On November 19, Indian Prime Minister Narendra Modi repealed three controversial farm laws after more than a year of farmers’ protests. The legislation was intended to remove subsidies for farmers and price regulation on crops.
This policy, ostensibly designed to “modernize” the agricultural sector, would ultimately have left millions of people without the much-needed government support, and at the mercy of the private sector and international corporations in an industry plagued by inequalities.
These harmful laws have been strongly influenced by Western countries willing to drive Indian farmers into poverty for their own capitalist agendas. To prevent this, the Indian government must implement policies that can sustain a livelihood for farmers and reject these unfavorable designs from the West.
While the government has been forced to reverse course, farmers in India are still facing significant challenges, including a crisis of poverty and increasing debt that is driving many to suicide. Currently, there are no government regulations on how much or how little a farmer can earn.
Current subsidies help farmers stay afloat, but it is still often impossible to make a profit given the high cost of production at the low prices at which crops are sold. Farmers are now asking the government to introduce regulations that prevent crops from being sold below actual input costs and guarantee a reasonable profit for farms.
One solution would be for the Indian government to introduce a minimum support price (MSP) in its agricultural policy across the country as it is currently only available in some states. Indian farmers are now insisting that MSP be given a mandate to ensure that prices of their crops are set on a formula that will make farming sustainable for the smallholder farmer and make the price of crops affordable for the public.
So what is stopping the Indian Prime Minister from moving forward and implementing MSP? In addition to his well-known closeness to the Indian corporate sector and tacit support for monopolies, he also faces intense pressure from the World Trade Organization and countries such as Canada, the United States and Australia.
Over the past few decades, these Western countries have been pushing India to remove subsidies in its agricultural sector from the WTO. In 2018, the US claimed India had underreported the MSP for wheat and rice. In 2019, both Canada and the US aggressively objected to the high level of MSP in India, which in WHO terminology is termed MPS, while Australia specifically criticized subsidies for sugarcane and lodged a formal complaint. In July 2020, Canada joined Paraguay, accusing India of bringing subsidies above allowable levels.
The WHO introduces regulations on farm products within countries, as well as agricultural trade between countries, to promote free trade and limit subsidies that create “market distortions”. This allows subsidies to increase to 5 percent of the value of production for developed countries and 10 percent for developing nations.
However, these policies are largely based on the structure of the agricultural sector in rich Western countries where farm sizes tend to be large – 400 acres (162 acres) in the US, for example. A subsidy of 5 percent for such agricultural enterprises is more than enough.
In contrast, the average farm in India is about two acres (0.8 acres). A 10 percent subsidy allowed by the WTO is not enough for a farming family to survive. This is why some Indian states have implemented MSP up to as high as 50 percent of production cost for some crops. Farmers have argued, however, that the formula used by state authorities to calculate the MSP they offer often does not reflect the true cost incurred.
Furthermore, in their campaign against India, which the developed countries do not recognize, is that they provide other types of income support to their citizens, including farmers, which are not available in developing countries. In the US, for example, there are food stamps, welfare, spending controls during economic downturns, unemployment benefits, social security and certain health insurance to help struggling families.
The infrastructure of developing nations simply does not support the creation of similar social policies. An Indian citizen cannot rely on any support other than their primary income.
In the case of farmers, who make up about 60 per cent of the Indian population, it can be devastating to be at the mercy of the world market and local speculators without any form of social or economic support. This is why India has shockingly high suicide rates among people who are dependent on farming.
Without a guaranteed minimum income, farmers cannot survive. Without MSP, the threat of small farms becoming extinct is imminent. When that happens, where will food come from? India will have to import – and this is where the interest of Canada, the USA and Australia lies.
The South Asian nation with a population of 1.3 billion is a highly profitable market for these Western countries. To capture this, they seem to be pursuing neocolonial policies, with the WTO serving as a new East India Company.
While agriculture may be just an economic sector for the West, it is much more for India. Indian farmers not only produce the food that their countrymen consume, but they are also closely connected to their land in their culture and personal lives. They call their farmland “mother” and see their relationship with it is that of family – a “umbilical cord” bond that cannot be broken by politics.
While the West may not understand the cultural significance of farming, the Indian government understands it. There is no reason why it should follow failed Western agricultural policies and put Indian farmers at the mercy of imperialist nations or corporate greed.
Its task is to protect the Indian national interest that lies in the prosperity of Indian farmers. The adoption of a national MSP will be a major step in this direction.
The views expressed in this article are those of the author and do not necessarily reflect Al Jazeera’s editorial views.