Time for Indian government to reform the agriculture “reform” laws hurting small farmers?

By Lanny J. Davis

The pull between regulation vs. free market ideology is long-standing.  The United States has been in the middle of that to-and-fro tension almost since its founding.   We have experienced adverse effects from too much regulation and too little.

We have seen a similar dynamic going on in India regarding the effects of agricultural deregulation legislation passed last September 2020 efforts of the government of Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) party. Now, with massive national protests across India, mostly from small farmers in reaction to these “reforms” allegedly for their benefit, it may be time for Prime Minister Modi to reconsider.

The core reform involved in these three laws pushed through the India parliament is the replacement of what is called the Agricultural Produce Market Committee (APMC) system that, for the last five decades or more has regulated and provided protections to tens of thousands of small farmers.

For those unfamiliar with this Indian system, in brief:  APMCs regulate farm production and markets in designated areas. They are created by Indian state governments where “various farm products can be sold by farmers to licensed people or commission agents.

According to a thorough analysis of the situation published last September by the All India Students Association (AISA), these APMCs provided local infrastructure (e.g., buyer-seller markets, warehouses, transportation to larger markets and customers) to assist small farmers to get fair prices and their products to their buyers.

Now instead of benefiting from the de facto elimination of these APMCs, small farmers throughout India claim to be suffering from lower prices, chaotic marketing conditions, and reported dominance by large multi-national agro-corporations and allegedly by a small cadre of wealthy interests who heavily financially supported the PM and his BJP Party.

The result:  massive farmer protests across India and alleged human suffering and human rights violations.  Recent media reports suggest that some 60 deaths in 40 days occurred in among farmer protesting the harsh effects of these “reform” laws and suicides as well. India’s widely respected newspaper, The Tribune, recently reported that a British Punjabi MP in the UK Parliament, Tanmanjeet Singh Dhesi, wrote a letter, co-signed by 100 other MPs, to British PM Boris Johnson on the pain suffered by small farmers allegedly as a result of this legislation.  The letter asking him PM Johnson to raise this issue when he next met with Indian PM Modi.  These protests have received widespread coverage in US media, from the Wall Street Journal to the Washington Post to CNN, and in western Europe and Australia. The tragedy of the pain allegedly being suffered by Indian small farmers allegedly because of these “reforms” contrasts with the long period of prosperity beginning in the early 1970s, referred to as the Green revolution.  As reported in a recent Forbes article, A recent Forbes.com article:   “The Green revolution transformed India into a wheat and rice surplus country,” and prosperity for farmers “diffused” from several western provinces across other parts of India. Two major wealthy families – the Adani and Ambani family groups – are being accused in the media, rightly or wrongly, of being behind these new laws, due to their financial investments in the agriculture market. A populist revolt aimed at these two families could be risky for their businesses and for family members personally.  Perhaps they would be better off if they led the effort to “reform the reforms” and take up the cause of small farmers.  It might help their relationships with small farmers and in the long-run could prove “that doing good and doing well” can go hand-and-hand. Recently, even the iconic US brand, Pepsi Cola, has been sucked into this controversy.  A recent Forbes online article reported that Pepsi has been rejecting one-half of a farmer’s potato production because the size of the potato was not exactly 12 inches, or the moisture content did not meet an exact specification.  Such market power by Pepsi, if true and widely reported in India, western Europe, and US media, could cause Pepsi serious reputation and brand risks.

Maybe Prime Minister Modi should recall what happened to conservative UK PM Margaret Thatcher ignored the more extreme effects of her deregulation program in the 1980s: She was overthrown by members of her own party in 1990.

The political rule that the middle ideological position is usually the right one isn’t always correct. But in the case of the Modi government reforms, it appears that a mid-course correction is needed.  And more compassionate brand of conservatism and free market policies may be needed.

Lanny J. Davis is an attorney and media crisis management specialist in the Washington D.C. law firm he co-founded, Davis Goldberg Galper, and the media strategic communications firm, Trident DMG.  He is a well-known US media commentator who has appeared regularly over the years on CNN, MSNBC, Fox News Channel, and other major US broadcast media. He writes a regular column for TheHill.com.  He also served as Special Counsel to President Bill Clinton.