Sunday, 26 June, 2022
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Ban on wheat export is tyranny. It stops farmers from getting a windfall from higher prices

Modi govt's ‘deal’ for the farmer is: ‘Heads I win, tails you lose’. Just when farmers might receive a decent price, the govt floods the market with imports or bans exports.

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Meddling with agriculture imports and exports probably takes the cake in terms of the innumerable ways by which farmers’ land and property has been stolen by the government in independent India.

In a civilised world, governments don’t steal the property of their citizens. If the Narendra Modi government wants to build a strategic wheat reserve, it should by all means do so – but only through the open market. Let the government pay farmers a rupee more than the highest price they currently receive, and all farmers will gladly sell their wheat to the government.

Bonded labourers probably receive greater respect as individuals than India’s farmers. While Nandan Nilekani (or any other business person) can become a multi-billionaire, farmers are condemned not just to subsistence, but to extreme poverty. Even the most efficient farmer can’t become a millionaire, let alone a billionaire.

In independent India, farmers’ property has been confiscated, efficient farmers have been forced to stay small, farmers are told what they can produce and precisely where they are allowed to sell (mostly to a monopolist, confiscatory government “mandi”) and have been forbidden on occasion to even transport their output across the district boundary.

Farmers are thus comprehensively prohibited from getting the market price for their produce and they virtually never manage to break even for their labour and sweat. In most cases, government interventions lead to severe losses, which then prevents farmers from repaying bank loans. The pressure so created ends tragically in some cases, in suicide.

In sum, the government’s ‘deal’ for the farmer is this: ‘Heads I win, tails you lose’. The moment India’s tyrannical governments think that farmers might receive a decent price for their hard work, they flood the market with imports or ban exports. To stop farmers from getting a once-in-a-decade windfall from higher farmgate prices for wheat is tyranny.


Also read: India faces flak for wheat export ban, experts fear move could trigger domino effect


Policies that harm the farmers

The language used in the government’s Foreign Trade Act export and import orders always reeks of a redistributive intention: the government wants food prices to be kept low for urban consumers by stealing from farmers. This time around, though, the Modi government is not just talking about transferring farmers property to Indian consumers. The Director General of Foreign Trade feels the pain even for foreign consumers. Indian farmers must now offer themselves as sacrificial goats not just for rich urban Indian consumers but also for “neighbouring and other vulnerable developing countries”.

The government publication, the 2014 Economic Survey, itself acknowledged that such tyrannical policies cause farmers “severe” harm: “Generally an ad hoc trade policy has been followed for agricultural commodities, more often as a knee-jerk reaction to the domestic price situation, which puts the domestic as well as international market under great uncertainty, and the farmer, being at the bottom of the pyramid, is severely impacted. It also leads to erosion of confidence in India being a trustworthy supplier in the international market.”

The Foreign Trade Act is just one of the many instruments to oppress farmers. The Securities and Exchange Board of India (SEBI) Act, 1992 has been repeatedly used by the Modi government to block agricultural trade. Over the course of 2021, the SEBI banned a range of agriculture-related futures and options contracts: for chana since August 2021; for mustard since October 2021; and for wheat, soyabean, oil, soya de-oiled cake, moong, etc since December 2021.

I hope the farmers of Punjab, Haryana and other parts of North India who misguidedly opposed the farm laws, which would have at least allowed a minimum of freedom domestically, have learnt their lesson by now. I have been warning them about this eventuality of an export ban on wheat, and it has happened. The governments in India are not the friend of the farmer.

The socialists (Congress and the BJP) have for seventy years destroyed property rights and seized the produce of farmers. They are also extraordinarily incompetent and cannot supply quality inputs such as adequate voltage 24/7 electricity. They force farmers to pay for electricity which burns their water pumps, and to pay back bank loans even when all options to make a profit have been crushed by the government itself.

India’s negative subsidy regime takes away at least $10 billion per year from farmers through market restrictions (net of any positive subsidies such as the minimum support price). The amount taken away through property rights restrictions is vastly greater.

The BJP, like the Congress, has no interest in agricultural sector reforms, which it treats as a sector to be “used” to advance industry. That is why I am committed to bringing together India’s farmers for a gathering in early October 2022 to demand genuine, full-fledged, long-term reforms. Our party will never accept anything less than the full suite of reforms. We have published a draft Discussion Paper, which provides extensive details of the kinds of reforms we need, and why we need them.

We are determined to follow in the footsteps of C. Rajagopalachari and Sharad Joshi to revive the original Ambedkar Constitution with its full suite of property rights. The Ninth Schedule must go, which will automatically eliminate oppressive laws like the Essential Commodities Act. As well, oppressive laws like the Foreign Trade Act must go. And any strategic food reserve must be built at the market price, with transparent budgetary support provided for the poor, not out of the farmers’ pocket. Farmers won’t take the tyranny against them any more.

Anil Ghanwat is president of Swatantra Bharat Party and senior leader of Shetkari Sanghatana. He tweets @anil_ghanwat. Views are personal.

(Edited by Prashant)

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