Asia Economics Social Issues

India’s Teetering Agricultural Market: a Fight Against Neoliberal Reforms

Contrary to the ambitions of neoliberal policies, a rapid transition towards free markets will not ensure economic efficiency. Instead, India’s government must revise the agricultural reforms to include safeguards against market volatility and protect local producers from exploitation by corporations.

For several decades, neoliberal economic policies have evoked turmoil and chaos for India’s farmers. Now, as the struggle for local producers to maintain their ground in the global market intensifies, Indian farmers unite to protest controversial agricultural reforms.

India first transitioned away from state interventionist economic planning and towards neoliberal policies in 1991. As first proposed in the 1930’s, the central goal of neoliberalism has been to promote economic growth by encouraging free market competition and discouraging state intervention in economic affairs. India’s introduction to neoliberal reform ran parallel to the experiences of many other developing countries, as the policies were imposed by the International Monetary Fund (IMF) in exchange for loans. As usual, aid came with a price, and the price was one that aligned with Eurocentric interests. This involved a colonial division of labor and a manipulated shift towards an agrarian society. England was quick to act on its imperialist ambitions and mechanize Indian agriculture, consequently shaping India into one of the world’s largest producers of spices, grains, milk, and fruits.

So what exactly is the issue arising from a highly globalized market and India’s latest neoliberal reforms? To answer this, one must go back several decades, when India’s government regulated an auction for farmers to sell their goods at. The nation’s Agricultural Produce Market Committee protected the local market by guaranteeing minimum prices for items, imposing price caps on essential items, and enabling farmers to predict the market for the following seasons. In September 2020, however, three new reforms dismantled the committee structure – the Farmers’ Produce Trade and Commerce Act, Farmers Agreement on Price Assurance and Farm Services Act, and the Essential Commodities Act. Through these bills, producers are granted full autonomy in setting their prices, as well as in selling their items directly to private buyers or large grocery chains. Consequently, since private traders and large corporations have the power to drive down prices, they are holding increasingly greater bargaining power over smaller producers. Local producers are left with the short end of the stick, as they cannot compete with these low prices.

India’s government claims its 7% GDP annual growth is indicative of the new reforms’ success, but it refuses to address the nation’s growing income inequality. Data from 2019 stipulates that over 650 million Indian adults had a net worth of less than $10,000, whereas around 15 million Indian adults had a net worth of over $100,000. The persisting trends of poverty rates in India  are swept under the rug, and the government instead utilizes neoliberal policies to feed into capitalist demands. 

Since winter 2020, thousands of Indian farmers have mobilized to protest the liberalizing reforms. In addition to marching on the capital, many set up blockades or participated in labor and hunger strikes. One of their largest rallies took place on January 26, India’s Republic Day, which commemorates India’s signing of its constitution. In India’s capital of New Delhi, the rally turned violent as demonstrators drove tractors straight into law enforcement, and officers retaliated with the utilization of tear gas and batons. Adding to the ensuing chaos, the Indian government’s heavy-handed response to this civil unrest was to shut down internet access and militarize the area. India’s Ministry of Home Affairs claims these actions are for the sake of public safety; but, the city of New Delhi is currently overrun with miles of cement barricades, barbed wire, and iron spikes.

Farmers demand a full retraction of the legislation. Upon rejecting the government’s offer to suspend the bills for 18 months, the farmers’ unions proposed an ultimatum. That is, the government must repeal the laws in their entirety by October 2, 2021, or else the farmers will abandon any civil discussions with the government and resort to confrontational demonstrations and demands. Until a new decision is made, hundreds of farmers’ lives will continue to be taken by exposure to cold weather, poverty, and suicide. Additionally, each protest only adds to the casualty rate, as police are not reprimanded for beating and killing demonstrators. Perhaps a testament to pervasive corruption in India’s criminal justice system, not a single police officer has been convicted for deadly force since 2011. Evidently, the conflict that India is facing is not merely an issue of agricultural reform and labor rights; rather, it extends to greater issues of police brutality and militant nationalism, as well. 

With the news of India’s brawl for democracy and civil rights spreading beyond the nation’s borders, a number of countries are beginning to voice their solidarity. As of now, India’s internal conflict has evoked the support of several powerful nations, such as France, Germany, and the United States. Despite current efforts for transnational coalitions, bringing attention to these pressing issues is proving difficult. India’s government has stipulated that any international interference will be viewed as a threat to its sovereignty, which they say will be dealt with accordingly. Indeed, the Indian government is persistent in seeking out anyone who dares to voice their opposition against its governance. Today, there are countless cases of activists being arrested, citizens’ passports being confiscated, and dissenting social media accounts being blocked. 

In light of the intense hostility that India’s government holds towards foreign aid, the US is in a difficult position to intervene. Presently, the US is intent on fostering diplomatic relations with India to counter China’s rise. Taking action against the Indian government now risks straining relations at a time when the Biden administration seeks to bring India in as a more forward-leaning partner in the Indo-Pacific. Further, US intervention may induce a mismanagement of the Indian economy, or it may even instigate a ripple of international ramifications. For these reasons, some legislators scrutinize the proposal to confront the Indian government. 

However, considering the highly globalized state of the world, it is integral that the US steps in to aid India. Instead of viewing this situation from a realpolitik standpoint, legislators need to prioritize the protections of civil rights and the lives of Indian farmers. In fact, pursuing geopolitical goals without first remedying the agricultural market will only exacerbate India’s humanitarian crisis and wealth disparity. In the long run, alleviating the economic hardships faced by Indian farmers will be in both India’s and America’s best interest. 

The best course of action may be to issue sanctions. Withdrawing diplomatic missions or implementing import quotas may prove most effective, while minimizing backlash from dissenters. Admittedly, even if US intervention upsets the Indian government, the truth remains that India depends on US power significantly more than the inverse. Further, India does not have other allies to depend upon, so these sanctions alone will not compromise US-India relations. Sanctions would certainly be a peaceful alternative to military action, and they would guide the nation to revise its agricultural reforms. 

Ultimately, the government needs to be pressured to address the persisting agrarian distress, for the economic vulnerability that Indian farmers are facing now will inevitably be translated to other countries that trade with India. Then, the consequences will also affect the countries that trade with these countries, and so forth. 

These three neoliberal agricultural policies are absolutely devastating local producers, leading to an exponential accumulation of debt. Contrary to the ambitions of neoliberal policies, a rapid transition towards free markets will not ensure economic efficiency. Instead, India’s government must revise the agricultural reforms to include safeguards against market volatility and protect local producers from exploitation by corporations. 

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By Christine Sohn

Christine is a staff writer for the Journal on World Affairs at UCLA. She is currently in her second year studying International Development and Asian American studies, and she is passionate about international relations, civil rights, and environmental politics.

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