Indian agriculture and its contradictions

MEKHALA KRISHNAMURTHY

 

OVER the last year, the physical presence, economic place, and political magnitude of Indian farmers and farming have occupied the national capital region and preoccupied national public debate in a truly extraordinary manner. The ensuing polarization has also brought to the surface some of the most deep-rooted and deeply felt contradictions of agrarian economy and society in contemporary India.

The conflicting perspectives that define this moment are well known but bear repeating. At the end of 2021, with the Union government’s repeal of the three farm laws, the historic farmers’ protest has been heralded by many as a lifeline for a battered democracy and broken federal compact. But this same show of collective strength has been vilified by others, who view the entrenched political economy of agriculture as the most regressive roadblock in the way of economic progress.

In the meanwhile, in fields, villages, towns, and cities across India, over these many months of the Covid-19 pandemic, it is agriculture and agricultural produce, especially basic foodgrains, that have served as material lifelines for millions of citizens. During this prolonged crisis, existing systems of public procurement and distribution, with all their infirmities, have been mobilized into action, and have even expanded to an extent. They have provided vital support to farmers and basic sustenance to the poor.

While the coverage has always been inadequate and many remain excluded, survey after survey indicates that basic food relief has reached millions in need and public procurement has registered record volumes and offtake.1 But the very same source of economic and social protection that has secured this vast buffer stock – the paddy-wheat centric Minimum Support Price (MSP) and procurement regime and the public distribution system (PDS) – has also long been at the heart of policy contention as a fiscal drain and driver of agroecological distress.

Yet more is at stake than a question of surplus grain. During this period, Indian agriculture also reprised its vital role as the oldest and most absorptive ‘sponge’ for surplus labour.2 In 2020-21, bolstered by a good monsoon, agriculture was the only sector of the economy to grow at 3.6 per cent amidst a devastating economic contraction.3 As millions of workers returned to their villages and to the fields, the share of total employment in agriculture saw a perceptible rise. The data from the periodic labour force survey (PLFS) tells us: of the 46.18 million additional jobs generated between 2018-19 and 2019-20 nearly 70 per cent of them are reported to have been created in agriculture. To put it in figures, this represents an estimated 32.72 million additional agricultural jobs compared to only 1.65 million in manufacturing and 3.58 million in construction.4

But the slow growth of agriculture and the meagre incomes that it yields for the great majority of agricultural households mean that for many this immensely absorptive sponge also appears to be an inescapable swamp, impeding India’s structural transformation.

Lifeline and roadblock. Social security system and agro-ecologically destructive drain. Sponge and swamp. When it comes to agriculture, no matter how stylized, idealized or crude these descriptions might appear, each undeniably also represents a grain of truth. Most importantly, even as they are all too easily framed as oppositions, their coexistence arises from deep and dynamic entanglements that have evolved over long periods of time and across very different agrarian regions, each with their own histories and relations.

 

 

The problem is that there is little interest or effort in understanding the genesis of agrarian arrangements and entanglements, investigating their moral and political foundations, and analysing the reasons for their persistence or transformation in different contexts. Instead, the approach to agriculture is at once heavy-handed and deeply indifferent to actually existing conditions. This is exemplified by a battery of laws, policies, and schemes that by design end up simultaneously over-determining and undermining the vast and varied field of social, economic, and political life known as agriculture and those who depend upon it most deeply.

Take the case of agricultural markets. On the one hand, the state imposes strict legal definitions and schematic terms and conditions that at best ineffectively regulate the innumerable kinds of exchange that take place in primary markets and provide farmers little protection against the multiple forms of production and market risk that they constantly confront. At the same time, the state firmly resists making real public investments in building accessible agricultural institutions and infrastructures that would address the actual structural constraints and exploitative conditions that small producers face and that reduce their bargaining power in primary commodity markets. This also effectively restricts the access of small and marginal farmers to whatever public support (whether that is in the form of agricultural credit, irrigation, subsidies, regulated markets, or MSP procurement) the state declares, yet only makes sparsely and unevenly available with disproportionate concentration in only a few regions and crops.

 

 

Moreover, when faced with rising commodity prices, the general response of governments has been to take idiosyncratic decisions by passing blanket orders and imposing temporary controls, usually to the detriment of farmers. On top of all that, there is a penchant for inflicting sudden, state-directed shocks (demonetization and the national lockdown being the most recent examples) that pay little heed to the complex linkages and interlinkages that keep essential agricultural produce in motion and sustain the millions whose livelihoods depend on these systems to work.

In such a context, the answer cannot be to drastically deregulate and get the state out of the way. For the Indian state has never really materialized where, and in the ways, it is needed most in the first place. It also cannot be to intensify ham-handed state control over diverse and complex agricultural markets. Both would in fact only extend the status quo and deepen the very contradictions that are playing out. And it most certainly won’t be achieved by pushing the blame onto a particular Indian region or group of farmers by holding them responsible for the woes of all other farmers, consumers, and taxpayers, refusing thereby to acknowledge and accept the histories and legacies of state and public action – and inaction – that have brought us to where we are today.

 

 

In Ill Fares the Land, the historian Tony Judt writes: ‘The problem is not whether we agree or disagree on any given piece of legislation. The problem is the way we debate our shared interests.’5 Much has been written about the way in which the farm laws were bulldozed through Parliament and the lack of consultation with state governments and the public on central legislation that concerns, in critical respects, subjects that are firmly in the domain of the states. Much has also been written on the deep design flaws in these acts when it comes to serving the basic public purpose and larger public interest of state regulation in agricultural markets.

But now, after the repeal has been secured on the back of a year-long struggle by the protesting farmers’ unions, perhaps it is this question, about the ways in which we debate and deliberate upon our shared interests that we must most seriously reflect upon. For surely there are few spheres of life and human activity where our interests are more deeply shared and more fiercely contested than in the field of agriculture.

At its heart are fundamental questions about the social, economic, and political arrangements that we, as a society, accept and put in place to govern the resources and relations involved in the production, exchange, processing, distribution, and consumption of food, fodder, fibre, and their by-products. Markets have long been vital to these economic arrangements, but non-market structures and exchange relations – households, kinship, caste, gender, religion, and of course, the state – have always been part of the workings of agro-commercial systems. Moreover, when it comes to markets for agricultural produce, and most especially for staples, different groups of people have also historically demonstrated a great capacity to resist the seemingly unstoppable forces and infinite possibilities of commodification and marketization.

 

 

Indeed, there is a long historical record, across time and place, expressing personal pain, class or group-based protest, and popular outrage at the prevailing conditions in grain markets in times of distress. These expressions, whether they manifest as violent riots or non-violent protest or simmer away as deeply felt resentment, reflect grievances that operate within a historically and contextually specific consensus – what E.P. Thompson, writing about volatile local markets for grain and bread in 18th century England, termed the ‘moral economy.’6

At any given time, this consensus is built around a collective understanding of what constitutes ‘legitimate’ and ‘illegitimate’ practices in marketing and the ‘proper economic functions of several parties within a community’ tied together by specific crops and their commodity forms.

When a ‘reform’ appears to one or more of these groups as a fundamental re-arrangement of those ‘proper economic functions’ and therefore threatens the basis of a consensus that has prevailed, despite numerous challenges, for over half a century (as is the case of mandi-based MSP procurement for paddy and wheat in Punjab and Haryana), the state, as we have seen this year, cannot easily get around the resistance by soiling protestors with the label of ‘vested interests’. But, now, having been forced to concede the repeal, the most likely response is for the state and its leaders to retreat back to a deeply problematic status quo.

 

 

Is there, then, a better way to approach our shared interests? Given how fundamental and complex the issues are, one thing is clear. Filling the newspapers with competing fiscal reasoning amounting to a few lakh crore or terrifying trillions of rupees is not the right place to start when it comes to questions about balancing and aligning our approaches to basic food and nutrition security, agroecological sustainability, and the livelihoods of millions of citizens. This is especially true in a society that is still composed of a vast number of small-scale producers and an even larger number of extremely vulnerable, poor consumers, including among them the producers of food.

These citizens would of course be the first to tell you how much expenditure matters. But a deliberation on the nature and extent of public support needed by those who produce food and those who are too poor to afford a basic, nutritious diet for their households cannot begin with the trading of fiscal estimates.

It also must not begin with declarations of the historic freedom and liberation of Indian farmers whose lives remain quite fully absorbed in the daily negotiations of multiple constraints that ensure weak terms of engagement in asymmetrical markets. Here again, farmers do not need theoretical lessons on their own agency or on the powers of market competition. But a more grounded and serious understanding of existing local market relations and the presence and absence of different forms of state intervention might be a more helpful place to start.

 

 

Yet, this is also precisely where the truly difficult problems for public policy and state intervention become most evident. Here, as with so much in Indian life, instead of clear breaks and transition pathways, let alone a textbook structural transformation, we have enormous diversity, the coexistence of institutional forms, persistent partialness, overlapping roles and relationships, and the presence and interaction of multiple scales of activity, most of which it seems remains small enough to defy expectations or merit close observation, except as large statistical categories.

Consider for a moment how common distinctions that we make between ‘inputs’ and ‘outputs,’ or those between ‘cash,’ ‘credit,’ and ‘kind’ or between ‘subsistence’ and ‘commercial’ cultivation are dissolved, reconstituted and interrelated in routine agrarian exchange.

 

 

Depending on varying conditions,
part of this season’s harvest is retained by farmers as next season’s seed; stored, processed, and preserved as food; or mixed and made into fodder for livestock. The harvest may also be divided (under a sharecropping arrangement), stocked (in anticipation of better prices or held back for contingencies), paid out as wages for labour, relinquished as repayment of a loan, sold in the market directly to a local buyer or via a commission agent to a more distant one, or may be procured by a public agency.
7 The harvest from a single farm invariably travels along multiple routes. All the while, in vivid and microscopic movements, people, animals, implements, technologies and the elements constantly move on and off the land. Their timing has great bearing on market activities as part of seasonal scrambles to mobilize the money and materials needed to keep farming on track and the social and political calendar ticking.8

Agricultural produce, once purchased, moves in and out of commodity form, often as gift or tribute, distributed as welfare entitlement or emergency relief, deducted as a customary fee, payment, or tax, diverted as bribe. The by-products of primary commodities, in turn, are also constantly commodified and generate their own circuitry and sites of exchange, trade and distribution. To give just one example, in the rice cluster in Arni, Tamil Nadu studied over decades by Barbara Harriss-White, husk has been commodified as a fuel; rice bran is traded as an intermediate good in the solvent extraction industry; broken rice is fed to cattle and consumed by some people, while de-oiled bran cake is used as an ingredient in livestock feed.9 When it comes to agricultural commodities, such complexity and specificity is generic.

 

 

While producers and consumers tend to be acutely aware of wholesale and retail prices, the interlinkages that keep agricultural commodities on the move remain largely invisible. In recent years, however, two massive, state-imposed nation-wide events – demonetization and the lockdown – each coinciding with a peak post-harvest marketing season (kharif 2016 and rabi 2020, respectively) have inflicted widespread disruption and damage on India’s agricultural markets.

Suddenly, under extraordinary conditions of enforced illiquidity and immobilization, ordinary yet vital people, places and things – labour and buyers, mandis and warehouses, gunny bags and transporters, cash and credit and much, much else – began to fall short, shut down, or go missing altogether. As a result, the myriad interconnections and arrangements, formal and informal, that keep our agricultural and food systems going every day came to be – at least partially and temporarily – visible. The costs of such delayed realization have been severe. At the same time, India’s agricultural production and marketing systems, stretched and fragmented as they may be, continue to demonstrate remarkable resilience and responsiveness.

 

 

And so, with this unfolding interplay of diversity, distress, and dynamism, we return to the contradictions with which we began. In the end, Indian agriculture’s absorptive and adaptive capacities are in large measure a continuous response to the dominant structures and conditions of production and consumption. These are characterized by persistently small and tiny farm sizes on the one hand, and by the determinants of domestic demand and consumption in an economy with a vast number of poor and low-income households, on the other. It therefore requires enormous material and intellectual exertion and endless feats of coordination at all levels, especially by those directly involved in the production and provisioning of food, to simply keep things going.

In such contexts, as we have learned from field research across diverse states, districts and agricultural commodity networks, the presence of ‘many intermediaries at multiple levels is less a sign of market inefficiency and more a rational response’ to particular regional structures and conditions, in which such actors play vital roles in local and long-distance market networks.10 This is not to imply that intermediaries do not exploit farmers when opportunities arise but to make the rather more basic point that the opportunities for exploitation arise not because intermediaries exist but because farmers are in structural relations that weaken their terms of exchange in primary markets.

With or without the farm laws, it bears repeating, that for the vast majority of Indian farmers, especially for  small and marginal cultivators, such exchange still largely takes place in villages and local market sites without any public regulation or support to enable better price discovery, oversight or risk management for small producers.

 

 

Finally, it is here that the dilemmas of diversification, both on and off the farm, are most palpable and perplexing. For some time now, the grand goal of diversification –of crops, diets, and livelihoods – has been held up by virtually everyone as the only solution to the intertwined crises of agro-ecology, farmers’ incomes, nutrition security, and economic development in India. But there is little discussion on the actual dynamics of diversification, consolidation, and scale in agro-commercial systems. As a result we avoid a critical public debate on the very different processes of market control and competition, accumulation and income distribution, and ultimately of political power that may emerge depending on the stated – and unstated – vision about how such diversification is to be achieved. This is exactly where the stakes are the deepest.

We know, for instance, that in India it is actually the smallest and most externally under-resourced producers – small and marginal cultivators, many of whom grow food for their own subsistence, often in remote, rainfed regions – who have the most diverse cropping systems and marketing arrangements. But they are also the most dependant on wage labour and other non-farm income to try to make ends meet.11 Generally, the farmers who have managed to accumulate, at least for significant periods of time, are medium and large mono-cropping farmers, especially
in regions that have received public investment and assured market support for major foodgrains and cash crops. The agroecological, economic and the political consequences of a conscious Green Revolution strategy of ‘betting on the strong’ have long been clear. But there is nothing straightforward about redesigning state intervention and support to redress these persistent imbalances.

 

 

On the other side, while small-scale and itinerant intermediaries engage in seasonal aggregation and low-margin trade, it is the larger regional agro-commercial and agro-industrial firms that are the most diversified in terms of their portfolio of activities. These firms tend to exercise greater market power in their dealings with both sellers and buyers and are able to extract higher margins from storage, processing, and trade. They also have greater access to formal credit and are major financiers, operating through both formal, but largely informal rotations of cash and credit. At national and global scales, conglomerate capital in agribusiness is even more fully and formidably diversified, including in integrating backwards from retail operations and with large investments in inputs, storage and logistics.

India is currently living out the realities of distress-driven diversification. At the same time, different interests are both aggressively pushing and actively resisting the promise and perils of diversification via corporate conglomeration and consolidation. General statements about farmers collectives will not resolve the fundamental tensions here: after all, cooperatives and FPOs can emerge as major agribusinesses (like AMUL) or serve primarily as local aggregators for large-scale private sector corporations. Much will depend on who and what public policy imagines is the real Indian private sector, the nature and extent of public investment poured into them, the regulatory frameworks that support or marginalize them, and the institutional capacities that are built over time.

 

 

Historically, of course, it is above all, the state that has held the greatest powers of diversification and consolidation. Indeed, this remains the ultimate source of support and the looming spectre of fear over the future of Indian agriculture, and of everything else. Any debate about our shared interests and collective purposes cannot bypass the state or avoid the thicket of contradictions and competing interests that will need to be constantly negotiated and balanced. If the farm laws and farmers’ protest remind us of one thing it is that there is no way to do this without openly declaring and debating the moral assumptions and social histories that underlie our approach to market forces and state intervention. And then to approach agricultural fields and markets with renewed conceptual clarity, grounded empirical engagement, and substantial and well directed public investment.

 

Footnotes:

1. Harish Damodaran, ‘How Food Has Become the Real Social Safety Net in Pandemic’, CPR Understanding the Rural Economy Series, 11 June 2021, https://cprindia.org/news/9841

2. Barbara Harriss-White, ‘More Than One Kind of Farm Protest is Unfolding’, The India Cable, 15 January 2021, https://www.theindiacable.com/p/the-india-cable-many-kinds-of-farm

3. Harish Damodaran and Mekhala Krishnamurthy, ‘Can ‘Rural’ Play Saviour Again? Agricultural Seasons and Covid-19 Waves’, CPR Understanding the Rural Economy Series, 4 June 2021, https://cprindia.org/news/9808

4. Harish Damodaran and Yamini Aiyar, ‘Employment U-turn: Rural India is India’s Main Employer’, CPR Understanding the Rural Economy Series, 6 August 2021, https://www.cprindia.org/news/9953

5. Tony Judt, Ill Fares the Land. The Penguin Press, New York, 2010.

6. E.P. Thompson, ‘The Moral Economy of the English Crowd in the Eighteenth Century’, Past and Present 50, 1970, pp. 76-136.

7. For a recent example of a detailed field-based examination of the diversity of primary markets sites and systems, see Shoumitro Chatterjee, Mekhala Krishnamurthy, Devesh Kapur & Marshall Bouton, A Study of the Agricultural Markets of Bihar, Odisha and Punjab. Final Report, Centre for the Advanced Study of India, University of Pennsylvania, Philadelphia, 2020. https://casi.sas.upenn.edu/agricultural-markets-study

8. David Ludden’s An Agrarian History of South Asia provides us with a remarkably vivid and detailed description of these two great seasons of cultivation and circulation across agrarian and territories. Cambridge University Press, Cambridge, 1999.

9. Barbara Harriss-White, ‘Local Capitalism and the Development of the Rice Economy 1973-2010’ in Barbara Harriss-White (ed.), Middle India and Urban-Rural Development: Four Decades of Change. Springer India, New Delhi, 2016, pp. 97-130.

10. See S. Chatterjee, M. Krishnamurthy, D. Kapur & M. Bouton, op. cit.

11.  Harish Damodaran, Mekhala Krishna-murthy and Samridhi Agarwal, ‘Agricultural Households and Farming Income: An Initial Analysis of Variations in Income from Farming and Other Sources Among Agricultural Households in India’, CPR Understanding the Rural Economy Series, 30 September 2021, https://cprindia.org/news/agricultural-households-and-farming-income-initial-analysis-variations-income-farming-and-other.