/ POLITICS & AMERICA
I find it interesting that 87 farmers’ unions in the United States have made common cause with their protesting counterparts in India.
The rights and wrongs of Indian prime minister Narendra Modi’s attempt to reform farming laws are contested. My friend Gurcharan Das, a former CEO of Procter & Gamble India, whose opinions I respect, believes that Mr Modi’s instincts were right but tactics wrong. In this piece in the Sunday Times of India in December, Gurcharan argued that Mr Modi neglected to communicate with other political parties, state governments and farmers’ organisations when pushing three farming bills through parliament in September. The result, he says, has been rumour and rising anger.
Rohini Kurup an associate editor of Lawfare, also recently noted the manner in which the Indian government rushed the legislation through parliament “without significant debate”, ensuring that it was “passed in a dubious voice vote”, while farmers complained they weren’t consulted.
So, are Indian farmers’ current woes as no more than a process issue? That the process of building a consensus was ignored? What about the policy changes in Mr Modi’s agricultural reforms?
Most people agree on the need for reform of India’s farming sector and the three new laws would do that in spades. (Check out my December 2018 National column on Indian farmers‘ terrible plight. Things haven’t improved much since then.)
Each of the three new laws would deregulate a different aspect of the agricultural chain: sale, price, storage. The Indian government says farmers would henceforth be free. Free to get rich. Rather than selling their produce to wholesale markets run by each state’s agricultural board, they could seek out private buyers. Rather than being bound by the so-called Minimum Support Price (MSP) set by the government, farmers could blithely name their own price.
That sounds like a pretty good deal but I ask you, where in the world have you found big private buyers wanting to pay high prices for anything? Wouldn’t a big grocery chain, say, seek to sharply undercut the farmer, especially when buying in bulk? Wouldn’t the farmer probably acquiesce rather than lose the deal and have his potential customer buy from the next guy with the same bushels of potatoes, onions and so on?
Is it unreasonable for the farmers to be worried that their safety net, the MSP, will fall by the wayside? Mr Modi says the MSP will stay but the farmers want the government to issue this promise in writing. That it hasn’t, yet, speaks volumes.
Or not, depending on where you stand on the various issues.
I do think it’s significant, however, that American farmers’ unions liken their Indian counterparts’ current situation to theirs in the 1980s. In their letter of support for Indian farmers, the American unions said that the “Reagan era furthered the farm crisis through deliberate federal policy changes, with systematic erosion of parity prices and other deregulatory efforts”.
They added that the Reagan administration followed a “Get big or get out” mantra. It meant big rewards for American “farmers with the means to consolidate” and grow “monoculture commodities, the US unions said. And they finished on a dispiriting note: “Unsurprisingly, farm suicides in rural America are 45% higher than the rest of the population.”
It’s a clear warning about the perils of allowing economic policy to sweep away the balance between the interests of a society and its markets.