Tooba Altaf
The recent spate of protests by Indian farmers over the new agriculture laws, is going to be another test for Modi’s regime. The protests started with the passage of Indian Farm Reforms-2020, by Indian Parliament on September 27, 2020. The laws are considered as anti-farmer and pro-corporate interests. Starting from the states of Haryana and Punjab, the protesting farmers have reached the outskirts of New Delhi, seeking the reversal of so-called reforms.
Indian farm reforms comprise of three laws i.e., the Farmers Produce Trade and Commerce Act, Farmers Agreement on Price Assurance and Farm Services Act and the Essential Commodities Act.
Each year, the Indian government, under its food procurement program, buys rice and wheat from Punjab and Haryana. The program is one of the world’s most expensive food procurement program, with billions of dollars of annual expenditure. Under the procurement program, the state-run Commission for Agricultural Costs and Prices (CACP) announces Minimum Support Prices (MSPs), guaranteeing stable prices of the staples. The Food Corporation of India (FCI), then buys the staples, at the determined rates and sell it to the poor, at highly subsidized prices.
On the one hand, the procurement program is responsible for the large quantities of crop yield in the mentioned states. On the other, it is also responsible for inflating the subsidy bill, incurring huge budget deficit.
Ironically, the government’s procurement program covers the well-off states of Punjab and Haryana. It does not cover the farmers of the poor and underdeveloped states such as Bihar. FCI’s procurement in Bihar is less than 2 % of its entire production. Hence, its farmers are forced to sell their produce at discounted rates, compared to the well-off states of Punjab and Haryana,
However, with the passage of new agriculture laws, the rules around the sale, pricing and storage of farm produce would be loosen. The deregulation of crop pricing would remove the safety net offered for decades to the farmers, by the government. The new laws intend to give a bigger role to the market forces in determining the prices of the agricultural commodities. Thus, it is deemed as market friendly and farmers’ unfriendly, leaving farmers at the mercy of unfettered free market, which is assumed would not to be so free.
The farmers dread exploitation at the hands of big corporations, as they will push down the prices. Some also fear losing their lands to the corporates. Hence, they want the government to repeal the laws. However, the government considers the laws as necessary reforms, giving farmers more autonomy over their produce. Farming experts and many activists support the famers demand for Minimum Support Prices.
Nearly 60 per cent of the Indian population depend on agriculture for livelihoods, yet it accounts for only 15% of India’s $ 2.9 trillion economy. The soaring COVID-19 cases have also resulted in migrations to the country side, to obtain livelihood in the farming sector.
Moreover, with India’s economy already in recession since the beginning of Modi’s second term, the challenges for his government are surmounting. The government and the protesters have engaged in series of talks, but have failed to break the deadlock. At a time, when Modi’s divisive politics and controversial laws are already facing criticism, Modi’s troubles seem to be un-ending.
The author Tooba Altaf is an International Relations graduate while working as a Researcher at the Center for Research and Security Studies (CRSS), Islamabad.
