by Anika Ajgaonkar
Recently, the Farmer Protests in India have attracted international attention from media outlets and interested spectators across the world, ranging from the United States to Canada to Sweden. The protests come after a set of agricultural laws passed by the government that will change the way farming works in the country. But what do the new bills actually entail, how do they differ from India's previous agricultural structure, and why is there such fierce opposition against them? Are there greater powers at play in this show of resistance?
The History of Indian Agriculture
To understand the impact of the Farm Bills, one must first understand the state of agricultural trading and farming as a whole throughout India’s history.
In British-ruled India, a Zamindari System existed, where intermediaries known as Zamindars (land owners) controlled regions of land worked by farmers. When it was abolished, large chunks of land were fragmented and distributed among farmers. Consequently, the tiller became the owner of the land, thereby increasing national agricultural output and preventing exploitation of farmers at the hands of landlords. However, because the amount of land tillers owned was so small, farmers produced less produce individually, reducing their bargaining power. Trade was unregulated during this time, so traders would take advantage of the weak farmers. They would extend credit to farmers with high interest rates, and then buy the farmers’ crops at a low price during harvest season. Farmers always remained poor because they could never get a good price for their crops—they could accept prices, but never set them.
In the 1960s, when India was going through the Green Revolution, Agriculture Produce Marketing Committees (APMC), or mandis, opened up around the country to bring regulation to the market. Only APMCs were allowed to buy produce from farmers directly, but they provided a license and space for traders to buy produce. Both parties, farmers and traders, had to pay market fees, user charges, levies, and commission for the agents. The government would provide a Minimum Support Price (MSP), or the minimum price at which different types of produce must be bought. The state government would buy a certain amount of crop at MSP to maintain prices and demand. In theory, this mandi system was much better than the old one; different traders had to compete with each other for the farmer’s produce to arrive at a price satisfying both parties, so farmers received better returns for their crops. Traders also could not offer prices below the MSP.
An Exploited System
However, traders soon discovered a loophole in this system. Instead of competing with each other, they decided to all quote the same price for a farmer’s crops. Because farmers couldn’t trade outside the mandis, they were again forced to accept the only price offered. There are also problems with corruption and middlemen exploiting farmers. Often, corrupt government inspectors check the farmers’ produce quality and deliberately declare them to be subpar, and subsequently offer a much lower price. In an act of desperation to sell their crops, farmers sell them to commission agents instead. The commission agent buys the produce at a lower price under the guise of “low quality,” then resells that produce at MSP, making a large profit. In a Gulf News interview, farmer Shyam Sundar Mehta explained, “Commission Agents take a major chunk of profit from farmers’ produce. This leaves very little for the farmers. For instance, in Yamunanagar, an onion farmer sold onions at ₹35 a kilo and the middlemen sold the same for more than ₹100 a kilo.”
Because mandis are regulated at the state level, their strength varies from state to state. For example, farmers in Punjab and Haryana are some of the wealthiest in the nation because the mandis there are stronger and better organised. The government purchases the majority of the crops brought by farmers to the mandi, and at a much higher MSP than neighboring states Uttar Pradesh and Bihar. Because of this, many large farmers, commission agents, and procurement agency officials will buy crops from poor farmers in neighboring states at prices far below the MSP, illegally transport them to Punjab, and sell them to the government at a much higher price. According to The Indian Express, the total agricultural production of Punjab should be 152 Lakh tonnes (15.2 million tonnes) in 2019-20, 169.44 LTs (16.9 Million tonnes) in 2018-19, and 164.14 LTs (16.4 million tonnes) in 2017-18, based on the amount of land and resources used. However, data from the Food Corporation of India (FCI) shows that the state actually bought 163.82 lakh tonnes (LT), 170.46 LT and 179.56 LT paddy in 2019-20, 2018-19, and 2017-18 respectively. This significant difference in crops purchased versus Punjab’s expected agricultural growing capacity reveals the amount of produce brought from other states and resold by middlemen looking to make a profit off poor farmers.
An infographic showing the difference in income of farmers from different Indian states. (Credit: Business Today, Jan-Dec 2013)
Finally, there are very few mandis in relation to the amount of farmers in India and the sheer size of the country. Across India, there are just a little over 7,000 mandis, some more densely spaced than others. In Meghalaya, for example, there is just one mandi for an area of 11,215 square kilometres. This poses a problem for farmers, who must spend extra to transport their produce to mandis, where they ultimately receive a negligible price for their crop. Small farmers can’t even afford to carry their produce so far, instead settling for local traders who buy from them at rates much lower than MSP. Clearly, the old system hurts farmers, the weakest link in the chain. This is reflected in a study conducted by the Centre for Study of Developing Societies (CSDS), based in Delhi, which revealed that 76% of farmers want to give up farming. Change was necessary, and this is where the new farming reforms enter.
What are the new bills, and what changes will they bring?
In September 2020, the Indian Agricultural Acts of 2020, now commonly referred to as the Farm Bills, were passed by the Parliament of India. Three acts were passed, listed below:
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020
Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020
Essential Commodities (Amendment) Act, 2020
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act expands the range farmers can trade their goods within, no longer limiting them to the borders of their own state. Although they cannot trade in the mandis of other states, as they come under the jurisdiction of individual states, this act grants farmers the freedom to sell their produce anywhere in India. It also allows electronic trading and e-commerce of scheduled farmers’ produce. This act prohibits the state from levying any kind of market fee, cess, or levy on farmers, traders, and/or electronic trading platforms in an ‘outside trade area.’ These can only be levied on state-controlled mandis.
Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act provides a legal framework for farmers to enter pre-arranged contracts with buyers outside of government mandis, where they would usually have to pay a commission. These buyers include private companies who need large quantities of produce for their products, and so directly interact with farmers to tell them the type of crop they need, the price they will pay for it, and how much and how often they will buy from the farmers. Because farmers know the price they will be paid in advance, they can better plan for the coming season and adjust as necessary, instead of riskily selling their goods in the mandis during harvest season, where prices aren’t guaranteed. This bill also details a dispute resolution mechanism in case any disagreements arise between farmers and buyers.
The Essential Commodities Amendment Act removes a list of foodstuffs like cereals, pulses, potato, onions, edible oilseeds, and oils from the list of essential commodities, thereby removing stock-holding limits on these items except under “extraordinary circumstances.” This is especially important because of the food surplus crisis India is facing. If farmers had more supply of one good when the demand was low, they received very low prices for their crops and the rest was wasted because hoarding these commodities beyond certain limits was illegal. Because of this, food was severely mismanaged and traders and private companies had no incentive to invest in warehouses or cold storage facilities. This act provides an incentive to traders and private companies to have infrastructure available to store goods. However, it states that a steep increase in price for these commodities may cause the stocking limitations to return.
Why the Protests?
So what is the reason for the protests, and why are they centered in Punjab and Haryana? The APMCs and commission agents in these areas benefit the most from the old system which exploits farmers and earns them significant returns. By giving farmers the option to sell their produce in mandis or deal directly with private companies, the new bills will eliminate these parties’ monopoly and return power to the farmers. This will increase competition for the farmers’ goods and help them get better prices, which hurts the income of powerful middlemen and even the state. Punjab, for instance, could lose around 4.5% in tax on sales of agricultural products. Political parties like Shiromani Akali Dal (SAD) also encourage more and more farmers to join the protests without fully explaining to them the benefits of the new reforms. According to The Print, on January 28 and 29, SAD urged party members to join the farmers protesting in Delhi to increase their numbers and gather more support.
Despite the opposition, many farmers have come forward to share how they have benefited greatly from the new bills; for example, getting a premium for crops, saving time, and eliminating transportation costs.
In an interview conducted by TV9 Bharatvarsh, one farmer said, “Earlier in the mandis, 10 kgs of grains was sent only for sampling purposes. It also took a lot of time in mandis to sell your produce. We had to bear the transportation and loading/unloading charges. We often had to wait for days, sometimes over a month to receive the amount for our agricultural produce. However, with the passage of the laws, the businessmen come to your farm and pay you for your produce upfront. Not only do we get a premium on the MSP but our transportation cost and time are also saved.”
Asked about the ongoing protests by farmers from Punjab and Haryana, one farmer replied, “We are not protesting against the farm bills because they are meant for our welfare. Those demonstrating against the agriculture laws are not aware of the benefits and the new opportunities it unlocks for the farmers. They have been tricked and instigated by the opposition politicians to launch an agitation against the Centre.”
In the TV9 Bharatvarsh report, a farmer from Rajasthan deeply thanked PM Modi for implementing the new bills because they opened up opportunities for farmers like him to sell their crops to whomever they wished, as well as the ability to negotiate for better prices.
Even if many farmers do not understand the benefits the bills will bring them, they are aware that they will bring magnitudes of change to the agricultural sector of India, and have been, for the most part, peaceful in their protest. Hundreds of thousands of farmers have blocked borders and highways near Delhi, India’s capital. They have set up makeshift kitchens and living areas, and use tractors and cars to live onsite at the protest area. This has consequently blocked commute paths for people living in villages near the borders occupied by the farmers and for those trying to enter the capital. From September to October, a “Stop the Trains” movement had also been underway, although it ended later because train services to Punjab and other essential goods could not be transported due to the interruptions.
A map showing the areas that have been affected by the protests. (Credit: Wikipedia, Jan. 06, 2021).
Farmers gather at the Delhi-Haryana border to protest against the agricultural bills passed by the government. (Credit: TIME, Dec. 08, 2020)
More concerningly, Khalistani elements have infiltrated the protests in recent months. Khalistan is a Sikh separatist movement that demands a homeland only for Sikhs, and efforts to achieve it have resulted in thousands dead due to terrorist activity over the past 50 years, such as plane, bus, and marketplace bombings. This is most evident on the Republic Day Kisaan Parade. On January 26, India’s Republic Day, tens of thousands of farmers held a parade to protest the agricultural reforms and brought in lines of tractors and horses. However, some farmers deviated from the agreed upon routes and breached barricades put in place by the police, leading to violence between farmers and police. Almost 400 police officers were injured by rioters and 30 police vehicles were destroyed, but the police did not fire at the crowd. After reaching central Delhi, where the protesting farmers had been prohibited from because of the annual Republic Day parade taking place, they convened at India’s Historical Red Fort. Protesters climbed up over the walls and ramparts (in similar fashion to the storming of the United States capitol on January 6) and hoisted religious and farmer union flags. The terrorist organization Sikhs For Justice (SFJ) had released a video on January 11, urging Sikhs to “roam in Delhi on their tractors and remove every tricolour. The Indian flag is the symbol of suppression that Sikhs have faced in India. Every Indian flag must be removed and crushed.” Thankfully, this did not happen, but it raises an important question: are the farmer protests becoming a medium for other groups to peddle their own agendas with the benefit of international attention?
In a protest turned violent, farmers storm the historical Red Fort on India’s Republic Day. One man climbs up the flagpole and hoists a religious flag above the Indian National Flag. (Credit: India TV News, Jan. 26, 2021)
Recently, American singer Rihanna and climate change activist Greta Thunberg have expressed their support for the protests on Twitter. Rumors are spreading that Rihanna was paid $2.5 million for her tweet, and controversy is arising over a tool-kit Greta Thunberg accidentally shared on her Twitter, which outlined plans for creating a “Twitter storm” and indicated possible premeditation of protests taking place around the world. There are also concerns with the funding listed in the toolkit, many of which come from organizations that have historically expressed enmity towards India and its government. Thunberg quickly deleted the toolkit and replaced it with an edited version of it, saying the previous one was “outdated.” However, the toolkit has garnered even more suspicion after Indian climate activist Disha Ravi was arrested by Delhi police for her contributions to the document and correspondence with Khalistani sympathizers and organizations.
Only time will tell what kind of powers are at play here, but in the meantime, it is crucial to recognize the importance of these bills and how the changes they will bring are going to help farmers in the long run, not hurt them, as many people have suggested. Educating others about this issue and fighting against misinformation will help to ensure that the farmers who have waited so long for these changes will be able to reap its benefits in the future, and see the Indian agriculture sector be transformed into one that uplifts and empowers them.
Bonus: Opponents of the new bills have spread misinformation about them and the changes they will bring. Some of these false claims are listed below.
The Government will get rid of MSP. This is completely false. The government has repeatedly assured farmers that MSP will continue. Narendra Singh Tomar, the Minister of Agriculture & Farmers Welfare, and Prime Minister Narendra Modi have both made it clear that MSP will remain like before.
APMCs will be removed entirely. This is also a false claim. The government has emphasized repeatedly that the mandis and private sector will coexist, and farmers will have the option of where to sell their goods.
Agriculture will become corporatized. Some opponents argue that introducing private companies into agriculture will help them make a monopoly and let them exploit farmers further, but this is not true. For this reason, farmers are given an option on where to sell their crops. In addition, introducing private players into India’s agricultural system helps to reduce the power that APMCs had, which let them do price fixing, caused a lack of innovation, and let corruption run rampant.
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