Indian Farmer's Protest

Thousands of farmers from Punjab, Haryana, Uttarakhand, Uttar Pradesh clashed with the Police on their march to Delhi to protest three new farm laws. Farmers on tractors and trucks flung police barricades into a river as police retaliated with tear gas and water cannon.

The march is a response to ‘Delhi Chalo’ (Let’s go to Delhi) call by the All India Kisan Sangharsh Coordination Committee. The march is being held under the banner of Samyukta Kisan Morcha (Collective Farmer’s Rally). Other organisations like Rashtriya Kisan Mahasangh (National Farmer’s Federation), factions of Bharitua Kisan Union -BKU (Indian Farmer’s Union), Jai Kisan Andolan (Hail Farmers Campaign), All India Kisan Mazdoor Sabha (All India Farm Workers Assembly), Krantikari Kisan Union (Revolutionary Farmer’s Union) have come out in support.

Before Delhi Chalo, farmers in Punjab and Haryana held sit-ins and blocked roads in sporadic protests. Punjab Farmer Unions then announced a ‘rail roko’ (stop the trains) agitation, which lasted about two months leading to suspension of trains to the state and shortages in critical areas like coal for thermal power stations.

The new legislations in questions are the Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Act 2020, the Farmer’s (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act 2020 and the Essential Commodities (Amendment) Act 2020.

The laws essentially change the way India’s farmers do business by creating free markets, as opposed to a network of decades-old, government controlled agricultural markets (mandi systems). The reforms seek to loosen rules around sale, pricing and storage of farm produce. Private traders can now stockpile large quantities of essential commodities for future sales, which earlier only government-approved agents could. The laws also lay down new rules for contract farming.

One of the biggest changes is that farmers will be allowed to sell their produce at a market price directly to private players such as agricultural businesses, supermarket chains and online grocers. Farmers can already sell to private players in many states, but these bills provide a national framework.

Currently most farmers sell the majority of their produce at government controlled mandis at minimum support prices (MSP). The markets/mandis are run by committees made up of farmers, often large landowners, and traders or ‘commission agents’ who act as middlemen for brokering sales, organising storage and transport, or even financing deals.

Farmers say the reforms will make them vulnerable to exploitation by big corporations, erode their bargaining power and weaken the government’s procurement system (the government buys staples such as wheat and rice at MSP), i.e., if they are not satisfied with the price offered by a private buyer, they cannot return to the mandi or use it as a bargaining chip during negotiations. The farmers also argue that the reforms will remove inter state barriers and since the state governments won’t be able to levy taxes, the mandi system will die down.

The farmers want the Modi government to revoke the three laws. The Farmer Unions might settle for a legal assurance that the MSP system will continue, ideally through an amendment to the three laws. The farmers are also pressing for the withdrawal of the the proposed Electricity (Amendment) Bill 2020, fearing it will lead to an end to subsidised electricity. Farmers say rules against stubble burning should also not apply to them.

The clash is also partly due to the manner in which the bills were passed. Despite repeated requests from the opposition, the BJP government refused to extend the debate to the next day or refer it to a special committee. Opposition MPs stormed the well of the house, threw their microphones, tore up papers while the deputy chairman of the house chose to go ahead with a voice vote rather than a physical ballot. Opposition MPs allege that due to the protests by opposition it is hard to determine if the BJP had enough votes to pass the bills.

While the amendments don’t mention MSP, the BJP government has insisted that it will continue to purchase farm produce at MSPs. They say that these new rules will bring retailers, online grocers and exporters to farmer’s doorstep. The amended Essential Commodities Act will spur investment in supply chains. The contract farming law will allow farmers to tailor their production according to a corporate buyer’s requirement.

The Modi government claims that the new laws will give more options to the farmers to sell their crops and get better prices. They claim that the reforms are necessary to increase farm incomes and productivity.

Agriculture minister Narendra Singh Tomar and railways, food and consumer affairs minister Piyush Goyal had held day-long negotiations with farmers on November 13. The discussions were inconclusive, but both sides had agreed to continue negotiations in the future. The next round of talks is slated for December 3.

The Congress rules government in Punjab has passed Bills intended to negate the three bills.

India’s Agricultural sector is long overdue a reform. The new laws can improve farm incomes, attract investments and technology, and increase productivity, but they will also cause the farmers to lose their commissions and state governments stand to lose crucial tax revenue. Agricultural Policy Expert Devendra Sharma says that leaving farmers entirely to the markets will be “akin to putting sheep before the world”. Examples from across the world show that corporatisation of agriculture, has often depressed the farm incomes and so replacing one faulty system with another is not wise.

by Swarnim Agrahari

The Corporate Law Journal2 December 2020Comment