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  • Yasmin Aliya Khan

The Farmers Protest in India - A Reflection


Hello! I’m Yasmin Aliya Khan and I’m the host of the Global Thread podcast. Thank you all so much for being here for the inaugural episode. It truly, truly means a lot.


A few tips on how to listen to this podcast...


Since it is our first time together, I want to start off with a few tips on how to listen to this podcast. Don't worry - I'll be quick.


Keep in mind that we’re all here to learn - together. Education, regardless of what form it comes in or what institution it came from, is a never-ending experience. There’s always MORE we can discuss, and MORE we can question - and we should. As the name of the podcast implies, this is just a thread off of a gigantic, earth-sized ball of yarn. If you keep tugging at it, who knows what you’ll discover.


Take this podcast as a foot in the door, to get you started on your quest for more. Oftentimes the hardest part with understanding issues like the ones we’ll be covering is knowing where to start. Lucky for you, I’ve already done that part.


So without further ado, we’re going to be talking about the farmers protest in India. This is something that you may have heard mentioned in the news, or maybe you saw someone posting about it on social media towards the end of 2020, but while the US was entrenched in its own drama, international stories such as this one largely got swept under the rug.


Also, as we dive into this, keep in mind that no nation exists within a bubble. A lot of what we’re seeing play out in India is similar to struggles we’ve faced in the US - and we'll talk about that a little bit - but they're rooted in similar causes and catalysts, seeking similar outcomes and freedoms. I think there’s a tendency for people to think that their experiences are unique in this world, but we’ve got more in common with people on the other side of the world than perhaps we realize.


Alright, so now that that’s out of the way, we can talk about the farmers’ protests in India!


First, a quick overview.


In June 2020, Prime Minister Modi announced three bills reforming farming practices in India. We'll get into the details in a bit, but for now, suffice it to say that the farmers didn’t like the bills. By November, thousands of farmers had settled in for a long-haul protest with enough provisions to last them anywhere from six months to a year, barricading highways leading into Delhi, and setting up encampments.


Then, last week, the Indian government offered to put a pause on the reforms. This wasn't good enough. The protesters rallied. It was a national holiday and their rally was approved by the government - but things quickly got out of hand when protesters approached the capital, taking over Red Fort, a site of historic significance, and clashed with police. There were casualties on both sides, with protesters riding tractors into crowds, and police attempting to control the crowd with tear gas, batons, and water cannons. The result? One protester was killed, about 200 were detained, and over 300 cops were injured.


Let’s talk about how we got here.


Before we go any further, let's talk about how we got here. The reforms and the response to them will make more sense this way.


Currently, there are about 1.4 billion people in India, and about half of the labor force works in agriculture. However, India’s agriculture industry has been in steady decline. Whereas it made up a significant portion of the economy in the past, today, it only comprises about 15%. There are a few reasons for this.


India gained independence from British rule in 1947, so the new nation had to figure a few things out for themselves. One of which was farming. Things were slow-going at first, with farmers being unable to produce enough food for the massive population. Drought conditions led to famine across the nation, so something needed to change.


The new government launched The Green Revolution in the 1960s. With the help of advisers from the US, India modernized its farming industry, utilizing chemical fertilizers and pesticides, as well as irrigation to increase the production of crops.


While that may sound fine, it wasn’t. They overused the chemicals and irrigation, leading to dead soil and water scarcity, and rendering large plots of would-be fertile farmland infertile. Overall, it wasn’t a good situation, but wheat and rice made it through.


Mandis


The next thing that you should understand is the system that was in place prior to these recent farming reforms.


When farmers grow their crops, instead of selling them directly to consumers, they instead sell them in regulated markets called mandis. These mandis are wholesale marketplaces where farmers sell their goods through auctions to traders who then distribute and sell them to consumers. Middlemen, basically.


In these mandis, the auctions determine a buying price for goods - they’re negotiable. However, farmers selling in mandis are guaranteed the MSP, or minimum support price. This means that if farmers cannot sell their goods at a fair price to the traders, the government will pay them the MSP for the goods.


So basically, the mandis are regulated marketplaces that give farmers the opportunity to sell their goods at a reasonable price, but should they be unable to do so, they’ll still get paid something. Ultimately, the mandis protect the farmer.


These exact rules of operation vary from state to state, but that’s kind of the general overview. Also, the mandis themselves are flawed. Traders have been known to collude with one another in an effort to bring the price for goods down - and when I say “collude,” I mean they form cartels and mafias. It’s not great for the farmer, but without them, farmers would have even fewer options for selling or distributing their crops.


For as long as this system has been around, the farmers have learned to work within it, though they’ve been sounding the alarm on inefficiencies and other grievances for decades. The farmers are up against a lot - the cartels for one, the damage that’s been inflicted on once-fertile farmland for another, but also the dropping prices of goods, which has led to farmers racking up serious amounts of debt. These factors and others have contributed to a suicide crisis among Indian farmers.


The Reforms


Now that you understand how it all works, the reforms will make more sense to you.


The first of these reforms is The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill. You see a lot of this type of thing regardless of what nation you’re looking at… the bill has “Farmers Empowerment and Protection” built right into the name, but it doesn’t actually do what it would imply. Not really.


This creates a farming contract system. It means that farmers and traders will have to enter into a contract together, with each side agreeing on the quality and quantity of goods to be delivered, the means of delivery, the pricing, etc. The bill states that this is meant for the protection of the farmer so that they’re less likely to get exploited by the traders. In actuality, this isn’t great, but bear with me - we’ll get there.


The second reform bill is The Farming Produce Trade and Commerce (Promotion and Facilitation) Bill. This one creates a free, unregulated marketplace where farmers can sell their goods outside of the regulated mandis, taking whatever price they can negotiate for. The bill purports to give farmers more freedom to sell their goods wherever they so choose. Again, there are some issues with this, not the least of which is the previously mentioned issue of farmers being unable or unlikely to travel very far from their farms to sell. Essentially, this bill creates a separate market for farm goods outside of the existing markets. Not only is this new marketplace unregulated when it comes to pricing, but farmers working within it are not guaranteed the MSP. Also, this new, unregulated marketplace is incentivized - you don’t have to pay transaction taxes if you buy or sell here, but in the mandis, you do.


Finally, the third bill is actually an amendment - The Essential Commodities (Amendment) Bill. The original bill was designed to control the production and distribution of essential commodities - food, drugs, fuel, etc. It prevents the hoarding of these goods, which was especially handy at the start of the coronavirus pandemic. Because of this bill, the Indian government was able to move things like hand sanitizer and face masks to the list of “Essential Commodities,” but just as easily, the government can take things off of the list.


The amendment to this bill did just that - it removed a lot of essential commodities from the “Essential Commodities” list - like food. Grains, pulses, onions, oils - those are no longer protected items, even though they’re staples of the Indian diet. Try making any curry or dhal without those ingredients. You can’t do it. This is especially bad because so many Indian citizens are vegetarian. A large part of their diet consists of things like chickpeas, lentils, and beans as they’re an essential source of protein for non-meat eaters.


The Bad


So, it’s clear from the nature of these reforms that the Indian government is going for a more global approach to their economy, becoming much friendlier to foreign investment and corporate players. However, it should also be clear that despite the language of these bills, they’re not helpful to the already struggling population of farmers, nor do these offer them any additional protections.


If you’re a farmer, you’re essentially given two options - you can continue to operate within the mandis, which are close to home, regulated, and guarantee a minimum payment for goods; or you can try your luck in the unregulated and untaxed “free” market.


We’ve already discussed the limitations of the mandis, so let’s look at the new stuff.


Prime Minister Modi has said that the bills are part of a globalization and modernization effort, and that he hopes the end result will be “One nation, one market.” But… aren’t there two markets? One regulated and one unregulated?


Right. Over time, the unregulated market will take over as the only market once the mandis are no longer viable options for farmers. This will happen because farmers who are already indebted and impoverished will have little choice left but to try their hand in the free market. Unfortunately, the newly-created unregulated and untaxed agriculture market has not only invited multinational corporations into India, but it’s incentivized them to do business there. How can a small farmer compete against corporations operating at a large, cost-effective scale? They were already barely holding their own against the cartels of traders, and that was with government aid. Crop prices will not go up - they will inevitably go down. What few protections the farmers had has been taken from them, and these economic fluctuations have already begun.


Certain states have been hit especially hard by these reforms, especially states that relied heavily on farming subsidies from the government. The farmers in Punjab and Haryana were doing the best in the nation prior to the reforms, so naturally, the protests started there.


This all sounds very pro-capitalism, very laissez-faire, doesn’t it? It seems like India is mimicking economic models from western nations, like the US.


Speaking of the US, how are the US farmers doing?


US Farmers


Not well.


Agriculture is a dying industry in the United States, and it’s been on the decline for some time. Farmers in Middle America are often overlooked by both the general populous and the government, despite their direct contributions to our food supply.


But oh yeah, that’s right - a lot of our produce comes from Mexico.


Let’s look at NAFTA for a minute, the North American Free Trade Agreement.


NAFTA came into effect in 1994, and it eliminated trade barriers between the US, Mexico, and Canada. Since its inception, it’s been criticized by politicians on both sides of the aisle for various reasons, including and notably by Donald Trump.


NAFTA essentially made it cheaper for Americans to import goods and crops from Mexico and Canada, so we did. This drove prices for domestic goods down. As a result, small farms across the American Midwest were forced to shut down with large corporations thriving instead - over 40,000 farms closed during Obama’s second administration alone. Farmers became strapped with debt with few options available to them for aid. Suicides among American farmers also started trending alarmingly upward.


Trump decided to renegotiate the deal in an effort to win favor with the farmers, a group that was supposed to benefit from NAFTA but ended up bearing the costly brunt of it. In the new deal, the US-Mexico-Canada Agreement, or the USMCA, Trump attempted to make life easier for both farmers and auto workers. As far as the farmers were concerned, the new deal did some things for them - it called out and got rid of some predatory trade behavior from Canada (yes, our friendly Canadian neighbors were bullying our farmers), it expanded American markets, and it updated farming practices to be more innovative and modern, in terms of biotech.


But Trump also launched a tariff war that spanned from 2018 to 2020. Tariffs are taxes on goods being imported from other countries and those taxes are paid by the importing country. They can be handy negotiating tools employed by governments to either harm their enemies or bolster their own local economies, but their effects can be difficult to predict and difficult to track.


Since tariffs are taxes on imported goods, the idea is that by raising the price of imported goods for local consumers, consumers will instead opt to buy the now-cheaper domestic products. Also, the exporting nation might have to lower the price of their goods to combat the tariff’s effects on the end-user. Oftentimes, the exporting nation might choose to retaliate by imposing their own tariffs, which is what happened.


Trump and his team tried to explain the tariffs using similar rhetoric to what we heard regarding the border wall with Mexico. “Mexico will pay for it,” he said. When pressed as to how, it was explained that rather than Mexico writing a physical check to the US government for a border wall, Mexico would feel the negative economic repercussions down-line in ways that are difficult, if not impossible, to target and pinpoint. Ultimately, the border wall was funded by American taxpayers.


With the tariffs - same thing. No, China wasn’t paying “hundreds of billions of dollars in tariffs” and filling our American coffers with revenue, as Trump said was happening. While there were some gains in the manufacturing sector from Trump’s tariff efforts, they were minimal, especially when compared to the larger economic impacts of them. Again, these impacts are difficult to track and report, but multiple reports from multiple sources have found them to be more costly to American businesses and to American taxpayers. As with the border wall, the tariffs cost American citizens - whether or not they work in the agriculture or manufacturing industries - upwards of $80 billion dollars in taxes on thousands of goods.


And the farmers? They were no better off.


Trump’s team must have known this, too, because prior to the 2020 presidential election, Trump essentially paid off farmers to make up for the losses they endured as a result of his trade wars. The US, without congressional approval, gave the agriculture industry an enormous bailout - one that exceeded the auto bailout in 2008 - to essentially pacify them for the time being.


The problem with the bailout, apart from the obvious, is that the farmers were given the money without any contingencies. For example, there were no requirements for how much farmers needed to produce to qualify for the money, nor were there any stipulations regarding sustainable farming methods. It was just given to them - and it’s still being given to them. Now that Trump’s out of office, that’s a problem for Joe Biden. How do you turn off or at least reduce aid without turning off the bleeding revenue first?


You have to wonder why they were just given money with no conditions attached. It’s hard to require more production if the reasons why these farms aren’t producing or selling isn’t being addressed. It’s hard to raise the domestic price of goods when you’ve invited corporations into the market to skew the pricing benchmarks.


However you feel about all of that, there are some obvious issues. American farmers are now being paid by the government without having to produce anything. The “Trump money,” as the farmers call it, has essentially become a welfare program not unlike the ones the Trump administration was so ardently against. There are also ethical disputes that arise from a president hitting up the US Treasury to issue an enormous bailout without congressional approval, especially when he is, in part, bailing them out from the detrimental consequences of his own policies. By the way, it’s worth mentioning that the farmers have been collecting government subsidies for a while now - this is just, by far, the biggest payout they’ve seen. The subsidies were in place originally because farming, in general, is already a volatile industry that doesn’t pay a whole lot.


Most importantly, though, neither the tariffs nor the subsequent bailout succeeded in addressing the root causes of why these farmers were suffering. And so, the problems will continue to persist.


The Good


Back in India, not everyone hates the farming bills that have been passed.


Firstly, only about 6% of farmers in India operate within the mandis, so it could be assumed that the rest of the farmers are already operating within some sort of free market system. Of course, they’re still struggling, but they’re doing it. Some say that these bills only affect that 6% of farmers, but farmers across the board will suffer from lower prices of their goods.


Proponents of the bill argue that farmers now have more options to sell larger quantities in a larger “free” market, whereas before, they could only sell small quantities to buyers in a marketplace. However, questions arise as to how these small farmers can realistically transport their goods to a distant marketplace for sale.


Another pro - it cuts out the middlemen, the traders that would negotiate with the farmers. The traders had been hostile and aggressive toward the farmers, but they also helped with the distribution of goods. Also, if these cartels were already engaging in price-fixing and market manipulation, then the monopolistic corporations that have now been invited in will be much, much worse.


Next, the bills are supposed to benefit the middle class and the non-farming lower class by giving them lower prices for goods. This sounds great for consumers, but it doesn't explain how farmers are supposed to sustain themselves when prices for their crops drop even lower. They're already going into debt because their operating costs exceed their revenues.


Some claim that the tax incentives aren’t as much of a problem as they seem to be since many buyers and sellers in the mandis regularly evade the taxes imposed upon them. Instead of enforcing the payment of those taxes, the government chose to incentivize transactions outside of the mandis by making them tax-free, creating economic competition. However, a small market really has no chance of competing against an MNC, anyway.


Finally, the bills are intended to shepherd India into a new, more capitalistic society, where the market determines pricing. But as we’ve seen time and time again across the globe, the bigger corporations get - and they are getting bigger - the more impossible it becomes for smaller players to move the needle. The result is inequality. Even in the US, we’ve had to subsidize our farmers for years because our government has acknowledged that farmers simply cannot compete with corporate food giants.


The Demands


So, what do the protesters want? They have a few demands.


I’m sure you can guess the first one - they want the bills repealed. They also want the mandis and their merchants to be protected, as well as their loans cleared. Finally, they want the MSP to be at least 50% more than the weighted average cost of production.


Keep in mind that these farmers have been in talks with the government for years and years. The bills that were put forth did the opposite of what the farmers were hoping for, leaving them to feel as though they were unheard and undervalued.


Will the Indian government concede? No one really knows these things, despite all of the predicting pundits out there. The protests have turned violent in recent weeks and the protesters are not planning on budging from their demands. They’ve already been struggling for years - what’s a few more months? At this point, they’ve got little to lose.


That said, the Indian government seems to be embarking on an initiative that goes far beyond what makes the farmers happy - they’ve got their eyes set on corporatization, industrialization, and capitalistic gains. If the bills were any indicator, they seem fine with letting the farmers bear the brunt of the reforms, even after decades of struggling to make ends meet.


In Closing...


Personally, I’ve always been a fan of change, as long as I felt it was heading in the right direction. However, change is almost always uncomfortable, and oftentimes, it can be destructive - tear down the new to make room for the old, right?


If you look at, say, the fossil fuel industry in the US, there are workers and politicians who are fighting to keep the oil-and-gas dream alive, usually in the name of preserving the jobs of the oil and gas workers. But while the majority of the country is ready to move on to cleaner and more sustainable forms of energy, we’re dragging our collective feet because we haven’t decided what to do with the workers.


I think most millennials can relate to this, but we’re used to technology moving faster than we can. I’ve come to terms with the fact that the degrees I earned in college and grad school are already obsolete. I’ve had to learn new skills to adapt to changes in my industry. I’ve had to jump industries. I’m currently learning skills that I just think I’ll need in the future.


The point is that the world is changing, and so must we. We should be going for adaptability, though, not stubborn traditionalism.


In the case of India, it seems as though they’re trying to do exactly that, but critics are unsure as to whether or not the means will justify the ends.


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And that’s it for our first episode together! I hope you enjoyed it, I hope you learned something, and I hope I gave you some things to think about and Google later. If you’d like to read a transcript of the audio, you can head over to the blog at globalthread.org, and be sure to subscribe to the podcast for updates.


Talk to y’all soon, bye!