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India’s Agricultural Deadlock


By: Shwetang Desai


India is locked in an agricultural deadlock, as farmers, mainly from the states of Rajasthan, Punjab, and Haryana initiated a movement called “Dilli Chalo”. Their mission was to march towards India’s capital to protest against three farm acts passed by PM Modi’s government. Protests are still ongoing, with an estimated 200,000 to 300,000 farmers still present at border points on the route to Delhi. Even after six rounds of discussions, no settlement has been reached as the protests rage on, and the future of India’s agriculture sector is on the line.


The government laws seek to reform agriculture in India by ending the requirement to sell through state-sanctioned wholesale “mandi” markets and allow for contract agriculture. The laws also seek to remove extensive government price control on agriculture. Altogether, these laws will loosen regulations around the sale, price, and storage of produce in India that have shielded Indian farmers from the free market. The farmers fear that this will benefit corporations, and end the MSP system which guarantees farmers an income for their crops. Farmers also fear that the new laws will leave them at the mercy of the free market, and drive down their crop prices.


Indian farmers account for more than half of India’s workforce, but in recent years their share of the pie has gone down to only a sixth of India’s GDP. 86% of India’s farms are smaller than two hectares, and this number is rapidly going down. However, an even bigger reason for agricultural inefficiency and lowering farmer wages is the agrarian bureaucracy present in India. In the 1950s and 1960s, the Indian government passed policies with the intent of protecting farmers from corporations and “greedy middlemen”. However, these policies have just led to a multitude of new problems. These policies falsely promoted “food security”, and restricted contract agriculture. They also designated wholesale markets known as mandis and introduced a minimum price (MSP) for various crops. India had over 7000 wholesale markets, which were then dominated by middlemen, who created a monopoly to control supply and capital flow in agriculture. India’s central bank reported that farmers only make a meager portion of the actual retail value of their crops. 57% of Indian farmers are unhappy with the current mandi system.


It is quite clear to see that the outdated agricultural model from the 1950s and 1960s, is bound to fail in an era of globalization and liberalized markets. In the present day, farmers in the grain belt of India (north and west of Delhi) are supported heavily by the government. Subsided seeds, subsidized fertilizer, free electricity, and a government price guarantee has led to non-optimal production. Farmers in the Northern states pump groundwater excessively to grow rice and wheat that is then purchased by the government under the pretense of food security. The government spends over 25 Billion USD every year and is forced to sell much of that produce for extremely cheap prices. Risk-free farming is not sustainable! The risk-free farming of rice and wheat has led to a groundwater shortage, toxic soil, and polluted air.


Agronomists and economists agree that reforms are much needed for farmers to keep up with urban wages and prevent stagnated growth. The liberalization of the agricultural market is needed to transfer the risk of farming and enable access to private investment and technology. The “middleman” system also needs to be eliminated so that farmers see the full share of their produce.


However, the execution of Modi’s government has been poor as usual. While reforms are truly needed and the agricultural sector does need to be deregulated, using the government majority to pass bills without considering the farmers union or rallying support is foolishness. Worse yet, labeling farmers as “anti-national” or “terrorists” is simply going to marginalize the farmer population even further. The Modi government needs to realize that in a time of market uncertainty due to the pandemic, there will be little support for a law that withdraws government support and introduces the private sector. Instead, a temporary suspension of the laws while the pandemic rages on is a wise choice. Modi should rally support for his agricultural reforms, and open the table for civilized discourse.


While I fully agree that these agricultural reforms are long overdue, undermining the opposition and marginalizing a diaspora is not the right way to do it. Both sides need to acknowledge that the current agricultural model is bound to fail and hollow out India’s agricultural sector even more. With the future of India’s agriculture on the line, we must ask ourselves whether it is wise to go back to an agricultural model that has continuously failed the Indian farmer.


Sources:

- https://www.thequint.com/news/india/are-the-new-farm-laws-good-or-bad-for-farmers-experts-weigh-in#read-more

- https://www.bbc.com/news/world-asia-india-54233080

- https://www.economist.com/asia/2020/09/26/indias-government-prunes-the-regulations-stifling-farmers

- https://www.economist.com/asia/2020/12/16/indias-government-is-undermining-its-own-agricultural-reforms

- https://www.cnbc.com/2020/12/08/india-top-economic-advisor-on-farm-reforms.html

- https://ca.news.yahoo.com/indian-farmers-agree-meet-government-154432422.html

- https://www.drishtiias.com/daily-updates/daily-news-editorials/mandi-system-in-india

- https://www.argusmedia.com/en/news/2149999-indian-government-raises-crop-purchases


*All arguments made and viewpoints expressed within Youth In Politics and its nominal entities do not reflect the views of the writers or the organization as a whole.

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