The ongoing effect of India’s New Farmers Bill

Being a Farmer in India is an emotional matter

The history of Agriculture in India dates back to the Indus Valley Civilization and even before that in some places of Southern India. I come from the south part of India, from the south west Arabian seaside surrounded by beautiful western Sahyadri mountains. Almost every family in India once had at least a small portion of farming land. In my coastal region, we could hardly find any farmer with 100s and 1000s of acre of land, but everyone has small portion of land and yet they grow one or the other crop every year. During the emergency, few lost their land, some gained land but with small portion of land to maintain, farming and agriculture as a profession has become impossible and hard to depend on. As a result, many displacements have happened and many have migrated to bigger cities like Bengaluru, Mumbai and to western countries for white-collar and many blue-collar jobs in gulf countries. But until the time when I was in Engineering graduation, we used to grow every year two crops mainly Paddy and Peanut. With 2 acres of farmland, and not even 2-3 quintals of rice produced, it was hardly a profitable proposition. My dad wisely converted the farmland to a proper farmhouse and so did many others in the coastal region. The paddy fields are now gone, and new houses have come up instead. Connected to the land emotionally, my parents are still maintaining the banana trees, coconut and betelnut plants but hardly there is any income than more expense of maintaining them. There are many such families in every part of India who are emotionally connected to farming even though living in big cities and living on non-farming income. Therefore, farming is an emotional topic for every Indian whether he is in India or abroad.

The political Exploitation

In 1991, then finance minister Shri Manmohan Singh started reforms, opened up the Indian economy, the transformational effects were clear for everyone to see!

It is documented that the farmers, a crucial sector of the Indian economy till date seeing income grow at a slower rate than the rest of the other sectors and remained burdened by price controls and other regulations that prevented them from going for the best price for their produce. While the rest of the sectors connected to global markets, Indian farmers could only sell their produce in their local markets – the traditional mandis. Most of the Taluka places have APMC wards where middlemen thrive. It is interesting to note that CPI/CPI(M) did not even implement APMCs in Kerala but they are making noise in the media and such is the kind of politics played in India.

The traditional mandis has now become the subject of debate and agitation. The Congress party which ruled India for more than 50 years kept promising big reforms in the farming sector and their latest manifesto (2019) listed farming sector reforms. The manifesto quotes “Congress will repeal the APMC act and make trade in agricultural produce – including exports and inter-state trade – free from all restrictions” The Congress party even promised to revamp the Essential commodities act. Not just the manifesto, many leaders have written the letters, made statements in the public forums and nothing was done in reality.

And now when the Modi government has implemented their own manifesto item, the Congress opportunistically has a problem with it and not just congress all these 18+ opposition parties have joined the farmers protest.

Not just Indian political parties, the Canadian government has also entered into the Indian farmers discussion which is quite shocking. It’s shocking that the Canadian Prime Minister trying to intervene in India’s domestic matter and none of the foreign media left in covering the farmer protest from abroad.

Economic Angle

I feel and many experts are also of the same opinion that the inability of the government to communicate effectively and lack of wider consultation seems to have led to this ground level protests but the myths and misinformation spread by major political parties have certainly fuelled widespread agitation and given various twists to the matter.

The ex-CFO of Infosys, Mr Mohandas Pai in his tweet, asks “What is the genuine concern?”

Key Point is

  • MSP Remains
  • PM-KISAN programme under which income support of Rs 6,000 per year is provided to small and marginal farmer families remains
  • APMC is not scrapped and mandi business remains
  • Procurement remains to give rations to 80 CR citizens
  • Subsidy of 75000cr for fertilisers, Water and Electricity all subsidiaries remain

When there are huge subsidiaries, MSPs and assurances provided by the government, one has to understand the economics and the scale in which the government can promise in the larger scale of things. Mr Anurag Singh, Value Investor with his series of tweets explains the concept very nicely. If we take the example of wheat produced in India, today, India hardly exports any wheat outside the country. India doesn’t even feature as a wheat exporter and even if India wants to export, there are major problems. He says with facts and figures that globally, the consumption of wheat is falling below the production and major developed nations are also biggest producers of wheat and possibly the demand will be from African nations, but they are hardly lucrative market for India. Today, the international prices of wheat are relatively stable at $200 per ton which translates to Rs 1400 per quintal vs the current MSP of Rs 1975 per quintal. So, the MSP is pretty good, and the farmers certainly benefit but India has already surplus of wheat and since India can not export, all get stocked and yet government has to pay the farmers, where will this money come from? Of course, from the taxpayers!

Professor Ashok Gulati, one of the leading agriculture economists explains why farmers in Panjab are angry. He says it’s because of misinformation campaign that all mandis will close, lands will be taken etc. and says there is nothing in the contract he sees in the bill. He feels that there is a huge communication failure by the government.  He says 90% of the producers sold to private except for wheat and rice which is produced largely in 4 to 5 states are under the MSP. He took the example of milk which does not go through the APMC and directly sold to the private sector and the milk, poultry and fishery products today are growing at a rate faster than the wheat, rice and sugar combined.

Well, all those PaaS (Protest as a Service) activists like Yogendra Yadava must ask themselves this question and think wider before coming out strongly and create confusion and adding fuel to the fire for their own benefit. I think the issue with these PaaS activists is that they were in anti-corruption protests earlier and the same PaaS activists later joined the anti CAA protest and now Farmers protest, but don’t be surprised if you see them in future protests related to medical reforms, postal reforms or any reforms that the Indian government brings.

London Protest

On Sunday,6th December, there was a huge protest organised in London in front of the Indian High Commission. It is reported that the protesters gathered in large numbers in 1000s flouting social distancing norms during the current pandemic. Interestingly its learnt that the High Commission of India had been given notification that the permission had been sought from the police for a drive past protest involving just 40 vehicles. But in the end about 700 vehicles participated in the rally.

I think everyone has a right to protest peacefully but the issue with London and some of these protests abroad was that it was already hijacked by number of vested groups mainly pro-Khalistan group which apparently has a clear backing of Pakistan establishment and number of anti-Indian MPs support here in the United Kingdom. Also, we have seen that there are 36 MPs who have signed a letter to the UK foreign secretary calling for an urgent meeting to discuss the deteriorating situation in Punjab and its relationship with the Centre. This act has been questioned by the Indian Diaspora as some of these MPs have biased opinion towards the current Indian Government.  I do not see this act would help their political parties here in UK in building its lost relationship with the Indian diaspora.

In Summary

Overall, there is a lot of smoke surrounding this agricultural market reform in India and sadly it has created a global embarrassment with many vested interests trying to score political brownies. Among all these, the real farmer who is working in the field is forgotten but we hope the current government will listen carefully to the real issues and put the farmers development rail on the track to success.

This Blog is based on my reading of the situation referring to many social media articles