Unpacking India’s Three Anti-Farm Legislative Reforms
Kiman Kaur
Tens of thousands of Indian farmers have marched to India’s capital, New Delhi, demanding that the government repeal three agricultural reforms: (1) the Farmers’ Produce Trade and Commerce Act; (2) the Farmers (Empower and Protection) Agreement on Price Assurance and Farm Services Act; and (3) the Essential Commodities Act. India’s Prime Minister Narendra Modi introduced these three bills to the Parliament of India in September 2020 in efforts to push forward the right-wing Bharatiya Janata Party’s (“BJP”) deregulatory agenda. All three agricultural bills were passed by the lower house of parliament (“Lok Sabha”) and the upper house of parliament (“Rajya Sabha”) and then approved by President Ram Nath Kovind.
Indian farmers in Punjab and Haryana started protesting all three agricultural bills in August 2020 when they became aware of the legislation. Farmers argue that these anti-farm bills will corporatize India’s agricultural economy and exploit them. After all three bills passed, farmers, their families, and supporters of all ages marched on foot and by tractor to Delhi from neighboring states and agricultural clusters like Punjab, Haryana, and Uttar Pradesh. Despite being met with tear gas and water cannons, the farmers have occupied Delhi for nearly three weeks and plan to continue to protest until the government repeals all three legislative reforms. Collectively, Indian farmers and their families are leading the largest protest in world history in Delhi, and they have also engaged South Asian diaspora communities across the globe to protest against these legislative reforms and stand in solidarity with them.
I. Why are Farmers Protesting?
Farmers and diaspora communities across the globe are enraged by Modi’s anti-farm legislation and his efforts to corporatize India’s agricultural economy. Together, the three legislative reforms undermine rules that guarantee farmers fixed prices for their crops and regulate the storage and sale of crops. Such rules have protected farmers from a free market for decades.
Agriculture has always played a vital role in India’s economy and culture—it is the primary source of income for 58% of India’s population. Agriculture especially impacts states like Punjab, also known as the bread-basket of India, which covers only 1.5% of India’s land but produces nearly 20% of the nation’s wheat and 12% of its rice. India is also among the 15 leading exporters of agricultural products in the world, producing about 68% of world spices, including pepper, cardamom, chili, ginger, turmeric, coriander, cumin, garlic, curry powder, and fennel.
Despite Indian farmers feeding much of the nation and the globe, time and time again, the Indian government undermines and neglects them. For example, with the 1960s Green Revolution trapping farmers in debt combined with the impacts of climate change and water shortages, Indian farmers have been saddled with profound economic burdens since well before the global COVID-19 pandemic. In a 2018 study by India’s National Bank for Agriculture and Rural Development, more than half of farmers in India are in debt: in Punjab alone, 81% of farmers are in debt; the average amount a farmer owes is more than four times their average annual income; and during the global pandemic, annual interest rates are as high as 60%. With this level of economic insecurity, more than 20,000 farmers committed suicide from 2018 to 2019 because of their inability to repay debts. Although Modi claims that the three legislative reforms were a “watershed moment,” the three reforms only further depress farmers into deeper economic insecurity. To fully understand the dire consequences of these agricultural reforms, it is necessary to first understand how the current farming system works in India.
II. India’s Current Farming System: The Role of Minimum Support Price & Agricultural Produce Market Committee Mandis
Farmers abandoned traditional farming methods in the 1960s as part of the Green Revolution, which introduced new technology to produce high-yield crops. Since the Green Revolution, the Indian government has enforced a Minimum Support Price (“MSP”) system which guarantees farmers a set price for all farm crops based on the recommendations of the federal Commission of Agricultural Costs and Prices (“CACP”). If crop prices fall below the minimum price, the federal government procures the crops at the promised MSP to prevent farmers from selling at lower prices. The MSP is a minimum price guarantee that acts as a safety net or insurance for farmers when they sell particular crops. The federal government declares the MSP twice a year, but there is no law making MSP mandatory.
To facilitate the sale of crops and enforce the MSP, state governments have established Agricultural Produce Market Committee (“APMC”) “mandis,” which are government-regulated wholesale markets. Through APMC mandis, a licensed middle-person, “arhatiya,” purchases crops from farmers and sells the crops to local vendors or food processing companies. Most arhatiyas have strong, longstanding, and personal relationships with farmers—this allows arhatiyas to provide advance payments to the farmers to help relieve them of economic pressures for the time-being. See Figure I for a visual representation of India’s current farming system.
Farmers are protesting the three agricultural reforms because the laws strategically undermine the MSP and APMC mandi system and push towards corporatizing the agricultural industry. For example, all three legislative reforms fail to mention MSP—farmers worry that if the government eliminates the MSP system and fails to provide a safety net on crop prices, then corporations could set prices that disadvantage and exploit them. While most of the farmers’ concerns arise out of the first agriculture reform, together all three legislative reforms place farmers in extremely vulnerable economic positions.
Image Description: Visual of India’s Current Farming System. Flowchart created by Author.
III. The Three Anti-Farm Legislative Reforms
A. The Farmers’ Produce Trade and Commerce Act
Farmers’ primary concern with the Farmers Produce Trade and Commerce Act is the systematic dismantling of APMC mandis that have helped keep farmers afloat. This Act undermines APMC mandis by encouraging farmers to sell their crops to buyers outside the mandi system where buyers have no legal obligation to pay the MSP. Chapter II, Section 4 of this Act states that “any trader may engage in the inter-State trade or intra-State trade of scheduled farmers’ produce with a farmer or another trader in a trade area.” However, under Chapter I, Section 2(m), the Act excludes existing APMC mandis from the definition of “trade area.” The Act states that trade areas do not include the premises, enclosures, and structures constituting:
(i) physical boundaries of principal market yards, sub-market yards and market sub-yards managed and run by the market committees formed under each State APMC Act in force in India; and
(ii) private market yards, private market sub-yards, direct marketing collection centers, and private farmer-consumer market yards managed by persons holding licenses or any warehouses, silos, cold storages or other structures notified as markets or deemed markets under each State APMC Act in force in India.
The Act limits APMC mandis to their physical boundaries even though mandis currently serve 200-300 villages beyond their physical boundaries. Although the Indian government states that the creation of an additional trade area outside of existing APMC mandis will provide farmers freedom of choice to trade their produce, farmers argue that the elimination of mandis from the “trade area” will give a free hand to large corporate buyers to purchase directly from farmers, thus undermining APMC mandis.
Under Chapter I, Section 2(n), the Act also expands the definition of “trader” to include the processor, exporter, wholesaler, miller, and retailer. Under the current APMC mandi system, farmers trade with arhatiyas who have already established their financial credibility after obtaining their license to operate a mandi in the first place. However, under the expanded “trader” definition, the Ministry of the Agriculture and Farmers’ Welfare said, “any trader [] can buy the farmers’ produce in the trade area[.]” Thus, the Act provides traders with the freedom to buy farmers’ produce outside the APMC mandis without having a license. With more traders entering the agricultural market, farmers are rightfully skeptical and hesitant to trust traders without a license, especially larger corporations.
Additionally, under Chapter II, Section 6, the Act prohibits state governments from levying market fees on any farmer or trader in a trade area. While, in theory, no market fees may sound beneficial to farmers, in effect, this provision incentivizes transactions directly between the farmer and larger corporations. For example, under the current APMC mandi system, up to 8.5% of all transaction in Punjab between farmers and arhatiyas include market fees and levies. Farmers worry that in efforts to evade market fees, they will be economically coerced into trading with corporations, thereby deterring farmers from trading their crops with arhatiyas in APMC mandis. Once private corporations start offering farmers a higher price for their crops without farmers paying a market fee, farmers will naturally be inclined to sell their crops to them instead of to APMC mandis, likely resulting in the eventual disappearance of mandis. However, because 86% of all agricultural landholdings are small and marginal, farmers fear that once they start selling to corporations, they will be exploited and be unable to meet their large demands, thus pushing them into greater debt.
In addition to pushing farmers into the free market, Chapter V of this Act bars farmers from suing traders in civil court “with respect to any matter.” While this Act encourages farmers to resolve potential disputes with buyers through a bureaucratic controlled Sub-Divisional Authority, this Act bars farmers from accessing the courts as an independent form of dispute resolution. This Act gets rid of market fees and changes the definitions of “trade area” and “trader,” which coerce farmers into selling their crops to buyers outside the APMC mandi system. For all of these reasons, farmers are rightfully fearful that deregulation of the APMC mandi system will be misused against them.
B. The Farmers (Empower and Protection) Agreement on Price Assurance and Farm Services Act
The Farmers (Empower and Protection) Agreement on Price Assurance and Farm Services Act forces the farmers into contract farming despite farmers’ unequal bargaining power. This Act requires a “farmers agreement” between farmers and buyers. Chapter 1, Section 2(g) states that a farmer must enter agreements with buyers “prior to the production or rearing of any farming produce of a predetermined quality.” This Act pushes farmers into contract farming which will likely bind farmers in unequal agreements. For example, historically, contract farming in the state of Maharasthra made “participating households vulnerable to indebtedness and loss of autonomy over land and livelihood decisions.” Similarly, farmers worry that corporations may twist their words and bind them in unfavorable contracts that may enable large corporations to take over their lands. Many farmers live in poverty and, with illiteracy, this gives farmers highly unequal bargaining power in forming binding contracts with buyers. Additionally, like the Farmers Produce Trade and Commerce Act, under Chapter IV, farmers are barred from suing buyers over any dispute covered by this Act. While Modi argues that written agreements will provide farmers freedom of choice, this act legally coerces farmers into binding contracts—this is not freedom under any economic theory.
C. The Essential Commodities Act
The Essential Commodities Act changes limitations on stockpiling and gives large corporations more price control over several crops. This Act benefits large corporations as it removes stocking limits that the government previously imposed on buyers. In fact, this Act affirms a buyers right to purchase, store, and distribute food items without any government regulation. Under Section 2(1A)(a) the government may only regulate essential commodities “under extraordinary circumstances, which may include war [or] famine . . . .” However, grains, potatoes, onions, and other perishable food items are removed from the list of essential items. Under Section 2(b) of this Act, the government is only allowed to impose stocking limits when the prices of perishable goods increases by more than 100% and non-perishables increase by more than 50% in the last year—there are debates on whether these retail price increases are too high or too low to render the Act effective and sustainable. Farmers worry that under these provisions, buyers will freely store and hoard crop items without any regulation. Ultimately, this Act gives corporations more price control; with more access to capital, they can control more crops, control market prices, put pressure on both farmers to sell to them, and buyers to buy from them at higher prices.
IV. Conclusion
Despite farmers being the backbone of India, each of the three legislative reforms signal that the government is moving away from the current MSP and APMC mandi system and moving towards corporatizing Indian agriculture. While Modi claims that these legislative reforms will free the farmer from the control of arhatiyas who run APMC mandis, countless examples of the corporatization of agriculture across the world show the contrary. Together, each of these legislative reforms further exploit farmers who have already found themselves in dire economic situations before these bills were passed.
The Farmers’ Produce Trade and Commerce Act gets rid of market fees and changes the definitions of “trade area” and “trader—” these three changes coerce farmers into selling their crops to buyers outside the APMC mandi system. The Farmers (Empower and Protection) Agreement on Price Assurance and Farm Services Act endorses contract farming despite farmers’ unequal bargaining power. The Essential Commodities Act allows buyers to store crops without any government regulation, thus leading to price control. The legislative reforms also bar farmers from suing buyers in civil court in the event that disputes arise. Given that India’s agriculture sustains over half of India’s population, the Indian government must enact new legislation that offers farmers equal dignity and legal protection.
For these reasons, farmers and diaspora communities across the globe are demanding the repeal of all three anti-farm legislative reforms. Farmers are also demanding that the government pass new legislation to make MSP a legal right. On December 9, 2020, Indian farmers rejected the government’s proposed amendments. Based on reports from India Today and The Tribune, as of December 17, 2020, at least twenty-four women and men have died in peaceful protest to repeal these legislative reforms. Despite the foreseen struggles, farmers will continue to fight against these anti-farm legislative reforms. To support and stand in solidarity with Indian farmers donate to organizations like Khalsa Aid and Sahaita that are actively working on the ground to support farmers and their families.
Farmers’ movement warriors* who died during peaceful protest:
November 24: Kahan Singh (Dhaner, Barnala)
November 27: Dhanna Singh (Chehlanwali)
November 28: Gajjan Singh (Bhangu Khatra)
November 29: Janak Raj (Dhanaula, Barnala)
November 30: Gurdev Singh (Attar Singhwala)
December 2: Gurjant Singh (Bachhoana, Mansa)
December 3: Gurbachan Singh Sibia (Bhinderkhurd, Moga), Baljinder Singh (Jhamat, Ludhiana)
December 4: Lakhvir Singh (Laleana, Bathinda)
December 7: Karnail Singh (Sherpur, Sangrur), Rajinder Kaur (Gangohar, Barnala)
December 8: Gurmail Kaur (Gharachon, Bathinda), Mewa Singh (Khote, Faridkot), Ajay Kumar (Sonepat), and Lakhvir Singh (Jharon, Sangrur)
December 15: Gurmeet Singh (Mohali), Gurpreet Singh (Patiala), Labh Singh (Patiala), Deep Singh, Sukhdev Singh
December 16: Sant Baba Ram Singh (Haryana), Pala Singh (Patiala)
December 17: Bhim Singh, Jai Singh, Kulwinder
*represents all protesters who died whose names we do not know.
Kiman Kaur (she/her/hers): Kiman is a first-generation Punjabi, Sikh womxn of color from Salt Lake City, Utah. Kiman is currently a third-year law student at Northeastern University School of Law and will pursue a post-graduate career in litigation in Boston, Massachusetts. As a law student, Kiman has protected civil and women’s rights; she has advocated on behalf of victims of domestic violence and victims of racial violence and discrimination. Kiman is actively and consistently showing up to fight for justice. Intersectionality, feminism, and Sikh values of equality always guide Kiman in her lifelong work to advance racial and gender justice. Kiman hopes to continue combining her growing legal skills and her passion for justice to ensure that all people and all communities have the human right to live with dignity and respect free from all forms of violence