to the national capital. Therefore, Farmer groups from Punjab and Haryana decided to leave everything else and head towards the capital, knowing that they will have to tear through an authoritarian regime to get their voices heard. They faced water cannons, lathi charge, cemented barricades, but they were successful in reaching Delhi.
Teenage kids, women groups, elderly – all are part of these protests. Farmers believe that it’s a question of their survival. While farmers and their families are braving Delhi’s harsh winters, the central government is busy calling them names and trying to diss their movement. The central government, led by the national right-wing party, the BJP, has called it a terrorist movement led by separatist Khalistani groups. They have called the farmers “middlemen” who have a problem with reforms in the agriculture sector. But the farmers are determined that they won’t go back unless the government takes back these “Black Laws”.
So what are these laws, and why are the farmers agitating?
The Indian government did not consult either farmer associations or the opposition parties before passing these laws. When analysed closely, it is evident that the reason these laws were passed in a huge rush, is because they are overwhelmingly pro-corporate and anti-farmer. We can look at them closely and see how each one of them aims to weaken the farmer and strengthen the already strong corporations.
The three laws that were passed are –
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020
The Essential Commodities (Amendment) Ordinance, 2020
Context
Agricultural Produce Marketing Committee (APMC) is a government body which regulates agricultural markets in India. APMCs were primarily set up to ensure fair trade between buyers and farmers for effective price discovery of the farmers’ produce. For simplicity, the price is found using a simple demand and supply model. However, whenever the supply exceeds demand for a particular commodity, which could lead to a decrease in the price of the commodity, the farmer is promised a Minimum Support Price (MSP). APMCs also regulate the trade by providing licenses to buyers, commission agents and private markets, and levy fees on any other charges on such trade and provide the necessary infrastructure to facilitate the trade. APMCs earn through the market transactions that happen through them. APMCs set up Mandis for the farmers, as a place where they can sell their produce.
The APMC system was never perfect. It needed reforms so that farmers can get better value for their produce. APMC was brought in to create a level playing field for farmers when they step out to sell their produce. The issues that existed when APMC was brought in still exist today.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020
This Ordinance can be looked at as an effort to systematically dismantle the APMC system. It allows farm produce to be traded intra-state and inter-state, beyond the ambit of APMCs. Moreover, the Ordinance prohibits state governments from levying any market fee, cess or levy on farmers, traders, and electronic trading platforms for the trade of farmers’ produce conducted in an ‘outside trade area.’ In a scenario where farmers will be taxed when selling to APMC mandis and not otherwise, farmers are going to move away from APMC. Therefore, it is completely aimed at weakening the APMC system and bypassing it. It is necessary to indicate that the market fee collected by the APMC mandis is used for the development of rural infrastructure, link roads and storage facilities. The shifting of trade to avoid payment of any levy/market fee by private players and the Food Corporation of India (FCI) will eventually witness the redundancy of the APMC mandis, leaving the farmers at the mercy of the corporate sharks.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020
This Ordinance institutionalises contract farming. Most likely farmers will be dealing with big corporations when entering into a contract. The dispute settlement clause in the Ordinance states that parties may approach the Sub-divisional Magistrate for resolution. Parties will have a right to appeal to an Appellate Authority (presided by collector or additional collector) against decisions of the Magistrate. Both the Magistrate and Appellate Authority will be required to dispose of a dispute within thirty days from the receipt of application. However, none of the parties can approach civil courts with their grievance.
This makes farmers vulnerable to corporate exploitation. Contract farming assures farmers of the price and the corporation of the supply. However, agriculture is largely dependent on weather conditions, with climate change making things more unpredictable. Therefore, a farmer may not always provide what they promised. There is no law for the protection of farmers in such a situation. If in a situation like this, the farmer is unable to provide for what was promised, there may be a penalty levied on the farmer. If their financial situation worsens, they may lose their land.
The Essential Commodities (Amendment) Ordinance, 2020
The central government had the authority to regulate or prohibit the production, supply, distribution, trade, and commerce of essential commodities which included farm produce. This Ordinance prohibits the central government from regulating the supply of certain food items including cereals, pulses, potatoes, onions, edible oilseeds, and oils, unless under extraordinary circumstances like war, famine, extraordinary price rise and natural calamities of grave nature. This Ordinance basically gives power to corporates to hoard as much farm produce as they want since corporates are capable of building huge warehouses and cold storages. It gives extraordinary power to the bigger players to manipulate prices in the market. It could lead to huge inflation without any repercussions on the company driving it. The hoarding could also diminish the negotiating power of the farmer to a great extent.
It has been established that when there is a price rise in the retail market, the benefit is not passed on to the farmers, but when there is a price fall, the loss is passed on to the farmers. Another way in which it can help the bigger corporation is, for instance, if Adani-Wilmar imports large quantities of oils and pulses from its holdings in other countries, including Africa. Adani-Wilmar is investing 350 million dollars in Bangladesh, setting up food processing industry. Since there will be no limit on stocking in India, imports by Adanis from their businesses abroad can dominate the Indian market in a bigger way.
APMC system wasn’t perfect, and it needed reforms. Previous policies led to unsustainable farming practices like producing water-intensive crops like rice in a water-stressed area. Reforms were needed to encourage more sustainable farming practices. However, these laws do not solve any of the pre-existing problems. In turn, they threaten the survival of the already vulnerable farming community. When seen together, it is evident that these laws are designed so that big corporations owned by capitalists like Ambani and Adani can overtake the agriproducts market. Farmers fear that if these laws are not taken back, they will lose their land and identity. Some of them also think that it's the central government’s strategy to push them into a cheap labour market.
While the people across the world were losing jobs or facing pay cuts, we have seen billionaires - from Jeff Bezos to Mukesh Ambani - increase their wealth. Trickle-down economics is a farce, and the only reason why governments support billionaires is because it takes funding to win elections. When billionaires hoard wealth, they are taking it away from people who need it for their basic sustenance. They take it from people who work hard and need it for nutrition, health, education, survival. The Indian government is throwing farmers under a bus which is driven by Ambani and Adani. But this time, farmers know better. They know why these laws were passed, and they say that they have brought in food and supplies for months and they won’t budge till the government takes back these laws.
The fight isn’t easy, and this cold makes it worse!
