Lessons of the Indian famers’ movement: the interests of the rich farmers are not those of the rural wage labourers

The massive protests by farmers in India against the laws of the Modi government, which took place between November 2020 and February 2021, have not gone unnoticed. They have gained wide support and expressions of solidarity from all over the world. Climate activist Greta Thunberg in Sweden, singer Rihanna, actress Susan Sarandon, YouTuber and comedian Lilly Singh, American climate activist Jamie Marglin, US lawyer and activist Meena Harris (the niece of Vice President Kamala Harris) in the U.S. have backed the protesting farmers in posts on social media.

Expressions of support were not restricted to famous people. The World Federation of Trade Unions, representing more than 105 million workers who live and work in 130 countries, expressed its solidarity with the farmers’ struggle. Trade unions in the UK, Canada, Italy, South Korea, etc. announced that it stood firmly in support of the hundreds of thousands of Indian farmers. More than 50 international organisations from 25 countries have said to be in solidarity with the farmer’s movement and urged the Modi government to repeal the three farm laws.

If so many individuals and organisations around the world have expressed their solidarity with the farmers’ protests in India, the biggest protest movement since its independence in 1947, should the organisations of the Communist Left not express their solidarity too with the protests? Il Partito (India; Between Peasant Protests and Workers’ Strikes) and Le Prolétaire (Pandemic, Economic Crisis and Class Struggles in India), two organisations of the Communist Left, have already published an article on the movement and both have not pledged their support to the movement, and they are right. In the following article we will explain why communist organisations should not plead support for the farmers’ movement in India.

The recent farmers’ protests were a reaction to the laws, passed in September 2020 by the Modi government, aimed at the deregulation of the agricultural sector and liberalisation of the prices. These new laws target in particular the “Agricultural Produce Marketing Committee” (mandis) and the “Minimum Support Price” system (MSP), fixed by the government. They were introduced at the start of the “Green Revolution” (See also: Kirsty Hawthorn, The Green Revolution in India) since the 1960s, a policy destined to promote large-scale industrial agriculture, enabling India to become a nation close to self-sufficiency in food.

Via a guaranteed procurement and government-mandated floor prices, the aim of these laws was to give the famers financial support in a few, well-endowed districts of the states Punjab, Haryana and the western part of the state Uttar Pradesh, enabling them to use high-yielding seeds and chemical fertilisers and, since the “Green Revolution” technology required lots of water, the construction and maintenance of extensive irrigation systems.

1. State protectionism against the crisis of overproduction

Since the independence of 1948 farmers have been considered to be the backbone of Indian society. The post-independence Indian policy remained attached to agrarianism and ruralism, with ceaseless eulogies to the farmer as the food provider, and was reflected in an approach that privileged the farmers over urban dwellers. Even to-day, 70 per cent of the Indian population still lives in the countryside while 58 per cent of the total workforce depends on agriculture and allied activities. The agricultural sector remained highly privileged and subsidised for tens of years. But this slowly started to change from the beginning of the 1990’s.

In 1991 India experienced a foreign exchange crisis that led to three rapid downgrades of its credit rating within the short space of a year, which made the World Bank write in its Memorandum that: “India’s creditworthiness has declined to the point where international sources of commercial credit have been cut off”. (Cited in: Modi’s Farm Produce Act Was Authored Thirty Years Ago, in Washington D.C.) India had little choice but to accept the IMF-World Bank prescriptions for ‘structural adjustment’. This year marked the start of India’s neoliberal era and the creation of the conditions for foreign products and investments to penetrate its domestic market.

The neo-liberal policy, which started in the 1980s and increased considerably after the collapse of the Eastern Bloc, aimed to reduce the cost of production in the central countries of capitalism by improving productivity and through outsourcing. Since the wages in countries like India were only a fraction of the wages in the central countries, whole parts of production were exported to these low pay countries. They were compelled to open up to this neoliberal expansion. Key instruments in this opening up and in the development of the international dimension of neoliberalism were institutions such as the World Trade Organisation (WTO), the World Bank and the IMF.

The end of the autarkic model of the Eastern Bloc countries cleared the way for this neo-liberal era and a new breath of economic expansion. “This expansion had a number of underlying elements: the technological developments that allowed a much faster circulation of capital and a reorganisation of global industrial networks; a more directly economic dimension, in which capital was able to penetrate new extra-capitalist areas and make use of much cheaper labour power, while at the same time making gigantic profits through the swelling of the financial sector; and also a social element, since the break-up of industrial concentrations in the “old” capitalist countries, driven by the hunt for new sources of profit, also had the effect of atomising centres of class militancy.” (Trade Wars: The obsolescence of the nation state)

In return for up to more than $120 billion in loans at the time, India was compelled to shift hundreds of millions of dollars out of agriculture. The structural adjustment programme, which resulted in the shift of more than 400 million dollars from the countryside into cities, led to the dismantling of its state-owned seed supply system, reduction of subsidies and the running down of public agriculture institutions, while offering incentives for the growing of cash crops.

On top of that, the Uruguay round in the 1990s, which was heavily contested by India, obliged the country to liberalise its trade regulations and to open up for foreign direct investments. While several sectors of the Indian economy were subjected to liberalisation, the deregulation of agriculture met much more resistance.

According to the Indian ruling class, the agricultural sector was not able to compete on the world market as it remained vulnerable in terms of “low level of commercialisation of agriculture, low productivity, weak market orientation, preponderance of small and marginal uneconomical operational landholdings, lack of infrastructure, dependence on monsoon, susceptibility to natural calamities, and dependence of a very large percentage of population on agriculture for their livelihood etc.” (Government of India, Ministry of Commerce and Industry, Negotiations on WTO agreement on agriculture; G/AG/NG/W/102; 15-01-2001)

India stubbornly refused the further opening up of agriculture. For example, in a 2003 publication, the Dutch Ministry of Agriculture stated that the Indian government was determined to continue to use tariffs and subsidies to protect its agricultural sector, which was diametrically opposed to the rules of the WTO. When Modi came into power, in 2014, this policy of state subvention of agriculture was still not drastically reduced and continued almost unabated. After world agricultural prices fell in 2017, the government even increased import duties on a wide range of agricultural goods.

Thus, after the 1990’s India continued to remain highly protective of its agricultural sector, upholding “minimum support prices for produce, the shielding off from international competition, state-regulated mechanisms for local trade in agricultural commodities and special provisions for those classified as ‘essential’ commodities.” (Kenneth Bo Nielsen, Jostein Jakobsen og Alf Nilsen, Liberalising Indian Agriculture; 16-10-2020) India had been singled out by the WTO as a kind of troublemaker because of its overly protectionist policy about agricultural and food products.

2. Years of crisis in Indian agriculture: growing misery for the small and marginal farmers

Nonetheless India’s farming has been facing a crisis for the last 20 years. This crisis developed to a large extent owing to the rising cost of pesticides, fertilisers, seeds as well as wage labour because of a shift in the cropping pattern from staple crop to cash crops, necessitated by the increased liberalisation. At the same time the agricultural sector was confronted with a growing number of smallholders, who in many cases not even owned the land, but rented it from a large farmer. During the last three decades, the number of smallholder farmers increased by 77 per cent from about 66 million in 1980-1981 to 117 million in 2010-2011. They now account for about 85 per cent of all the landholdings in India, compared to 75 per cent in 1980-1981.

After 20 years and more the side-effects of industrial agriculture began to affect yields in a negative way. The “Green Revolution” brought about richer yields, but the quality of soil began to deteriorate, because of

• “overuse of fertilisers and its damage to soil health, decreasing the nutritional value of the crops;
• “the massive use of GM/GE ‘hybrid seeds’ posing a direct threat to bio-diversity [since] the soil is getting more and more polluted or even totally poisoned.” (What lies behind rise in global food prices?; World Revolution no.316, July / August 2008)

In addition to the problems resulting from the massive use of chemical pesticides, high water consumption and the general impact of global warming, the high investment, required for these crops, were not offset by either the MSP, offered by the government, or prices available in the market.

As a consequence of these worsening conditions farmers’ debts to banks and private money lenders were mounting considerably. In 1991 the National Sample Survey Organisation (NSSO) found indebtedness among 26% of farmers; in 2003 this was increased to 48.6% farmer households, while in 2012-2013 already 52% of India's agricultural households were indebted. On an average, the amount of debt per farmer household was 12,585 rupees in 2003, and increased by nearly 4 times to reach 47,000 rupees per agricultural household in 2012-2013. In 2018 it even reached an average of 74,000 rupees per household. In the regional state of Punjab the marginalised and smaller farmers have six times more debt than the big farmers.

For reasons of a dawning fiscal disaster, due to the unstoppable growth of agricultural subsidies, between 2012 and 2014 and still before Modi came into power, India effectively reduced the subsidy on agriculture and food security by $3 billion dollars.

Gradual and piecemeal opening of the agrarian economy was implemented, together with the reduction of public subsidies for agriculture. Therefore “in roughly half of India’s States and Union territories, agricultural reforms that allow private markets have already been carried out [which]reduced input subsidies, deregulated the seed sector for foreign direct investments, facilitated privatised banking interests within agriculture and, not least, shifted towards private sector research and development.” (Kenneth Bo Nielsen, Jostein Jakobsen og Alf Nilsen, Liberalising Indian Agriculture; 16-10-2020)

Nonetheless Indian agriculture’s crisis continued to worsen, with the period since 2011-2012 seeing increased costs of production, depressed prices for farm produce, and a growing indebtedness. Year after year farmers faced a severe income squeeze and less and less means to make investments in agrarian infrastructure and machinery. Among farm households in 2016, 53.4 per cent were below the poverty line; only 47 per cent of their income was derived from farming; monthly median incomes were just 1,600 rupees ($25).

In1912 Rosa Luxemburg wrote that in the India of the 19th century “Every day another plot of land fell under the hammer; individual members withdrew from the family unit, and the peasants got into debt and lost their land.” As a consequence of the colonial policy carried out by the British occupation “over large areas the peasants in their masses were turned into impoverished small tenants with a short-term lease”. (The Accumulation of Capital) In 2020, under the same remorseless process of capitalisation of agriculture, every year nearly a million farmers leave farming while 15,000 of them commit suicide.

The federal government could not be left behind and had to follow the overall policy of that the regional state governments had started, which was to implement agrarian “reforms” in the area of the former “Green Revolution”: Punjab, Haryana and the western part of the state Uttar Pradesh. On 18 December 2020, addressing a Kisan Sammelan (Farmer Conference) in Madhya Pradesh by video conferencing, Narendra Modi declared: “We are compelled to do things which should have been done 25-30 years ago”.

3. Modi’s laws attack the richer farmers and the middlemen

With the new farm laws of the Modi government, the limitations regarding the financial interactions between farmers and “external” buyers, outside the rural field, will be lifted. The use of the “mandis” is no longer obligatory and any buyer can purchase agricultural produce directly from the farmers. Since for trade outside the state-run markets no duties will be imposed and there will be no transport costs for the farmer, this will be an incentive to prioritise this kind of trade. Even if it is not ended formally, in practice it means the beginning of the dismantling of the system of guaranteed prices for wheat and unmilled rice (paddy).

Who benefits the most from the old system of price regulation and state run markets for government procurement? Who are the most endangered by the new laws of the Modi government? Which class of farmers has the most to lose when the new laws are implemented?

“As the government procurement is concentrated at a few centres, it requires farmers to have transport facilities to reach the procurement centres, usually located far away from villages. Therefore, [how] small it wouldn’t make sense for farmers with limited amounts of produce to take their produce to these markets. Furthermore, a high proportion of farmers are not aware of the MSP and whether it is higher/lower than the prevailing market prices. Therefore only the larger farmers are able to benefit from the MSP and government procurement.” (Dr. Richa Govil and Dr. Ashok Sircar, Explainer MSP (Minimum Support Price) and Government Procurement; Azim Premji University, April 2018)

For a long time the farmers have sold their crops by means of government-regulated wholesale markets across the country. These “mandis” are run by committees made up of farmers, often large land-owners, and traders or “commission agents” who act as middlemen for brokering sales, organising storage and transport, and even financing deals. Of all the farmers only 6 per cent actually receive guaranteed price support for their crops. A survey undertaken by Punjab Agriculture University has confirmed that 94 per cent of the government subsidies are being used by big and medium farmers, leaving the smaller farmers sidelined.

On top of that these rich farmers, who have a large marketable surplus and pocket a bulk of MSP, manipulate small and marginal farmers, engaging in predatory lending practices to their poorer neighbours, further squeezing them dry. “Very often rich farmers and Kulaks take on the role of commission agents and intermediary traders; they also take on the role of usurers and moneylenders, and purchase farm produce from the lower middle and poor peasants at prices much lower than the MSP and earn profit by selling these products at remunerative prices and also through commissions.” (Abhinav, The Three Farm Ordinances, Present Farmers’ Movement and the Working Class; Red Polemique; 08-01-2021)

Thus, these laws of the Modi government are actually not meant to be a frontal attack on the small farmers, but mainly to sideline the layer of larger farmers, the money lenders and middlemen, who now function as mediator between the small famers and the “mandis”. In India, the agrarian reforms of the “Green Revolution” have developed “a class of ‘kulaks', middle peasants who have grown rich and form a social buffer in the countryside between the great landlords and the smallholders”. (Notes on the peasant question; International Review no. 24 - 1st quarter 1981) The agricultural laws will finish off the monopoly of this new class of farmers formed by the “Green Revolution”.

This new step in liberalisation and deregulation also permit big food corporations to penetrate the agrarian market in these northern states of the country, to deal directly with the very small farmers, of whom 85% has only two hectare land or less. In the near future these laws will not essentially change conditions for the small farmers. Today India’s poorest farmers are forced to sell their crops at discounted prices to their richer neighbours and in the future they might have to sell it at discounted prices to the corporate agrarian food business. But under the yoke of the big food corporations the process of ruination of the small farmers will probably accelerate.  

Deals with the big food companies may include contract farming, involving the corporate buyer specifying the quality required and the price, with the farmer agreeing to deliver the agreed quantity at a future date. In the logic of this evolution the perspective for the small farmers would be first to become bonded labourers of these big companies and finally to be evicted from their land.

4. The farmers are not a class and were not united in the protests

It is certain that the recent farmers’ protests were the largest and most massive in the history of India since its independence in 1947.

But who took part in these protests? Undoubtedly the biggest part of the protesters consisted of small and marginal farmers and many of them were rural wage labourers. But that doesn’t mean that it was a working class movement (in which the focus was on the demands of the agrarian wage labourers), or even an interclassist movement (in which these wage labourers put forward their own specific demands). The farmers’ protests were spearheaded by the class of richer farmers-cum-commission agents, the Indian version of Kulaks, and in the demands the entire focus was on repealing the three farm laws.

“Unlike the sociologists, who talk indiscriminately of the peasantry as a unified social class, Marxists have always demonstrated its heterogeneity. (…) The peasantry as such does not exist; there is rather, on the one hand a rural proletariat, and on the other hand, various social types of ‘farmer’, from the great landed proprietor to the jobless.” (“Notes on the peasant question”, International Review no. 24 - 1st quarter 1981)

It is not true that the farmers and the agrarian wage labourers in the North-Western states of India have all the same interests, and that they were united behind the demands of the farmers’ organisations which organised the protests. Most of the farmers’ unions, brought together under the umbrella of the Samyukt Kisan Morcha (SKM), are dominated by richer farmers and their paid servants, and the objectives of the farmers’ movement were shaped above all by the interests of this group. 

Left and extreme left organisations, such as Friends of the Earth International, Europe Solidaire Sans Frontières, Communist Workers International (CWI), The Fourth International, Socialist Worker in the UK, , etc., presenting the movement as a genuine famers movement, in which rural wage labourers fought shoulder to shoulder with the farmers, don’t tell the whole story. Since the farmers’ unions, who organized the protests, are led by better-off farmers there are strong connections to the political establishment. Behind the protests, and which is typical for a bourgeois movement, all kind of political, sectorial, regionalist and even religious pressure groups pulled at the strings and determined the course of the movement and the demands put forward.

The working class in India is weak and is held in a stranglehold by the unions, but there is nonetheless a great deal of anger among the workers, given the harshness of the attacks on large sections of the population. Since a big part of the (migrant) workers still has strong links with the countryside, there was broad sympathy among the Indian proletariat for the farmers’ movement and its demands. Moreover, the impoverishment affects not only the farmers, but all the non-exploiting classes. In solidarity with the farmers’ protests a “strike” was reported of 50,000 public sector employees in Punjab who participated in a ‘sick-out.’

However, for the working class these protests are not something it should welcome or even to show solidarity with. They do not contain the potential to put the capitalist mode of production into question, and thus seek a solution within the structures of the present society. But in the decadence of capitalism the problems of the farmers cannot be solved in capitalism, even not by a “farmers’ revolution”. A solution to the problems of the rural population, especially in these countries, can only brought about in the framework of a worldwide proletarian revolution.

2021-04-10, Dennis