What way forward for Indian farming?

22 Feb 2021

The protests provoked by the 2020 Indian agriculture acts, initiated—but not yet implemented—by the government in September of last year, are far from over. The general strike in November 2020, which involved 250 million people, was probably the largest single protest in human history1.

While the world media continues in search of the latest breaking news, unresolved tensions continue to bubble on the stove, threatening to boil over.

A crisis decades in the making

These tensions didn’t start last year of course. Sluggish growth in farmer incomes across the world in recent decades has created significant hardship as growth in other sectors of the economy has spurred inflation. This has led to the impoverishment and financial instability of millions of farmers, especially in India, where hundreds of thousands have committed suicide over the same time period: an average of 28 people dependent on farming kill themselves every day2.

Something then is clearly very wrong in the world of Indian agriculture. Given that farmers account for around half of the workforce, it’s an issue that any politician must try to tackle if they hope to gain and maintain power. The current Indian government declared a target in 2016 of doubling farmer incomes by 20223. Instead, incomes in real terms (adjusting for inflation) have barely increased at all4.

Given these conditions, the state-set Minimum Support Price (MSP) has been a lifeline to many farmers, guaranteeing that they’d be able to sell certain crops at a fixed rate: a protection against the ongoing private sector push to drive agricultural prices down. But while in theory the MSP is applied to 23 different crops, in practice there is no government mechanism to procure most of these crops, and the payments at the MSP are generally made for just two: paddy (unmilled rice) and wheat5, while a separate but similar system called “fair and remunerative price” (FRP) exists for sugar6.

So how is the government proposing to change the law?

Firstly, by doing away with the Agricultural Produce Market Committee (APMC), better known as mandi. These were, until 2020, the first place where agricultural produce could be bought and sold, giving the state governments a mechanism to protect farmers from large retailers. Any produce bought from farmers outside the mandi incurred heavy taxes, thus motivating market participants to trade through the mandi. But a new act of law would strip states of the power to impose such taxes, invigorating the private sector.

Secondly, one of the other aspects of regulation in the firing line is the current mechanism of dispute resolution. Up to now, this has meant that farmers could appeal to a state authority when disputes arose, but these too would disappear in the interests of the free market. The freedom gained, however, would benefit private capital more than the farmers7.

Thirdly, restrictions on stockpiling have, up to now, aimed at leveling the playing field between smaller- and larger-scale farmers, preventing the latter from hoarding and undercutting the former group. These restrictions would be removed, giving larger-scale farmers greater power to exercise economies of scale. It would also reduce the capacity of the currently-dominant stockpile—the State’s—to provide for citizens in times of need through the public distribution system.

An example of what awaits already exists

It would be naive to treat India as a singular entity in these considerations, as it’s a federal nation comprised of 29 states and seven union territories, each with varying degrees of autonomy, as well as significant differences in both economy and ecology. The protesters who have occupied the streets of Delhi in recent months come disproportionately from just two states, Punjabi and Haryana, widely considered the breadbaskets of India—wheat producers, and thus more directly effected by any change to the MSP and mandi system. But their concern isn’t merely based on a hypothetical cause-and-effect: there are examples from other Indian states which show what happens when the mandi system is removed.

In 2006, the State of Bihar scrapped the mandi, and conditions for farmers have deteriorated as they’re forced to sell their produce at whatever price the local traders offer, no matter how low: the vast majority of these farmers work on micro-farms, under a hectare in size, and have no ability to store produce. It is either sold—at any price—or goes to waste. Indeed there been migratory movement of farm laborers from Bihar to other States, particularly Punjab and Haryana8.

What about the environment and biodiversity?

What both sides of the argument so far seem to be lacking is a more holistic approach to the problems facing India, which are much greater than the MSP. A perspective on the government’s intentions and the protests against them that focuses purely on the economic question of whether or not to subsidize farmers misses the bigger picture. The economy is a wholly owned subsidiary of the environment, and not the other way round. Our economy must be subservient to our ecology. Yet an MSP that is in practice applied to only a handful of crops encourages the spread of monocultures and a loss of biodiversity; quantity over quality.

Much like the Common Agricultural Policy9 in the European Union benefits the largest landowners—subsidies are determined according to farm size—the Indian government’s efforts to support farmers are based on yield, not the nutritional value produced, nor the biodiversity they protect. And herein lies one of the issues. If prices are only effectively guaranteed for wheat and rice, it’s natural that farmers will grow as much of these crops as possible, as they’re effectively insured. The quality of that wheat and rice doesn’t matter. And nor does the fate of all the other crops which are sacrificed to make space for them.

The old system didn’t work… but these reforms won’t help

Hundreds of millions of small-scale farmers trapped in debt with stagnant income, producing at little more than subsistence level to stay afloat with meager state-provided safety nets: there is ample evidence of the inadequacy of the current food system in India. Indeed, despite being a food surplus country, producing more than it requires, India ranked 102 out of 117 countries in the 2019 Global Hunger Index10.

Change is inevitable, no matter what: the ongoing and deteriorating climate crisis guarantees it. And as so often, it is people who have made the smallest contribution to global emissions—the farmers of the Global South—who will face the fastest and severest consequences. But the current reforms of Indian agriculture being proposed by the current government will empower that very same force that is chiefly responsible for the climate crisis: neoliberal capitalism. They are reforms that continue to see the economy as an abstract set of numbers, somehow separate from the real environment in which it exists. This is short-sighted, to say the least.

Putting ecology before the economy

India is one of the world’s greatest stores of biodiversity both in terms of wild and domesticated species: a third of its plant species are endemic11. It is also by far the most densely-populated of the 17 “megadiverse” countries12, with more people per square kilometer than Belgium despite being more than 100 times larger. Laws which motivate a concentration of agricultural production on just a handful of crops are bad for biodiversity, but removing the protections keeping millions above the breadline will have disastrous consequences for society.

“Modernizing” agriculture is not a desirable achievement in and of itself; insofar as modernization sacrifices society and the environment in the name of the economy. What we need are reforms that involve building eco-friendly infrastructure, improving access to storage facilities and a general rise in the prices paid to farmers for their crops, with smaller profit margins for middle-men. In short, we need to protect and reward the millions of small-scale farmers whose everyday work safeguards the enormous heritage of Indian biodiversity without needlessly polluting the environment. We cannot afford to lose it.



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