The Intended and Unintended Consequences of the Farm Laws

Amit Bhaduri

The decisive Battle of Palassy in which the East India Company got its foothold in India, and established its company rule was not lost in the battlefield, but due to the treachery of a military general. An African saying warns in a similar vein, “An army of sheep led by a lion can defeat an army of lions led by a sheep”. The truth behind this saying is wider, and covers not only battlefields but many modern governments and democratic leaders.  A wrong leader, a toxic ideology, foolish ambition or a false sense of grandeur can play havoc, cause unimaginable damage in a very short time. And then, the country would take a long time, if ever, to recover from the damage.

Examples abound in history. Hitler and Mussolini are still not too distant in memory. The irony of Stalin’s rule was that the Red army defeated the Nazis, but at the same time his policy of purges left the independent communist parties of east Europe crippled from which they never quite recovered. It is now well documented that toxic policies promoted by the IMF and embraced by its market fundamentalist leaders sent Argentina, a country of vast natural resources begging in the world. Delusion combined with a toxic ideology is a suitable recipe for disaster in any country. A negative rate of growth and unprecedented recession, massive unemployment coexisting with a soaring stock market combined with such ideological priorities as banning cow slaughter, building a central vista to show the historic importance of a leader have been foretelling such a disaster. However, we woke up to the fact that the monster is at the door only when the farmers of this country showed the nation the mirror.

If you have not already deposited all your intelligence to the expert discussions and images of the mainstream media, you might ask, like in the fairy tale: “Mirror, mirror on the wall, show me who is behind it all”. And, the mirror would show not two most powerful politicians (both from Gujarat) of the ruling party in power, but two other faces, the two richest businessmen (again, both from Gujarat) of the country. No prize for guessing who they are. Both have been long time cronies of the current leader from his days as the chief minister of Gujarat.

However, it is not merely a case of ‘crony capitalism’ that we are talking about. The three farm laws recently passed hastily in a moribund parliament are no exception to the trend already set in a way.  The government has done it repeatedly but the trend started earlier with blitzkrieg attacks without giving the public time to react. It started with first a guerrilla attack of demonetization and then, strategically bad implementation of GST to weaken petty and small businesses and the states in our federal financial structure. This followed with migrant workers whose, lives and livelihoods were violently uprooted at 4 hours notice of a most severe lockdown. There was disquiet, discomfort and distress, but the public response was still not one of outrage. The illusion of the government fighting against black money (forget about the promise made of 15 lakh rupees), and valiantly imposing a lockdown against the looming pandemic still had some credibility with the trusting public. Then we all could not but see how the cover of the pandemic was being used to hollow out from within the very essence of parliamentary democracy. A series of anti-labour and pro-corporate labour laws were passed virtually without any prior notice and discussion, and now the government has taken a calculated move of bringing the three farm laws into effect fearing little resistance inside or outside the parliament again under the cover of a pandemic in a demoralized economy with negative growth and crushing unemployment where most are gasping for oxygen. 

Very briefly, the three laws are meant to dismantle the mundi system and the minimum support price of agricultural commodities. And, this is the point of general interest often underemphasized by mainstream media, they are meant to do away with virtually all normal legal processes in case of dispute by giving unilateral power to the government. This will transfer power of settling disputes to the executive itself, with no role for the judiciary. The alleged culprit will judge the nature of the guilt, violating all notions of possible conflict of interests in law. Such a law was passed by our democratic parliament hurriedly, demolishing not only farmers’ rights, but threatening the rights of all Indian citizens.

The farmers rose against it. They rose to defend their rights and this has now also become linked with the wider constitutional rights of all Indian citizens. The demoralized poor majority of India has suddenly become aware of the serious danger that stares them in the face. The corporatization of agriculture is a prelude to the corporatization of Indian democracy, of our constitutional rights.

Economists of establishment are not known for their expert knowledge, but for their irrelevant half truths couched in jargons. The cornerstone of their argument, made famous by Milton Freedman is that, a free democracy requires a free market. The farm laws have brought up the question: is it a democracy where the executor is also the judge. Is that the new definition of a free democracy? And then, how free is a market where, a small or marginal farmer faces Mr. Ambani or Mr. Adani in a bargain over price? It is a badly kept secret of standard economic theory that, the price mechanism does not work unless all buyers and sellers are price takers in the market. This means nobody has the market power to make prices. High powered general equilibrium theory had to invent a disinterested outside ‘auctioneer’ like Voltaire’s god who would set and revise prices to get at the market clearing prices. With all its imperfections and corruptions, the minimum support price is the closest we have to a price set by an ‘auctioneer’. The farmers want it enshrined as a law; the government is unwilling because it wants sooner rather than later the corporations to set the prices when the mundi system will become dysfunctional with the present laws, with or without amendments. This is the free market mechanism celebrated by mainstream economists, debated by so-called experts in mainstream media, financed by big corporations. And in the meantime, Mr. Ambani’s Reliance has its fingers on the retail market of agricultural produce, and JIO will control all corporate on-line bulk purchases, while Mr. Adani is busy extending his network of corporate transport and silos for storing agricultural commodities. The government is understandably especially enthusiastic about the future of digital capitalism with 5G which will be controlled by JIO in India. Is there any respite, any alternative route possible? 

The farmers are showing how wrong we all were in our pessimism. Things change but not always in the way a few plutocrats and their menials want, if ordinary people unite with all their usual frailties, and force opposition political parties to unite at least on this issue, who otherwise neither want to have a clear pro-poor road map of development nor enough courage to call the bluff of mechanized corporate agriculture as the El Dorado of the future. The determined resistance of the farmers has created the necessary circumstances. It is for us all to join boldly. It reminds one of the wisdom of the observation: “Men (and women) create history, but not under circumstances of their own making (Plekhanov).”  The circumstances have been created. The lion of the African proverb can still lead an army of sheep to defeat what looked once like an invincible enemy.    

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Dec 12, 2020

Amit Bhaduri

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