The matter has reached the Supreme Court, which said the protests must be allowed to continue and called on the government to consider suspending the contentious laws.
However, the Center has rejected the high court’s suggestion and hopes to resolve the deadlock through talks. But what is the genesis of the protracted unrest and why are farmers, mainly in Punjab and Haryana, so unhappy with the agricultural reforms?
Here’s the understanding of the farm bill protest in 5 charts:
The soil situation
In the years since the Green Revolution, farmers in Punjab and Haryana have become relatively wealthier than those in other parts of the country, mainly due to higher yields and assured income for their products.
According to Nabard’s India-wide Rural Financial Inclusion Survey 2016-17, the average monthly income of a farm household in these two states was more than double the national average.
In fact, data shows that an average farmer in Punjab earns more than twice as much as a farmer in Gujarat, a state that ranks fourth in terms of monthly farm income.
Furthermore, the Nabard data shows that the rural economy in these states is highly dependent on agriculture, as the average monthly income of farm households is much higher than the average income of rural households.
In both states, the monthly income of an average farm family is nearly Rs 6,000 more than the average monthly income of rural households. This gap is in stark contrast to the national landscape. The average Indian peasant family earns slightly less than Rs 900 more than the average rural family.
Therefore, farmers in these two northern states are important stakeholders when it comes to making changes to the laws related to agriculture.
Returning to the ongoing protests, agitated farmers fear that the new laws could damage their income and leave them at the mercy of companies. How? With the gradual end of the minimum support price (MSP) system of negotiation and exploitation by companies.
Why farmers in Punjab and Haryana love MSP
MSP is the minimum price the government pays when it purchases any crop from farmers.
Farmers in Punjab and Haryana grow mainly wheat and rice, two crops for which the government offers secured purchases at MSP. This system allows farmers, both small and large, to sell their products at guaranteed prices to government agencies. It also provides them with a safety net that farmers growing crops not covered by MSP do not have.
The Food Corporation of India (FCI), which is the main state grain procurement agency, buys mainly rice and wheat from MSP.
The FCI then sells these food grains at highly subsidized prices to the poor and is then compensated by the government for its losses.
The data suggests that farmers in Punjab and Haryana have been the main beneficiaries of the government procurement system over the years.
To put things in perspective, more than 95% of rice farmers in Punjab benefit from MSP compared to just 3.6% in Uttar Pradesh.
However, there is also a negative impact of the current system. Due to the guaranteed acquisition, most Punjab farmers do not have the incentive to diversify into other crops.
Additionally, experts note that rice cultivation is depleting the water table by as much as 0.7 meters a year in central Punjab and the issue of unsustainable agriculture in the state is going to be raised.
But is the MSP the main fear of these farmers? For the most part, yes.
While farmers have raised some other concerns with the new laws, the fear that the MSP system will eventually disappear is at the center of the protest.
Here are some of the main concerns of protesting farmers:
So will the MSP really end?
The government has maintained that the MSP is an administrative decision and will remain as is. He has also said that he is ready to give a written guarantee that the system will continue under the new laws. However, it has refused to provide legal guarantees for it.
Farmers, meanwhile, are not buying the Center’s guarantees and have said they will not budge until the government withdraws the three laws. Some peasant leaders say they have come prepared for an upheaval that could last “several months.”
.
