In 1991, when I was 12 years old and studying in eighth grade of my school in Odisha’s Barunadiha village, the Indian government, then led by the Congress Party, launched a set of new economic reforms. I vividly remember reading local newspapers, which carried news on the reduction of agricultural subsidies on seeds, fertilisers, electricity and irrigation.
The government had also started dismantling the universal approach to food security and public distribution system. My father, who was an active farmer then and used to be the Secretary of Kisan Morcha, a farmers’ organisation affiliated to the Bharatiya Janata Party (BJP), supported liberalisation, privatisation and globalisation policies of the Congress government in New Delhi.
He argued that these policies will bring economic boom and lead to a trickle-down effect on all sectors of the Indian economy. The agriculture sector and famers will benefit from such policies. This was also the silent understanding of the BJP and its ideological mothership, the Rashtriya Swayamsevak Sangh (RSS), who had then mounted only a piecemeal opposition to the reforms led by the Congress Party.
Back then, the national and mainstream media had heralded the new economic reforms as the best policy option for a powerful and developed India. But the theological promise of neoliberalism is like the deceptive idea of salvation in the Hindu religion.
After three decades, my village is witnessing the decline of agriculture. The new economic reforms were slow poison for the agrarian economy. They ruined agriculture in my village. The fertiliser corporations get subsidies. The industries get water and electricity subsidies. But the farmers nearly abandoned agriculture as a source of their livelihood. Today, there are very few of them left in my village due to a lack of alternative livelihood.
As the incumbent Narendra Modi government follows the footprints of the Congress Party in implementing more ruthless agricultural policy reforms, my father (and my best friend) has come about to oppose these polices. Today, he argues that corporatisation will destroy the agricultural economy and take away farmers’ livelihoods in the short run and their land in the long run.
Such a transformation in my father gives me hope and signals a greater countrywide transformation that is waiting to take place in political and economic terms. Meanwhile, the democratic debate between a father and his son continues as hundreds of thousands of famers protest against the Modi government’s triad of new farm laws on the fringes of New Delhi.
The Modi government and its Hindutva allies have been claiming that agricultural reforms are necessary to expand trade and investment in the sector. The goal of the reforms, ostensibly, is to expand the wholesale agricultural market for the growth of exports. The government claims that farmers will get greater freedom within a liberalised agricultural market system and would be able to maximise their profit. Apparently, the reforms would create a higher standard of living and quality of life for Indian farmers.
It is important to bust these myths propagated by the BJP-led government and its crony capitalist lobbies. These claims are blatant lies. In reality, such agricultural reform policies are unsustainable as they would render farmers vulnerable to market forces. The deepening of capitalist market forces has ruined agriculture, agricultural communities, farmers’ lives and livelihoods.
To put it simply, a market-led industrial approach to agriculture drives farmers out of business and creates a kind of pervasive agrarian crisis that ultimately forces farmers to commit suicide.
Lessons from America and Europe
American farmers have become vulnerable to corporate exploitation and abuse because of similar reform policies. Liberalised agricultural policies have boosted the growth of very few corporations that control American agriculture today. The deepening of market forces and growth of industrial agriculture led to the growth of four corporations that control 40% percent of the American agricultural market, while destroying small and medium farmers, rural communities, small agri businesses and family farms.
The corporations supressed the price of the farm produce and increased its selling price. Both American producers and consumers suffer heavily due to such agricultural transitions. Today, many American farmers are fighting back to challenged corporate control over agriculture.
The European Union (EU)’s Common Agricultural Policy (CAP) has also created a system in which large farmers and landowners in the UK, France and Germany became the prime beneficiaries of its subsidies whereas small farmers remained marginalised. It has created a wholesale agricultural market where prices of agricultural products are different in different parts of EU member countries.
Market forces have led to extreme price fluctuations within the European agricultural market, thus creating a crisis for small farmers. The CAP, further, has had an adverse impact on the developing countries of Africa. The subsidised overproduction of food, milk and poultry is destroying local production and local markets in the continent. Only the big farmers and agricultural corporations in Europe are the net beneficiaries of such agricultural policies. Like in the US, these policies ruined rural communities and destroyed the livelihoods of small and medium farmers in Europe.
Therefore, today, the Land Workers’ Alliance is not only opposing the CAP, but also demanding subsidies for small farmers and family farms in the UK. It is also demanding that the British government exempt agriculture from all free trade agreements. Many European countries have also realised that industrial agriculture led by corporations destroy the environment. So, many social and political movements against corporate takeover of agriculture have sprung up in Europe today.
From land grab to decay of agricultural communities
With the growth of corporatisation of agriculture, many developed countries have witnessed land grab by big corporations and big farmers. Over the years, Congress-led governments encouraged corporate land grab in the name of Special Economic Zones (SEZs). After agricultural policy reforms, the Modi-led government is planning to liberalise land laws further, by which the corporates can take over land ownership from the small and medium farmers in India.
The incumbent BJP-led government is preparing to hand over vast stretches of land to its capitalist patrons and friends. This is bound to create conditions of industrial feudalism and corporate landlordism on the one hand, and consumerist individualism on the other.
Moreover, the corporatisation of agriculture destroys the social fabric in agricultural and rural communities. Cooperative culture is converted into competitive culture. Market forces do not believe in diversification, instead promoting economies of standardisation that is dangerous for diversity within Indian agriculture. Therefore, market-led industrial agriculture dominated by corporations can never be an alternative for India and Indian farmers.
The Indian government needs to find ways to invest in agricultural cooperatives to empower farmers and generate employment in agriculture by diversifying it. Indian farmers need socially responsible, environmentally sustainable and economically rewarding agricultural policies, along with egalitarian land reforms, to increase their income and create a form of market-led agricultural economy in which agricultural producers can directly interact with their consumers. Only such an agricultural market economy would be open, free and fair.
A government for corporates, courtesy the IMF
The surge of wealth of Indian billionaires and the Modi-led BJP government’s onslaught on poor, marginalised and farmers continue to grow simultaneously as masses reel under the COVID-19 pandemic. Over the last one decade, there has been a 90% rise in the wealth of Indian billionaires. This is not accidental.
The Modi government reduced corporate income tax from 30 to 22 percent starting from FY 2019-20 and has provided many other opportunities, incentives and foregoing exemptions to corporations. The new corporates established in India after 1 October 2019 will only pay 15 percent tax.
The Modi government is now pursuing only further economic and agricultural policies to marginalise poor farmers and beef up the wallets of its Hindutva capitalist allies by reforming agricultural policies and dismantling all safety nets. In doing this, the government is only following the policy prescriptions of its Washington masters – the International Monetary Fund (IMF).
The Executive Board of the IMF concluded its consultation with the Indian government on 25 November 2019 and released its Country Report next month. The report openly acknowledges the deletion of market-sensitive information and policy intentions as part of the half-baked IMF transparency policy. However, this country report also reveals policy prescriptions for the deepening of market forces in the Indian economy.
The IMF advocates and encourages the Indian government to reduce corporate income tax and implement both land agricultural reform for further trade and investment liberalisation. It further prescribed increasing and integrating wholesale agriculture markets for the expansion of agricultural exports. The IMF-prescribed New Agriculture Export Policy (2018) designed by the Modi government aims to double agricultural exports to USD 60 billion by 2022.
The IMF further argues that the slow progress in reforming labour, land, and agriculture is creating setbacks in the structural reform process for economic growth and investment. The strengthening of the business climate is the central objective of both the IMF and the Modi government. In order to achieve these goals, the the Indian government has approved the Agri-Market Infrastructure Fund of Rs 20 billion to be used for development and upgradation of infrastructure in 10,000 rural agricultural markets and 585 regulated wholesale markets.
It is within this context that the companies such as the Adani Agri Logistics Limited (AALL) should be seen – not an accidental but a systematic business initiative for procurement, storage, transportation and distribution of food in India. The AALL, which came into existence around 2005-06 and has logistics contracts with the Food Corporation of India (FCI), is now well placed to develop a total monopoly over the food market, thanks to the new farm laws brought in by the Modi government.
But the corporatisation of agriculture and marketisation of food security is only going to accelerate hunger and starvation deaths, while paving the path for the privatisation of FCI. This is bound to be socially and economically disastrous for India.
Modi’s reforms as Congress legacy
The BJP-led government has introduced three dangerous agricultural policy reforms prescribed by the IMF. These policies are concomitant with the requirements of market forces.
The agricultural reforms policies under the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Ordinance, 2020 are associated with three acts – the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, and Essential Commodities Amendment Act.
These policies are going to destroy farmers’ freedom to produce and diminish the security of their products and livelihoods. They are a death warrant against agricultural communities and farmers in India. The corporate takeover of Indian agriculture and growth of contract farming will further accelerate agricultural capitalism in which corporates will command production, consumption and distribution, and control the lives of 60 percent of the Indian population who are engaged in agricultural activities.
As per the 2011 census, agriculture is the prime source of livelihood for 494.9 million landless Indians, while 263 million Indians depend directly or indirectly on agriculture for their everyday survival.
Food self-sufficiency, agricultural production for buffer stocks and accessibility of food for all in India should have already become a reality given the availability of agricultural technology, land and labour. But unfortunately, successive governments have dismantled every social and economic safety net designed after Indian independence.
The Pradhan Mantri Fasal Bima Yojana (PMFBY), launched by Prime Minister Modi in 2016, is not an insurance for farmers, but an income source for private insurance companies in India. This policy will ensure farmers remain in debt trap in the name of improved flow of credit. On the other hand, the Pradhan Mantri Kisan Maan-Dhan Yojana (PM-KMY) is a way to consolidate small savings of poor, small and marginal farmers for corporate investment. These policies are detrimental to Indian economy and its people.
India has followed an integrated approach to agricultural economy and food security policy after independence. Production, availability and accessibility of food for all were the objectives of this policy. The core idea was to provide Minimum Support Price (MSP) to farmers and inspire them to produce more food to ensure food security of the country. The Agricultural Produce Marketing Committee (APMC) was established to procure the products, safeguard farmers from the market and maintain price stability to access food for survival.
The Public Distribution System (PDS) was developed to ensure food security by distribution of food and ration during situations of food crisis. The FCI was integrated within such an integral policy framework to provide buffer stocks to face situations of scarcities caused by natural calamities or war. Unlike such a state-backed system, markets only work towards the concentration of wealth in the hands of few and marginalise the masses. From food to fashion, the market has always failed to develop a mechanism of egalitarian distribution.
The successive governments led by the Congress destroyed the integrated policy approach to agriculture and food security. The Universal Public Distribution System (UPDS) was restructured as the Revamped Public Distribution System (RPDS) and Targeted Public Distribution System (TPDS). These reforms have destroyed integrated and universalistic characteristics of the agricultural and food security policy to allow market forces to grow during India’s half-hearted liberalisation of the 1980s and full-fledged liberalisation after the 1991 new economic reforms.
The BJP and RSS used to oppose these reform policies during those days in the name of nationalism. But today, they stand on the foundations of reform policies created and shaped by the Congress party. Essentially, there is no difference between them and the Congress when it comes to economic policies. Both uphold the interests of the corporations.
Towards a slave society?
The ruling and capitalist class strategy is to expand consumerism and market of food in a massive scale as a result of which masses will continue to seek work for food. Such a feudal approach of Hindutva capitalism is suitable for political dominance of the BJP, social and cultural hegemony of the RSS, and economic dominance of corporates over Indian people and their resources.
The food insecure and unemployed Indians will always be available as a massive army of low-waged labourers for Indian and global capitalist classes to amass profit by inflicting mass misery. The agricultural reforms will accelerate corporatisation of agriculture and create conditions where farmers will be slaves in their own land. The landless farmers and agricultural workers will turn into low-waged workers.
Mass misery, hunger and unemployment are going to be three net outcomes of these policies, while pushing India and Indians to live under corporate feudalism. The long-term outcomes of these reform policies are going to be more dangerous, creating conditions for a slave society.
The ruling and non-ruling elites in India have found their poster boy in Modi and ideological brotherhood with the BJP-RSS to pursue their hegemony. The IMF argument behind the productivity of agriculture and empowerment of farmers is dubious. These agricultural reform policies are not going to increase productivity in Indian agriculture and farmers are not going to be prosperous. After all, capitalism as a system is always against productivity and mass prosperity.
Economic productivity of labour has increased with the growth of science and technology, but mass prosperity did not grow. Like the rest of the world, India is witnessing concentration of wealth and marginalisation of masses and their everyday life. As the late David Graeber has argued, “the ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger” to their command and controlled system of hegemony called ‘free market capitalism.’
A safety net for Indian billionaires
It is clear that Indian billionaires and their Brahminical social and economic order find their safety net under the leadership of Modi. The Western capitalist systems were evolved over centuries of trial and error, but Indian capitalism has been built by its consciously designed foundation of a caste-based Brahminical order. The ruinous economic policies, social disability and political stability are three weapons of the Indian ruling and non-ruling class. It is important to see the agricultural reform policies within the context of these strategies of corporate cronies and their Hindutva political cheerleaders.
The ongoing farmers’ movement against the agricultural reform policies of the Modi government gives new hopes of deepening of democracy. It has exposed the corporate character of the Modi government and dismantled the hegemonic narratives of neoliberal governance by the BJP-RSS. The mainstream media and all the hypocritical propaganda of Hindutvavadis have failed to hide the authoritarian nakedness of the sitting government and all its failures.
The united working-class movement in support of Indian farmers can only save India and Indians from medieval forces of Hindutva. The bigotry of BJP and RSS can never be an alternative. These forces can never provide a peaceful and prosperous India to Indians.
India needs a second wave of freedom struggle against caste, capitalism and Hindutva to ensure liberty, equality, justice, secularism, socialism and democracy enshrined in the Constitution. It is the duty of every Indian to rebuild their country by defeating the Hindutva forces and their corporate backers. A secular and democratic struggle is the only path in history for a peaceful and prosperous future for India and Indians.
Views expressed are the author’s own.
Featured image by Kannan Muthuraman, Flickr.
Bhabani Shankar Nayak is a political economist based in Coventry, UK. He researches and writes on political economy of religion, market, business and development.