Gov’t says laws make it easier for farmers to sell produce directly to big buyers, as opposition and farmers protest.
Some of India’s farmers are among the country’s poorest people, but government policies have long protected them from the ravages of open market prices.
That is changing.
A set of three laws passed in September aims to deregulate India’s enormous agriculture sector. Prime Minister Narendra Modi has said they will “liberate” farmers from the tyranny of middlemen.
But many farmers fear that they stand to lose more than they could gain from the new regulations and that the main beneficiaries will be agricultural corporations with gargantuan financial firepower.
As a result, the farmers have taken to the streets in the biggest such protests in years.
The demonstrations ramped up last week when several thousand protesters from the northern states of Punjab and Haryana set out to converge on the capital, New Delhi. Police blocked them at the city’s borders, denying them permission to gather in a place of their choice.
Firstly, they make it easier for farmers to bypass government-regulated markets (known locally as mandis) and sell produce directly to private buyers.
They can now enter into contracts with private companies, a practice known in India as contract farming, and sell across state borders.
The new regulations also allow traders to stockpile food. This is a shift away from prohibitions against hoarding, which could make it easier for traders to take advantage of rising prices, such as during a pandemic. Such practices were criminal offences under the old rules.
Farmers have some genuine concerns.
A big one is that the new rules remove many of their safeguards. More than 86 percent of India’s cultivated farmland is controlled by smallholder farmers who own less than two hectares (five acres) of land each. They fear that they just do not have enough bargaining power to get the kinds of prices they need for a decent standard of living when they negotiate to sell their produce to larger companies.
“The government has left us at the mercy of big corporations,” Rashpinder Singh, 27, a farmer from Punjab state, told Al Jazeera in September.
“It is preposterous to believe that farmers who have small land holdings will have any bargaining power over private players.”
One of the new legal provisions says that to resolve disputes, farmers can seek out a so-called conciliation board, district-level administrative officers or an appellate authority. In other words, these cases will not go to a regular court.
The new laws also do not make written contracts mandatory. So in the case of any violation of their terms, it can be very hard for a farmer to prove that he or she has been aggrieved, giving them little recourse.
It also does not help that, in general, there’s a bit of a bad odour around doing business with large companies.
Farmers have seen the costs of things like fertilisers and seeds shoot up over the years as those farming inputs are predominantly sold by the private sector.
There is, for certain crops such as rice and wheat.
Producers have been able to rely on the so-called minimum support price (MSP), the assured price the government pays for these crops.
But the new rules do not guarantee any minimum price for any product, and farmers worry that the existing MSP will be abolished at some point.
This would be a big blow to farmers who grow the foods that are currently eligible for the MSP, many of whom are from Punjab and Haryana, the home states of a large proportion of the protesters out on the roads.
Farmers are not the only people feeling like they are losing out. In fact, the new rules have upset a lot of other people with vested interests.
Under the old regulations, state governments earned a fee for all the stuff sold through the mandis.
As those sales fall, so do their state revenues.
Then there are the middlemen who pretty much control the mandis and also stand to be big losers if farmers skip past their doors to sell directly to customers.
Because no one bothered to check with them before they were passed!
The governing Bharatiya Janata Party initially enforced the new laws as the coronavirus pandemic ramped up in June, first as emergency ordinances. It then passed them in Parliament in September.
It did all that without consulting the farmers. They responded initially with a month-long protest in their respective states. In Punjab, they blocked the passage of trains.
Some ministers from the federal government finally tried to negotiate with the farmers in the past few weeks but to no avail.
Modi has dismissed the farmers’ fears as misplaced and blamed opposition political parties for spreading false rumours regarding the fate of farmers under the new laws.
“The new agricultural laws have been brought in for benefit of the farmers. We will see and experience benefits of these new laws in the coming days,” Modi said on Monday.
Meanwhile, Home Affairs Minister Amit Shah offered to allow them entry into the capital as long as they restricted their protests to a designated spot. The farmers’ response: thanks, but no thanks.