Farmer protests are a reflection of this sector’s structural crisis3 min read . Updated: 03 Dec 2020, 09:24 PM IST
Demands for guaranteed prices should be seen in the context of a sharp decline in farm earnings
For more than a week, farmers have been protesting at Delhi’s border, demanding the withdrawal of India’s recently-passed farm bills. Although led by farmers from Punjab and Haryana, the issues raised concern farmers across the country. The government’s seeming reluctance to engage them, even though protests have been going on for three months in several states, has aggravated the situation. Behind this stubborn approach is the flawed understanding that the current protests are localized and limited to the specific issue of a minimum support price (MSP) guarantee.
In reality, the issue is of a sustained decline in farm incomes caused by low prices. The issue is old and was at the heart of the government’s 2014 promise of implementing recommendations of the Swaminathan Committee to raise MSPs to 1.5 times the cost of cultivation. This was also a major issue during the first term of this government, resulting in such major protests as Maharashtra’s long march to Mumbai and an agitation in Madhya Pradesh that saw the killing of seven farmers in police firing. Farmers from Tamil Nadu also protested for 100 days in Delhi, as did farmers in other states.
While farmer incomes have been worsening since 2011-12, their condition has worsened in recent years, leading to a build-up of anger. Their income decline is partly a result of an overall fall in demand in India’s economy, which has pressured farm-gate prices. It is also a result of rising input prices and other costs of cultivation. The Centre’s farm reforms should be seen in the context of these long-term trends. While they are in many ways a continuation of past attempts to reform the agricultural marketing system and open agricultural trade to the private sector, they have come at a time when the farm sector is suffering the twin blows of a slowing economy and the covid pandemic. These have led to a fall in demand for agricultural commodities, not least because of restrictions that have hurt the hospitality industry and catering for weddings and social gatherings.
Most farmers would agree that the agricultural produce marketing committee (APMC) mandis are politicized and need reforms. Over the last two decades, several reforms have taken place at the state level, and none has led to this kind of protest. The reality is also that in states where the APMC system is functional, farmers have been able to get better prices. Farmers see APMC mandis as an institution that protects their interests, despite shortcomings. In their view, the MSP system ensures better prices for crops that are state-procured—mainly rice and wheat. Wholesale Price Index data for October shows that prices of all cereals declined sharply compared to last year, except paddy. Surprisingly, wheat prices, which saw massive procurement and record production, have seen wholesale prices decline for the past three months. But for all other crops, for which procurement is negligible even though an MSP is announced, the prices realized by farmers are much lower. Maize is a good example; the prices received by farmers in most states, including Punjab and Haryana, have been much lower than the MSP. It is worse in states such as Bihar, where an APMC does not exist. Although a guaranteed purchase at MSP is unrealistic, the fight of farmers is to retain the last vestiges of state support in an environment of falling prices and increasing losses.
Protesting farmers see the present APMC bypass act as an attempt by the government to withdraw even from this nominal commitment to protect farm incomes. The solution to an inefficient APMC and uneven MSP system is to widen procurement to cover more crops and more states, rather than weaken the existing mechanism.
But it is also a matter of trust. Not only has the government’s promise of implementing the Swaminathan Committee recommendations remained unfulfilled, there has been no attempt to provide price support to farmers for a majority of crops other than rice and wheat. Contrary to the government’s promise of doubling farmer incomes, the reality is that most farmers have seen a decline in crop income. The government’s apparent reluctance to engage with state governments and farmer unions has added fuel to the fire.
The demand for making MSPs a legal guarantee should be seen as a demand for ensuring remunerative prices for farm produce. This is also necessary to generate demand in the country’s economy, given that agriculture still provides livelihood to almost half of India’s working population.
Himanshu is associate professor at Jawaharlal Nehru University and visiting fellow at the Centre de Sciences Humaines, New Delhi