One would think that the BJP government would have realised by now that it is losing the farmers’ vote (almost 65 percent of India’s population) and would withdraw the three laws the farmers are protesting against. But the government seems adamant not to do so. Why is this the case?
To my mind, this is because the Indian government seems to have come under the grip of the big corporates, national and international, and is simply doing their bidding. The big corporates are eager to enter the agricultural sector in India, because of the current recession in the global economy and because very few avenues are left for profitable investments. It is in the nature of capital that it seeks avenues for profitable investment. Most avenues presently seem closed, but the massive agricultural sector in India remains as yet unexplored by the big businesses. Now the corporates seem to have come to the realisation that this is an area that may yield large returns, and so they have decided to enter it in a big way.
The Indian government, which is in the firm grip of the corporates, claims that it has got the three controversial laws enacted by the Parliament to benefit the farmers. But the reality of this warrants examining.
The first law, The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, purportedly
(1) expands the scope of trade areas of farmers' produce from select areas to any place of production, collection, aggregation;
(2) allows electronic trading and e-commerce of scheduled farmers' produce; and
(3) prohibits state governments from levying any market fee, cess, or levy on farmers, traders, and electronic trading platforms for the trade of farmers' produce conducted in an “outside trade area.”
This may sound rosy and beneficial to farmers, but what is overlooked is that it does not provide a statutory Minimum Support Price (MSP) to farmers for their produce (which was recommended to be set at 50 percent above the cost of production by the Swaminathan Committee Report). Without MSP, the law gives no benefit to the farmers; instead, it places them at the mercy of the corporates since farmers are on an unequal bargaining position vis-a-vis the corporates.
Between 300,000 to 400,000 Indian farmers have committed suicide over the last 25 years or so, since they did not get adequate remuneration for their produce, which made them get stuck in a debt trap. The poor farmers could not repay the loans that they had taken from money lenders at high-interest rates to procure inputs (fertiliser, pesticide, seeds, electricity for irrigation, etc).
The second law, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, provides for contract farming. This is also in reality against the interests of the farmers. In a contract, farming prices for the farm products are fixed by agreement between the farmer and the businessman before the farming operations begin. This means that the farmer cannot benefit from any rise in market prices after the contract has been signed. For example, if what is agreed upon is Rs 100, and later the market price rises to Rs 150, the farmer will still get only Rs 100. But if the market price crashes to below Rs 100 to, say, Rs 50, the businessman can usually refuse to pay Rs 100 and wriggle out of the contract, often through some term in it which his lawyers were careful to include when drafting the contract. If nothing else, they can always claim that the product is not of the requisite quality. Thus, the businessman wins both ways, and the farmer, being in an unequal bargaining position, has to settle for whatever little he is offered.
The Indian farmers have seen through the charade of such laws made without consulting their leaders, and are hence on the agitational path. Where will this deadlock end? If both sides remain determined to stick to their stands, one fears that the situation may quickly escalate to large-scale violence – the likes of Bloody Sunday in St Petersburg in January 1905, Vendemiare in Paris in October 1795, or Jallianwala Bagh in Amritsar in 1919.