Farmer Protests: Is India's Green Revolution 2.0 At Stake?

re has been lots of drama surrounding farmer protests from Khalistani activists openly brandishing separatism to left interlopers slipping in or issues of dissent. An attempt has been me to almost spin protests in direction of anarchy and an anti-state movement which has been thankfully blocked by some deft handling by Central government. While talks between Centre and farmer unions might yield a compromise sooner or later, we need to understand certain issues threbare.

Experts have called Modi government’s three farm laws and associated acts like Electricity Amendment Bill, amounting to heralding Green Revolution 2.0. At time of India's first green revolution in mid-1960s, agriculture contributed roughly 50 per cent to GDP, employing about 75 % of its workforce. By 2020, while agriculture’s contribution to India's GDP stands at 14-16% w which is at par with some developed world ecomies. size of population dependent on agriculture does t reflect this new reality. Up to 60% of India's population still directly or indirectly surviving on agriculture. This dichotomy is at root of ongoing crisis. Simply put too many mouths to feed from agriculture pie.

How things stood before omnibus reforms came into force? Farmers were tied to nearest APMC market yard. y could t even go to a neighbouring district and h to pay transportation costs. Middlemen and wholesalers took commissions giving mandi a mopoly and thus making a small cartel control destiny of farmers in ir neighbourhood. To top it, state governments levied taxes that became an important source of revenue.

w, what do three laws do? One, y let farmers choose where y want to sell ir produce, t necessarily nearest mandi. oretically, a restaurant can w directly go to fields and pick-up farm-fresh vegetables and take m straight to kitchen. Two, y can get into a contract with ultimate sellers even before ir produce is rey giving m little surety of income. Three, y take away state's role in taxing agri-produce outside APMC yards. Four, laws dilute stocking restrictions under British era Essential Commodities Act. 

Taken toger, se measures cut down on chain of middlemen, reduce ancillary costs of transportation/stor to farmers. contract route gives farmers an extra arbitr income and incentivizes private sector investment in stor and processing by breaking Food Corporation of India mopoly. One would say it's a win-win situation for farmer. Unfortunately, things never move in a straight line. Particularly when politics get involved. So, let's look at what protesting farmers and ir unions want. 

crux of demands is one, statutory support for minimum support price (MSP). Two, y want some sort of guarantee against corporatisation of agriculture Three, y want a rollback of clauses that eliminate states’ powers to tax farm produce. Four, y want a rollback of Electricity (Amendment) Bill, 2020 which proposes to transfer subsidy component on account of power consumed by farmers directly to ir accounts inste of free power which is fully subsidised by government. rest of demands have been as outlandish as release of urban Naxals and right to burn stubble overturning Supreme Court and National Green Tribunal orders. 

So, let's take main ones one by one. Why farmers want MSP? MSP is a relic of food short era of 1960s when it was introduced as an ministrative measure to boost domestic production. Through its entire existence, it has never h any statutory backing. More importantly, with India being a food surplus nation w, re have been regular demands to provide a parallel scope for market forces to get in. 

Roughly one-third of 100 plus million metric ton wheat is procured by government through Food Corporation of India (FCI) mechanism. cross-subsidy of FCI alone stands at about Rs.2 lakh crores by way of debt. This is apart from budget food subsidy of over Rs.2.5 lakh crores that goes into government programs like Food Security Act and PDS. FCI godowns are full to at least three years of total national production/consumption. Entirely financed by taxpayers of course, inefficiency of which we can revisit subsequently. 

Coming back to farmers' protests, why is it that farmers of Tamil Nu or Odisha are t rushing to Delhi to sit at Jantar Mantar? Because MSP is an issue largely impacting wheat and rice states. One would ask why t wheat states like Uttar Presh and Mhya Presh n and only Punjab, and Haryana? reason is that market mechanisms have me sure that in UP and MP, government procurement constitutes anything between 10 to 30 per cent of total production only. But in case of Punjab and Haryana, it is as high as 70-80 per cent thus raising stakes for farmers from se states. More specifically, government and middlemen due to proportionate levies and commissions.

Going by last year’s procurement figures, at about 10 million metric tons and state levies and commissions of up to 17-20%, at current MSP, Punjab government looks at a revenue of about Rs.6,000-7,000 crores. Plus, an ditional Rs.1000-1500 crores for middlemen. That's a lot of money to lose if Modi government’s farm laws kick in. And hence protests. w let's look at argument of corporatization of agriculture. While unbridled corporatisation must t be allowed, fact is that free markets bring in efficiencies of costs and capital. Contract farming has found its way into system for deces w. MNCs like PepsiCo and SABMiller have been contract farming since 1980s in Punjab, Maharashtra, and Bengal for potatoes, oranges, and tomatoes getting entry mostly during Congress regimes in se states.

More importantly, private capital has been ackwledged as an enabler of better market links, access to new techlogy, protection from price volatility, and better supply chain manment. Congress itself has batted for such liberalization while in power during UPA years. Planning Commission in 2011 brought out a report on agriculture reforms which underscored need for both private investment and alternative marketing channel by way of contract farming and setting up markets in private sector. 

Speaking at 57th national development council meeting in 2012, n PM Manmohan Singh said that it was an imperative that large surplus of farmers is moved to n-agriculture jobs as sustaining roughly half country’s population on agri-related activities when it contributed only 15% to GDP was t sustainable. All through UPA years, Congress me half-baked attempts at much-needed market reforms in agriculture beginning with model APMC Act in 2007 that sought to liberalize APMC regime to 2013 inter-ministerial committee that recommended inter-state tre and commerce of agricultural goods. In pursuance of this, Congress-led UPA even wrote a draft law called “Agricultural Produce Interstate Tre and Commerce (Development and Regulation) Bill, 2012, but did t have stomach to table it in parliament. It was more or less similar to Modi government’s first of three farm laws w being opposed by Congress.

In 2014, as a build-up to General Election, Congress-ruled states delisted fruits and vegetables from clutches of APMC Act, thus taking tre and commerce in this segment of agriculture out of designated mandis. On Essential Commodities Act amendment, Congress' position becomes even more untenable because diluting law was part of its manifesto in 2019.  opposition of Akali Dal and its relationship with Modi government has also evolved in response to Congress-led Punjab government pushing envelope with latest protests. From silently accepting ordinances in June to opposing passing of bills in Parliament to Harsimrat Kaur Bal resigning to patriarch Parkash Singh Bal returning his Pma Vibhushan, nation’s second-highest gallantry award, it is a jousting for farmers vote bank in Punjab more than any appreciation of reforms.

More proof was needed that it’s political? Mamata Banerjee is as vocal on farm protests as Punjab, despite her state Bengal being a blip on MSP rar. This is what Niti Aayog study of 2016 h to say on Bengal's implementation of MSP regime: “In West Bengal, MSP system has a long way to go. ne of farmers sold ir produce at MSP. Intermediaries are quite common owing to n-existence of mandis/market places for pdy. Rice millers have are t in direct contact with farmers (except camps organized recently by mills on instructions from government). It is very difficult for mills to make small purchases from farmers while it is convenient to deal with middlemen for bulk purchase.” 

Like with GST, Narendra Modi has taken battle he-on with opposition. Calling passing of reform bills a watershed moment, PM has clarified two things. One, old system remains. Farmers only get new options in so far as selling ir produce is concerned. Two, MSP which always remained an ministrative measure remains. But politics over who would own farmer vote bank is set to continue for some time.