Agricultural Reform Is Highly Political

When the Indian Constitution was written, it placed Agriculture on the State and Concurrent List, making it both a State subject and a Central one. Albeit with the preponderance on the States’ authority to legislate on agriculture. The clue on how to proceed after the three farm laws were withdrawn recently by the Centre lies in this fact.  

It may be best to leave it to the States, in the broad interests of  India’s quasi-federalism. However, since 50% of the population still live in rural areas, anything to do with agricultural reform is a political hot potato. States and the Centre as well, tend to throw some relief money via yojanas at it, rather than do something more constructive. The farmer votes are too important.

However, now that the Centre has given up, the States can, individually or severally, implement some parts, or even the whole of the three farm laws withdrawn. This is the theory of it, with modifications to suit their own  requirements. There is a serious danger however of letting agricultural reform stagnate, rather than disturb the hornet’s nest afresh.

It is broadly true that the bulk of the states and union territories have not protested the reformist farm laws. But neither have they been particularly vocal in their support.

Indian agriculture has long been in an existential crisis, even as there have been bumper and surplus crops. Paradoxically, there have been hundreds, if not thousands of farmer suicides, in states such as Maharashtra. This despite frequent waivers of farm loans as a stop-gap measure. Droughts and floods play havoc as well.

The present scenario suggests that Indian agriculture suffers from chronic problems that a democratic set up cannot solve. But this may provide the second clue. It is unlikely that any reform designed to benefit the small farmer can be implemented without the concurrence of their de facto bosses.

In the case of these recent protests, Opposition political parties, other interests such as alleged Khalistanis, have jumped on the bandwagon.But they haven’t managed to take over.

That the latest position of the protestors is to go home from the various borders of Delhi, and review the situation in January 2022, is heartening. This has come about after written assurances from the central government that all their demands, have been met.  The protestors  camped out for the last 15 months, stormed the Red Fort, and  allegedly lost several hundred lives. Many rounds of talks prior to this final resolution proved fruitless.

The intent of the three central laws was to empower the small farmer to sell his produce wherever he wanted. This, beyond government-controlled state mandis, via commission agents, using digital platforms, corporate contracts, and other means as necessary. While farmers from several states reported beneficial sales as a consequence, adding value to the central government’s desire to double farm income, the protestors from three states had a different view.

These were farmers and associated people, mainly from Punjab, but also from Haryana and Western Uttar Pradesh. They said, among other things, that the three farm laws would lead to a relentless corporatisation of agriculture. The small farmers would have, over time, taken dictation on prices and crops from business houses that would become very influential. There was also suspicion that the Minimum Support Price (MSP) system would be withdrawn in favour of this free-market environment. This would destroy the livelihoods of the commission agents, and place great hardships on small farmers, dependent on the agents for loans and leverage with the state and central government.

In fact, the withdrawing farmers want a widening of the MSP structures. Basically, the desire is that the government must guarantee agricultural offtake and income for all produce in perpetuity, even if it distorts retail pricing of food items.

The distortion is not just in pricing. In Punjab, a major, if inappropriate paddy producer, from times when there was a shortage, is now facing crisis level water shortages plus pollution evils from stubble-burning. Also, the paddy grown in essentially dry state Punjab, is inferior to that from Madhya Pradesh and other better rain-fed states. Punjab ends up importing this good paddy from other states for its own consumption, even as it sells its sub-standard paddy to the government at MSP. However, fierce vested interests prevent any change in crop patterns.

In several other states, another high-water consumption crop, sugarcane, is produced in huge supply owing to MSP support. Exports are difficult because of generally lower international prices. Local consumption plus factory demand from those who make molasses and ethanol is insufficient. Payments to farmers are inordinately delayed. The government is now making efforts to absorb the extra sugarcane to make bio-fuel to blend with petrol. This will cut imports of petroleum in due course if all associated issues are tackled.

In Mughal and British Raj times, almost all taxation involved impositions on the peasants who worked the land for their overlords. This and tolls for access and safe passage by road or waterways were principal sources of revenue. There were also conquests of territory and demands for indemnity from the defeated or weaker kingdoms.  

These agrarian taxes were demanded and collected from the land owners, the jagirdars, zamindars and higher nobility. Sometimes they were taken in produce and grain. At other times they were required to be sold and the resultant gold and silver directed upwards. The structure therefore always had a dominant collector on top of the peasant farmers. The British too had their Collectors who sat above, and took the tithes from the landlords.

When Zamindaris were abolished in the fifties under the influence of Fabian Socialism, so was agrarian taxation. The politicised and connected took over instead as de facto overlords. The peasants neither had the leadership nor the spine to fend for themselves.

They didn’t then and do not now. The Modi government too decided the political cost was not worth it. ‘No good deed goes unpunished’ as the saying goes. But our antiquated poor farmers seem oblivious.

(1,001 words)

December 10^th, 2021

For: Firstpost

Gautam Mukherjee