INDIA: Federal policies bring farmers to the streets as opposition fans flames

The Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government is struggling to contain protests against a clutch of agricultural reforms introduced earlier this year after thousands of farmers laid siege to New Delhi over the weekend and have resolved to block all arterial roads leading to the capital until the federal government revokes the laws. While the government has deputed senior ministers to engage representatives of farmer bodies in talks, the opposition hand in fanning the protest is evident. This agitation, if not defused soon, could be the biggest crisis for the government since 2014 when Narendra Modi became prime minister. Protests against the farm laws began in India’s northern states of Punjab and Haryana soon after parliament passed them in September. These laws, among other things, paved the way for farmers to sell their crops anywhere in the country—both within and outside APMC (Agricultural Produce Market Committee) markets—and allowed them to go for direct contracts with traders and food processors, nudging them towards a market economy. But despite the government’s repeated assurances to the contrary, farmers believe that this is the first step in the inevitable process of withdrawing government protection for farm produce. Currently, farm commodities (mainly wheat and rice) are purchased by state owned agencies like the Food Corporation of India (FCI) at prices decided by the federal government factoring in cost of inputs, and are then sold to low-income families at subsidized prices through the Public Distribution System (PDS). Punjab and Haryana farmers are the biggest beneficiaries of FCI’s procurement and fear that the government will gradually scale down food procurement targets amid an ongoing debate around leakages and corruption. The government is considering rolling out direct benefit transfers (DBT), or in-cash grants, to low-income families replacing the present system of giving rations of subsidized food. If that happens, north Indian farmers will be the biggest losers. PDS alone accounts for about 80% of the FCI’s outflow. Around 85% of Punjab and Haryana’s marketable yield is purchased by FCI. Farmers say purchase of their produce at minimum support price (MSP) rates should be made mandatory as they fear corporations will take advantage of the deregulated crop prices and drive them down. The federal agriculture ministry on the other hand, does not find this a practical option, arguing eventually MSPs could prove to be highly inflationary with volatility driving up food-grain prices unconscionably. However, this is not the full story. Punjab has an opposition Congress government in power. In Haryana, while a BJP government is in place, farmers are being mobilized by the opposition party, Congress. The federal government believes a progressive law is being misrepresented to the farmers for politics. However, the BJP-affiliated farm organizations are either not strong enough to call out the protestors, or are in tacit agreement that the new laws will hurt agricultural interests. For the moment, the farmers, who have trundled into the capital on tractors carrying months of dry rations with them, are camping at the various entry points to New Delhi, refusing to move. There has been no violence so far. A second round of talks between farmer body representatives and the government is scheduled for 3 December. Having harvested the standing crop, they are now free till mid-January when preparations will begin to plant for the next season. If the government does not reach an agreement with the farmers soon, a small incident could spiral into an unmanageable crisis amid an ongoing health emergency, something the government simply cannot afford. On the other hand, jettisoning its own law means a major loss of face. Either way, it is the government which has more to lose.

December 1, 2020

INDIA: Federal policies bring farmers to the streets as opposition fans flames

BY Aditi Phadnis

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December 1, 2020

INDIA: Federal policies bring farmers to the streets as opposition fans flames

BY Aditi Phadnis

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More by Aditi Phadnis