Farmers in India are protesting new laws that will have a serious impact on global supply chains — and on your turmeric lattes.

by Nanya Sudhir

In recent months, Indian farmers have walked hundreds of kilometers to the border of the capital in the middle of a pandemic, set up temporary shelters that have ballooned into cities, and huddled over scrap fires to survive the worst of a biting winter, just to protest against new laws that threaten their livelihoods. At least seventy-two farmers have died since I first started writing this, and a protest that started as peaceful finally broke into violence on India’s Republic Day, with thousands of protestors storming national monuments in an effort to be heard.

These liberalization laws that break down farmer’s last defenses in an already vulnerable system have an impact on global supply systems that directly affect end consumers across the world. So, what’s happening exactly?

An overview

In September, the Indian government introduced three laws that removed long-held government support to farmers in an effort to privatize agriculture in India. The government says this liberalization will be helpful to farmers and private markets and create a spirit of healthy competition. The problem is that the government bypassed this using an emergency executive order that gives them power over individual State government lawmaking, in a violation of the Constitution. And State governments are not happy. Perhaps they sensed that laws) that put millions of lives in danger would not be approved if they were to go through the usual Parliamentary debate process of lawmaking. More significantly, the laws were put in place without introducing any complementary infrastructural reforms that could protect vulnerable farmers from this sudden exposure to market shocks. 

The Impact of the New Laws

The new laws strip away the last remaining buffer of security for already vulnerable farmers, without any infrastructural changes in place to provide them stability and income security. The first law, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, forces farmers to compete with other farmers not just in their region or state but across the country. This makes smallholder farmers previously equipped to compete locally more vulnerable to national price fluctuations, supply shocks and comparative advantages in production. Given the lack of cold-storage facilities in a country with difficult and remote terrains, it also puts last-mile farmers at a distinct disadvantage.

The third law, the Essential Commodities (Amendment) Act, removes long-held price protections on goods that form essential components of a poor person’s diet, and gives control over price-setting to large private-sector buyers. Given the nature of free markets, when there is a glut (overproduction) of a crop, it is extremely likely that private players will push down the prices at which they buy the crop from farmers, who already earn very little. Conversely, in times of scarcity of a crop, private players may raise prices for consumers, who on average have low buying power in India. The unregulated Invisible Hand then only exists as a Tight Slap to the most vulnerable.

With regard to the second law, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, giving farmers this legal armor sounds good in principle. But in India, a country with low literacy levels and where 85% of farmers are smallholder farmers with less than 2.5 acres of land apiece, what is the real bargaining power of an average farmer in the face of a big private sector buyer? This change also closes off other avenues of legal recourse to farmers, making them increasingly vulnerable to exploitation by agricultural conglomerates.

In other words, the laws that are intended to open smallholder farmers up to healthy competition are trying to force free market ideas into a context that is not prepared to support it. In the states of Bihar and Madhya Pradesh, where such changes have already happened, farmers are poorer than those in neighboring states, and farming supply chains are collapsing, leaving farmers stranded and without remuneration for their produce.

This bears the distinct smell of the same set of free market reforms that international financial institutions tried to force down the gullets of the nations they ‘aided’ in the late 80s, causing long-term financial and political crashes that they are still struggling to recover from. The forcible removal of subsidies without any supporting infrastructural reform in India threatens to plunge farmers into a turbulent sea of price fluctuations and market shocks without first teaching them to swim.

What Do We Want? Infrastructural Reform

Despite producing one-tenth of the world’s agricultural output, India has the highest number of farmer suicides in the world. The year 2019 saw the suicides of over 10,000 farmers, a number that will no doubt increase in the coming months due to disrupted chains of transport caused by closed state borders during the pandemic. 

Farming in India has been in a dire state for decades. Current agricultural infrastructure does not support the backbreaking work of farming on which the country survives. Water scarcity caused by a long-held political dispute over the Indus Valley stymies the supply of water to the largest agricultural region in the country. Land tenure information and the practice of agricultural extension exist, but do not reach the marginal and smallholder farmers that could benefit from them most. Feudal systems of land ownership brought in by the British are blamed for the continuance of tenant farming and vicious debt cycles, issues that could be easily resolved through digitization, education and better enforcement of laws that already exist. (By digitization, I mean less surface-level ‘Smart Cities’ programs and better capacity building for citizen registration and digital banking in villages.) Farm-to-market supply chains are weakened by a lack of proper road infrastructure and low knowledge on cold chains. And the increase of both labour-intensive cash-cropping and rural-urban migration of men means that women are often the ones left to shoulder the added burden of farming. 

The fact that farmers are coming all the way to the capital to protest instead of tending their farms after seasons of disrupted harvests illustrates that they refuse to be a part of an already unjust system that places them on the lowest rungs of human decency. They deserve so much more.

What Does All This Mean?

Forget all the big words for a second. Imagine for a second that subsidies were taken away from European cattle farmers, for whom subsidies comprise up to two-thirds of their total income to produce the fancy name cheeses and other European agricultural products whose quality you so enjoy. Without the subsidy, these products would evaporate overnight. No fondue for you.

Now think about India. While being the world’s second-largest producer of fruit and vegetables, the largest or second-largest producer of rice, chickpeas, cotton, spices, bananas, lentils and tea, it also simultaneously accounts for a quarter of the world’s hungry people. These new laws leave Indian farmers stranded and you without your beloved turmeric and chai lattes, organic cotton and jars of hummus.

Farming is the labour of love on which nations are built. Farmers do the undervalued hard work of nurturing and transforming the earth so that it bears the fruit that generations can grow from. Both my great-grandfathers were farmers and to them I owe a great debt for being able to be where I am today. Farming was the backbone of my family, just as it is the backbone of our countries and economies.

Hope For the Future

Indian farmers don’t need more competition to become more efficient. They need longer-lasting legal and infrastructural changes that can deepen the foundation and expand the scope of the courageous, honorable work they do. Ten rounds of talks between the government and farmers have led the laws being suspended for 1.5 years, but there is still much to do. I hope this piece brings to light some of these issues to more people, and puts additional pressure on lawmakers to repeal these laws and instead focus on changes genuinely needed by the agricultural system. I hope the Indian government is forced to reconsider that though they may want the nation to grow on the engine of capitalism, we are nothing without farmers. And I hope you, dear reader, are reminded of the real value of your voice and of your cheap chickpeas.

Sources:

Laws/Explainer, Reuters

States bypassing laws, Times of India

Farming stats, FAO

Infrastructure, Vox Explained

Land tenure, USAID

Agricultural extension, IFPRI

Update on tenth round of talks, The Hindu