Precarious Freedom

Thirty farmers on an average, according to government data, kill themselves every day in India—mostly after finding themselves trapped in a vicious circle of debt. And now the government has offered the Indian farmer some more freedom of the market. In this free market, somebody who owns less than 1 hectare of land and produces around 22 quintals of rice per season, for example, competes with those who own over 5 hectares and produce over 110 quintals. The farmer can choose the buyer, but the buyers—a commission agent, a corporate giant, a startup or the government—get to determine the price.

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Another domain of India’s policy brush with free market in agriculture has been contract farming. Going by the controversies triggered by such attempts, the experience hasn’t been good. Last year, for instance, PepsiCo sued farmers in Gujarat for Rs 1 crore for illegally growing and selling a potato variety registered with the company. The case was withdrawn only after the state government intervened.

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All these years, Indian farmers have been protected by the government through various legislation and mechanisms. The ‘farm bills’ recently passed by Parliament—the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, and the the Essential Commodities Act (Amendment) Bill—seek to modify the rules and regulations around sale, price and storage of crops. These legislation, awaiting the President’s assent, will allow private players to hold stocks of essential commodities for future sales—something done so far only by government agencies like the Food Corporation of India. The government will intervene only if there is a 50 per cent rise over the previous year’s price in case of non-perishable goods and a 100 per cent rise in case of perishable goods.

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Farmers incur several costs to grow crops.  Besides the cost of seeds, pesticides, power and irrigation, which are accounted for, the farmer also puts in his and his family’s labour, takes loans and spends on transportation to the mandis, among other costs. For decades, farmers have been demanding three things that successive governments have failed to provide: assured price that covers all the incurred costs; assurance of fair deals despite the vagaries of weather, a demand growing in significance especially due to climate change; and a minimum guaranteed income.

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The vast majority of farmers in India work small landholdings of less than 1 hectare, and face other challenges such as lack of storage, crushing debt, dependence on monsoons and changing weather patterns. The farm bills bring the free market into the precarity of small farming, leaving farmers worried about how it will play out in the persistent battle for their livelihood. The government hopes that the concept of “farmer producer organisations” (FPOs) will empower farmers in the emerging situation—a plan to set up around 10,000 FPOs is already on the agenda and was announced in the Union budget.