Masses against Market Power
Updated: Feb 4
In India, workers and farmers are demonstrating against the liberalisation of Labour law and Agribusiness
On the 26th of November, a joint platform of ten trade union organizations and over 250 farmers’ collectives successfully organized a nationwide general strike which was attended by thousands of demonstrators - workers, students, unemployed, and farmers.
Earlier this year, on the 8th of January, the joint platform of central trade unions (CTU) had organised a general strike in opposition to three new labour codes. Compared to January, three new farm laws that seek to deregulate the agriculture sector, have mobilized farmers in significant ways.
Chakka jam: Mass Demonstrations and Roadblocks around the Capital
The capital city of New Delhi was almost successfully blockaded by thousands of trucks and trailers on the highways connecting the city to the states of Haryana onto Punjab. In response, police blocked entry to the farmers, who intended to drive into the city centre. At major points of entry, deep trenches were dug up, barricades erected, and the police used tear gas and water cannons on the peaceful demonstrations.
The highway blockades extend for several kilometers from the suburbs of Delhi, and many farmers told Nikita Jain that their resolve to remain in place until the bills are withdrawn remains solid. The road blockade at the Singhu border with Haryana now resembles a large camp - or a small town, replete with medical clinics, food kitchens, elaborate water, milk, and tea distribution lines, and a supply of several weeks’ rations to keep the protests going. While Haryana shares a long border with Delhi, most villages in Punjab are between four and nine hours away from the blockade. Several farmers have swapped places with relatives every few days, and have returned with more supplies to buttress the blockade.
Farmers from other northern states like Rajasthan and Uttar Pradesh have begun joining the protests, and several southern states including Karnataka and Tamil Nadu have orchestrated similar demonstrations of solidarity in their respective regions. Although most of the farmers laying siege to the capital are relatively wealthier and farm larger parcels of land, the impact of these laws will most harshly be felt by landless agricultural labourers and marginal farmers, many of whom are Dalits.
Before the Law: State, Farmers, Industrial Interests
On September 27th 2020, the president passed three controversial agriculture bills, which saw an outrage from farmer's associations in Punjab, Chhattisgarh and Haryana. The bills namely - The Essential Commodities (Amendment) Ordinance, 2020, The Farmers’ Produce Trade and Commerce, 2020, and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 – were passed in the parliament despite a major uproar from the opposition MPs. And even though the National Democratic Alliance (NDA) clearly was not in a position to win, the bills were passed.
In nearly every state, farmers obtain licenses and pay commissions to sell their produce at registered mandis (agricultural produce markets). This system has long been criticised - there were not enough mandis, they cost farmers too much, and their governance had been captured by local power brokers.
Twice a year, India's central government announces the guaranteed price at which it will procure different crops from farmers. The declaration of this minimum support price (MSP) before the sowing season influences farmers’ investment decisions but its guarantee of stability - protecting farmers against crashes during bumper years - is perhaps more significant.
Minimum support price (MSP) is the major demand that farmers want to be included in the bill. The minimum support price is an agricultural product price set by the Government of India to purchase directly from the farmer. This rate is to safeguard the farmer to a minimum profit for the harvest, if the open market has a lesser price than the cost incurred. The farmers have said that they are assuming that this will be removed as nothing has been mentioned about recurring it in the bill.
The MSP is also important to the other objective of India's agricultural policy: the pursuit of food security through the creation of buffer stocks and a public distribution system (PDS). In spite of food surpluses, India remains one of the world’s most food-insecure countries, with the highest rates of stunting and wasting among other South Asian countries. For crops like wheat and rice that are vital for food security, the government allows its procurement agencies such as the Food Corporation of India to buy at the MSP, whatever is offered by the farmers for sale.
The FCI maintains a stock for distribution along with reserves to meet shortfalls. The MSP has also been criticised for incentivising farmers to grow only those crops that are distributed to India's poor at subsidised rates.
Ceilings on the storing and movement of essential agricultural produce, enforced through administrative orders, is another part of this system. It too, has been criticised for its unpredictability, for stifling private investment in post-harvest storage and logistics.
Who is the market for?
85% of India’s farmers are small and marginal, with a landholding of less than two hectares. Most of them do not have access to mandis where they can sell their produce at the MSP. They lack storage capacity and other infrastructure such as transport, and are forced to immediately sell their produce at the rates offered. That vast majority of farmers from India's marginalised communities, including the oppressed castes and the tribal communities, belong in this category.
For years now, developed nations have challenged India’s state support for agriculture. Opening up the agricultural markets to market forces had been on the agenda of India's governments ever since it liberalised its economy in 1991. So far, successive central governments had tried to coax state governments to open up their agricultural markets, and in 2003, even made a model law that several states had in fact enacted to different extents.
The power to make law on the subject of agriculture, under the constitutional system of distribution of powers in India's federal system of government, belongs to the state governments. The new laws passed by India's Parliament, were in violation of this scheme.
Doubling farm incomes was one of the biggest promises of the Narendra Modi government after it assumed office in 2014 but incomes have been falling. These bills have been sold as a path towards that goal. They imagine a greater role for market forces and the private sector in agricultural value chains by deregulating contract farming, removing restrictions on the movement and storage of food items, and allowing trade in agricultural produce to take place outside mandis.
Permitting the trade of farmers’ produce outside the physical premises of the mandis, the government says, will break the system of commissions to middlemen. Critics argue that mandis will not survive the proposed system. Agricultural trade will move out of mandis to the zero-tax areas outside, replacing the current set of middlemen with more powerful corporate elites.
“Why are these local markets useful for different categories of farmers? They know them, in every state there are several of those kinds of things. So it's proximity, knowledge of markets - markets are social terrains. Long-term relationships exist between people in markets. These bills would entail the replacement of the current setup by effectively a new kind of market-network, which is itself tied to corporate control, to the neoliberal global food regime. And so the degrees of control that the farmers are likely to have, including rich farmers, on many aspects of this distribution chain is likely to be far lower than in the case of markets which are local, where the actors are known to you, with whom you have made relations in the long run.”
Subir Sinha, professor at SOAS in London in an interview with AK.
Protesting farmers also fear that the creation of private markets where private buyers are not required to purchase farmers’ produce at the MSP is a precursor to the eventual removal of the MSP. The government has asserted that the MSP mechanism will continue but the fact that the law does nothing to strengthen the governance and efficiency of mandis or increase their reach in underserved regions, has deepened suspicions.
“What the bills say is less of a worry for farmers than what they don’t say”, Ankur Sarin, professor of public policy at the Indian Institute of Management, Ahmedabad told AK referring to the lack of wording around the MSPs in the bills. “Farmers have drawn their conclusions about what is likely to happen to the MSPs.” In the states of Bihar, Sarin argued that the marked fervor of the farmers’ protests could be attributed to the lack of participation in decision-making about the new farm bills. “This time, it seems like the protests are not just about what is being done, but also about how it is being done”, he added.
Another new law permits farmers to enter into contracts with agribusiness firms for the sale of future farming produce at a pre-agreed price, without seeking permission from the state. The third law removes commodities like cereals, pulses, oilseeds, onion, and potato from the list of essential commodities and does away with stock holding limits.
These laws assume that private investments in agri-food supply chains will lead to gains in efficiency along the supply chain and that these gains will be passed on to farmers in the form of higher output prices or lower input prices. Many poorer farmers told us that this would mean that they would likely end up losing ownership of land.
Critics apprehend however, the corporatisation of agriculture without sufficient regulation. Large firms will be able to influence farm practices and investments and hoard large amounts of crops. Apart from questioning their adequacy to boost incomes, protesting farmers also fear that these measures herald the large scale withdrawal of state support from farming.
During the curtailed Monsoon session, India’s parliament also passed three legal codes on labour that joined the Code on Wages, 2019 to replace 44 federal laws. Similar to agriculture, governments had long been under pressure to simplify and amend India's labour regulations. Here too, there was consensus among India's larger national parties that the old regulations contributed to the lack of competitiveness of Indian firms. Here too, the changes had first been attempted through legislation in the states before the Modi government had felt it had waited long enough. It made no attempt, as governments had done in the past, to secure consensus with labour unions before passing these bills through the legislative chambers.
Most of the old laws which protected wages, working hours, conditions of work, social security benefits, and collective bargaining rights from being pushed below acceptable levels, applied only to the country's formal sector, where less than 10 per cent of its workforce is employed. India’s labour unions’ long-standing demand to include the millions of non-regular and precarious workers in their protective embrace was not heeded by the central government.
Criminalization and marginalization of trade unions
India’s labour law already frowned upon strikes, but the new laws have further restricted them. Just as in several other countries, Indian labour laws had, in the name of maintaining peaceful industrial relations, limited the ability of workers to go on strike. The 1947 law had required that strikes in public utilities could not be conducted without giving at least 14 days notice. This resulted in practice, in several sectors of industry, including several types of mining and the cement manufacturing industry, successfully lobbying to be declared as public utilities. This law was sanctified by the Supreme Court of India that never recognised a worker’s right to strike as being fundamental to her liberty or dignity.
With the new laws, prior notice is mandatory for all strikes in all industries and any strikes without it, are “illegal strikes”. Support for such a strike is an “unfair labour practice” that can be punished with heavy fines and prison terms. Even the registration of a trade union can be cancelled for such a violation.
The new law also introduces the concept of a sole negotiating union. A trade union needs at least 75 per cent of the work-force as members to become the sole negotiating union with an employer. If as is likely the case, no trade union has 75 per cent of the workers as members, governments can form a negotiating council, giving them immense power over representative unions.
Contract work, easy retrenchment
The new laws also permit businesses to employ workers for a limited duration based on a contract, a system that has been used historically to deny benefits to workers.
The 2020 code also permits governments to revise through executive action, the threshold number of employees at which a business is required to obtain the government's consent to retrench (termination of an employee’s service for reasons other than disciplinary reasons) workers. Previously, a state government would have had to pass a law for that purpose.
Bharat Bandh: General Strike on 8.12.2020
On 8th December, a further general strike took place in India and this time it was intended as a clear protest against the laws and the undemocratic politics of the Hindu-nationalist government. Many transport associations around Delhi offered their support in the form of breaking the supply chains in the capital and street blockades around the government buildings.
The Hindu reported on the strike, stating that “the Bandh call was supported by at least 25 political parties, as well as a wide range of society, including major trade unions, traders and transport associations as well as professional bodies such as the Bar Association of the Supreme Court.” Although emergency services remained operational during the Bandh, many streets all over northern India were blocked, markets in many places remained open, although mandis in Delhi’s neighbouring states in many rural areas were shut completely.
The Delhi Police, which is under the control of the BJP, have forced the chief minister of the Aam Aadmi Party under virtual house arrest preceding the general strike, although Delhi police denies the claim. Many political leaders, including Dalit leader Chandrashekhar Azad, have also been put under house arrest in parts of Western Uttar Pradesh.
After talks with the home minister Amit Shah, leaders rejected the amendments to the three contentious bills, and vowed to continue their protests. They announced a plan to block the highways leading up to Delhi from Agra and Jaipur, rendering toll roads unoperational, and surrounding the ruling party’s offices across the country.
“We are not prepared to talk anymore,” Shiv Kumar Kakkaji Sharma, who heads the Rashtriya Kisan Mahasangh, told The Hindu on Thursday. “One by one, we will block all of Delhi’s roads. Until the three laws are repealed, our war will continue.”
Worldwide Protests in Solidarity
Internationally, the protests have been led largely by the Sikh diaspora in Canada, Britain, the United States, New Zealand, and several other places. In California, the Indian embassy in San Francisco was surrounded by thousands of protesters in support. In turn, significant amounts of funding has also been pouring into the blockades through international networks such as Khalsa Aid.
In Berlin the collective Arbeiter*Innen Macht and Berlin for India jointly organised a demonstration in solidarity with the general strike at Alexanderplatz on 26 November. Both groups demanded more transnational cooperation between workers’ struggles. The cooperation between local groups and party political interests will be important in this respect, particularly because the Grand Coalition is ready to sign further agreements with the Modi government which have been harmful to workers in India and would continue to cause harm.
Aju John (Berlin) is founder of Open Civic Learning und editor of the podcast Nagrik. Aju tweets @islandexpress.
Nikita Jain (New Delhi) is a journalist based in Delhi and writes on social and political themes.
Mihir Sharma (Berlin) writes about race, class, and the environments, especially in the context of social movements.