Farmers in India are in uproar: The planned organization of growers in cooperatives “cuts off their hands” and there are ongoing protests and an impending lockdown. Jaswinder Singh Bhamra, CEO of Hamburg-based import company RhineLink GmbH, comments on the situation: “All over the world, farmers are losing power over their produce, the protests in India have taken on a different dynamic than anyone expected.”
The Indian government is planning on organizing growers into cooperatives which will be in charge of marketing the products, effectively taking away market power from the growers and putting it into the hands of corporations.
The BBC writes: “Taken together, the reforms will loosen rules around sale, pricing and storage of farm produce - rules that have protected India's farmers from the free market for decades. They also allow private buyers to hoard essential commodities for future sales, which only government-authorised agents could do earlier; and they outline rules for contract farming, where farmers tailor their production to suit a specific buyer's demand.
One of the biggest changes is that farmers will be allowed to sell their produce at a market price directly to private players - agricultural businesses, supermarket chains and online grocers. Most Indian farmers currently sell the majority of their produce at government-controlled wholesale markets or mandis at assured floor prices.
These markets are run by committees made up of farmers, often large land-owners, and traders or "commission agents" who act as middle men for brokering sales, organising storage and transport, or even financing deals. It's a complex system underpinned by regulations, and a host of personal and business relationships. The reforms, at least on paper, give farmers the option of selling outside of this so-called ‘mandi system’.”
The fear of the farmers is that corporations will offer fair prices for the time being but once the mandi system has been eliminated, there will be no back-up option anymore. The concern is a lack of leverage of farmers against big corporations. "This is a death warrant for small and marginalised farmers. This is aimed at destroying them by handing over agriculture and market to the big corporates. They want to snatch away our land. But we will not let them do this," Sukhdev Singh Kokri, a farmer, told BBC Punjabi.
Jaswinder adds: “The producers don’t want to hand over their freedom in worries that they will suffer under the new system which will imbalance the established ways of trade.”
“What started out as local protests led by Punjabi farmers has turned into a nationwide movement. Farmers have travelled from all over the country and have now encircled New Delhi, still led by Punjabi farmers. Many politicians and union ministers are among the tens of thousands of farmers in the capital to voice their disapproval”, says Jaswinder. “All major highways leading into New Delhi are rapidly getting blocked in some cases with up to 45 km of tractors and vehicles jamming the roads from all directions. The protesters are claiming they will not go back home until these bills are removed.”
The government, in turn, has reacted violently: “Peaceful demonstrators were attacked with teargas, water cannons, and were beaten up with sticks. The UN General Secretary Antonio Guterres, the Canadian Prime minister Justin Trudeau and some 36 British MP’s have condemned these usage of this violence against the peaceful demonstrators. After all, India is the world’s largest democracy.”
India will be brought to a halt today, 8th December 2020, when all business is set to stop for one day to highlight the sentiment of the farmers. “It is expected that 31 members of the various farmers unions and the Modi government will meet and discuss the matter tomorrow. The protesters are prepared to stay in the streets of the capitol, however long it takes for the government to revoke these bills.”
India is not the only country with protests
Jaswinder sees similar issues, even on the German market: “Farmers suffer under the market dominance of big retail chains which are screwing producers so tightly, they can barely survive. These farmers do their hard work to feed the country and yet get nothing out of it. The supermarkets delegate the prices with disregard to growers.” While there have been some protests in Germany and other neighboring countries, it is a new movement in India.
In terms of importing produce from India, the lockdowns are making the situation even more difficult than it has already been, Jaswinder knows: “Consumers are already more likely to buy kitchen staples such as potatoes over exotic fruit during the pandemic. The freight rates have gone up significantly, making it even more difficult to sell exotic fruits.”
So far, the lockdowns haven’t made the situations worse than it already is: “If the lockdowns on farms and even in logistics continue, or the new government rules get passed, the sector will take a big hit – in India and in countries importing Indian goods.”