Protesting Farmers and the Indian Agrarian System

Author Name: Hassan Mujtaba       30 Dec 2020     India

India’s farmers are witnessing a harsh winter, literally and figuratively, ever since the Modi-led Bharatiya Janata Party (BJP) government passed three farm bills in late September. Nation-wide protests and strikes have erupted across the country. Colloquially known as the Bharat Bandh or the lockdown of India, the protests have mobilized approximately 250 million people, making it the largest general strike in the history of mankind. In addition, people from all walks of life—students, workers, actors, women, and so on—have rallied around the farmers’ cause, and all trade unions have declared their unconditional support, except one which is aligned with the ruling party. Small wonder then that the Bharat Bandh is sending shockwaves across India’s power corridors, and the ruling juntas’ frustration is conspicuous in the baseless media campaign against farmers, terming them as “separatists” and “terrorists”.

While farmers have unanimously rejected all the reform points proposed in the bills, they are especially antagonistic towards the retrenchment of the Minimum Support Price (MSP). For Indian farmers, the MSP is a sort of universal basic income that hedges against the forces of nature and the free market, as the government buys all the farmers’ agricultural output at a minimum guaranteed price. This keeps the farmers fiscally buoyant, especially during turbulent times. Without MSP, the farmers are vulnerable to the fluctuations in demand and supply and a market price that is all but guaranteed to be lower than the MSP. This market dynamic can potentially hurt farmers regardless of their wealth and landholding, hence the Bharat Bandh’s unprecedented unity among farmers and agricultural workers across the class and caste divide.

The significance of MSP does not just end here. According to a study by political economist Shreya Sinha, it is the state procurement of crops via the mandi (or market) mechanism of MSP that is sustaining the success of agriculture in the northern states of Punjab and Haryana, which are also known as the breadbaskets of India. This mandi support system was first introduced by Indian policymakers in the 1960s as part of the ‘Green Revolution’ reforms that aimed to reinvigorate the decaying Indian agricultural sector. The reforms also resulted in the large-scale construction of dams, irrigation canals, setting-up of agricultural universities, and introduced high yield seed varieties. However, the MSP has stood out as a reform owing to its spillover effects on farmers’ welfare, besides transforming the agrarian political economy and rural social relations.

The Indian mandi isn’t exactly a straightforward system and involves layers of intricate processes and stakeholders with competing interests. For instance, the farmers in regulated agrarian markets do not sell their output directly to the government, rather utilize the services of a middleman known as arhtia. The arthia connects a farmer with the client and charges a commission on each sale, which varies according to the type of crop. Moreover, the arthias also provide credit to needy farmers who otherwise have no recourse to formal borrowing, owing to lack of financial inclusion in India. The arthia is a typical example of merchant capital, which according to Karl Marx (1818-1883), is predatory and parasitical as it hinders the growth and full-scale convergence of capitalism. However, in the case of India, the evidence is mixed, with some scholars affirming Marx’s view, while others negating it by documenting the link between merchant capital and productive economic activities.

Regardless of the academic debate, the exploitative role of arthia in the Indian mandi and rural social relations remains undeniable. The retrenchment of MSP will further serve to consolidate the arthia position, at the expense of farmers in three broad ways.

First, in the absence of a guaranteed state procurement mechanism, the Indian farmers will witness a substantial decline in their incomes. This will, undoubtedly, strengthen the arthia as farmers increase the demand for credit to meet their agricultural and personal needs. Also note that even with the underpinning of MSP, many Indian farmers are already heavily indebted to arthias and other lenders, which has forced many of them to commit suicides.

Second, the strengthening of arthia’s market power and bargaining position vis-à-vis farmers will directly feed into their political power, which is already on the rise. This is evident in the historical support of the BJP to arthias and other petty bourgeoisie classes. Even members of the Congress party—which is perceived to be pro-labor and pro-farmer—view the arthias as indispensable to the Indian agricultural system. Besides, there is evidence to suggest that the political clout of the arthias has grown to such an extent that they are routinely able to influence the political choices of their indebted clients.

Lastly, with the corporatization of Indian agriculture—courtesy of the neoliberal market “reforms” led by the Modi-led BJP government—the arthias can expect to see a rise in their business, as more companies will seek to buy the output of the farmers. This will translate into higher margins on sale commissions for arthias while the farmers witness a further decline in their profitability.

To sum up, the analysis above shows a small glimpse of the precarity of the Indian farmers who are simultaneously competing with the decline of agricultural conditions on the one hand, while constantly checking the advance of neoliberal corporatist agenda on the other. In addition, the Bharat Bandh has shown that the farmers are not merely protesting for their own lives and livelihood, but also for the right of local communities to continually engage with local farming and agriculture as they have done so since time immemorial. Thus, in this revolutionary struggle, the farmers need the support of their subaltern compatriots as together they have nothing to lose but their chains

Hassan Mujtaba is a Researcher in the Economic Affairs section of Centre for Aerospace & Security Studies (CASS). He can be reached at cass.thinkers@gmail.com.