Why Indian farmers are protesting Modi's new farm laws

Why are Indian farmers protesting?

For months, tens of thousands of farmers have been camped on the edge of New Delhi, seeking to repeal three new farm laws passed in September 2020. Farmers across India fear the laws will favour large agribusiness and corporations, reduce their earnings and leave them saddled with debt.

What has been the government's response to protests?

Protests have largely been peaceful but violence erupted on January 26, India's Republic Day, when tens of thousands of farmers riding tractors and horses and many marching on foot entered New Delhi. The demonstration turned ugly when police barricades were knocked down and New Delhi's 17th century Red Fort was stormed in a brief but shocking takeover.

The protesters waved farm union and religious flags from the ramparts of the fort, where prime ministers annually hoist the national flag to mark the country's independence.

The farmers say the vandals were largely from members of a Hindu nationalist group with close ties with PM Narendra Modi's Bharatiya Janata Party (BJP), intent on sabotaging the peaceful movement. The government, in turn, accuses farmers of violating a deal that allowed their protests inside the Indian capital.

The clashes left one protester dead and nearly 400 police officers wounded. Officials did not say how many farmers were wounded but many were seen bloodied after police in riot gear hit them with batons and fired tear gas.

The issue has turned red hot with Riri, Ranaut and Greta

What was simmering before the Red Fort incident has now erupted and the narrative now includes voices of international celebrities in support of farmers pitted against local stars.

Police have arrested scores of people, continued search for farmer leaders with their passports, and also slapped sedition charges against several journalists over their reporting and online posts about a farmers' protest. 

Authorities have also blocked New Delhi's borders against farmers with iron nails, rods, circular razor wires, and makeshift walls on the main highway.

Several media outlets, ruling party leaders, and celebrities inclined towards right-wing policies have called farmers "traitors" and "terrorists". Others have highlighted possible foreign roles in destabilising India. Farmers say their movement is purely indigenous and have refused to speak with certain media outlets that they see promoting the state's narrative of the protests.

Global icons like Rihanna and Greta Thunberg have expressed solidarity with the protesters angering India.

What do the new laws change and what is the government's stance?

PM Modi's government says the new laws were prepared (after a thorough review) thoroughly to modernise India's age-old agricultural practices. The laws also extend to 7,000 mandis or markets where the farm produce is sold.

According to the new laws, farmers can trade their produce even outside mandis, and also enter into contract farming through verbal or written contracts with corporates.

India says the laws help farmers get a higher price for their produce by opening up more avenues where they can sell their grains, vegetables and fruits, including electronic trade.

The laws also get rid of middleman or arhtiyas, who buy the produce from farmers and sell it at the wholesale markets. These arhtiyas, who also finance small landowners, pay next to nothing to farmers while selling the farm produce in markets at a higher price.

Why do farmers oppose these laws?

On the face of it, the laws seem to benefit the agriculture business but farmers say there's much more than meets the eye.

Farmers say the laws were introduced as ordinances, not as bills, without allowing much debate from opposition or farmer unions. Modi's party also denied referring the laws to a special committee, where members could further discuss them. Farmers question the timing of it, saying the "pro-corporate" laws were imposed in the Covid-19 pandemic to avoid any kind of resistance.

They fear by deregulating the mandis the government is absolving itself from the responsibility of ensuring that farmers get a fair price. 

Successive Indian governments have adhered to a policy of fixing the minimum price (MSP) of various crops. That's basically a policy tool the government uses to safeguard farmers from the merciless price swings in the open market. New Delhi says it has no intention of rolling back the system but farmers say that's exactly what's going to happen when the private sector comes to play a more prominent role in the procurement process.

Farmers say the government will pay a minimum price only on wheat, paddy, and cotton. They want the government to purchase other harvests if the private players refuse to buy from farmers. Farmers want the minimum price clause to be included in the law.

Currently, the Indian government has fixed a minimum price for 23 crops. Procurement of all these crops at set prices will amount to around $233 billion. 

Left to the mercy of private sector's supply-and-demand model, the farmers say whatever little they earn right now will further erode. They also fear the private corporations could pay farmers below the existing MSP which is not sufficient. 

One of the major fears farmers cite is that they will have no legal recourse in courts. About 85 percent of farmers are marginal growers who don't have access to markets, transportation facilities, or inexpensive judiciary in case of disputes. They say marginal farmers will have no real bargaining power over private players.

Farmers say free markets work in countries with less corruption. They also say farmers' conditions worsened after similar laws were imposed in India's Bihar state in 2006.

Have there been talks?

Yes. Eleven rounds of them. But negotiations between farmer leaders and Indian officials have hit a deadlock, especially after Republic Day clashes.

Modi's government has offered to suspend the new farm laws for 18 months, but farmers have rejected what they say is a dilly-dallying tactic and demanded a complete repeal of all the three laws. 

Modi has, however, warned against violence and vowed to continue with the controversial laws.

Are farmers posing PM Modi a major challenge?

The protests pose the biggest challenge to Modi since he took office in 2014 because farmers are the most influential voting bloc in the country and a key part of the economy.

In a rare show of unity last week, 16 opposition parties boycotted a parliamentary address by the ceremonial president Ram Nath Kovind, who is from Modi's BJP. 

There have been protests in favour of farmers in the US and UK as well. 

Both farmers and the Modi government appear to be growing more entrenched. 

Is MSP provision at the heart of current tension?

Agriculture is a big gamble in India. Water shortages, floods, and increasingly erratic weather caused by the climate crisis, as well as debt, have taken a heavy toll on farmers.

More than 300,000 farmers have killed themselves since the 1990s. Nearly 10,300 did so in 2019. 

Farmers and their workers are also abandoning agriculture in droves – 2,000 of them every day according to the last census in 2011.

Despite all this, crops procured from farmers through MSPs have swelled government stores. The government has been hiring private storerooms to stockpile food grains, some of which often rots there for the want of costly distribution. This has become a major headache for all governments.

But to understand it better, a look at the agriculture situation in the 1960s is imperative.

In the years of 1964-66, India faced a food shortage, so acute that then PM Lal Bahadur Shastri called for a day of fasting every week to cut demand. New Delhi avoided famine after importing some 10 million tonnes of wheat.

In the next few years, India began revolutionising its agriculture sector. New hybrids, fertilisers, pesticides, and subsidies were introduced to upgrade it.

MSP, a safety net for the farmers, was announced. It was meant to incentivise farmers to grow food crops and save them from natural calamities and market uncertainties. Known for his role in India's Green Revolution, noted geneticist M S Swaminathan marked that "India's global image of a nation destined to lead a ship-to-mouth existence was erased."

Backers of new reforms say MSP was helpful when India faced acute food shortages and since that era is over, agricultural policies to deal with surpluses and rotten food grains in government stores will have to be fundamentally different. 

MSP, they argue, has also led to a surplus of food grains over other crops such as pulses and oilseeds, resulting in costly imports. 

How does WTO fit in the picture?

India often faces accusations of supporting its agri sector at the cost of farmers in other countries. In 2019, the US and Canada filed a complaint with the World Trade Organisation (WTO) that New Delhi was under-reporting the minimum price at which government procurement agencies were buying pulses such as chickpeas. 

In 2020 as well, India had to invoke the peace clause of the WTO for exceeding the cap on help it can offer its farmers for rice.

What India does is nothing unusual. 

Governments in other countries also fix a price for grains and vegetables to ensure their farmers get a fair return. But such practices distort competition by making products of a particular country inexpensive in comparison to the same product in another country.

By letting the private sector play a bigger role in buying agri products from farmers at market prices, Modi's government can avoid spending billions of rupees on subsidies and also sidestep criticism at WTO.