Farmer's protests: need for agricultural reform.

ABSTRACT:

This article delves into the factors contributing to the persistent agrarian unrest in Punjab, three years post the repeal of the controversial farm laws. The APMC’s failure in achieving its goal of curbing middlemen cartels has left only a fraction of farmers benefitting from the Minimum Support Price (MSP).The 2021 farm ordinances aimed to empower farmers by allowing tax-free transactions outside APMC, stockpiling autonomy, and pre-sowing contracts. Despite these seemingly favorable measures, vehement protests erupted due to fears of MSP collapse and excessive corporatization.

Beneath the struggle lies Punjab’s impending environmental catastrophe as groundwater depletion threatens the region’s future. The article argues for a shift from water-intensive Green Revolution practices to sustainable, and diversified cropping. Despite the urgency of a long-term plan for Punjab’s agricultural sustainability, political inertia prevails. The Central Government’s undemocratic handling of the farm laws casts a shadow over future initiatives, leaving the farmers caught between the immediacy of their struggles and the looming specter of an agrarian crisis.

KEYWORDS: Farmers protest, minimum support price (MSP), APMC, Punjab water crisis 

ARTICLE

Merely 2 years after the 3 contentious farm laws were repealed by the government, the farmers of Haryana and Punjab are once again marching towards Delhi in protest. It is important to understand the motivations of the government and the farmers through protests 2 years ago; to understand the situation today. The farmers' current demands and actions are linked to their success in 2021.

At the time of independence, middlemen formed cartels to force farmers into lowering crop prices by a significant amount. To prevent the exploitation of farmers, the government introduced the APMC markets. These markets were the only place where farmers would be allowed to sell their produce and only government-licensed traders would be allowed to buy. Further, the government set a base price which was the MSP. The APMC aimed to prevent the formation of cartels and protect farmers from exploitation. Additionally, to prevent farmers from exploiting consumers by artificially lifting prices, the government prohibited hoarding of stock. It is to be highlighted that the sales through the APMC markets were taxed.

The APMC was an abject failure, licensed traders still formed cartels and it is estimated that only 6% of farmers sold their produce at prices above the MSP. This was mainly because the MSP was not a legal requirement but rather an advisory guideline that was hardly taken into consideration.

After careful consideration, the government introduced 3 new farm ordinances. These laws allowed farmers to sell outside the APMC markets, directly to private players, food firms, and the type, without taxes. The farmers were now allowed to stock their grains and sell them when they deemed fit. Further, these laws sought to establish contracts with the farmers for fixed prices on their crops before the seeds were even sown. This was done to ensure that farmers had some level of certainty regarding their future incomes.

Even though, at face value, these laws might appear to be in favor of the farmers, they were met with extreme vehemence from the farming community. They were afraid that tax-free transactions outside the APMC would lead to the collapse of the MSP and APMC system which would lead to excess corporatization of farming. It was believed that initial incentives given to farmers by big corporations would destroy all competition and make the farmers dependent on the company, which would as a result lower the farmers’ profit margin.

An analogy of this would be the dominance of taxi service providers Ola and Uber in Indian cities. Initially, these service providers sustained heavy losses by providing free rides, giving people incentives to choose their platform for rides, and even paying their drivers well. Over time they eliminated the competition (the kali-peeli) and built a level of trust and dependence for both their drivers and riders. Over time they were slowly able to clamp down and today boast a duopoly in the market.

The fear and distrust of the farmers led to their protests in 2021. A year ago, the farmers were out on the streets yet again, demanding higher MSP, and legalization of the MSP as well as waiving off of loans, and India’s exit from the World Trade Organization (WTO) and other free trade agreements. Their demands were in direct opposition to the government’s policy that would reduce the MSP and introduce a capitalist structure to the agriculture markets in India. Further, given that the government already subsidizes irrigation, fertilizer, and other equipment for the farmers, it is loath to increase spending.

What the farmers of Punjab want is not necessarily what they want.

The deep hidden problem in Punjab is that it is slowly turning into a desert. Estimates suggest that the groundwater resources will be extinguished by 2039. Farmers in Punjab predominantly grow wheat and rice, as these crops received a boost during the green revolution. The government currently offers an MSP that is higher than many international prices for wheat and rice. However, high amounts of fertilizer and desertification are further raising the cost of agriculture and creating a vicious cycle for farmers. Additionally, wheat and paddy crops are water-guzzling crops that require electricity to pump water out of the ground, which leads to additional costs amidst the water shortage in Punjab.

The need of the hour is to shift from Green Revolution farming practices, which were significant at a point, to more sustainable methods and introduce the growth of diverse crops.

While the discourse on agriculture is focused on higher MSP and more subsidies which were the cause for the depletion of groundwater in the first place, the rapid desertification of Punjab is the elephant in the room which needs to be addressed immediately.

The demands of the farmers are seen as easy fixes for the government given that the farming crisis is marked by thousands of suicides every year.

Unruly farmers heading towards Delhi might seem unreasonable and politically motivated, but what lies behind constant unrest among the farmers in Punjab is the policy failure. The policies of the Green Revolution are no longer applicable in a food-surplus India. Neither the government nor farmers are willing to make radical changes and thus both focus on short-term issues like prices and free goods.

There is no consensus on how to shift from the wheat-paddy cycle to diversified cropping patterns. There are no signs of politicians willing to get rid of power subsidies to discourage the growth of paddy. On a side note, wheat and paddy are two crops that contribute to pollution in North India as they are contingent on stubble burning.

The government is notorious for mismanagement of limited crops, which makes diversification through MSP an impossible task. The required investment in storage and processing can only be brought about through the private sector.

The argument thus circles back to the 3 farm laws. The government had tried to push an ambitious restructuring of framing in Punjab but was met with distrust from the farmers' community. The farmers doubted that the private sector would offer them a fair deal. They further feared that APMC and MSP would collapse and that they would be left at the mercy of the private corporations. Despite numerous reassurances from the government, the farmers are not persuaded.

Farmers have come to believe that the only way for them to be secure and to attain high incomes is through free goods and state support. The need now is for the government to not yield to the farmers’ demand and perpetuate the status quo but rather form a consensus on a long-term plan for Punjab. The attitude of the Central Government, especially the undemocratic way the farm laws were introduced has been a major deterrence.

The farmers in Punjab are going to be the primary victims of this crisis, either today or slowly over the next 15 years, but after the Central Government made a mockery of itself with the farm laws that it was forced to repeal, no political player is likely to take the initiative.