The biggest political challenge that Indian Prime Minister Narendra Modi's government faces right now is the agitation on the outskirts of Delhi by farmers coming mainly from Punjab, Haryana and western part of Uttar Pradesh. The protest by thousands of farmers has already entered its third month, and there is no sign of a resolution even after eleven rounds of talks between the protesters and the government. Both sides are firmly entrenched in their respective position on the fate of the three new contentious agricultural laws piloted by the Modi government as one of its bold reform initiatives.
While the farmer unions insist on total repeal of the laws, the government has offered to make changes in the legislation to address their concerns, an offer that the unions lost no time in rejecting. What's more worrying for the government is that the farmers are intensifying their agitation and have threatened to block highways across India on February 4 to press their demand. Desperate to end the protest which has already set off churnings within a section of the ruling Bharatiya Janata Party (BJP) and its ideological mentor Rashtriya Swayamsevak Sangh (RSS), the government had offered to put the three laws on hold for 18 months to allow more discussions on the issue. But it did not work as the protesters apparently took it as a sign of its defensive posture. The offer to suspend the laws was made after taking a cue from a suggestion made earlier by the Supreme Court. The apex court's proposal to appoint an expert panel to study the laws was seen as "a face saver" for the government, but some have also called it a "judicial overreach".
The agitation, which had been peaceful for the first two months, took a violent turn on January 26 when the farmers riding tractors smashed through security barricades and entered the Indian capital from various points. The most serious part of the violence was the protesters storming the Red Fort, an iconic Mughal-era landmark, and the hoisting of a religious flag at the ramparts from where the prime minister addresses the nation on Independence Day on August 15 every year. There have been allegations and counter-allegations from both sides, but there is no doubt that the violence came as a setback to the farmers who were hit by a rift as two of the 40-odd unions of farmers pulled out of the agitation. A number of national and regional farm unions, with separate leaders, have come under the umbrella banner of Samyukt Kisan Morcha for the ongoing agitation. However, the protest by the other unions not only continues but the number of protesters also appears to be swelling.
The three new laws in question are: The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, and The Essential Commodities (Amendment) Act. The farmers' contention is that the laws will lead to the creation of private mandis (village markets for selling crops) which, along with the state-run Agriculture Produce Market Committees (APMC), will push all agriculture businesses towards private markets. This, they argue, will end the existing government markets and intermediary (commission agents) mechanism for procurement and allow large, financially powerful traders and corporate houses operating in the markets to procure farm produce at "incidental" prices.
The farmers also want the federal government to provide the legal guarantee of a minimum support price (MSP) for their crops by introducing a new law. Another key contention of the farmers is that since the state governments will not be able to collect market fee, cess (a form of tax) or levy for trade outside the APMC markets, the laws will make them vulnerable to corporates which might exploit them. On the other hand, the government has proposed that there will be a uniform policy of taxes, fee and cess for both government and private markets. But the farmers are distrustful of that, claiming the government would delay procurement and turn the public markets inefficient.
In Punjab and Haryana, the commission agents and farmers enjoy a relationship developed over the decades under the existing system of crop procurement. On an average, at least 50-100 farmers are attached to each agent who takes care of farmers' financial loans and ensures procurement and prices for their crops. Farmers are apprehensive that the new laws will do away with these agents and have them replaced by corporate houses that may not help them in their hour of need—for example, in cases not related to farming such as marriage in the family or house construction. Inherent in this is the fear of the new and the uncertainties that inevitably come with any change.
A majority of the protesting farmers are from Punjab where the ruling Congress party and main opposition party Shiromani Akali Dal (SAD) have already shown their support to the farmers. According to a study by Punjab Agricultural University, there are more than 1.2 million farming families in Punjab and 28,000 registered commission agents. A large part of Punjab's political economy relies on funds infused by federal and state-owned procurement agencies that buy a major portion of wheat and rice grown in the state. In the 2019-2020 rabi crop season, Punjab supplied 129.1 lakh tonnes of the 341.3 lakh tonnes' wheat procured for the federal government's pool.
A sizable number of the protesters are also from neighbouring Haryana state, ruled by BJP, where the party is in a catch-22 situation. To enter Delhi, farmers from Punjab have to cross through Haryana but the state government has failed to prevent the swelling crowds of protesters coming to Delhi from Rajasthan and Punjab, the two states ruled by the Congress. Had the BJP foiled the farmers' journey through its territory, it might have given rise to a serious law and order situation, something the saffron party can ill-afford.
A question that is often asked is why farmers in other Indian states are not hitting the streets in support of their colleagues in Punjab and Haryana. There is no APMC Act in at least 15 Indian states, and nearly 18 states allow private markets and direct purchase from farmers by private corporate houses. It is estimated, therefore, that the three farm laws are expected to make a difference only in some states and chiefly in respect of cereal crops and onion because most of the vegetables are already out of the purview of APMC markets.
In pushing through the farm laws, Narendra Modi's BJP government followed up on its economic agenda, which revolves around market economy, as vigorously as it pursued its political-ideological agenda of scrapping the special constitutional status of Kashmir and criminalising instant triple talaq as a step towards a uniform civil code. According to the government, the idea behind the three laws is to liberalise the farm markets in the hope that doing so would make the whole system more efficient and allow farmers to get more options to sell their crops and thereby stand a chance to earn a more remunerative price.
India's progressive deregulation of the farm sector envisages a shift from input subsidies and procurement regimes like MSP to income support and facilitation of greater private investment in agriculture, which badly requires fund infusion particularly to build cold chain infrastructure and other forms of value addition and join the global food supply chain that remains insulated from disruptions like Covid-19. This is also a foreign policy objective strongly advocated by the Modi government in its outreach to major countries like the US, Japan and Australia. According to an official estimate, India's share in global food markets stands at 2.3 percent. The efforts to make India a key link in the global food supply chain by becoming a major food exporter need a major investment in agriculture.
As the budget session of parliament progresses, the opposition is gearing up to corner the government on the issues of farm laws and the unrelenting protests by farmers at Delhi's borders. And with many parties including regional outfits and some BJP allies—some of which have clout in rural areas—rallying behind the farmers, the government has its task cut out.
The RSS' call to the government to be sensitive in handling the farmers' agitation has drawn murmurs of discontent in a section of the BJP that feels that the issue could have been handled more tactfully. One view is that since the government is ready to put the three laws on hold for one and a half years for facilitating more talks with the farmers' unions, this could have been done before the bills containing the laws were introduced in parliament last year, or that they could have been referred to a select committee once the objections were flagged, which would have weakened opposition to the laws. On the other hand, the farmers would do well to show flexibility, an ingredient inherent in across-the-table negotiations, for any resolution to be reached.
Pallab Bhattacharya is a special correspondent for The Daily Star. He writes from New Delhi, India.