Farmers laws in India 2020 — The Truth
India passed three farm laws in the year 2020 under the Modi government. There were a lot of protests against these laws calling them draconian law and against farmers. The protests were also seen in Canada where people supported farmers.
Were these protests actually for the farmers? How will these laws help farmers? Before diving deep, it is important to have a look at the farmers’ situation in India before these farm laws.
Most of the India’s population still dwells in its villages. Primary occupation is agriculture.
Traditionally, any income related to agriculture is free in India from any taxation to help farmers and keep them free of bureaucracy. However, the situation of the farmers hardly improved in the last 7 decades. Partly the reason was the law that the farmers were allowed to sell their crop only in the local market. The law nevertheless provided Minimum Support Price for every crop sold to government agencies. So if the farmers are unable to sell their crop in the local market because of low prices or no demand, they have no option but to either abandon their crops or sell at a cost that doesn’t even cover their own cost. I have seen farmers throwing their truckload of produce in the river as they could not sell it or did not get the price they wanted.
This led to the advent of middlemen, who would buy crop from farmers, manipulate the local authorities and sell it at much higher price to large companies or other institutional buyers. Since these middlemen acquired this income through agriculture, they enjoy the tax-free income without even producing anything. In some cases, the middlemen earned 10 times the cost by just making a few calls and using their local influence.
Over a period of time, these middlemen became powerful and started controlling the lives of farmers. Whenever the farmers had financial crunch, these middlemen would give them loans and charge hefty interest. There were instances, when farmers resorted to suicide as they could not repay the loan.
The new farmers laws enacted in the year 2020 give farmers the option to sell their crop anywhere in the country including online. Special online portals have been setup to help them. These laws provide the farmers the option of contract farming as well, where they are free to contact any large company or institutional buyer and produce the crop of their choice at a pre-negotiated price.
In addition to providing them the option to sell their crop anywhere, these laws have also stipulated that the Minimum Support Price for their crop will continue and that the farmers are always protected. If a farmer enters into contract farming agreement to produce at a pre-negotiated price and finds out later that the price of the crop in question is much higher elsewhere including online, the farmer is allowed to nullify the agreement without any penalty.
Here are links to the new acts — 1, 2
So why are the “farmers” protesting? Why do they want the farmers bills be repealed while disregarding the government calls for negotiation? The reason is that the so-called farmers are actually not farmers. They are the same middlemen, who used to earn unaccounted money without any tax and control the farmers. Their existence is now under threat and this makes them nervous about their future because with just one masterstroke, the government has done away with all the middlemen.
Don’t believe me? Here is the Chief Minister of Punjab, where the most of the middlemen come from, saying that he supports these middlemen. I find it amusing, how influential these middlemen have become, where they can force a chief minister of the state to say what they want.
Another face of this whole farmers’ agitation is Rakesh Tikait. He has been leading the so-called farmer protests in New Delhi and Uttar Pradesh. Tikait is not a farmer himself, rather a middleman who has acquired huge wealth by working as middlemen. Here is an article that talks about his accumulated wealth. Just to compare — in India where a farmer may not have more than a few thousand rupees in the account plus house and agricultural land, Rakesh Tikait has accumulated wealth worth over 80 Crore rupees.
It has already been over a year now since these laws have been in effect. Let me now list the positive changes these laws have had in this short period of time on the agriculture sector:
- In Maharashtra, there was a record out-of-market trade thanks to these new farmers laws
- India’s farm exports are expected to grow to 30–35 billion dollars by 2025 as per a report by Bain and Company