Grapes of Wrath: Why are Indian Farmers Protesting Against Modi Government’s New Agricultural Laws

The 2020 Indian farmers’ protest is a continuing demonstration against the three laws passed by the Indian Parliament in 2020. Led predominantly by farmers of Punjab and Haryana, they are protesting laws that deregulate the sale of crops, allowing private buyers freer rein in a marketplace that has long been dominated by government subsidies and support prices.

80% of farmers in India are small farmers, and they do not have the resources to go against big corporations. This is sounding alarm bells for the farmers. The protests began in August in Punjab and Haryana, and they marched on New Delhi in November. A heavy-handed police response met them. Officers used tear gas and water cannons on protesters in late November. 

What is in the laws that the farmers have a problem with?

In September 2020, Parliament passed three laws, The Farmers Produce Trade and Commerce (Promotion and Facilitation) ACT 2020; The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act,2020 and the Essential Commodities (Amendment) Act 2020.

Explained in layman language, this is what these laws effectively do:

1. They allow farmers to sell their produce to the private sector, outside of the government-controlled marketplaces called mandis or APMC. 
2. They also allow for the private sector to enter contracts with farmers and dictate  what they want the farmers to grow so that they can buy the produce that the farmer grows.
3. The new law also removes all the regulations on hoarding of food produce,which was illegal in India till now. For example, till now, the traders could not stockpile supplies of, say, onions, because by doing so, they can quickly drive up the price or then open the reserve to drop the price 
4. The laws also prevent the farmers from seeking justice in civil courts if there be any produce marketing disputes. It directs them to bring the issues to the District Collector or other local official and binds the local official’s decision to the issues as final.

Why are the Farmers protesting if these laws are ‘liberating’ the sector?

Farmers are protesting against laws that deregulate the sale of crops, allowing private buyers freer rein in a marketplace that has long been dictated by government subsidies. Farmers say the amendments to laws that have long protected small landholders’ place in the market will put them at risk of losing their businesses and land to big corporations.

Farm produce was bought and sold in the marketplaces called APMC, which are regulated by the state governments, and only licensed traders can buy in APMC.

This requires the farmer to bring his produce to the market physically. There was a problem because many times, farmers cannot afford to bring it to the market, and once they bought it in, they cannot afford to take it back.

There are around 6,000 APMCs in India on the last count, which doesn’t cover the whole country, so farmers who couldn’t afford to go to the APMC would then sell their produce to these traders at price they could get.

The APMC offers price protection to small farmers on paper because it’s a regulated space and has licensed traders. It also provides a grievances redressal system for them.

But over some time, the APMCs have become a sort of cartel with monopoly and corruption enabling the middlemen and the traders to have power over the farmers. 

The middlemen called “arhatiyas” have traditionally traded and represented the farmers in all negotiations regarding the sale of their produce. Despite the fact that these middlemen may be corrupt and created a cartel for their own benefit, farmers view them as their saviors for not only making their lives easier but also a source of loans when in need. The Farmers fear that Modi’s Law will eradicate this support system for them and replace it with capitalist big corporations.

The Modi government argues that the APMC system is flawed.It contends that the only way to fix this system is to allow the farmers direct access to the private sector by allowing the private sector to set up similar Mandis across the country. 

The devil is really in the details of what the government is promulgating.

The farmers assert that if the private sector can set up the Mandis, for which they don’t have to pay the levy or the tax to the state government, then it will not be long before the private sector Mandis, because of competition, will wipe out the APMCs.

If the APMCs get wiped out then the farmers will effectively be left only at the mercy of the private sector and the private sector will then begin to drive down prices, and the farmers will have no options. 

The farmers also argue that the MSP (Minimum Support Price — threshold price for essential crops promised by the government) at the APMCs will be weakened by this law over a period of time, and the private APMCs will take away the pricing support and subsidies. 

Smaller farmers will lose any bargaining power against corporates on the legal front. These laws do not mandate for written contracts and this law specifies that the farmers cannot go to court. It gives the rights instead to a government official — a subdivisional magistrate or a collector — and whatever that officer decides is final. The new law also specifies that nobody can file a case about the specific issues of this law against either the central government or the state government or any officers of central or state government. 

The law seeks to take away that fundamental right to legal redressal of the farmers. The farmers are arguing that effectively, these laws are making them legally and financially vulnerable.

Criticism faced by the farmers

Some media houses allege that farmers have a political angle. The notion that farmers are being misled by the opposition has been debunked. To even suggest that the farmers have been misled five months after these laws have been placed in the public domain is, akin to suggesting that the farmers have not been able to understand these laws and that they’re so naïve and uneducated. Live interviews with the protesting farmers suggest otherwise.

The farmers have made a detailed presentation to the Indian government on their main concerns and the government has heard them out as well as acknowledged those concerns. This should be enough for any biased media to conclude that these farmers are not naive, and that the stereotypes being portrayed are misplaced.

Though members of the opposition political parties have spoken up in support of these protests, the farmers have not been fronted by anybody political so far. 

The second criticism and accusation is more outrageous. Biased media called these protests a case study separatist movement. Many of these farmers were outraged by these statements and emphatically countered the preposterous argument laying out that most of them have children in the armed forces and neither is their objective nor their protest anti-national.

Senior leaders of the BJP (the party of Modi) in Punjab have issued statements condemning such a narrative calling it unfair to use the Khalistan narrative to downplay the agitation and grievances of the Punjab farmers. 

Why are most farmers protesting from Punjab?

Punjab farmers grow mostly wheat and rice, which are MSP crops. So, they benefit the most from the APMC system. They also stand to lose the most if either the APMC or the MSP system were to be challenged or in some way tweaked to their disadvantage.

The Modi Government’s argument

The government says the reforms are necessary to increase the efficiency of India’s farming sector, which accounts for nearly half of the country’s workforce but makes up only 16% of GDP.

Although some economists also say the reforms are necessary, many have criticized the way the laws were enforced. In September, at the height of the pandemic in India, the Modi government passed these agricultural reform laws in a short session of Parliament, using a parliamentary maneuver to push through the reforms in the upper house. There was also barely any consultation with farmers or any farmer organization (farmers have very highly instituted unions). 

Since the 1960s, the Indian government has had a policy where it guarantees farmers a set price for certain staple crops (like wheat and rice). Combined with improvements in farming technology, that structure has helped India move from widespread hunger to big annual food surpluses. 

When the COVID-19 pandemic hit in March, officials estimated there would be 100 million tons of grain available to see India through the lockdown, which is enough to last at least 18 months.

As per the Modi government, this system has also affected crop diversity, impacted the environment, and unduly benefited larger farms over smaller ones.

The new laws do not eliminate the guaranteed minimum prices, which will remain in place. However, they do get rid of previous restraints on conglomerates buying land and stockpiling commodities beyond a certain level. 

They allow enterprises to circumvent markets where farmers’ produce is normally sold and strike direct deals that farmers worry will be less subject to laws. 

The laws also prohibit the practice of debris burning, a change that farmers have demanded be reversed despite its environmental benefits.

While the Modi government says the new laws will “empower farmers,” farmers’ unions say that the rule changes are not policies they have asked for. Instead, they fear that instead of trying to help farmers, the government is opening the door to big corporations who may eventually force them off their land and out of business.

The reforms are necessary. Whether or not the demands made by the farmers, who are adopting a maximalist position are justified or whether the protests are justified in the context of the reforms that have been proposed. The solution process is complicated because the government rushed through the reforms without any stakeholder discussions.

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Meera Kaul is a Silicon Valley-based author and contributor with an interest in writing about political systems, economic and legal frameworks, foreign relations, policies, and ideologies. 26+ years of experience in executing ventures across three continents. Thomas Jefferson School of Law and Stanford GSB Alum.