Modi’s assault on Indian farmers

The Modi government’s high-handed and abrupt style of economic policymaking has become the subject of growing domestic discontent. Modi’s economic ambitions of making India ‘shine’ has its share of rich backers, who are increasing their wealth under his Hindutva rule. However, Modi’s economic vision has produced some disastrous results for poorer segments of Indian society despite all his populist rhetoric.

Following the surprise decision in 2016 to scrap old paper currency which decimated savings of poor people, and his sudden lockdown of Indian cities which stranded migrant workers, Modi’s latest attempt to reform the agricultural sector comes as bad news for the rural poor.

The liberalisation of the agricultural sector at the behest of lending agencies like the IMF and World Bank had led India to allow multinational agribusinesses like Monsanto to infiltrate the Indian rural sector with BT cotton in the late 1990s. The profusion of BT cotton enabled large and middle level Indian farmers to boost their agricultural yield. Indian cotton exports also increased substantially over these past two and a half decades. However, poorer farmers who bought BT cotton seeds often became very indebted when they were unable to grow BT cotton according to stringent specifications or when climate change led to crop failure. Despite agricultural growth, farmer suicides have thus become a recurrent phenomenon in India.

The Modi government has now introduced a series of new bills which aim to dismantle government control of crop prices and allowing stable Indian crops to be sold to private domestic and international buyers. The Modi government is insisting that this new legislation will give farmers the option to sell their produce to private buyers but that the government will continue to buy staples such as rice and wheat at guaranteed prices. However, farmers are skeptical, and they are demanding assurances that government supported prices will continue.

The Indian government used to announce a minimum purchase price at the beginning of each sowing season and nearly 7,000 regulated wholesale markets would then purchase crops based on these prices. The Modi government claims that it has now freed farmers from exploitation by the Agricultural Produce Marketing Committee mandis and from middlemen. Poorer Indian farmers were being exploited by middlemen, who often buy crops at prices below the official rates and sell them onto the mandis (as they do here in Pakistan). Yet, middlemen (or arhtis) also provide poorer farmers vital information, inputs, and credit in lieu of purchasing their crops at lower than government set prices.

Indian farmers groups are rightly pointing out that instead of helping poorer farmers by providing them needed services and ensuring that they are able to avail government set support prices, Modi’s agricultural reforms are instead going to help private capitalists make larger profits by driving down crop prices. Modi’s agricultural reform policies also allow private traders to stock food items, which could potentially lead to hoarding.

Farmers’ organisations opposing these new agricultural laws are further upset that poor Indian farmers’ views were not really taken into consideration. The haste with which the agricultural ordinances have been passed, amid the catastrophic coronavirus crisis, has increased mistrust between the government and farmers. Large protests have taken place in main food growing states like Punjab, Haryana, Uttar Pradesh, despite the Covid-19 scare.

Given the highhandedness with which Modi’s government has acted in the past, and the top-down view of making India ‘shine’ that he espouses, it is unlikely that he will allow farmer disenfranchisement to stand in the way of his ambitions. However, this economic highhandedness could also have a political cost, and lead to a resurgence of Sikh grievances, as Sikh farmers would be particularly hard hit by these new agricultural policies.

The Competition Commission of Pakistan, which has recently recommended that the government should stop fixing the support price of wheat, should pay heed to these ongoing contentions in neighbouring India.

Published in The Express Tribune, October 2^nd, 2020.

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