Farmer’s protests and Modi’s dilemma
The Supreme Court of India gave an interim stay on 12 January 2021 to the three farm laws introduced by the Modi government in September 2020 to resolve the deadlock between farmers’ unions and the government. However, the unions have refused to cooperate with the Court established four-member experts committee and vowed to continue the agitation blocking roads to India’s capital city.
Why are farmers protesting?
The farmers want three laws passed by the Indian Parliament repealed. The laws are the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act; the Farmers (Empowerment and Protection) Agreement of Price Assurance Act; and the Farm Services and the Essential Commodities (Amendment) Act. The Produce Act facilitates barrier-free inter-state trade including e-trading of agricultural produce. It frees small farmers from the clutches of commission agents that rule the present government-controlled agricultural produce market (mandi). Empowerment Act enables contract farming and direct marketing. Essential Commodities Act, except in extraordinary circumstances, deregulates the production, storage, movement, and sale of several major foodstuffs.
Adamant farmers
Interestingly, the unions themselves demanded such laws about a year back, and the opposition parties also included such a promise in the election manifesto. Yet, now the same farmers’ sit-in protests and the opposition is fishing in troubled waters.
Initially, the protestors spread misinformation that the minimum support price (MSP) would be removed by the new laws, the government assured that the extant MSP mechanism would continue. The farmers then raised the issue that the corporate sector would snatch farmlands. The Produce Act itself specifically ensures that contracts are for produce only and not for land. To clarify the government’s position against each of the farmers’ demands the government issued a 106 pages booklet. Effectively, the substantive demands made by the farmers have been accepted by the government.
Many rounds of talks between farmers and the government have failed as unions are not prepared for a clause-by-clause discussion of the laws but adamant that the laws be repealed. It is mainly the farmers from Punjab state who are agitating. In the rest of India, there are no protests.
The agitating farmers are largely commission agents, if the produce can be sold in the open market, they would lose their commission of about 2 to 2.25 percent of the price of the produce. As per the old laws of the current mandi system, a farmer must sell his produce to the commission agents. The rich farmers themselves act as commission agents and buy produce from the small farmer at a lower price and on-sale at MSP to mandis pocketing huge profits. The new laws enable small farmers to sell the produce in the open market. Naturally, the vested interests are up in arms.
Modi government’s dilemma
The Modi government faces a dilemma.
Firstly, if they withdraw the laws, it would not be able to fulfill its promise of doubling farmers’ income by 2022. Furthermore, backing out would pave the way for similar agitations for other progressive laws brought by the government. Secondly, if they use police force to break the agitation, it may lead to mayhem. The agitators are strategically using old persons and women as a front to increase the death toll in the ensuing stampede.
The anti-Modi forces and their international propaganda machine would jump at the opportunity to malign the government.
Foreign meddling
The meddling by the Canadian Prime Minister need not come as a surprise. He was elected with solid backing by the Canadian diaspora which is mainly from Punjab. His cabinet also has Sikh ministers. Furthermore, the pro-Khalistan movement (funded by Pakistan) with its headquarters in Canada has infiltrated the agitation.
It is obvious, the agitation is not about any substantive issues but purely a political stir. The obstinate farmer’s unions backed by India’s opposition parties are holding the Modi government to ransom. Modi government has been trying to defuse the situation without resorting to police action as far as possible while the agitators want the Modi government to precisely do that so that the agitation can spread. It has been described as Shaheen Baug 2, the agitation last year that led to the Delhi riots.
The current situation is that the Supreme Court has established an expert panel to resolve the issue, while the unions have vowed to continue the agitation.
It remains to be seen how Modi; the astute statesman handles the dilemma.
(Milind Sathye is a Professor of Banking and Finance at the University of Canberra. Views personal)
