The Entangled Economics And Politics Of India’s Farm Agitation

Context: Highlighting the root causes of farmer’s agitation and options before the Government and the farmers.

Roots of farmer’s agitation

• Role of Green Revolution: In the 1960s, introduced high-yielding variety (HYV) seeds, subsidized water, power and fertilizers and assuring remunerative prices.
  • While the subsidy-driven policy regime succeeded in achieving food self-sufficiency, it led to chronic fiscal challenge and disastrous for ecology.
  • For E.g. Adoption of the wheat-rice cycle in Punjab resulted in water tables being plummeted, the soil is degraded by chemical fertilizers and toxic pesticides and stubble burning problem.
• Underlying trust deficit: Between agitating farmers and Government.
  • Democratic subvention: Rail-roading three laws through Parliament without a vote division, which the opposition had demanded.
  • Biases in dispute resolution mechanism: Precluding civil courts from having jurisdiction over dispute resolution between farmers and contract-farming companies, and no legal recourse beyond executive authorities not viewed in the interest of farmers.

Way forward

• On the part of Government:
  • Reduce price distortions: Gradual shift from procurement of wheat and rice to that of other MSP crops, especially coarse grains, pulses, oilseeds, etc.
  • Curtail market power of politically-connected traders cartels: Multiply number of Agricultural Produce Marketing Committee regulated markets.
  • Helping Farmer-Producer Organizations (FPOs): To invest in cold storages and other infrastructure to enable diversification to other high-value crops.
• On the part of farmers: Build FPOs - through which they can collectively risk-proof themselves, secure bank credit, and realize better prices. This is necessary because -
  • About 83% of rural households are entirely landless or own less than 1 hectare of land, which cannot provide living income or mitigate risks. (Thus, FPO provide risk-proofing against corporates)
  • The idea of FPOs is no pipe dream. The story of Amul, the Khera district milk producers cooperative, is well known.