The farmers’ agitation around Delhi has gone on without a break for days on end, with large numbers of farmers, mainly from Punjab and Haryana, camping on the Delhi-Haryana border. A meeting of farmers’ representatives with Union Home Minister Amit Shah has failed to break the impasse.
Behind the farm unrest -- which has farmers of the two, rich, north-western states as its fulcrum -- lies opposition to farm legislations that were recently passed by Parliament, amid opposition protests, to liberalise the farm produce marketing regime.
The jury is still out on the future impact of the new farm laws, but these may change the political dynamics in Punjab and Haryana.
The farm legislations and the rationale
In a nutshell, the new laws provide for the intra-state and inter-state trade of farm produce outside the APMC mandi system free of any market fee, cess or levy. Contract farming via an agreement between farmers and a buyer is allowed, with any dispute regarding the agreement to be settled by a three-tier process: a conciliation board, the SDM and the district collector, the appellate authority. A penalty can be imposed on the party found in violation of the agreement, but farmland cannot be taken away for it. The supply of certain food items can be regulated only in case of war and famine and stock limits imposed only during a steep price rise.
Supporters of the farm reforms say the idea is to offer farmers access to a larger pool of buyers. In this liberalized farm regime, they will be able to trade freely without a licence or stock limits. The backers say this will end up increasing farm incomes.
The farm laws have attracted strident opposition particularly from the farmers of Punjab and Haryana, rich agrarian states that were beneficiaries of the green revolution. Protesters say this is a ploy to gradually dismantle the APMC and the Minimum Support Price regime, wherein, technically speaking, the government fixes a minimum price, which is the guaranteed minimum price at which it purchases from farmers in case market prices fall below the MSP.
The government has said that it is not rolling back the APMC system or the MSPs but opening multiple choices for farmers. But the fear is that the initial diversion to contract farming by the farmers for better prices may mean that the APMC system may fall into disuse, making it unsustainable in the long-run. And once private buyers have carved out an informal monopoly, say critics, they can dictate and determine prices.
Why Punjab, Haryana as protest fulcrum
The reason Punjab and Haryana farmers are the ones to be up in arms and are leading the agitation is that the two states have the best organized APMC and MSP system, says Vikas Vasudeva, the Punjab correspondent of The Hindu. In Punjab, the government procures wheat and rice at the MSP, leading to more stable incomes. However, the procurement guarantee does not really apply in most states on the ground.
My travels as a journalist looking at farm issues in MP, Maharashtra and Gujarat in the last few years revealed that farmers often had to sell their produce well below the MSP and were also indebted. Farmers in Madhya Pradesh told me in 2017 that government procurement centres opened late, often a month or more after the harvest, and they could not store all their produce. So, they sold much of it to merchants at prices well below the MSP.
Economist HM Desarda, who is former Maharashtra State Planning Commission member, had told me during the trip that the MSP did not mean much on the ground unless the government gave a guarantee to purchase the farmers’ produce at the MSP.
A report, a few days back, cited a central government report that just 6-percent of farmers in India take advantage of MSP. It also cites a 2016 NITI Ayog report that 100-percent of Punjab farmers benefit from the MSP regime. It adds that the government told the Rajya Sabha on September 18 that 43-lakh farmers took advantage of MSP on wheat during the Rabi season, and 42-percent of them were from Punjab and Haryana.
“Punjab, Haryana and western UP have a formal agricultural marketing system under the APMC. The government purchases wheat, paddy and cotton, three crops from among 23 for which MSP is declared, at the MSP here,” says Lakhwinder Singh, professor of economics at Punjabi University, Patiala. “This has drastically reduced rural poverty in these states, while in states where this isn’t done poverty levels are often still high. Huge infrastructure has come up in Punjab and Haryana and the marketing system functions well. The new regime will replace it with an informal system. Hence, these regions are seeing protests.”
Indeed, the repealing of the APMC Act in 2006 in Bihar had, according to PRS, led to erosion of the marketing infrastructure. Even requisite private investment did not come. The PRS report, however, notes that the present farm laws “do not repeal the existing APMC laws, but limit the regulation of APMCs to the physical boundaries of the markets under their control”.
There has been much buzz that the ongoing farm agitation may hit the Narendra Modi government hard. The devil, however, lies in the detail. In Punjab and Haryana, this may indeed impact political equations. However, the BJP does not have a farm constituency in Punjab and just has a limited following among urban Hindus.
In Punjab, Chief Minister Amarinder Singh is trying to make capital out of the farm unrest. The Shiromani Akali Dal, which has a largely Sikh constituency, is also supporting the farm agitation after it quit the NDA over the farm laws. However, the Congress will try to corner the SAD by reminding the voters of the long, past, association of the Akali Dal with the BJP. The Aam Aadmi Party, which has made some inroads in Punjab in the past, may also try to take advantage of the situation, but it lacks the kind of leadership the Congress and SAD has.
It seems that the Congress party may be able to beat anti-incumbency in the state on the issue of the farm laws.
In Haryana, too, the Congress can rely on Bhupinder Singh Hooda to reach out to the Jat peasantry, while the alliance with the BJP may damage the Jannayak Janata Party (JJP) of Dushyant Chautala, as his core constituency is also the dominant Jat peasantry.
Whether the farm agitations will impact national politics – given that half of India’s population depends on farming, even if farmers do other things side-by-side to eke out a living – and damage the BJP is a question many are posing. This is something still uncertain, as farmers in large parts of India anyway sell below the MSP. In fact, it’s even possible that if they can get into contract farming, their incomes may rise for a few years and this may end up even benefitting the BJP for a few years, at least, and see it through another time.
However, the party may face a rout in Punjab, both because of farm fears and because of social media messages, largely from anonymous supporters of the Centre’s farm laws, denouncing the agitating Sikh farmers as supporters of Khalistan. This may lead to a combination of material and cultural alienation, possibly harming the BJP even more in Sikh-majority Punjab.
Vikas Pathak has been a political journalist for a decade-and-a-half and teaches at Asian College of Journalism, Chennai