The matter has reached the Supreme Court, which said that the protests should be allowed to continue and asked the government to consider putting the contentious laws on hold.
However, the Centre has refused the apex court’s suggestion and hopes to resolve the impasse through talks. But what is the genesis of the prolonged agitation and why farmers, primarily from Punjab and Haryana, are so unhappy with the agriculture reforms?
Here’s understanding the farm law protest in 5 charts:
The ground situation
In years since the Green Revolution, farmers from Punjab and Haryana have become relatively more affluent than those elsewhere in the country – mainly due to higher yield and assured income for their produce.
According to Nabard’s all India rural financial inclusion survey of 2016-17, the average monthly income of an agricultural household in these two states was more than double the national average.
In fact, data shows that an average farmer in Punjab earns over twice as much as a farmer in Gujarat, a state that ranks fourth in terms of monthly agriculture income.
Moreover, the Nabard data shows that the rural economy in these states is heavily farm-dependent since the average monthly income of agricultural households is way higher than the average income of rural households.
In both states, the monthly income of an average farming family is nearly Rs 6,000 more than the average monthly income of rural households. This gap is in stark contrast to the national picture. The average Indian farming family earns just under Rs 900 more than an average rural family.
Thus, farmers from these two northern states are important stakeholders when it comes to making any changes to laws related to agriculture.
Coming back to the ongoing protests, the agitating farmers fear that the new laws could potentially hurt their income and leave them at the mercy of corporates. How? With the gradual end of the Minimum Support Price (MSP) system and exploitative bargaining by companies.
Why Punjab, Haryana farmers love MSP
MSP is the minimum price paid by the government when it procures any crop from the farmers.
Punjab and Haryana farmers mainly grow wheat and paddy, two crops for which government offers assured procurement at MSP. This system allows farmers – both small and large – to sell their produce at guaranteed prices to government agencies. It also gives them a safety net that farmers growing crops not covered by MSP don’t have.
The Food Corporation of India (FCI) – which is the main state-run grain procurement agency – largely buys only paddy and wheat at MSP.
The FCI then sells these food grains at highly subsidised prices to the poor and is thereafter compensated by the government for its losses.
Data suggests that farmers from Punjab and Haryana have been the principal beneficiaries of the government’s procurement system over the years.
To put things in perspective, more than 95% of paddy growers in Punjab benefit from MSP compared to only 3.6% in Uttar Pradesh.
However, there is also a negative impact of the present system. Due to guaranteed procurement, most Punjab farmers don’t have the incentive to diversify to other crops.
Moreover, experts point out that rice cultivation is depleting the water table by as much as 0.7 metres a year in central Punjab and there is going to be the question of unsustainable agriculture in the state.
But is MSP the primary fear of these farmers? Largely, yes.
While farmers have raised a few other concerns with the new laws, the fear that the MSP system might eventually go away lies at the heart of the protest.
Here are some of the key concerns of the protesting farmers:
So will the MSP really end?
The government has maintained that the MSP is an administrative decision and will stay as it is. It has also said that it’s ready to give a written assurance that the system will continue under the new laws. However, it has refused to provide legal assurance for the same.
The farmers, meanwhile, are not buying the Centre’s assurances and have said that they won’t budge until the government withdraws all the three laws. Some farmer leaders are claiming that they have come prepared for an agitation that could last “several months”.