In India too, thousands of farmers are once again taking to the streets, access roads to Delhi are blocked off with barbed wire and cement

New Delhi looked like a fortress last week, surrounded by blockades on the main access roads to India’s capital region. Barbed wire, cement and crush barriers, even tear gas and rubber bullets were used against thousands of farmers from the northern Indian ‘breadbaskets’ of the states of Haryana and Punjab. They want a better income and that is why they are taking action against the federal and state governments.

The agricultural uprising and the strict measures against it are reminiscent of three years ago. In 2020 and 2021, hundreds of thousands of farmers from Punjab and Haryana managed to reach the New Delhi ring road. They established a protest camp on the outskirts of the capital that lasted for months, and demonstrated against laws aimed at greater market forces in agriculture. Farmers feared that this could mean the dismantling of subsidies and other support measures. Their action had an effect; the Modi government repealed the laws.

This time, according to the farmers, attempts are again being made at a lower government level to worsen their position. That is why they are increasing the pressure on the government again and demanding legal minimum prices for their crops.

This kind minimum support prices – the abbreviation MSP has become common – have been known in Indian agriculture for some time. The Commission for Agricultural Costs and Prices calculates this based on, among other things, production costs and developments on the domestic and international markets. Governments then purchase crops for that minimum price. This happens, for example, with rice and wheat in Haryana and Punjab. A minimum price is also set for cotton in some regions.

Also read
the farmers’ protests in India in 2021

That is not enough for the farmers. They want a lower limit for 22 crops (including several types of grain, but also different types of fruit), which also limits trade. Agriculture publicist Devinder Sharma defends that claim: “Only 14 percent of farmers sell the harvest to the government. The rest, 86 percent, depends on market forces – and on the market the price is usually a third lower,” he says on the phone. If a mandatory minimum price applies to all agricultural products and every buyer, this offers farmers an important, structural guarantee. “It will lift the entire sector.”

According to the dozens of agricultural unions and action committees supporting the protests, a margin of 50 percent on top of farmers’ production costs is fair. The costs must then be calculated for each crop – and then what the minimum price should be. But the wide variation in crops and soil in the enormous country makes a clear calculation difficult, analysts say.

The chief economist of credit rating agency India Ratings and Research warns in the Indian magazine BusinessToday that setting minimum prices in law leads to problems. “The government must then pay out a certain amount every year, regardless of its financial situation. There is no wiggle room for adjustments.”

According to Sharma, the additional government expenditure is not too bad. According to him, compensating the difference between market prices and minimum prices would have cost around 2.3 billion euros for all 22 crops last year.

The number of farmers already benefiting from price support for rice, wheat and cotton was between 16 and 19 million. In 2022, the government will spend more than 300 billion euros on purchasing rice and wheat, basic food.

On Sunday, after a fourth round of talks with farmers’ representatives, the government proposed an amended package, with price minimums for some crops and only for governments, not for trade. The farmers rejected it. “Too little,” according to Sharma.

Large landowners

Agriculture is of great importance in India, both economically and socially. Two-thirds of Indians depend on it. Only a small portion of them own enough land to sell the harvest to wholesalers or the government. The majority of farmers only feed their own families or work on other people’s land. Critics of the farmers’ protest pointed out that minimum prices mainly benefit large landowners.

Minimum prices and other support measures emerged in the 1960s, when the ‘Green Revolution’ aimed to significantly increase agricultural production. This led to less poverty and more food security. India is now the second largest producer of rice and wheat after China and an important exporter. Agricultural products made up 7 percent of India’s exports in 2022, and represented a value of approximately 24 billion euros. According to government figures, the agricultural sector (including related sectors) is in good shape almost a fifth of the gross domestic product.

Government influence on Indian agriculture has remained strong. Not only through minimum prices for rice and wheat, but also through subsidies for water supplies and pesticides. The intensification of agriculture also brought problems; soil depletion, for example in the northern states, where these crops are widely grown, and greater dependence. The long hot summers of recent years, when the monsoon did not materialize or came too late, caused harvests to fail.

The big public

No matter how connected India is to its agriculture, the current protest appeals less to the general public than the prolonged actions of three years ago. At least that’s what it says researcher Sudha Narayanan, who works in New Delhi for the International Food Policy Research Institute, an advisory organization for developing countries on hunger and malnutrition. According to her, the minimum prices are mainly seen as a requirement that is important for farmers in the northern states of Haryana and Punjab. “This is really different from 2021. I think there will now be less broad social support,” she writes to NRC.

Sharma sees it differently: “If minimum prices are fully introduced, farmers in the south and west of the country, who grow other crops, will benefit. It would equalize the position of farmers with different crops and in different regions. And if all farmers have a higher guaranteed income, the entire economy will improve: everyone can spend more.”

The farmers’ protests come at a salient time, just months before the general elections. A huge portion of the electorate lives in agricultural areas. For this reason, authorities were reluctant to tackle demonstrators in 2021. And although they are now taking tough action against protests, politicians are careful not to completely dismiss the farmers and their grievances.

The Congress Party, the main opposition party, sees the protests as a political opportunity. Leader Rahul Gandhiwhich has until now had difficulty controlling the campaign, promised last week to ensure that the minimum price guarantees are laid down in law if it wins.

To share





Email the editor