(Archive: Originally published in The ASEAN Youth Journal, March 2021)
Farmers in India have been protesting for months after the parliament sought agricultural reforms that opposition leaders say would only benefit private corporations.
These reforms passed in September last year would ease transactions and allow contracts between farmers and private buyers, enable inter-state trading, and authorize traders to hoard food items to make a profit which was a criminal offence.
Farmers are concerned that corporations will have control over pricing as the minimum price for products will not be guaranteed and contract disputes cannot be taken to court.
State governments’ revenues will also be affected by deregulation, and hoarding enables corporations to take advantage of rising prices in the future.
The three bills have since been stayed by the Supreme Court due to the protests and the COVID-19 pandemic.
Opposition leader Rahul Gandhi of the Indian National Congress party claimed Prime Minister Narendra Modi is "making farmers 'slaves' of the capitalists."
The government argued that the Minimum Support Price, the pricing standard that the government follows in purchasing farmers' produce, will not be scrapped after deregulation.
PM Modi also said in a Twitter post: "For decades, the Indian farmer was bound by various constraints and bullied by middlemen. The bills passed by the parliament liberate the farmers from such adversities. These bills will add impetus to the efforts to double the income of farmers and ensure greater prosperity for them."
The middlemen he is referring to are commission agents who, in accordance with the Agriculture Produce Marketing Committee (APMC) Act of 1964, are tasked to help farmers sell harvests to state-owned and private companies in regulated wholesale markets called mandis.
Challenges in the system come in various forms, such as the annual increase in prices and oversupply of produce.
Mandis would follow the MSPs announced annually after the government calculates the cost of cultivation. The yearly increase in the MSP becomes a challenge to exporting overflowing rice and wheat, as farmers would produce large quantities due to the guarantee provided by the pricing standard. The government, in turn, is pressured to buy the extra supply. This surplus of rice and wheat results in state warehouses struggling to store staple commodities, and their prices become more expensive than the world price.
The problem with middlemen, according to BBC's India correspondent Soutik Biswas, is they have "form(ed) cartels and gobble up much of the profits."
Policy analyst Devinder Sharma told news agency Al Jazeera that nobody denies the APMC needs to be reformed, but the MSP should be legally binding to avoid trading below the pricing standard. Economist Sudha Narayan said the bills have no safeguards and do not regulate price setting.
Back in November, thousands of farmers across states blocked major roads in Delhi while police forces were deployed by the parliament.
As of writing, protesters have remained outside the capital.
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