On November 19, Indian Prime Minister Narendra Modi repealed three contentious farm laws after more than a year of farmers’ protests. The legislation was meant to remove subsidies for farmers and price regulation on crops.
Supposedly designed to “modernise” the agricultural sector, these policies ultimately would have actually left millions of people without desperately needed government support, and at the mercy of the private sector and international corporations in an industry that is plagued with inequalities.
These harmful laws have been heavily influenced by Western countries who are willing to drive Indian farmers into poverty for their own capitalistic agendas. To prevent this, the Indian government must implement policies that can sustain a livelihood for farmers and reject these inauspicious designs from the West.
While the government was forced to reverse course, farmers in India still face significant challenges including a crisis of poverty and mounting debt driving many to suicide. At present, there are no government regulations regarding how much or how little a farmer can earn.
Current subsidies help farmers stay afloat, but it is still often impossible to turn a profit given the high cost of production against the low prices for which crops are sold. Farmers are now asking that the government implement regulations that prevent crops from being sold below real input costs and guarantee a reasonable profit for farms.
One solution would be for the Indian government to legislate a minimum support price (MSP) in its agricultural policy throughout the country, as it is currently available only in some states. Indian farmers are now pushing for MSP to be mandated to ensure that prices of their crops are set to a formula that will make farming sustainable for the small farmer and the price of crops affordable to the public.
So what is stopping the Indian prime minister from moving forward and implementing MSP? Besides his well-known closeness to the Indian corporate sector and tacit support for monopolies, he is also facing intense pressure from the World Trade Organization and countries such as Canada, the United States, and Australia.
During the past few decades, these Western countries have been pushing India to remove subsidies in its agricultural sector through the WTO. In 2018, the US claimed India underreported the MSP for wheat and rice. In 2019, both Canada and the US aggressively objected to the high level of MSP in India, which in WTO terminology is labelled as MPS, while Australia specifically criticised subsidies for sugarcane and made a formal complaint. In July 2020, Canada joined Paraguay accusing India of bringing up subsidies beyond permissible levels.
The WTO imposes regulations on farm produce within countries, as well as agrarian trade between countries, to promote free trade and restrict subsidies that create “market distortions”. It allows subsidies to go up to 5 percent of the value of production for developed nations and 10 percent for developing nations.
These policies, however, are based largely on the structure of the agricultural sector in rich Western countries where farm sizes tend to be large – 400 acres (162 hectares) in the US, for example. A 5 percent subsidy for such agrarian enterprises is more than enough.
By contrast, the average farm in India is around two acres (0.8 hectares). A 10 percent subsidy permitted by WTO is not enough for a farming family to survive. That is why some Indian states have implemented MSP as high as 50 percent of production costs for some crops. However, farmers have argued that the formula that state authorities use to calculate the MSP they offer often does not reflect the true costs that are incurred.
Furthermore, in their campaign against India, what the developed countries fail to recognise is that they offer other types of income support for their citizens, including farmers, which are not available in developing nations. In the US, for example, there are food stamps, welfare, spending cheques during economic downturns, unemployment benefits, social security and some health insurance to assist struggling families.
The infrastructure of developing nations simply does not support the creation of similar social policies. An Indian citizen cannot rely on any other support besides their primary income.
In the case of farmers, who make up around 60 percent of the Indian population, being at the mercy of the global market and local speculators without any kind of social or economic support can be devastating. This is why India has shockingly high rates of suicide among people dependent on farming.
Without a guaranteed minimum income, farmers cannot survive. Without MSP, the threat of small farms dying out is imminent. When this happens, where will foodstuffs come from? India will have to import – and here is where the interest of Canada, the US and Australia lies.
The South Asian nation with a population 1.3 billion is a highly lucrative market for these Western countries. To capture it, they seem to be perpetuating neocolonial policies, with the WTO serving as a new East India Company.
While for the West, agriculture might just be an economic sector, for India, it is much more. Indian farmers do not just produce the food their compatriots consume, but they are also closely connected to their land in their culture and personal lives. They call their farmland “mother” and see their relationship to it is that of kin – an “umbilical” bond that cannot be severed by politics.
While the West may not understand the cultural significance of farming, the Indian government does. There is no reason why it should follow failed Western agrarian policies and put Indian farmers at the mercy of imperialist nations or corporate greed.
Its job is to protect the Indian national interest which lies with the prosperity of Indian farmers. Adopting a national MSP would be a major step in this direction.
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.