Wednesday, January 27, 2021
Business

250 million Indian farmers protest agricultural reforms

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India is currently witnessing one of the world’s largest planned strikes in human history.

Protestors are agitating against new farming laws that would deregulate crop prices and leave farmers vulnerable to large corporations. The protests involve around 250 million people, with many more standing in solidarity with Indian farmers globally.

On Tuesday, India’s highest court temporarily suspended the implementation of these laws and mandated a court-appointed committee of experts to examine the farmers’ grievances. However this has not halted the strike, as protest leaders refuse to relent until the laws are completely repealed.

For the past six weeks, hundreds of thousands of Indian farmers gathered in the Punjab and Haryana regions, blocking the main roads leading to the Indian capital Delhi. 

Farmers protesting in the Punjab region

Men, women, and children are enduring tear gas, water cannons, severe cold, and rain, but have indicated that they are not ready to go home without meaningful government action.

Indian diaspora worldwide are also supporting this cause, and an online campaign using the hashtag #istandwithfarmers is gaining momentum. 

The issue has sparked protests in the UK, including London, Leicester, and Birmingham.

Police using water cannons to disperse the crowd 

Protestors are demanding Prime Minister Narendra Modi revoke the new agricultural reforms approved in September 2020. Several rounds of negotiations between farmers and government ministers have failed.

The plight of Indian farmers

More than 50 per cent of Indian workers are dependent on the agricultural sector for their livelihood. 

This dependency on agriculture has increased after the collapse of the urban economy due to COVID-19. Millions of laid-off factory workers have gone back to their villages and joined the agriculture sector as a last resort.

According to the 2018 Report of the OECD (Organisation for Economic Co-operation and Development), Indian agricultural household income was only one-third of a non-agricultural household. 

During the election campaign of 2016, Mr Modi promised to double farmers’ income by 2022. 

However, data shows that agricultural income declined between 2014 and 2019.

There are many reasons for India’s ongoing agricultural crisis. These include low productivity due to fragmented land grabbing, lack of storage and transportation infrastructure, high debt, and extreme weather conditions in recent years. 

Endemic poverty and the government’s unfulfilled promises of Minimum Support Price (MSP) have pushed the farmers to the brink of suicide. 

In the past two years, 20,000 farmers have committed suicide due to economic hardships. 

The new laws and farmers’ concerns

Indian farmers have been demanding more assistance from governments for decades. Instead of protecting these farmers, the government has passed three new laws that will strip them of existing protection.

The farmers’ stance is that these reforms will eventually dismantle the system of MSP and the government wholesale market locally named “Mandi,” leaving them at the mercy of big corporates. 

The three new farming laws, which have caused this unrest, are explained below:

  • The first law creates free, unregulated trade spaces outside the “mandis”. Farmers fear that they will be exploited in the absence of benchmark prices set by the “mandis”.
  • The second law allows business agreements between farmers and private investors without much government intervention. In this scenario, small farmers will suffer in any dispute with big corporations and have no choice except to agree to their terms and conditions.
  • The third law permits unlimited storage, which was previously prohibited. Using this law, big players can stock up and dictate market prices.

The government’s stance

The government’s stance is that new laws will boost productivity and are beneficial for farmers and traders. Under the new system, private companies and buyers can enter the market without red tape and farmers can benefit from many customers.

India has liberated its economy in recent decades and is experiencing good growth. Mr Modi has ambitious plans for the Indian economy and wants to double the economy by 2024. 

The government says that the current agricultural system is not sustainable and efficient. To boost agricultural growth, they need to free the market.

Many economists also note that there are many benefits of liberating the agriculture market. 

Private investment can revitalise India’s run down agriculture sector and farmers can sell their crops directly to different businesses, supermarket chains, or online retailers and can get higher prices. 

In the current system, they sell to the “mandis” at low prices, and most of the profit is taken by middlemen who have the license to buy from these “mandis”.

On the other hand, farmers fear that big companies will control the prices in the long run by using the new laws. They already struggle to make a living and survive even with the existing protections. The new laws were made without considering all stakeholders.

Mobile shelters for the protesters

The government says that the “mandi” system will continue along with other private markets and MSP will continue. However, farmers are not convinced that these reforms will bring any benefits to them.

A decade ago, in the Bihar state, the Indian government ended the “mandi” system and let private investors enter the market. 

Today, a handful of retailers control the market prices. Moreover this deregulation has resulted in Bihar’s farmers having the lowest income among all Indian states.

The government should have gained the confidence of all stakeholders before changing the agricultural laws. 

There are many problems in the current system, like corruption and red tape, which need to be fixed however replacing one failed model with another is not the solution.  


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