Farm Laws

In September 2020, as the world was reeling under Covid-19, the Narendra Modi government introduced three contested farm bills in the Indian Parliament. The government unilaterally passed the bills into law despite opposition from other parties. Together, the three laws would have weakened government procurement from farmers, and eased the entry of big capital into contract farming and marketing. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act allowed farmers to sell their produce to private traders outside state grain markets and eliminated market fees for traders. The Farmers’ (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act allowed farmers to enter production contracts with private firms or traders; and the Essential Commodities (Amendment) Act removed restrictions on private entities to stockpile cereals, pulses, oilseeds, onions, and potatoes. [2]

As with other moves, the Farm Laws reflect the Modi government’s ambition to take advantage of its Hindutva-backed political mandate to initiate big transformations in India’s economy and polity. The Farm Laws can be seen as the Modi government’s attempt to resolve the impasse at the heart of Indian agriculture, rooted in the uneven adoption of Green Revolution techniques, low productivity of Indian agriculture, and its implications for public spending.

Green Revolution in India [3]

In the late 1960s, India adopted Green Revolution techniques in agriculture to reduce dependence on food aid from the US in the form of PL480 wheat imports. Green Revolution techniques, more precisely the high-yielding varieties of wheat and rice, along with the use of chemical fertilisers, pesticides, and intensive irrigation, are more resource-intensive, increase dependence on paid inputs, and demand greater cash outlays. The techniques were initially adopted in only a few regions—fertile, well irrigated parts of the north-west and south that had seen historical development of large-scale irrigation and other types of public investment in colonial and independent India.

Indian policymakers, as well as the forces behind the Green Revolution project such as Norman Borlaug, understood that small farmers would not be able to implement these techniques without access to credit and other types of support. Therefore, since the late 1960s, the Indian State has supported agricultural petty commodity producers with various input subsidies, easy availability of credit, and has provided support prices for major crops. The State procures foodgrains at support prices, which are sold at subsidised rates through the Public Distribution System. The combination of these efforts enabled India to achieve food security and prevent large-scale food shortages since the 1970s.

The liberalisation of the economy in the early 1990s changed this picture. Even as Green Revolution techniques have been adopted in more regions, insufficient adaptation of Green Revolution techniques to varying ecologies and limited State support in credit, irrigation, and research & development, have contributed to depressed productivity and incomes. The decline in availability of formal credit has contributed to farmers’ dependence on private credit, often at explosive interest rates.

Moreover, the opening of the economy has left Indian agriculture susceptible to fluctuations in global agricultural commodity prices, rendering agriculture vulnerable and uncertain. Rising input prices, rising debt and greater volatility, led to several years of acute agrarian crisis, which manifested in alarming numbers of farmer suicides across the country, particularly in Maharashtra. Farmers in previously beneficiary states such as Punjab and Kerala have also faced agrarian distress.

Farmers movements throughout this period have demanded the implementation of support prices and procurement uniformly across the country—procurement varies drastically across states, and in many parts of the country farmers have very little access to marketing channels of any type, public or private.

At the same time, there has been considerable discourse about the “subsidy burden” of agriculture on the state exchequer, and the market distortions introduced by support prices and incomplete land and labour markets. Proponents of this view advocate the opening of markets to private capital, to reduce inefficiencies. This perspective pervades sections of the media, academia as well as the government’s “expert” policy advisors on agriculture. [4]

The government’s neoliberal orientation and commitment to improving the “ease of doing business” in India is perhaps also the reason why it is the darling of corporates, Indian and foreign, and attracts massive funding. [5]

The Farm Laws can be seen as the Modi government’s attempt to find a way out of this impasse in the State’s approach to agriculture. It was an implicit admission of the government’s inability to tackle the challenges facing Indian agriculture and the over 40% of the country’s population that is dependent on it.

The laws made way for large private capital to subsume petty commodity producers under new relations of exploitation. Recent reportage [6] indicates that large capital such as the Adani group lobbied the government in 2018 to lift the Essential Commodities Act. Farmers’ unions caught on to this nexus early on, and launched an attack on the government for its close relations with specific large business houses such as the Adanis and the Ambanis.

Contradictions in Indian Agriculture

While the farmers’ protests were vibrant political spaces that resonated with the larger pro-secular democracy sentiment in India, they did not necessarily reflect participation from all segments of Indian agriculture or farmers from all parts of the country.

From their inception, Green Revolution techniques and associated policies of state support and procurement were only effectively implemented in a few regions in the north-west and south. In these regions, access to subsidised fertilisers and subsidised electricity, which enabled the use of tubewells to pump groundwater, as well as support prices and well-functioning procurement for key crops like wheat, rice, mustard etc. allowed yields, farmer incomes, and surpluses to rise. In these states, a new dominant class of medium and large farmers emerged as a political force in the 1970s and 1980s, demanding greater resources from the State.

Moreover, the long-term trajectory of Indian agriculture and of those engaged in it is tied to the wider processes of structural transformation in the economy. The distress in agriculture is reflected in the macroeconomic fact that while the contribution of agriculture to GDP has declined from nearly 60% in the early 1980s to under 20% in 2021-22, it continues to provide employment to over 40% of the workforce. [7]

India’s service sector-led growth since the 1980s has failed to generate commensurate employment, and instead has led to a burgeoning of informal employment that has failed to draw people out of their dependence on land. Instead, the prevailing reality of the Indian countryside is a diversification of livelihoods across sectors, spaces, and times, with agriculture continuing to provide one among a plethora of livelihoods.

Indeed, more and more rural households today are diversified into multiple sectors, livelihoods, and spaces—spanning agriculture and non-agriculture, rural and urban, formal and informal. These connections are fundamentally shaped by the success (or lack) of accumulation within agriculture, which in turn is differentiated by region, class, and caste. In core Green Revolution areas where medium and large cultivators were able to gain from increased productivity and surpluses, these provincial propertied classes were able to transform their agrarian footholds into non-agrarian sources of incomes, rents, and profits.

At the lower end of the spectrum, the growing numbers of marginal and small farmers, particularly in less-productive regions, engage in distress-driven diversification into non-agricultural activities such as casual wage work, particularly in construction, and other seasonal work often entailing seasonal migrations to more developed agricultural regions or big cities. The livelihoods of this latter group, though tied to land, are not primarily dependent on it. Nor do they benefit from state procurement, marketing channels, and credit. This group was not part of the farmers protesting the farm laws. It is the former group—medium and large farmers from core Green Revolution states and states with well-functioning procurement—who were the major participants in the 2020-21 farmers’ protests. [8] This is because they still have the most to lose from receding state support to agriculture.

Indeed, while agriculture as a sector has lost out relative to the non-agriculture sectors during the last four decades, distress has been unevenly experienced within agriculture. Even through the peak of agrarian distress, some groups and regions continued to accumulate. The fate of those in agriculture does not depend only on agriculture, but rather on the pathways they can make in non-agricultural sectors.

To understand the fault lines that differentiate those in agriculture, I did intensive fieldwork in Sangli, [9] a village in Rewari district in southern Haryana. Green Revolution techniques were adopted early on in Haryana, which was carved out of post-partition Indian Punjab. Haryana also happens to adjoin the industrial belt that extends from Delhi to its surrounding districts, where foreign capital has concentrated in the neoliberal era. This makes it an interesting place to study processes of generation and re-investment of agricultural surpluses, and to scrutinise the relationship between “modernised” agriculture and neoliberal industrial and urban growth that has dwarfed the rural economy. I present some findings below.

Methodology for Agrarian Class Analysis [10]

In attempting to unpack the differentiations and contradictions between agrarian households, I drew from the considerable literature on agrarian class analysis. The ownership of means of production, particularly land, and relatedly the tenurial relations in which agricultural households are engaged, are critical to locate their class position.

In agrarian economies that are dominated by commodity production, the distinction between simple or petty commodity production and capitalist commodity production is strongly linked to the systematic production of surplus. This criterion, termed the ‘surplus criterion’, has been developed for the Indian agrarian context by Athreya, Böklin, Djurfeldt, and Lindberg. [11] In my analysis, I qualify the surplus criterion to consider re-investment of surplus in agriculture and non-agriculture, the purchase and use of machinery to displace labour, and the expansion of the scale of production.

The relative use of hired versus unpaid family labour in agrarian economies has also been identified by scholars such as Utsa Patnaik to be among the critical identifiers of agrarian class. [12] Scholars of agrarian change typically use a combination of these three criteria.

In my analysis, I consider ownership of land, scale of production or land leasing, ownership of agricultural machinery such as tractors, re-investment of surplus towards cultivation or non-agricultural avenues, extent of hiring of agricultural labour, and type of non-agricultural diversification (property incomes, diversification via education into formal employment, diversification into commercial activity, and diversification into informal employment).

Additionally, the institution of caste, which manifests in regional jati hierarchies, has historically shaped the rural economy, and must be integrated into a holistic understanding of agrarian class relations. Caste is critical to the conception of power in the rural economy, as it fundamentally shapes the ability to command productive resources.

In Sangli, ahirs (officially categorised as Other Backward Classes), brahmins, rajputs, and banias (all three officially categorised as Other or General castes i.e., upper castes) are the predominant landowning dominant castes that have historically commanded the labour of prajapats, khatis (both non-dominant Other Backward Classes that perform traditional caste occupations such as pottery-making in the former case and woodwork in the latter case), and several Dalit jatis (Dalit is a political identity of the formerly untouchable castes; in Sangli the Dalit jatis present who engaged in agricultural labour were chamar, dhanak, nai, and others).

Productive Forces

Agriculture in Sangli has been transformed by the Green Revolution over the last five decades, though this transformation has lagged that of the more fertile northern parts of Haryana and Punjab. Sangli is drier and more arid than core Green Revolution regions. Respondents noted that access to electricity in the 1970s was critical to the use of pump sets, which allowed for groundwater-based irrigation. With irrigation, high-yielding varieties of wheat, mustard, and pearl millet could be adopted. Chemical fertilisers and pesticides replaced manure, and by the 1990s tractors and threshers wholly mechanised parts of the agricultural production process.

Labour Process in Sangli

The transformation of the production process through the adoption of Green Revolution techniques changed the labour process as well. For centuries, caste-based servitude (the jajmani system) tied individual landless Dalit households with dominant caste landowners or zamindars into relations of forced dependence. From the 1970s, jajmani ties have weakened considerably, to be replaced by hired wage labour, though agricultural labour hiring out continues to be the domain of Dalit landless households. Over time, long-term farm servants have been replaced by daily-wage and piece-rated labour, the former predominantly by Dalit men and the latter by Dalit women.

Apart from local Dalit labour, dominant caste landowning households also hire (and certainly prefer) migrant labour groups for harvesting and threshing operations on piece-rated contracts. Migrants come from nearby states of Uttar Pradesh, Rajasthan, and Bihar, and often comprise whole families (including children) who work together in large groups, are paid by the acre, and therefore finish operations more quickly—precisely why landlords prefer them to local Dalit labourers. [13] Regional disparities in development contribute to large-scale migratory flows of labour, and allow booming regions to benefit from cheap labour from depressed regions.

Despite the adoption of ‘modernised’ techniques and the ‘super-exploitation’ of migrant labour, high input costs and small farm sizes put pressure on surplus margins in agriculture in Sangli. Most cultivators combine unpaid household labour with hired labour on the farm to mitigate this pressure and boost cash surpluses. Using Utsa Patnaik’s Exploitation-Ratio or E-Ratio [14], I find that half of the landowners in my sample rely primarily on unpaid family labour. Reliance on family labour further inhibits scale, especially if some household members are diversified in other lines of work.

Agrarian Class Analysis and Pathways out of Agriculture

Virtually all landowners I spoke with were dissatisfied with returns from agriculture, especially given the dependence of surplus margins on intensive physical labour, and instead sought pathways into ‘service’ (i.e., formal, often office-based) employment. This is noteworthy because Haryana is frequently presented as a Green Revolution success story with widespread adoption of “modernised” techniques and relatively well-functioning public procurement systems for several key crops.

Instead of sustained accumulation and re-investment within agriculture, agricultural surpluses paved the way for diversification into non-agricultural activities for dominant caste landowning households. Many dominant caste landowners, 70% of my sample, earned most of their household incomes from non-agricultural sources—from wage employment, small businesses, or pensions from public-sector employment. Indeed, the average per capita income for diversified landowning households was twice that of primarily agricultural households.

Some better-off dominant caste landowners, particularly banias (or merchant castes), can deploy surpluses towards setting up local small businesses or merchant capital ventures like grain trading, fertiliser and seed shops, kirana (or grocery) stores, etc. These households are likely to withdraw from the use of family labour on the farm, and are among the most well-off in the village. Others, predominantly ahirs and brahmins, can secure coveted jobs in the public sector, whether in the army, the electricity department, the police, etc., while continuing to cultivate the family farm through a combination of family and hired labour. Once diversified, landowners cease consistent investments in agriculture.

Using agricultural surpluses to ‘invest’ in education, from local private schools to postgraduate programmes in nearby cities, as well as knowledge and social connections cemented over generations of access to public sector employment, dominant caste landowners dominate the pathways into secure, non-agricultural livelihoods, though not all make the shift successfully. Many are not able to secure formal wage employment in the public sector or in offices and factories of the nearby industrial belt. Some tried their hand at the work in factories but returned to cultivation because it offered a better livelihood. Landownership serves as a failsafe against the most precarious and low-paid wage work.

Dominant caste landowners who continue to invest in agriculture and produce on an expanded scale are those who have not yet established pathways into formal employment or petty businesses. Their incomes are lower than those of the first two groups, and their surpluses in agriculture depend at least in part on the intensive use of unpaid family labour. These households may be agents of capitalist development, but their continued reliance on unpaid family labour and relatively worse economic position indicate that agrarian surpluses will eventually be diverted to non-agrarian ends, and so the tendencies for capitalist accumulation within agriculture are limited.

Landless Dalit households on the other hand, who have neither the investible surpluses from cultivation nor the social networks of upper castes, are precluded from access to formal employment. Engaged primarily in precarious daily wage work in agriculture and construction, the few instances of self-employment are confined to petty commodity production with very small asset bases (as street hawkers, seamstresses, etc.). The limits of formal job creation are more tangible for Dalit households. Access to basic foodstuffs through the Public Distribution System (PDS) is critical for several Dalit households.

However, even this limited access to non-agricultural employment and PDS is resented by dominant caste landowners. Shorn of centuries-long assured access to the labour of Dalits, dominant castes lament that Dalits “don’t want to work anymore because they get rations from the government”. When they do work, “they ask for too much”. When asked why cultivators prefer to hire migrant workers, one ahir landowner said that daily wage workers come in at 930am, take an hour-long lunch break and a tea break, and leave promptly at 530pm. Migrant workers, on the other hand, work till late in the night.

Contradictions

Indian agriculture is riven by several contradictions. At the macro policy level, it is the inability of the State to successfully support petty commodity producers in the adoption of regionally-differentiated Green Revolution techniques, while maintaining existing political support and subsidy structures that are limited to a few regions. At the village level, it is hierarchies in the ownership of land, access to credit and marketing, and ability to transform agrarian surpluses into pathways in non-agricultural employment that create gradations among the agrarian population. These latter gradations are as much a result of the incomplete structural transformation of the Indian economy which has failed to generate sufficient formal employment; as they are of historical, regionally differentiated caste hierarchies. All these divisions were visible in the 2020-21 farmers’ protests as well.

While it is true that the period of reforms has generated a further divide between rural and urban, and agriculture and non-agriculture, the graded hierarchies within agriculture shape unequal access to urban and non-agricultural opportunities. In consequence, agrarian economic but also political interests are diversified into multiple sectors and spaces. This results in complicated political expressions that are not easy to classify.

For instance, Sangli lies close to National Highway 8, where one of the three big protest sites of the 2020-21 farmers’ protests was established. However, barely any farmers from Sangli or the entire southern Haryana region participated in the farmers’ protests, which were instead composed of farmers’ groups from Punjab, northern Haryana, Madhya Pradesh, and other parts of the country.

Instead, when in 2022 the Modi government announced a new policy called the Agnipath scheme which jeopardised long-term hiring into the Indian army (one of the primary sources of formal, secure employment for dominant caste households in Sangli and in southern Haryana), there was swift, organised, and persistent political action by the dominant caste agrarian households of Sangli and its surrounding regions. [15]

This reflects that while the connection to land remains strong, cultivation, and the politics of cultivation, may not be the mainstay for large sections of the agrarian population. These changes demand new prisms to understand the contradictions within and beyond Indian agriculture.

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Srishti Yadav is Assistant Professor in Economics at Azim Premji University, Bangalore, India.

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