Farmers Movement Archive

From ordinance to repeal: How HT covered the farm-laws debate

In an early morning address to the nation on the occasion of Guru Nanak Jayanti, Prime Minister Narendra Modi announced that his government has decided to repeal the three farm laws. Modi’s address, interestingly, has attributed the repeal to the fact that a section of farmers could not “understand” the benefits of these laws. He even apologised to the nation for his government’s failure in conveying the benefits of these farm laws. What does this move mean? HT has covered this issue extensively right from the beginning. A summary of our coverage is the best way to approach this question. There was never any unanimity about the so-called benefits of the farm laws There has never been a consensus on the supposed benefits of the farm laws. HT discussed this question as early as May 18, 2020, almost immediately after the reforms were announced (https://bit.ly/3DwOVhD). The fundamental economic premise of the farm laws being beneficial for all farmers was questionable for two reasons. One, contrary to government claims of farmers being forced to sell their produce to vested interests in Agricultural Produce Marketing Committees (APMCs), which the farm laws abolished, most farmers in India have already been selling their crop to private traders. The latest numbers from the 2018-19 Situation Assessment of Agricultural Households and Land and Livestock Holdings of Households in Rural India (SAS) confirmed this. In a two-part series based on the business of farming in India, HT looked at SAS data to find that only 5.4% of farmers sold their output to APMCs and an overwhelming 77.5% sold their produce in local private markets (https://bit.ly/3Cun7Jh) . SAS also shows that every third farmer is unhappy with the prices he receives for his crop. When read together, these numbers suggest that private traders are not the best when it comes to guaranteeing better prices. The article also highlighted the limitations of contract farming, another key aspect of the farm laws. “Selling to contract farming sponsors or companies directly – this is often offered as a panacea for low farm incomes in the country – does not offer significant improvements in satisfaction of sale. Here, however, the main cause of dissatisfaction is delayed payments”, it said. And two, the deregulation of farm prices through amendment of the essential commodities act, was always susceptible to be suspended when high food prices became a food problem. This part has been confirmed by government actions on crops such as onions and edible oils after the reforms. This was explained in detail in an HT piece on September 23, 2020 (https://bit.ly/3CA0CTc). As the farmers’ protests gained momentum, the rhetoric became more and more anti big-business. HT explained why this was the case on September 19, 2020 (https://bit.ly/3nxQGoU). Input markets in agriculture are already dominated by big business and farmers have seen worsening terms of trade (ratio of prices received to prices paid) mostly on account of input costs in farming. With big business being allowed into output markets, they feared even worse. The move is political, not a change of heart on policy The next assembly election cycle – this includes the state of Punjab and Uttar Pradesh – will take place early next year. Punjab has been the epicentre of the farmers’ protests since day zero. It is here that the Bharatiya Janata Party (BJP) paid the biggest price for the farm laws when the Shiromani Akali Dal (SAD), one of the oldest constituents of the National Democratic Alliance (NDA) decided to break ranks on the issue. It remains to be seen whether the BJP reaches out to the SAD after this decision. Also, whether the SAD-BJP and estranged Congress leader Amrinder Singh form a joint front to fight the elections will be an interesting thing to watch out for. But the farm laws did not seem to be a big political factor elsewhere. For example, the BJP actually managed to increase its vote share in the Ellenabad assembly by-poll in Haryana even though it did not win the election. “While the Haryana elections will only happen in 2024 and the BJP has never had much of a presence in Punjab, a consolidation of non-Jat and non-Muslim votes could minimise, if not completely negate, the BJP’s potential losses in the Uttar Pradesh elections early next year”, this author said in an analysis (https://bit.ly/30GpBap) of the by-poll results on November 3. Even the opposition did not try making the farm laws into an issue (in elections such as in Bihar last year) as was explained in HT on October 30, 2020 (https://bit.ly/3DC6jBu). The farm law attracted protests in only those states, where agriculture is still a relatively high-income activity. This, in turn, is a direct outcome of government procurement. However, there can be no denying the fact that the forthcoming assembly election cycle would have presented the biggest political challenge to the BJP on this issue. Punjab and western Uttar Pradesh, along with Haryana, is what forms the core of Green Revolution belt in India. The BJP’s retreat on the farm laws should be best seen as a decision to avoid a full-scale confrontation with the local elite in the Green Revolution regions, which, to its credit, was able to rally other sections in its protests as well. HT has looked at this issue in detail on September 21, 2020 (https://bit.ly/3xa73vm). By making a retreat on this front, the BJP has clearly indicated that it prefers to be risk averse on the issue than risking its political capital in the most important state of Uttar Pradesh. Western Uttar Pradesh, where the farmers’ protests are the strongest, accounts for more than hundred assembly constituencies in the 403 member assembly. Indeed, the Lakhimpur incident, where the son a BJP union minister for state has been accused of killing protesting farmers, might have increased the potential headwinds to the BJP from farmers’ protests. Status-quo in farming and all of farmers’ demands aren’t desired outcomes either Just as the government’s claims of farm laws being unambiguously beneficial do not stand scrutiny, demands of restoring status-quo-ante or even strengthening it are difficult to justify. For example, a Minimum Support Price (MSP) driven expansion of paddy cultivation in Punjab and Haryana has unleashed widespread environmental destruction on soil quality and water tables in these states and pollution in Delhi and adjoining areas because of stubble burning. HT explained the relation between paddy cultivation and pollution on November 16, 2021 (https://bit.ly/3HzZG58). An HT article published on December 2, 2020 showed that richer farmers inflicted greater environmental damage in Punjab (https://bit.ly/3CxDB3x). Then there is also the question of the dubious practice of agricultural subsidies – they are often driven by demands from farmers -- which has destroyed the financial health of distribution companies as well as state governments. Some of these issues were discussed in an HT piece on October 28, 2021 (https://bit.ly/30B2a24). Each of these challenges needs to be addressed on an urgent basis if India’s long-term growth and sustainability interests are to be preserved. This is not the end of political conflicts on agricultural policy The government’s decision to repeal the farm laws is not going to be the end of political conflict around farm policy in the country. In fact, this is the basic political economy fault line in India. “The main reason for the agrarian crisis is that agriculture employs far too many people to be remunerative. At least 40% of India’s workforce is employed in agriculture, even though it generates less than 15% of the country’s GDP”, HT explained on October 10, 2020 (https://bit.ly/3oClZOS). “The current set of reforms does nothing to address this basic income-employment asymmetry in agriculture”, the article said. An HT piece published on July 29, 2020 underlined another central contradiction in India (https://bit.ly/30CoXuX). “Maintaining terms of trade in favour of agriculture (which is what boosts farmers’ income) and ensuring reasonable food prices for consumers might not be compatible”, while adding that “to really shift the fortunes in favour of agriculture will require a demand driven sustainable policy trajectory”. These are all issues which will continue to matter in Indian politics in the foreseeable future. Will farmers’ movements gain a pan-India boost after this struggle? Not necessarily. The current farmers’ protest was not the first in India. However, not all of them have been as successful as this one. One of the biggest handicaps which prevent genuine farmers’ solidarity in India is the question of caste, which prevents farmers from the Other Backward Classes and upper castes from coming together while the Dalits are largely non-stakeholders in agriculture, HT explained on September 23, 2021 (https://bit.ly/3qVwuj0).

Hindustan Times

19-11-2021

India