Farm legislations, intent and a map of mistiming
Before and after the passing of the three agriculture reform legislations, a lot of analysis and commentary on their objectives and effects has appeared. Both Houses of Parliament have seen truncated debates, and protests on the streets have been reasonably well covered after some initial hesitation. Remember, the Ordinances were issued at the beginning of June but peak coverage happened three months later, around September 14, when the Monsoon Session of Parliament was slated to begin.
However, there are two aspects that have not been delved into sufficiently. One has to do with the strategic mistiming of the government in introducing agriculture reforms, and two, the true intent behind the legislations. Of course, questions have been asked as to why the Bills were passed in such a tearing hurry, but there has been little exploration into the Modi government’s propensity for bad timing. When it comes to intent, the government has still been using the language of welfare, while what it intends to do is precisely the opposite of it, that is to extricate the government and allow market control.
Starting with the aspect of Modi government’s recurring errors with timing, the first big example, and one that takes the crown, is demonetisation from November 2016. At that point, the economy was shaping up, the GDP was close to 7%, crude oil prices were sliding for over a year, and inflation was manageable. Instead of constructively channelling these relative advantages, Rs 500 and Rs 1,000 currency notes were made invalid overnight. The economy was given such a shock treatment that it has refused to recover since. Mostly, it was the small and medium scale industries, and those in the unorganised sector that were felled. The big and mighty found ways to exchange their currency and stabilise their ships.
The second example could be from the early months of Modi’s second term: the reading down of Article 370, and stripping the statehood of Jammu and Kashmir. This fulfilled an ideological desire but it may have triggered geostrategic and economic implications that are still unfolding. China had never stretched its muscle along the LAC since 1962 as much as it has in recent months, and Ladakh is never out of news. A creative relationship with China was important for our scheme of things, and one thought from the prime minister’s numerous meetings with the Chinese leadership that he thought so too.
Another big item on the bad-timing list is the unplanned lockdown and the devastating sight of millions of migrants packing up from the cities to trek back to their rural safety. Now, the farm legislations appear to have followed them on their village tracks to accentuate their instability. Agriculture was the only sector looking up when the economy looked defeated with the GDP at a negative growth high of minus 23.9%. Monsoon rains have not let us down so far, rabi harvest has been bountiful, and kharif sowing has exceeded expectations.
But the farm legislations have suddenly injected uncertainty into the rural economy. It was not the best time for such gargantuan reforms. Psychologically, people wanted to hear and feel continuity. They wanted to be assured that normalcy would return soon, but that is clearly not the message going out. Governments are not expected to have empathy, but they are expected to deliberate assiduously on the timing of their moves. The only timing that the Modi government appears to have got right so far is the Balakot air strikes before the 2019 general elections.
Coming to the intent behind the legislations, it is clear that the government wants to change the characterisation of both farmers and agriculture. A Niti Aayog vision document (New India@75) from November 2018, endorsed by the prime minister, clearly says that in “agriculture emphasis must shift to converting farmers to agripreneurs”. This is a huge cultural shift since farmers and farming are never imagined as a business or entrepreneurship in our country.
They have always been assigned a pivotal social role and are part of a nationalistic pairing alongside soldiers: ‘Jai Jawan, Jai Kisan.’ But the farm legislations aim to end this and move from mandis, with government and community oversight, to private markets. The document does not hide anything. It speaks of agriculture as agribusiness; it says futures trade should be encouraged; it talks of contract farming and agricultural land leases as well as inclusion of private traders.
But the biggest giveaway is that it says the Commission for Agricultural Costs and Prices (CACP), an institution that fixes the minimum support price (MSP) of 23 commodities, should be replaced by farm tribunals, and MSP itself should be replaced with minimum reserve price (MRP). A mention of tribunals in the place of CACP is admission that dealing with private players is bound to create a plethora of disputes. This stated intent does not blend with the fire-dousing rhetoric we are hearing from the government’s side as protests have gone on.
The prime minister has spoken of doubling farmers’ income by 2022 and eliminating middlemen. Neither of it will be achieved. In fact, the new legislations will make farmers seek more intermediaries as they shift to an individual, knowledge-based system from a community-based system. Experts have already pointed out that commodity trading has not worked for even US and European farmers, where 50% of agricultural subsidies come in the form of direct income support. It is an irony that when the government is talking of public spending and economic stimulus packages to beat the pandemic blues, the weakest in the chain, the farmers, are being thrown to the mercy of the markets. The intent is clear and the mistiming too.
Sugata Srinivasaraju
Senior journalist and author
(sugataraju@gmail.com)