Farm reforms — how both sides faltered
Over the past fortnight, the agitation against the Centre’s agricultural reforms — led primarily by land-owning farmers of Punjab, but now supplemented by a range of other farmer groups — has assumed a political, economic and regional element. Irrespective of how the issue is eventually resolved, the protests throw open questions about the trajectory of India’s political economy and developmental model, the role of the State and markets in a sector that employs the largest number of people in the country, Centre-state relations, and the future of politics in rural India in general but Punjab in particular.
But the issue has also highlighted the strengths and weaknesses of the two key actors involved in the issue — the government as well as the agitators. What have they done right, and where have they gone wrong?
Take the government first.
The Narendra Modi government — as this newspaper has argued — did well in turning the crisis presented by the pandemic into an opportunity for reform. Indeed, Indian economic policymaking experience shows that it is in moments of crisis that reforms are most politically feasible, giving room to governments to challenge status quo. If it was not for the balance of payment crisis in 1991, it is doubtful if the PV Narasimha Rao-Manmohan Singh duo would have been able to push far-ranging and necessary reforms which liberalised India, integrated it with the world, boosted growth rates, unleashed the animal spirits in the private sector, expanded the middle-class, enriched the government through additional revenues leading to enhanced welfare spending, and lifted millions out of poverty.
But one sector which was largely immune to the trajectory of reforms was agriculture. No agricultural expert can today argue with any justification that status quo is tenable. The structural issues in Indian agriculture need not detain us here — but the mismatch between agriculture’s contribution to GDP and the number of people dependent on it is enough to show that urgent reforms were essential. And that is why the Modi government acted with the right intent in reframing how agricultural produce in the country can be procured and traded. It broke the monopoly of the mandi system, enabled greater interface between agriculture and industry by allowing structured corporate participation, and increased the freedom and choices available to farmers. This has the potential of enhancing farm incomes, infusing more capital in the sector, enabling diversification and possibly paving the path for the modernisation of India’s rural economy.
But if it was right in its intent, as well as the overall substance of the law, the government faltered in building wider consensus around reforms.
Do remember that the Bharatiya Janata Party (BJP)-led government has had a somewhat paradoxical relationship with farmers in general. On one hand, it has faced fierce opposition from a range of farmer groups on diverse issues — from its proposed amendment to the land acquisition act to the demand to implement the MS Swaminathan Committee recommendations on minimum support prices (MSPs). At the same time, through a range of policy measures — the PM-Kisan scheme which enables direct cash transfer to small and marginal farmers; the focus on rural India in terms of construction of homes and toilets, and provision of gas cylinders; occasional promises of loan waiver in states which it is in power (Uttar Pradesh in 2017); a genuine attempt to boost agri-infrastructure — it has also won the support of a large segment of farmers. So, in a sign of the heterogeneity of farmers and their aspirations, it is useful to remember that while segments have been upset, others have also voted overwhelmingly for the BJP in elections.
But the Centre should have recognised that precisely because of this heterogeneity, there was a large constituency which could be uncomfortable with reforms and had the strength to express it. And that is why the farm reforms should have been preceded by much wider consultation in the public sphere. The government’s big mistake was in not allowing the farm bills to go through the parliamentary committee route — stakeholders would have not only got a chance to express their views and concerns, but it would have added legitimacy to the process. And even if this meant some delay, the democratic participation within the constitutional framework was worth it. The government also clearly underestimated the depth of anger, especially in Punjab, even though it was apparent that given the well-entrenched mandi system and the more widespread procurement of produce at MSP in the state, resistance could be fierce. The Centre’s actions led to the perception of unilateralism and only alienated those sceptical of the reforms further, providing the ground for a sustained movement.
But what about the agitators?
Irrespective of whether one agrees or disagrees with the farm reforms, there is no doubt that the farmers are within their rights to express their opposition to measures which they believe will hurt their economic interests. There is genuine apprehension at being left to the mercy of market forces without adequate protection. Farm unions have also done a remarkable political job in spreading their message down to the ground, forcing the entirely spectrum of political actors in Punjab and now nationally to support their demands, and registering their dissent. They have also built a remarkable coalition of diverse interests — though it is somewhat ironical to see those who would have been otherwise categorised as feudal elements in agriculture and Left farm unions and even economic liberals who have, in the past, argued for more openness in agriculture — come together because they oppose the BJP. This may be hypocrisy, but it is also clever politics.
But where the farmers have faltered is in the method and idiom of the protests.
Any interest group in a democracy has the right to oppose the government peacefully and through constitutional methods. But this cannot be at the cost of undermining the rights of fellow citizens. To gain leverage in negotiations with the State, protesters have been inflicting costs on society — by blocking highways and the right to free movement and disrupting supply chains and the right to trade. This has not only caused inconvenience but also led to inflationary consequences, the brunt of which is borne by the poor. It is easy for protesters, when they are in the middle of a movement, to think they have the edge and underestimate the State. And while the context is entirely different, farm unions would do well to remember that the anti-Citizenship (Amendment) Act protests eventually lost their moral high ground because of obstructionist tactics. The other big weakness of the movement is in its maximalist posture — of seeking nothing less than a repeal of the laws — instead of being open to compromise.
Indeed, it is only through this political process of negotiation that both reforms can succeed and interests of those fearful of reforms can be safeguarded. Both the Indian State as well as dissenting citizens are on test.