Updated: Feb 26, 2021
By Anika Thota
Image via NDTV
Thousands of farmers have been protesting new agricultural legislation for more than five months, starting in the Indian state of Punjab. Last September, India’s Parliament approved three new agricultural laws: The Farmer’s Produce Trade and Commerce Bill, The Farmers Agreement on Price Assurance and Farm Services Bill, and The Essential Commodities Bill. Prior to the implementation of these new bills, the Indian government was guaranteeing farmers baseline prices for certain crops when they sold their product at their states’ Agricultural Produce Market Committee (APMC). This means that farmers were always guaranteed a Minimum Support Price (MSP) for the crops they grew; in having a government-agreed set price, farmers were able to make calculated decisions of which crops to invest in and grow for the following crop season.
These new bills incentivize private participation, allowing farmers to bypass traders in APMCs and sell directly to private organizations. At first glance, this new legislation may seem beneficial to farmers, allowing them to make more than the government-mandated price. However, unlike previous legislation, the three new bills do not guarantee an MSP for crops. This means that although farmers can make more than the MSP, there is also a likelihood they may make less. Many farmers rely on the MSP for a dependable income, and the lack of having a baseline wage is the main cause of these protests. Farmers are worried the new regulations make them susceptible victims to exploitation by these private companies.
To further explain this prospective exploitation, private companies may initially offer farmers higher wages than the MSP which will lead to farmers to enter contracts with them. Once contracts are secured, there is nothing stopping these privatized organizations from lowering the amount of money they have offered for farmers’ crops, forcing farmers to sell their products at prices well below the MSP. The introduction of these deregulation laws may lead to the elimination of the MSP program, which will destroy the salary of farmers who are dependent on it. The removal of the MSP program in addition to selling crops well below their worth will propel farmers into poverty and unemployment. Farmers who are unable to survive off these earnings will be forced to sell their land, hence, leading to unemployment.
The Indian Prime Minister, Narendra Modi, promoted and justified these new laws by claiming they offer farmers more freedom to set their own prices; however, because there is no regulation within these bills to stop private organizations from decreasing their buying price once contracts are signed, there is no guarantee that farmers will not be exploited and forced to sell their crops at lower prices.
Written by writer Anika Thota