Issues Americans Must Know if They Want to Support Indian Farmers Without Taking Political Sides

Over the last few months even the most judicious minds have voiced their support for Prime Minister Modi’s farm legislation as they are in the favor of privatization and growth of the Indian economy. However, mixed media reports, analysis and dictates fueled by conspiracies, rumors and opinions have gravely done injustice to the real issues that the farmers are really concerned about. So, without any political agenda, lets look at the issues that the farmers have with the laws and debunk the theories making rounds of WhatsApp groups and social media discourses.

1. APMCs and MSPs are not guaranteed under the new laws.

There is no judicial obligation for the government to publish minimum support price (MSP) for agricultural produce. That the central government does so is a politically driven convention that started at a time of food shortages and soon after the Green Revolution when farm productivity grew. The Indian government or any of its agencies (primarily the Food Corporation of India, but also state agencies) are also not required by law to buy whatever is brought to the Agricultural Produce Market Committee (APMC). A 2017 report from Indian Agricultural Research Institute scientists showed that less than 25 percent of rural farm households were aware of the MSP, and only 6 percent of rural households actually sold their produce at the MSP. 

It is misleading to state that the APMC and the MSP are guaranteed to continue under the new farm laws. One of the demands of the protesting farmers is that the MSP be enshrined in statute. It goes without saying that MSP itself is inconsequential unless there is a purchaser (an agency of the central or state governments) inclined to buy produce at that price even when the market price falls below it.

2. Freedom to sell outside APMC and above MSP does not guarantee the income of small farmers.

Currently the farmers have the freedom to sell outside the APMCs. Most of the agricultural trading takes place outside the mandis and the idea of contract farming is not at all novel to India. (Contract farming has been prevalent for long years in potato growing regions, especially in West Bengal, one of the most productive potato growing regions of India, with the help of PepsiCo)

Under the new laws, farmers will have the hypothetical liberty to sell their crop nationwide. But the pricing will have no association to any MSP that may or may not be announced in the future. The farmers’ fear that the market will push prices down, as is already demonstrated by how the system works now (except for sugarcane, most food crops are already being largely sold to local private traders, with mandi being only the second-best choice), and since the cushion of state procurement at MSP will disappear, the farmers will become destitute.

In Bihar, where the APMC Act was scrapped by the JD(U)-BJP government in 2006, the mandi procures just a fraction of the wheat. In Punjab, on the other hand, the mandi dominates. This is a key reason why Punjab’s farmers are leading the protest: in Punjab, the mandi and government agencies still dominate procurement, while in Bihar, the private trader already rules.

Though not all farmers can sell their entire crop to the mandi, those who can, are more positive about the quality of the transaction. Farmers selling to mandis reported the highest satisfaction with the quality of the sale, and the least likelihood of having to sell below-market prices, according to the NSSO survey.

Those who had to sell to input dealers or private traders, on the other hand, were more likely to have to sell below market prices. The ability of the MSP to act as a minimum floor price even outside the mandi — a key element of the government’s promises about allowing in more private players — has not worked well in practice in the farmers’ experience.

The essence of Section 19 of this farm law also strikes at Article 32 of the Constitution of India, which guarantees a right to constitutional remedies (legal action). Section 32 is considered part of the basic structure of the Indian Constitution.

3. Under new Laws, Farmers will not be protected from bad-faith buyers.

The settlement of trades in the APMC is usually exceptionally reliable. Indeed, one of the consequences of the Modi government’s catastrophic act of demonetization in November 2016, when overnight currency notes of Rs. 500 and 1,000 denomination were declared unlawful, was that the settlement of APMC deals totally collapsed, not because of any intention of buyers to refuse to pay but because the means of payment were taken away by an administrative sanction.

There will always be market participants who renege on deals and then the aggrieved party will need to seek redress. 

Sections in these new laws restrict the jurisdiction of the courts in India in the event of disputes. For instance, section 13 of The Farmers’ Produce Trade and Commerce Promotion and Facilitation Act, 2020 says, “No suit, prosecution or other legal proceedings shall lie against the Central Government or the State Government, or any officer of the Central Government or the State Government or any other person in respect of anything which is in good faith done or intended to be done under this Act or of any rules or orders made thereunder.”

Infact, this section should be not only of grave concern to the Farmers but to all citizens of India: The immunity given to all those in respect of anything, acting ‘in good faith,’ whatever they do, is sweeping. Not only can they not be taken to the courts for a crime they may have committed ‘in good faith’ – they are protected against legal action for crimes they are yet to commit (‘in good faith’ of course).

Just in case you missed the point – Indians will have no legal recourse in the courts – Section 15 rubs it in: “No civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter, the cognizance of which can be taken and disposed of by any authority empowered by or under this Act or the rules made thereunder.”

An alarmed Bar Council of Delhi asks this in a letter to Prime Minister Narendra Modi: “How can any litigation having civil consequences be given for adjudication to structures involving administrative agencies, controlled and run by executive authorities?” 

(Among executive authorities, read subdivisional magistrates and additional district magistrates – all famed for their independence and bursting with good faith and good intent, as every Indian knows). The Bar Council of Delhi goes on to term the transfer of judicial powers to the executive as “dangerous and a blunder.” And notes its impact on the legal profession: “It will substantially damage district courts in particular and uproot the lawyers.”

Still think the laws are only about farmers?

More such transfer of judicial power to the executive lies in the law about contracts – The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act. 2020.

Section 18 regurgitates the “in good faith” argument.

Section 19 states: “No civil Court shall have jurisdiction to entertain any suit or proceedings in respect of any dispute which a Sub-Divisional Authority or the Appellate Authority is empowered by or under this Act to decide and no injunction shall be granted by any court or other authority [emphasis added] in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any rules made thereunder.”

Article. 19 of the Indian Constitution is about freedom of speech and expression, peaceful assembly, freedom of movement, the right to form associations or unions.

The essence of Section 19 of this farm law also strikes at Article 32 of the Constitution of India, which guarantees a right to constitutional remedies (legal action). Section 32 is considered part of the basic structure of the Indian Constitution.

4. Farmers cannot fix their own prices under the old laws.

Neither under the current structure, nor under the new laws can farmers establish their prices. Over 300,000 farmer suicides over the last few years are testimony to the appalling power equations that establish the status of poor and small farmers in India, where they must take what is inflicted upon them. 

The price, almost by definition, is what the buyer is prepared to pay and the farmer willing to accept; but outside of the MSP system which sets the floor rather than fix the price. It is the market, and the relative balance of power between buyer and seller, that determines the price. It is a myth that the farmer can fix his price. He can try, and if there is a generous wealthy buyer, he will gladly accept a higher than MSP price. But, when he sees his perishable crop wilting in the heat of the Indian sunshine, he will soon have to climb down and settle for the price his buyer might condescend to pay.

The OECD study of 2017 looked at the farm income of 16 years and they found out that Indian farmers lost 45 lakh crores (~ $450 Billion) In these 16 years. Another economic survey 2016 (and studies by Punjab Agricultural University) tells us that the average income of a farming family in 17 states of India which means half the country is only rupees 20,000, a year, which means 1700 rupees a month (approx.~ $15 per month).

One of the arguments is that these specific farmers who are protesting are only from Punjab and Haryana and are the ones who have benefited a great deal from APMC’s, the Green Revolution, and from the government’s MSP, so they are the richest farmers in the country.

The truth is that the average income of a farming family in Punjab is around Rs. 2 Lakh per annum ($3,000), which is less than Rs. 18,000 a month ($250). 

Are these the riches that these farmers are protesting to protect? 

 Matters that Americans must be concerned about if they want to support the farmers without interfering in Indian internal policy matters.

1. The unilateral process by which these laws came to be passed. The government used its majority in Lok Sabha (the lower house) to refuse opposition demands that the bills be referred to a select committee for detailed scrutiny. In the upper house, where the government does not have a majority, the debate was restricted, and despite calls from many members for a division, the Speaker, in a partisan and undemocratic move, declared the bills passed in a boisterous, noisy, and chaotic voice vote. This was undemocratic in essence.
2. The other matter of concern should be the harsh and repressive approach of the Indian government in dealing with legitimate protests; silencing deliberation through foul and intimidating trolling on the social media; shutting down access to the internet; and arresting, beating, and punishing journalists using untruthful charges merely for broadcasting or reporting about the continuing protests.

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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. She is a Thomas Jefferson School of Law and Stanford GSB Alum.