At the borders of India’s capital of New Delhi, thousands of farmers have been camping out since November 25 2020. The largely peaceful farmer protests have recently taken a deadly turn, with violence erupting on January 26 – India’s Republic Day. Now, the government has responded by fortifying the protest sites, similar to the arrangements at the US Capitol following the insurrection.
It is just the latest step in the months-long standoff between India’s farmers and the BJP-led National Democratic Alliance (NDA) government. The protests represent the biggest political challenge to Prime Minister Narendra Modi, who has tried to woo farmers since his 2014 election campaign. So what went so wrong? Why are farmer protests taking place despite a government which sees itself as pro-farmer? It can all be traced back to three controversial farm laws.
India’s Complex Farm System
To understand the protests, you need to understand how India’s complex agricultural system works. The country has a nationwide marketing system to ensure fair prices for agriculture. The system differs from state-to-state, but there are some common elements where the market is present.
Farmers bring their crops to wholesale markets called “Mandis” or Agricultural Produce Market Committee (APMCs), where they sell the crops to traders through an open auction system. The prices for the crops vary but are usually at or above the Minimum Support Price (MSP) set by the government. The MSP is the rate at which the government buys crops from the farmers, so it serves as a benchmark for prices paid by private buyers as well.
These traders buy the crops and either sell them to the open markets or store them for future sales. Farmers are protected by the MSP and government regulations, ensuring that they are able to make money on their crops. Kavitha Kuruganthi, a social activist told Vox: “They (the system) have been designed keeping in mind that the farmers are the weakest link and can be exploited in numerous ways.”
However, over the last few decades, economic crises have seen farmer incomes drop dramatically, leading to a rise in debt and suicides. That’s where the reforms come in.
New Laws Give Rise to Farmer Protests
The Modi government introduced three farm laws in June 2020: the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, the Essential Commodities (Amendment) Act, 2020, and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020. Rather than help increase farmers incomes, the laws are targeted towards ending the MSP and oversight farmers have come to rely on.
The first act legalises the creation of unregulated trade markets outside the mandis, where prices are negotiated entirely by the farmers and traders. The MSP doesn’t apply to these spaces and the government won’t step in to ensure farmers are getting a fair price. Farmers do currently trade outside the mandis, in some states where they are legal. This bill simply seeks to nationalise the practice. With that, the MSP will be succeeded by the rate dictated by the traders, as farmers fear the rates will also make their way to the mandis.
The Empowerment and Protection act creates a framework for contract farming deals. That means prices would be based on the agreement between the farmer and the trader, not the MSP. The Essential Commodities (Amendment) Act eliminates storage limits that were set by the Indian government to regulate pricing. With the act, traders can stock up on as much produce as they want, giving them more freedom to dictate prices in the off-season that affect both farmers and the end consumer.
Harshit Pai, who works with the Aam Aadmi Party (AAP) in Punjab said – “All the three acts are meant to promote sale of produce outside the markets. When the farmer is a small farmer, he would be coerced into selling at a particular price, with no choice but to sign the contract.” He went on to explain “if you read the Empowerment and protection act independently, it is a very good law. But if you read it in context with the other two laws, you are allowing traders to control prices.”
Together the laws force farmers to choose between selling at prices that are unsustainable to them, or not selling at all. That is because traders would prefer to buy from outside the market, where they are able to control the prices.
In essence, these laws do three things:
- Legalise nationwide private markets as an option, while keeping mandis
- Alienate smaller farmers who may not be able to supply large quantities
- Allow private traders to dictate how the market works and costs
Deregulation of the markets is not new. Several states in India have passed similar laws in the past, some to devastating effects. Bihar did in 2006, resulting in farmers in the state being some of the poorest in the nation. The average income for an agricultural household in Bihar is just Rs. 6,277, as compared to Rs. 16,020 in Punjab. While regulation isn’t the whole reason, it does play a significant role in the amount farmers are able to get.
Kuruganthi added “by deregulating the markets, the government has put out the message in the same breath essentially saying that they think that farmers don’t need protection anymore from the government”.
Farmer Protests Go International
The farmer protests are no longer just a national issue, now the international community has gotten involved. Sikhs from outside India have begun raising awareness of the protests, causing foreign governments to step in. Canadian Prime Minister Justin Trudeau has since been engaged in a spat with Delhi, for his comments in November.
The situation is concerning and we’re all very worried about family and friends… Let me remind you, Canada will always be there to defend the right of peaceful protest. We believe in the importance of dialogue and that’s why we’ve reached out through multiple means directly to the Indian authorities to highlight our concernsJustin Trudeau, Canadian Prime Minister
Several UK members of Parliament have also written a letter to Foreign Minister Dominic Raab, requesting information on any discussions with Delhi. Now, activist Greta Thunberg and singer Rihana have joined in, tweeting in support of the farmers. They aren’t the only ones. The Indian government though has stuck to its guns echoing the familiar line that such actions amount to “unacceptable interference in India’s internal affairs”.
International condemnation though, is still forthcoming, especially since India’s diaspora is one of the largest in the world. The Ministry of External Affairs (MEA) and government officials have sought to downplay the incidents. In a statement, the MEA said: “The temptation of sensationalist social media hashtags and comments, especially when resorted to by celebrities and others, is neither accurate nor responsible.”
The Politics of Farmers
The farmer protests are of vital importance to Modi politically, for two reasons. The first is that he is keen on strengthening his image internationally, which is why the comments from Canada and the UK are worrying. With India attempting to woo foreign investors, Modi needs to be seen as a leader capable of upholding the law, and India is a safe option to invest in, especially with the growing global anti-China sentiment. The protests do the exact opposite of that, with the turmoil expected to set back India’s economic recovery as investors wait to see how it plays out. The protest also hampers farmer’s productivity, despite contributing just 17.76% to India’s GDP.
The second is to do with upcoming elections. Over the course of the year, several states are due to hold assembly elections. These elections will decide who controls the state legislature. Since farmers make up nearly two-thirds of the electorate in India, their votes will be the deciding factor in the upcoming state elections in Assam, Kerala, Punjab, Tamil Nadu, and West Bengal. The BJP has already begun reaching out to farmers in West Bengal, a key battleground state over the last few weeks. The party has sought to downplay the farmer protests, but it is unclear as of now if it has enough support to win the elections.
Without the farmer’s support, the BJP will be unlikely to win enough seats or form an alliance to control the state governments. That is vital to the party as it looks to expand its grip on power, expanding programs nationally with little pushback. Winning these elections is also seen as a floor test for the BJP’s popularity, which could influence its grip on power in states like Goa and Karnataka, where it is currently in power by a very small margin.
That is why the government has had to take a different approach towards the farmer protests. It cannot dismiss them entirely, yet bowing to their demands would be a big blow to the BJP’s business-friendly image. The Modi government needs to strike a careful balance, as it cannot afford to alienate either side.
Do you want more great analysis? Sign Up for Humanosity’s Newsletter
The effects of the protests are already being felt by the party. Garry Birring, a volunteer of the AAP in Punjab told Humanosity – “For now the BJP is totally washed out. In Haryana, their chief minister has been unable to hold a public meeting in his own constituency because he was not allowed to visit by the locals.” Harshit said that “BJP leaders are themselves saying we prefer not to associate with the BJP. There is a large exodus over the last few months, with a lot of BJP leaders joining our (the AAP) party.”
What began as a standoff with farmers has now turned into a major political flashpoint. The upcoming elections are seen as a test of the BJP’s popularity, as it tries to win the states of Kerala, Tamil Nadu and West Bengal where it has so far failed to gain a foothold. In the past, the government has managed to quash protests through nationalist appeal, something which cannot be done in this case. That is why it has had to think differently about how to deal with these.
Responding to the Agitations
The government has taken a two-pronged approach to the farmer protests. On one hand, it has fortified Delhi with iron nails on the roads, barbed wire, and makeshift walls. It has also cut electricity and internet to areas around the protest sites, effectively locking farmers from the outside world. Armed paramilitary guards have also been deployed, in a bid to avoid the violence seen on Republic Day. The Delhi Police has also arrested 121 people in connection with the violence, that saw farmers clash with police and scale New Delhi’s iconic Red Fort.
The fortifications have shocked the public, with many taking to social media to compare it to an international border. Manjinder Singh Bhullar, a social activist who is working to spread awareness of the issue told Humanosity – “This is totally wrong. We are citizens of this country.” Yet, they are being made to feel like they aren’t. Birring, who regularly visits the protest sites added – “the government is denying sanitation and water. It is a gross violation of human rights.”
On the other hand, the government has also shown it is willing to negotiate with farmers, even offering to put on hold the contentious farm laws for months. So far, 11 rounds of negotiations have taken place, with each failing to yield an outcome. When asked why, Bhullar said – “The first two rounds were totally futile because the farmers were called only to be taught what the laws were and why they were good. Only since the fifth round was the government willing to negotiate.” So why hasn’t that yielded an outcome?
Bhullar explained that the farmers wanted the laws to be fully repealed, while the government was only willing to offer amendments and delays. To further complicate matters, some farmers have also used the opportunity to protest against other laws like the Electricity (Amendment) Act. The act is a step towards the privatisation of electricity supply, which farmers fear would lead to higher prices. In an interview with The Print, Ashwini Swain, a fellow at the Centre for Policy Research said – “the sector has been struggling with a chronic structural problem and this amendment is just trying to put a band-aid on the wound.”
Since the negotiations have so failed to yield an outcome, the government is using the 2021 Union Budget to further push its credentials. The budget included plans specifically for the states of Assam, Kerala, Tamil Nadu and West Bengal which are due to have local elections. While the budget doesn’t do much for farmers directly, it does target other voters that the BJP is hoping to turn.
India’s Finance Minister Nirmala Sitharaman used the budget speech to highlight the increase in MSP under the Modi government. She further went on to announce that 1,000 more mandis would be added to India’s E-NAM marketplace, a digitised version of the mandis. Despite that, others noted that the overall budget for the Department of Agriculture, Cooperation and Farmers Welfare was slashed 8.5%.
The budget announcements have not been met with delight by the farmers. “The fight is for the rate of crops, not for credit. They didn’t talk about MSP. There is nothing for farmers,” farmer leader Rakesh Tikait told the Press Trust of India on the budget.
Right now, the farmers’ demands are clear. They want the farm laws to be completely repealed, not put on hold or amended. Ravinder Kaur, a historian of contemporary India told The Atlantic: “They are extremely disciplined because they know the art of political negotiation. These farmers’ unions and workers’ unions are resourceful, and they have also been extremely careful in making sure that the focus always remains on these demands and not be sidetracked by anything else.”
With such a single-minded goal, it is going to be hard for the Modi government to respond to the farmer protests. Unlike other protests, the government cannot call the farmers anti-national or discredit them, as it would only further alienate the farmers from voting for the BJP.
Agricultural Reform Due
Agricultural reform is long overdue in India. The industry is facing a crisis on a massive scale, both in terms of income and employment. The industry has seen a steady fall in the number of people it employs, from 51.5% in 2010 to 41.4% in 2020, as per World Bank data. Yet, it still remains one of the largest sectors of employment in India.
That is quickly shifting though, with inflation causing drops in farmer’s incomes. A 2018 report by the Organisation for Economic Co-operation and Development (OECD) estimated that farmer’s incomes have grown by just 2% between 2013 and 2016, while inflation was estimated to be at 4.9%. As a result, farmer’s incomes were estimated to be at just one-third of non-agricultural households. That is why many young Indians have begun moving away from agriculture, in favour of urban jobs.
Migration is just one of the many issues plaguing India’s farmers. A rise in inflation has seen debt levels soar, leading to a sharp rise in farmer suicide levels. Data from the National Crime Records Bureau showed that 42,380 agricultural workers died by suicide in 2019, a 6% increase from 2018.
Without reform, India could be left with insufficient farmers to feed its rapidly growing population. As global warming has made it more challenging to grow crops, the Indian government needs to address other critical areas. The Modi government has long promised multiple reforms, but on the ground, farmers are yet to see any major benefits.
With the challenges posed by the COVID-19 pandemic, the government is now stuck between a rock and a hard place. Pushing private markets is the quickest way to revive the economy, but doing so at the cost of farmers comes with major political consequences. It is indeed the biggest challenge to India’s democracy in many decades.