By Uma Pal
In November 2020, more than 200 farm unions from 22 states across India organised a nationwide protest against the new farm laws introduced by the Indian government. Over the past few months, thousands of farmers have taken to the streets, battling the cold, water cannons and tear gas to demand amendments in the new laws for better income security, market regulation and protection from being exploited by large corporations. The protest, which started in the northern, agricultural states of Punjab and Haryana, has ever since become heavily political, with massive push back by the current government and support from some opposition parties, and gaining traction in the international community. As a result, the Supreme Court of India has put the three new farm laws on hold and asked for a committee to be constituted to resolve the impasse.
The focus of the protests surrounds three farm laws enacted by the Government of India in September 2020, which collectively intend to facilitate barrier-free trade of agricultural produce outside notified markets under the state-controlled Agriculture Produce Marketing Committee (APMC) laws. They also introduce a framework for contract farming and regulate supply mechanisms for certain crops such as cereals, pulses, potatoes, and onions only under extraordinary circumstances such as famine, price rise and war.
|Explainer: Why are the farmers protesting? Prior to the introduction of the farm laws, APMCs were controlled under state laws, with states levying taxes and fees from buyers. While the new Act proposes that anyone can buy produce directly from farmers, based on certain conditions, farmers fear that by doing away with APMC, regulated market prices might subject them to market exploitation. The new laws have not envisioned an alternative market system that can set price signals. The other main concern that farmers have is regarding the laws doing away with the federally fixed Minimum Support Price (MSP), a safety net that guarantees farmers prices and assured markets. While the government has made provisions for MSP for 23 crops, only wheat and rice are bought by the government in large quantities under the Public Distribution System (PDS), mainly due to lack of procurement capacity. This has raised concerns regarding MSP limiting crop diversification. MSPs are also variable across states, causing wide variations in price levels across the country. Alongside, less than 10% of farmers sell their produce at the MSP set by governments. However, despite many challenges within the MSP system, a robust MSP mechanism in the predominantly wheat and rice-growing states of Punjab and Haryana is the principal reason why the protest is the strongest in these states.|
In essence, the farmers’ protest signifies the vicious cycle of poverty and vulnerability that plagues farmers and the agriculture sector and the dire need for agricultural reforms and social and economic protection structures that take into account farmers’ voices. Close to 43% of the country’s total employed population was engaged in agriculture and allied services as of 2019. However, the sector faces multiple challenges such as fragmented and small landholdings, subsistence farming, fragmented markets with several intermediaries, high costs and margins, low-value addition and low-income share of farmers, and limited access of farmers to institutional finance technology, inputs, and storage. These structural issues are exacerbated by challenges associated with the energy-water-agriculture nexus: Heavy dependence on rainfed agriculture, poor access to and inefficient use of irrigation, water contamination and degradation due to indiscriminate fertiliser and pesticide use, water scarcity, and poor soil health.
Socio-economic vulnerabilities in the agriculture sector exacerbated by the climate challenge
Climate change-induced temperature rise, shifts in rainfall patterns and increased intensity of extreme events further exacerbate existing socio-economic vulnerabilities. The Global Climate Risk Index 2020 ranked India the fifth most vulnerable to the impacts of climate. Estimations indicate that climate change is responsible for annual economic losses in the agriculture sector up to 9%. According to India’s Economic Survey 2017-18, climate change could reduce annual agricultural incomes by 15-18% and up to 20- 25% for rainfed agriculture. The survey also indicates that repeated monsoon failures and prolonged drought have been a significant cause for stagnation in the country’s agriculture GDP. Climate projections suggest that rice and wheat yield in India may decline by 6-10% by 2030, while crops like potatoes, soybean, chickpea and mustard may be neutrally or positively impacted in the short term. While there are uncertainties around how climate change affects different regions and crops, it is well established that crop seasons are shifting, and yields of some crops are adversely impacted. These shifts point to an urgent need to incorporate climate considerations into all facets of the agricultural sector. An effective response will require access to climate information, climate-smart practices, new crops better suited for different micro-climates, and interventions for addressing existing socio-economic vulnerabilities. Importantly, climate change needs to be fully integrated into large scale agricultural reforms instead of being seen as a standalone issue.
The Green Revolution in India is the most dramatic example of large-scale agricultural reforms that failed to adequately consider the long-term social, environmental, and climate impacts. The revolution was characterised by short-termism. Initially, the policies increased agricultural production and played a vital role in making the country self-sufficient in food grains. However, in recent years farmers have been dealing with contaminated soil, air and water, and chronic health problems amongst communities; fallout from the heavy use of fertilisers, pesticides and irrigation over many years. These challenges have rendered farming systems in the region highly vulnerable to climate change impacts such as erratic rainfall, droughts, and higher intensity floods, indicating the urgent need to diversify seed varieties and resources used based on regional vulnerabilities.
The Indian government has made a concerted effort to tackle the impacts of climate change on agriculture, for example, by researching abiotic stress-tolerant seed varieties, demonstrating climate tolerant technological activities, and encouraging shifts to dryland agricultural practices under the National Mission for Sustainable Agriculture. However, domestic agriculture policy considerations continue to fall short of considering long term impacts of climate change while designing reforms and development activities. The new farm laws are a case in point. They do not consider how climate change impacts production causing price volatility and demand-supply gaps, with knock-on effects across agricultural value chains.
The new laws also fail to recognise the economic importance of APMC markets in enabling price discovery and regulating price fluctuations and the need to address existing limitations of the MSP system to incorporate broader climate challenges, diversify the government’s procurement system and scale it up for better access for farmers. In this context, the question remains whether limiting APMC’s influence or not addressing existing challenges within the MSP system is the best way forward. The farmers do not seem to think so.
|The underlying dynamics of the famers’ protest Enhancing growth in the agriculture sector and enabling rural development continues to be a key policy concern for India. The government maintains that the new farm laws are designed to improve farmers’ access to markets and their bargaining power and that the MSP system will continue functioning, and so will the APMC mandi systems, albeit with a more limited scope. However, one of the most extensive critiques of the new Farm Laws is that they were formulated in silos without considering pre-existing diverse contexts, policies, regulations, and interventions in various agricultural states. For example, the new farm laws fail to recognise that multiple states have introduced different localised agricultural market ecosystems and that farmers’ groups play an active role in asserting their market demands and navigating market spaces. Concerns over the government doing away with MSP and existing regulated market systems collapsing are underpinned by a sense that the new farm laws do not consider farmers’ voices, existing localised market dynamics and interactions and context-specific vulnerabilities.|
Valuable lessons for climate practitioners from the farmers’ protests
The protests against the farm laws show that when designing policies, regulations and interventions for addressing various bottlenecks within the sector, it is imperative to foster a deeper understanding of on-ground complexities. Socio-economic and climate vulnerabilities, power relations, market dynamics and perceptions of farmers and local players in the sector are crucial considerations for effective policy design and implementation. The farm laws’ inability to take such complexities into account exemplifies how top-down policies and regulatory mechanisms run the risk of not addressing root causes of vulnerabilities and bottlenecks and fail to get buy-in from the community they intend to benefit.
Equally, climate resilience
planning and action need to delve into existing nuances and locally-driven
processes and partner with on-field experts and players to identify effective
entry points and design flexible solutions. Regulations or technological
interventions aimed at enabling adaptation, without considering how they will
be perceived and how they might impact existing complex ecosystems, runs the
risk of exacerbating the very vulnerabilities they wish to address. The farmers’
protest against the new farm laws provides valuable insights into the need to
develop participatory and context-specific interventions while also integrating
climate change in macro policy considerations. Resilience to climate change can
only be effectively enhanced if considered in tandem with the existing array of
social, economic and ecological challenges across scales.
 Financing agriculture value chains in India: challenges and opportunities. Indian study in business and economics. https://www.ifpri.org/publication/financing-agriculture-value-chains-india-challenges-and-opportunities