Why Did the Government Relent?

PRIME MINISTER NARENDRA MODI FINALLY gave in to the demand of agitating farmers. In a speech delivered on November 19th, the prime minister invoked the name of the first Sikh guru, Guru Nanak, to say that his Government had decided to repeal the three laws. The invocation of the guru’s name was laden with symbolism and was an obvious reference to farmers from Punjab who were adamant about getting the three laws repealed.

It was one of the more emotional speeches that Modi had made as prime minister. He said that he sought forgiveness from Indians and that his intentions were pure and his heart was true in the matter of the farm laws. “Yet, a truth like the light of a lamp could not be explained to some brother farmers,” he said. At the end of his speech he said that he was not blaming anyone.

In the days that followed, there was a spate of commentary that ranged from celebrating the farmers’ ‘defeat’ of Modi to some commentators worrying that farm reforms, the most challenging of economic reforms that had been attempted till date, would not be attempted again. All this was topped with anodyne comments about the timing of the withdrawal, just before elections in Uttar Pradesh and the locus of trouble, Punjab.

A far-reaching decision, one in which the Government and especially the prime minister had invested a huge amount of political capital, and lost some of it, is unlikely to be based on purely instrumental—electoral—reasons. It is quite possible that electoral calculations were part of the decision package—as is always the case in a democracy—but it is also worth noting that the decision was taken just as the agitation had plateaued and for all the continuing noise around it, had made no headway in forcing the Government to back down. Until November 19th, that is.

If the decision was made with an eye to elections, the political calculation would have been quite straightforward. In the two-and-a-half years since the 2019 General Election, the opposition has not found any idea or concern that would get it back into the political game so thoroughly dominated by the Bharatiya Janata Party (BJP). The farmers’ agitation offered a chance that if it could be widened, Modi could be challenged in 2024. But with the withdrawal of the farm laws that plank has been taken away. In any case, the issue was of political salience only in Punjab where elections are around the corner. Uttar Pradesh (UP), another state that is election-bound, is simply too big for an agitation in one corner to mar BJP’s electoral chances.

It is perhaps this spoiling of the political game that has led farmers to make renewed excuses for continuing their agitation. The never-ending set of demands includes giving a legal backing to Minimum Support Price (MSP), changes in the Electricity Act, sacking of Union Minister of State (MoS) for Home Affairs Ajay Mishra, and more. These demands are clearly an afterthought to the prime minister’s announcement and are unlikely to get the kind of attention farmers have got in the past one year.

Much has been made of Modi’s speech heralding an uncertain time for reforms. Within days of the repeal announcement, it became fashionable to say that Modi and his Government were unlikely to engage in reforms anytime soon. The agitation over the farm laws, it was said, has once again demonstrated that it is politically too expensive to engage in economic reforms. Comparisons have been made with other sectors like electricity where huge losses have accumulated over time and where organised unions make any attempt at privatisation next to impossible.

These comparisons and claims are invalid. The farm laws had to be withdrawn not because there was a lack of consensus on them—another fashionable claim—but because of the extremely concentrated and well-organised source of opposition to these laws. It is a category error to say that the farm laws failed as farmers did not support them; it was opposition from farmers and the government of a single state—Punjab—that sealed their fate despite the best intentions of the Union Government. There is evidence that farmers in most states supported the reforms.

While the prime minister’s announcement on the farm laws garnered all the attention, he made a significant remark that a committee would be established that would look into fairness and transparency issues around the MSP regime. This committee would be broad-based. Hopefully, the financially ruinous implications of one state cornering most benefits from the system will be discussed.

The agitation that began soon after Parliament passed the three agriculture reform laws started in Punjab. Farmers from that state marched to the borders of the national capital before they were stopped at Singhu and Tikri, the two different entry points to Delhi. Practically, all farmers in this group were from Punjab. A sprinkling of farmers from Haryana also joined to express solidarity with this group. At that stage (September to November 2020) there was almost no presence of farmers from western UP, the other Green Revolution area that had the same caste composition as the protesting farmers, the Jats. In time, the agitation spread to Haryana and UP and this was often commented on in the press as the spreading of the agitation and the coming together of a class that shared the same interests and faced the same threat from the laws passed by Parliament.

IN REALITY, THE CAUSES OF THE AGITATION ‘spreading’ were very different and opportunistic in the case of Haryana and UP. In Haryana, there is simmering discontent against BJP for choosing Manohar Lal Khattar as chief minister. Khattar is a non-Jat and in a state led by Jat chief ministers since its existence, it rankles among the dominant caste, the Jats. This latent opposition became manifest over time and the agitation in Haryana has a very different locus. In UP, the so-called agitation is even more opportunistic. Here, Rakesh Tikait—who is the son of the late Mahendra Singh Tikait—viewed the agitation as an opportunity to inherit the legacy of his father who had led many successful farmers’ agitations in his time. It is worth noting that Tikait Jr has not been successful in building a political career. For him, the agitation was a launchpad for bigger things that had eluded him.

Outside these three regions—Punjab, Haryana and western UP—the agitation did not take wing despite some heavy lifting by opposition parties, civil society activists and others. A number of all-India ‘bandhs’ turned out to be damp squibs and farmers across the country expressed no reservations against the three laws.

The story of the agitation thus comes back to a single state—Punjab—and the farmers there. But it was not just farmers but the entire state, its government, its infamous middlemen—arhtiyas, who have been the biggest gainers from the Green Revolution—and anyone remotely associated with agriculture who opposed the laws tooth and nail.

Usually, opposition to reforms is made in the name of the poor and vulnerable who allegedly stand to lose from economic changes. This was the excuse for the Left’s opposition to economic reforms in 1991. But in the Punjab of 2021, it is the rich and privileged who have opposed the reform laws that were clearly meant to provide options for small and marginal farmers as the prime minister clearly stated in his speech.

The Punjab of today is a far cry from the state it was in the 1960s. Back then, few states were equipped to undertake a risky transition to modern agricultural practices. Most Indian farmers were happy to continue with low yields of crops but with a stable output. In contrast, Punjab alone had the right mix to make the transition to a higher agricultural output equilibrium: consolidated land, instead of the multiple patches impossible for farmers to cultivate at the same time and, most importantly, a risk-taking attitude. That paid off and for a long time the state was at the top of the league table of states.

Things are very different now. Punjab is no longer at the frontier of growth. Instead, the state has to be supported extensively by Central dole. If one looks at the devolution and transfer of taxes from the Centre to the states, Punjab is an average state. Its share is much less than that of large states, something that is due to its relatively small population. It gets much less than states like Odisha and Rajasthan, let alone states like UP and Bihar that get a lion’s share of Central help.

This picture, however, is misleading. When one adds the Centre-funded purchases of wheat and rice—now a burden on the Union exchequer—the inflow of Central money rises dramatically. In 2020-21, Punjab’s net devolution of Central taxes was ₹ 44,475 crore. But if one adds the money funnelled through MSP-linked purchases of foodgrains that, conservatively, cost the Centre ₹ 64,060 crore in 2020-21, the overall flow of Central money adds up to a tidy ₹ 1,08,535 crore. By this measure, Punjab ranks third, right behind UP and Bihar, in terms of what it gets from the Centre. In per capita terms, Punjab is the state most pampered by the Centre. Increasingly, this exacts a very heavy cost on the country.

It is the fear of losing this privilege that has fuelled the agitation in Punjab. Repeated assurances by the prime minister that MSP-linked purchases would not be stopped did not wash. Such is Punjab’s fear of losing its privilege that it cannot even countenance an alternative to the current system of buying and selling its agricultural output. In the 11 rounds of ‘negotiations’ on the farm laws, its farmers and their leaders could not point out a single issue that would threaten the current system. It was an obdurate “No” to the laws meant for the entire country. For the moment, Punjab seems to have won.

This, however, is a problem that is not going to go away. Punjab’s leaders have over the past months increasingly converted the phoney ‘farmers’ issue’ into a question of identity politics based on religion. Congress leader Navjot Singh Sidhu has openly made a pitch for this kind of politics. The unstated, but very real, rebellious political formula in the state is stark and poses a challenge to the Centre: continue with your largesse—for that is our right—else we will resort to identity politics. While BJP is alarmed at the possibility, Punjab is in the mood for repeating the same, ruinous, misadventure once again. It has learnt nothing from the 1980s.

It is probably this issue that has led to the reversal on the farm reform laws. The prime minister did not mention this aspect in his speech but this is obvious to anyone who has observed the course of the agitation.

Can this renewed ‘Punjab problem’ be overcome and farm reforms brought back? Normally, one way to make reforms of this kind feasible is to create a transition fund that supports the change. Farmers who lose out to competition can be supported for some years, say five to seven, and paid to switch to alternative crops. Unlike wheat and rice, alternative crops can be found, ones that have higher demand and are less damaging to the environment in terms of water consumption and disposal of crop residue by burning.

This is least likely to work in Punjab for a number of reasons. For one, why should any farmer shift to the new, riskier, system when his current crop is marketed and backed by Central money? For another, the state government would be loath to move to a new system when currently Central money effectively runs the state’s economy. This was obvious in the year-long agitation when the Punjab government fully backed the agitating farmers and ‘sent’ them to Delhi. The government was in so comfortable a position that it did nothing to stop the economic blockade of the state by farmers who squatted on railway tracks for months on end. Any other government, one that cared for Punjab’s economy, would have ended this ruinous state of affairs quickly. But Punjab, backed by generous Central inflows, has no incentives to do so. It is fashionable in Delhi’s ‘economic circles’ to propose a ‘transition fund’ to ‘help’ Punjab in making a switch from wheat and rice. The trouble is Punjab does not want to be helped. The situation is so bad that it wants money to be dished out to farmers just to stop stubble-burning. It has the rest of the country by its jugular.

A FEW DAYS BEFORE THE PRIME MINISTER announced the surprising decision, National Security Advisor (NSA) Ajit Doval addressed newly minted officers of the Indian Police Service (IPS) at the Sardar Vallabhbhai Patel National Police Academy in Hyderabad. As such occasions go, his speech was a bit of a homily. There was an exhortation to serve the nation, how the future was bright for them, the importance of implementing laws in their spirit, and so on. But in the middle of the speech, he said something very different. He told his audience that India faced the danger of “fourth-generation warfare” where the country could be subverted by fully democratic means.

“The new frontier of war, what we call fourth-generation war, is civil society. Wars have ceased to become an effective instrument for achieving your political or military objectives. They are too expensive and unaffordable and at the same time there is an uncertainty about that outcome,” Doval said.

The essence of what the NSA said was clear from his words: “[I]t is civil society that can be suborned, that can be divided; that can be manipulated to hurt the interest of the nation. And you [fresh IPS officers] are there to see that this [the national interest] can be fully protected.”

The speeches by the prime minister and the NSA were very different events, but it is hard to ignore the fact that they were about the same reality even if the words were different. The prime minister spoke of “some” farmers who could not be convinced about the benefits of the farm laws. But these ‘some’ farmers were not alone. In the year that passed, large sections of civil society—intellectuals-turned-politicians, scholarly commentators in India and abroad, and the run-of-the-mill activist—were mobilised to ensure that the farm laws went nowhere. It was the exemplar of subversion that Doval was warning IPS officers about.

For any government, including one that has been smeared as ‘anti-democratic’, there is a hard upper limit to its staying power in bearing a sustained agitation. The Modi Government—whatever its reasons—gave great leeway to agitating farmers, who went so far as to occupy highways and even blockade the national capital. Far from using any coercive force, it invited leaders of farmers to discuss the farm laws at the negotiating table. But when this was combined with the organising tactics of civil society—including many activists who have honed their skills in agitation—it was only a matter of time before the screaming headlines would take their toll. The combined force of agitation and suborned civil society finally subverted the will of Parliament on November 19th.

From the time the agitation began, soon after the laws were passed by Parliament, the claim that Parliament had been ‘rushed’ into passing these laws was repeated again and again. The message was simple: Parliament’s action was less than legitimate. It was a breath-taking arrogation of power, the power to say what is legitimate and what is not, in the hands of a few. This aspect of the situation, the lunge for power by those who were incapable of going through the rough and tumble of normal politics, was simply brushed aside. India under Modi had already been declared something less than a democracy.

There are troubling implications and challenges for the Government that flow from this situation. For one, it is clear that a small section of farmers from one geographic location and a group of activists have derailed legislation, probably for the first time in India’s history. For another, the danger that other laws will be made and unmade on the streets is very real. This is the grammar of anarchy that worries most law-abiding citizens.

The challenge for the Government is when and how to arrest these anti-democratic agitations. In the Shaheen Bagh protests against the Citizenship (Amendment) Act, the Union Government did nothing to end the agitation. The same template—blocking arterial roads and highways—was adopted successfully by farmers. In the Shaheen Bagh case, the Covid-19 pandemic came to the Government’s rescue; in the farmers’ agitation, the Government’s entreaties emboldened the agitators. The repeal of the farm reform laws is likely to be interpreted by activists as a licence to try and ‘dis-enact’ any law that is not to their liking. It is a strange situation. An allegedly ‘anti-democratic’ Government is extremely hesitant to use any force to disperse mobs that want to over-ride Parliament’s will.

How this dynamic plays out and who gives in first will determine whether India’s roads remain open and the majesty of Parliament is maintained.

agricultural reformsAjit DovalAssembly electionsfarmers protestidentity politicsNarendra ModiPunjab