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KT Explains: Why farmers are protesting in India

The fear is that new agricultural laws will lead to the government abandoning the minimum support price system.

For days at end, scores of farmers have been protesting outside India’s capital New Delhi. The protests are against new agricultural laws passed by the Narendra Modi-led government. The fear is that these laws will lead to the government abandoning the minimum support price system and an increasing corporatisation of Indian agriculture.

Talks between the government and the farmers have failed. Further, attempts made to discredit the farmers by those close to the government haven’t helped.

What are the new agricultural laws all about?

One of the new laws allows farmers to sell their produce outside the government-controlled marketing yards, to cold storages, warehouses, processing plants or even directly to the end consumer. Another law essentially hopes to create a framework for contract farming. On paper, these laws seem to be good for farmers, giving them more choice. Hence, the question is, why are they protesting?

As we shall see, there are multiple reasons for it. In the mid 1960s, in order to make India food sufficient, the government wanted farmers in the state of Punjab to grow a certain kind of high-yielding wheat. To encourage the farmers to do so, the government started buying the wheat they produced. Over a period of time, along with buying wheat, the government started to buy rice as well. The fear among farmers is that this historical system will be done away with.

Why has this fear crept up among farmers?

The procurement infrastructure of the government is more efficient in some states than it is in others. It is particularly good in the states of Punjab and Haryana, where the direct procurement first started. Given that the farmers in these states and a few others can sell directly to the government easily, it takes the price risk out of the equation. If this system is done away with, the business of farming for farmers in states where the procurement system is good, becomes riskier. And clearly, they don’t want that to happen. Hence, the protests.

The government has repeatedly tried to assure the farmers that the minimum support price system will not be done away with. But the farmers aren’t buying any of it. One reason for this is that the research paper that had the philosophical underpinnings of the laws passed by the government, recommends doing away with the system.

Are there any ill-effects of the minimum support price system?

With the government being a permanent customer offering a fixed price known in advance, farmers in states with good procurement facilities, are incentivised to grow rice. Rice is a highly water-intensive crop and the states of Punjab and Haryana which have the best procurement facilities, are a semi-arid region. This, along with free electricity for agriculture in Punjab, has led to water tables in these states falling dramatically, as farmers have been digging deeper and deeper to find the water they need to grow rice.

This has led to more rice being grown than is being consumed. The godowns of the government are overflowing with rice and wheat. At the same time, India doesn’t grow enough of other agricultural crops like pulses, oilseeds and onions (in certain years). The new laws are also being seen as an attempt to get the farmers to grow crops other than rice and wheat.

Are farmers going to move away from growing rice and wheat?

Any economic reform disturbs the status quo. Hence, it is important that before a reform is pushed through in the form of a law, the parties negatively impacted by it are brought on board and communication channels are opened. In India, over the years, economic reforms have always been pushed through and have been reforms through stealth. This time was no exception. The government first passed the laws and only when there were protests, they got around to talking to the farmers. This has clearly not helped. Also, just passing these laws is not enough if the endgame is to get farmers to grow crops other than rice and wheat. The farmers need to be incentivised to grow these crops, like they were incentivised to grow rice and wheat. Other than that proper storage systems in different parts of the country, a proper power supply system needs to be in place as well.

What are the other problems with the new laws?

The laws are so framed that in case of any dispute, the farmers cannot take private buyers to court. In case of a dispute, a sub-divisional magistrate’s court is supposed to adjudicate. A sub-divisional magistrate is a part of the government’s executive and not the judiciary. Of course, this is being seen as a government sellout to big corporates because a big corporate is more in a position to influence the sub-divisional magistrate than a small farmer.

Agriculture Minister Narendra Singh Tomar told The Times of India earlier in the month: “Farmers’ unions feel that the SDM’s court is a lower court and they should be allowed to go to higher court. The government will consider this demand.”

Any negotiation process involves give and take. For starters, the government should allow disputes to be challenged arising from the new laws to be challenged in proper civil courts.

— Vivek Kaul is the author of Bad Money.