Farmers protest 2024: A look into reality

The recent farmer's protests leading up to the 2024 general election have sparked discussions on the legitimacy of their demands and the underlying motivations. These protests have drawn parallels to the Citizenship Amendment Act (CAA) protests before the 2019 general election, raising questions about trends or mere coincidences. Let's delve into the facts and myths surrounding the demands of farmers to understand the situation better.

I aim to examine the validity and motivation behind recent farmer protests, avoiding speculative theories. First of all, to be clear, this is not Farmer’s protest 2.0. The demands of that protest have been met with repealing of three farm laws. For example: SKM, which is the flagship body of more than 500 farmers unions, which spearheaded the last protest, has not joined this time. Reasons? Let’s not speculate.

So, we should focus on what farmers are demanding this time. The question focuses on distinguishing genuine concerns from performative actions within the context of Indian farming communities' demands. How much of it is legitimate and how much is for show? Is it a signal of the oppression of farmers by the ruling party or is there a nefarious plot in play? Rather than delving into potential conspiracies, we will explore factual evidence regarding the legitimacy of these demands and their possible implications.

Majority of small scale farmers are facing issues in our country. Challenges encompassing limited and divided land ownership leading to inefficiencies, absence of marketing and storage infrastructure, financing constraints, soil degradation, groundwater depletion, inadequate crop insurance, impact of climate change, and fluctuating prices are widely acknowledged. The current debate revolves around assessing whether the proposals put forth by farmers in Punjab and Haryana offer a net positive outcome compared to the drawbacks, and if they effectively address these issues while promoting nationwide benefits for all farmers and our country.

Let’s look into the impact of each of their demands one by one.

1)      Full debt waiver for farmers and laborers (Not recommended)

2)      Implementation of the Land Acquisition Act of 2013, with provisions for written consent from farmers before acquisition, and compensation at four times the collector rate (Recommended)

3)      MSP & India should withdraw from the World Trade Organization (WTO) and freeze all free trade agreements (Not recommended)

4)      Pensions for farmers and farm laborers (Not recommended)

5)      200 (instead of 100) days’ employment under MGNREGA per year, daily wage of Rs 700, and scheme should be linked with farming (Not recommended)

6)      Compensation for farmers who died during the Delhi protest, including a job for one family member (Recommended)

7)      Electricity Amendment Bill 2020 should be scrapped (Further modifications recommended)

8)      Strict penalties and fines on companies producing fake seeds, pesticides, fertilizers; improvements in seed quality (Recommended)

9)  Ensure rights of indigenous peoples over water, forests, and land (Recommended)

Full Debt Waiver

The previous loan waiver cost the government approximately $16-17 billion, constituting about 1.2% of India's GDP and worsening the fiscal deficit. Despite not being a full waiver, it still imposed significant conditions, indicating that the current debt waiver would likely have a more substantial impact on our fiscal expenditures.

Loan waiver programs pose reputational risks by undermining financial discipline, potentially serving as a temporary fix and setting a dangerous precedent for future ethical dilemmas. The phenomenon of free riding emerges as farmers may exploit loan waivers regardless of genuine need, negatively impacting those who truly require assistance. Furthermore, such initiatives lead to reduced formal access to credit as banks become cautious about lending to the agricultural sector, pushing farmers towards informal lenders. This shift exacerbates the dependency on informal sources, with adverse effects on the banking sector's stability, including increased non-performing assets and diminished financial ratios. Moreover, this loan waiver will only benefit those farmers who had access to institutional lenders. Ultimately, loan waivers work against the interests of depositors, as banks' losses directly affect their stakeholders, contradicting the fundamental principle of safeguarding depositor interests.

While full loan waivers may offer short-term relief, they pose severe long-term consequences. However, I support targeted waivers for small-scale farmers genuinely in need.(Example: whose loan size is at max 1-2 lakh cumulative). Additionally, rather than relying solely on waivers, the government should promote insurance schemes for farmers and invest in them, drawing inspiration from NBFCs' outreach to small-scale farmers to bridge the gap left by traditional banks.

Thus, this may have more cons than pros, in my opinion.

Land Acquisition Act, 2013

Farmers are requesting compensation for the land acquired by the government for various projects, along with a 10% reservation of land for their families. Considering that this land often holds significant sentimental or ancestral value for farmers, their demand for fair compensation and increased transparency seems reasonable. Therefore, it would be beneficial for the government to review existing laws and make amendments that prioritize the interests of farmers. Overall, I believe this proposal offers more advantages than disadvantages.

MSP & Withdraw from WTO and Free Trade Agreement

India’s effort to stop MSP lies in WTO. WTO stops any countries from following any trade distortion techniques. The main reason for this demand is that the WTO rules require member countries to limit domestic support to agricultural producers, which goes against the farmers' request for a legal guarantee of Minimum Support Price (MSP) for crops. India's adherence to WTO rules restricts its ability to provide the desired MSP, leading farmers to call for India's exit from the WTO to fulfill their demands related to MSP. The farmers argue that under the WTO regime, agriculture has shifted focus from food security to commerce and trade, adversely affecting small landholding farmers. They believe that large players and corporate houses have benefited while small farmers have been marginalized, leading to increased farmer suicides and migration away from agriculture. This discontent has fueled demands for India's withdrawal from the WTO to protect the interests of small-scale farmers.

Thus, India's membership in the World Trade Organization (WTO) has significantly benefited its economy, leading to increased foreign investments, production, and exports. It has provided market access for key sectors like textiles, clothing, and agriculture, boosting India's foreign currency earnings. Additionally, WTO membership has granted India most favored nation treatment and enabled its participation in shaping international trade rules, safeguarding its trade interests.

However, a withdrawal from the WTO could have severe repercussions on India's economy. It would result in the loss of benefits such as reduced trade barriers and access to open services markets. Furthermore, withdrawal could spark trade disputes with other nations, potentially leading to economic instability. The impact on India's exports would be significant, particularly with the loss of benefits like duty-free treatment under programs like the Generalized System of Preferences (GSP). This could lead to substantial revenue losses, affecting India's GDP and various sectors, especially considering the potential impact on trade with major partners like the United States. Moreover, India being a net importer in many sectors, such as petroleum, gold etc would adversely affect the entire economy. Overall, India's withdrawal from the WTO would likely have a detrimental effect on its economy, hindering growth and disrupting key sectors.

Thus, this is not recommended.

Pensions for farmers and laborers & Revised MNREGA scheme

The proposed demands for significantly increasing the daily wage under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to Rs 700 per day and expanding the program's duration to 200 days annually, along with the request for a substantial farmer pension, pose considerable challenges for the Indian economy and its fiscal health.

Firstly, the expansion of MGNREGA as requested would lead to a massive surge in costs. A six-fold increase in the current budget allocation of approximately Rs 86,000 crores would result in expenses ranging between Rs 5 lakh crore and Rs 8 lakh crore. This amount alone represents a significant portion of the country's overall budget.

Secondly, if implemented, such a drastic change in MGNREGA would likely reduce migration from states like Bihar, Odisha, Uttar Pradesh, and others to Punjab and Haryana due to higher local wages and job security. However, this reduction in labor mobility may disrupt various economic activities in both sending and receiving regions. For instance, agricultural production and other industries might suffer without the influx of migrant workers.

Thirdly, the proposed pension plan for farmers over age 60, which amounts to Rs 1.2 lakh per person per annum, would represent a staggering expense. With about 15 crore individuals aged 60 or above in India, and roughly 71 percent residing in rural areas, the annual cost of implementing this proposal would approach Rs 12 lakh crore. Such a high level of spending would strain the nation's resources and potentially contribute to inflation.

Lastly, the combined financial burden of these proposals would place immense pressure on the country's fiscal deficit. In 2023–24, the Government of India's total expenditure was Rs 48 lakh crore, while total revenue receipts were Rs 31 lakh crore (excluding borrowings). Meeting the demands outlined herein would require either raising taxes, cutting back on essential services, or increasing debt levels—all of which can negatively affect the economy. Thus, this demand has a potential to seriously disrupt our economy, and is not recommended.

Compensation for farmers who died during the Delhi protest

Generally, farmers are the major bread earners of their family. Thus, their death would lead to the ruin of their whole family, if support is not provided. Thus, the government should look into fulfilling this demand.

Electricity Amendment Bill

Scrapping the Electricity (Amendment) Bill, 2020, would have significant implications for the Indian economy, particularly in the realm of power sector reform. The bill, aimed at modernizing the power sector, faced substantial opposition due to concerns about centralization, potential limitations on state autonomy, and doubts about its effectiveness in resolving existing issues.

If the bill were to be scrapped, it could perpetuate the challenges currently facing the power sector, including financial strain on distribution companies (DisComs), disputes over subsidies and tariffs, and the need for stronger regulation and cooperation between state and central governments.

Further amendments would likely be necessary to address these ongoing challenges. These amendments would need to consider the concerns raised by various stakeholders, such as farmers, state governments, and power sector experts, regarding decision-making processes, subsidy models, and tariff determination mechanisms. Additionally, amendments should also address the rapid changes in the power sector, including the growth of renewable energy and distributed energy resources. This would require a forward-looking approach that promotes innovation, sustainability, and cooperation between different stakeholders.

Overall, while scrapping the bill might delay immediate changes, further amendments are needed to ensure the long-term sustainability and efficiency of the Indian power sector. These amendments should strive to balance the interests of various stakeholders and address the evolving dynamics of the energy landscape.

Penalties for fake seeds/fertilizers

The utilization of counterfeit seeds and fertilizers poses significant risks to both human health and the economy. Synthetic fertilizers, commonly used in agriculture, can diminish the nutritional value of crops, potentially leading to health complications due to nutrient deficiencies. Moreover, direct exposure to synthetic chemicals in fertilizers and pesticides can have adverse effects on individuals, including infants, causing various health problems such as cancer, reproductive issues, and immune system disruptions. Economically, the excessive and inefficient use of fertilizers can result in nutrient losses to the environment, impacting soil health and agricultural productivity.

Despite these risks, there is a growing global demand for crops, which fuels the market for agrochemicals like fertilizers, contributing to significant sales revenues. To address these challenges, promoting organic alternatives made from natural materials and implementing sustainable agricultural practices are essential strategies. Additionally, incentivizing sustainable consumer choices, adopting ecosystem-based approaches, and strengthening standards for pesticide and fertilizer management are crucial steps to mitigate the adverse impacts on health and the environment. Ultimately, proactive measures are necessary to safeguard human well-being and ensure the long-term sustainability of agriculture and the economy.

Thus, it is important for the government to ensure that fake seeds and fertilizers are not being circulated in our country, with banning products having a harmful effect on the environment and our health. A strict and heavy penalty on companies following these practices can be a starting point.

National Commission for spices

Establishing a national commission specifically dedicated to spices like chili and turmeric would offer several significant benefits for our country. Firstly, such a commission could serve to protect the rights of spice producers, ensuring fair treatment and representation in policymaking and industry regulations. This is particularly important for small-scale farmers and producers who may face challenges in accessing markets or dealing with unfair trade practices.

Secondly, a national commission for spices could play a crucial role in ensuring food safety and quality standards are upheld throughout the spice supply chain. By establishing guidelines and regulations for cultivation, harvesting, processing, and distribution, the commission could help mitigate the risk of contamination or adulteration, safeguarding consumer health.

Moreover, having a dedicated commission could promote research and development initiatives aimed at enhancing the productivity, sustainability, and profitability of the spice sector. This could include initiatives to improve cultivation techniques, develop new varieties, and address challenges related to climate change and pest management.

Furthermore, a national commission for spices could serve as a platform for collaboration and knowledge-sharing among stakeholders, including farmers, processors, traders, researchers, and government agencies. This collaborative approach could foster innovation, address common challenges, and promote the sustainable growth of the spice industry.

Overall, establishing a national commission for spices would provide a structured framework for addressing the specific needs and challenges facing the sector, ultimately contributing to its growth, competitiveness, and contribution to the economy.

Rights of indigenous people over water, forests and land

Protecting the rights of Indigenous Peoples is crucial for both environmental sustainability and economic prosperity. Indigenous Peoples possess invaluable traditional knowledge and practices that have sustained ecosystems for generations. By safeguarding their rights to land, territories, and resources, we not only honor their cultural heritage but also ensure the preservation of biodiverse landscapes essential for global ecological balance.

Indigenous Peoples play a pivotal role in developing, managing, and protecting natural spaces and ecosystems. Their traditional knowledge offers insights into sustainable land management practices, biodiversity conservation, and climate change adaptation. By including Indigenous Peoples in decision-making processes and management of ecosystems, we harness their expertise to promote responsible stewardship of natural resources.

Furthermore, respecting the rights of Indigenous Peoples contributes to economic resilience and growth. Sustainable land use practices fostered by Indigenous communities support ecosystem services vital for agriculture, water supply, and climate regulation, thus underpinning various sectors of the economy. Additionally, equitable partnerships with Indigenous Peoples in resource management initiatives create opportunities for inclusive economic development, job creation, and entrepreneurship within Indigenous communities.

Moreover, upholding Indigenous rights aligns with international commitments to human rights and sustainable development. The United Nations Declaration on the Rights of Indigenous Peoples emphasizes the importance of free, prior, and informed consent, ensuring Indigenous Peoples have a voice in decisions affecting their lives and territories. By adhering to these principles, governments and businesses can build trust, foster social cohesion, and promote long-term environmental and economic sustainability.

Thus, protecting the rights of Indigenous Peoples is not only a matter of justice and human rights but also a strategic imperative for environmental conservation and economic prosperity. By recognizing and respecting Indigenous rights, we tap into their invaluable knowledge and stewardship practices, laying the foundation for a more sustainable and inclusive future for all.