Close to a half billion people in India make their living in the agricultural sector. A common holding for the average farmer is only about two hectares and as such allows for little bargaining power against large corporates. This is the crux of the issue resulting in massive protests by farmers against the Narendra Modi government’s new laws designed to open agricultural markets and eliminate government price supports.
The laws mean that farmers can deal directly with private corporations, an arrangement that farmers believe puts them entirely at their mercy. Under the old system they dealt through agents, sometimes known to farm families over generations. The agents served as buyers and banks, often lending money at planting time and recouping it later.
At present farmers sell their produce mostly at wholesale markets that ensure government support prices serve as a floor. The markets are organized by committees of large landowners, commission agents who act on behalf of farmers arranging suitable storage and transport. Under the new system, private agricultural businesses, grocers and supermarkets can buy directly from farmers and government price supports have been eliminated. Farmers believe it puts them at the mercy of agro-business.
The government claims the present system will also continue but the farmers think that private buyers will first offer farmers attractive prices causing the present wholesale market system to be abandoned in a few years; after which the farmers will be at the mercy of the private players and ripe for exploitation. They believe they cannot trust or allow big business to establish prices and crops.
Centered around Delhi now, the farmer protests are aimed at closing roads entering or leaving the capital. Protests and demonstrations have been ongoing since August, and have occurred across the country although most forcefully in Punjab and Haryana the Indian bread basket states.
Supporters include a score of farmers unions as well as the All India Motor Transport Congress (AIMTE) a union of 9.5 million truckers and 5 million bus and taxi drivers. Any stoppage by AIMTC would bring the movement of goods and people across India almost to a halt.
Couple that to a push by protesters to disrupt rail services and it could end up with Bharat Bandh (closed India). The rails are a two-edged sword for they also affect the transport of fertilizer needed by farmers as well as other critical goods.
It is more usual for the Modi government to ignore protesters and the fact that they are sitting down with the farmers’ representatives is an indicator of the huge voting bloc they form. Their principal demands are a repeal of the new farm laws and a re-establishment of minimum support prices. For the farmers it is a literal matter of life or death.