Lodha, 37, is from a long line of Maharashtrian grain farmers. But he’s transitioning away from the family business. He works as an accountant on the side and has had a taste of the business world.
“Farmers know how to grow, but farmers don’t know how to sell,” Lodha says. “The biggest problem the farmer is facing is that he doesn’t know how to market his product.”
Women sift through onions outside a government wholesale market in western India where traders buy from farmers in bulk. New rules for such markets have sparked huge farmer protests in the capital.
Farmers never really had to do that, he says, if they were selling their crops inside their local Agricultural Produce Marketing Committee, or APMC. Those are the thousands of government-run wholesale markets where Indian farmers typically sell their crops. They are the focus of Modi’s new reforms.
More Ways To Sell Crops
APMCs have been the backbone of India’s agricultural trading system – another legacy of government intervention during the Green Revolution. Modi’s new farm laws don’t eliminate APMCs but strip them of their monopoly on trade, and allow transactions to happen anywhere – even online.
The APMC where Sanap and Lodha do business is a sprawling concrete shell of a building in a dusty lot in rural Maharashtra surrounded by farmland. It looks like it’s perpetually under construction.
Farmers, traders and customers weave through waist-high heaps of chili peppers, piles of ginger and mounds of carrots at a government-run wholesale market in western India.
Trucks pull up day and night, disgorging bales of cauliflower and cabbage. Women in colorful saris balance bundles of spinach on their heads or squat on their haunches on the cement floor with garlic and chili peppers piled on tarps before them. A government auctioneer rattles off eggplant prices. His voice reverberates off the corrugated tin roof.
The APMCs have long lent security to farmers. However low market prices go, they would always be able to sell at these government-run markets, explains Seema Bathla, an agricultural economist at Jawaharlal Nehru University in New Delhi.
“The government’s intention [with the new laws] is that farmers should have multiple platforms for selling – not just the APMCs – so that they have choice and can get better prices based on competition,” Bathla says. “The problem is, agriculture prices are subject to a lot of volatility. Farmers have gotten used to this safety net, and now they are not willing to go for a change.”
The government says it will keep setting minimum support prices for certain crops. Last month, Modi told parliament the Minimum Support Price (MSP) mechanism “was there, is there and will remain.” His government is not closing the APMCs, just adding more options.
Still, Sanjay Gohad is worried. He’s a middleman whose family has spent 40 years paying into the APMC system. He buys produce in bulk from farmers and sells it onward to retail outlets. He thinks the government’s reforms will lead to less competition, not more.
“I support the protesting farmers 100%!” says Gohad, standing amid burlap sacks of ginger and gooseberries in his garage next to the APMC.
Sacks of green beans, onions and carrots sit in a wholesale trader’s office outside a government-run vegetable market in western India. Small traders fear new agriculture reforms, which have sparked huge protests in New Delhi, will obliterate middlemen like them.
Gohad pays a special tax on all of his transactions for the privilege of buying from farmers there.
“It’s a good business! But the government wants only one or two big traders – Ambani and Adani — to own this space,” Gohad says, referring to two billionaire industrialists, Mukesh Ambani and Gautam Adani, who run two of India’s biggest corporations, Reliance Industries and the Adani Group, respectively. (Protesters have targeted both, after Ambani praised Modi’s reforms.)
Confusion, Misinformation … And Jealousy
As NPR was interviewing Gohad in his APMC workspace, another trader interrupted.
“We are proud of Narendra Modi! He’s a real man! He will be king of the world!” the man yells. Gohad shoos him away.
It’s an illustration of what has happened to India’s new farm laws: Any debate over their merits has devolved into political bickering. Opposition politicians accuse Modi of mistreating humble farmers who’ve helped millions of their countrymen avoid starvation. Modi’s government has in turn labeled some of the farmers and their supporters as “anti-national” – questioning their patriotism and allegiance to India.
At a wholesale government market in western India, auctioneer Sanjay Gangurde takes down bids from traders for crates of glistening eggplants.
Agriculture reform has long been the third rail of Indian politics. Successive governments avoided it. Modi is trying to address it now, on a national scale. But farm policy has typically varied by state and by crop.
The timing of the introduction and passage of these laws – in September, at the height of India’s coronavirus crisis — has also fallen under suspicion. Supporters say that when COVID lockdowns forced some wholesale markets to shut, farmers needed reform even more urgently to allow transactions to happen outside those shuttered markets. It was around that time that India’s economy shrank 24%. Millions were falling back into poverty.
On the other hand, the government’s critics accuse it of taking advantage of a health crisis to push through unpopular reforms without consulting farmers themselves.
“The amazing thing is that the Modi government passed these laws in the middle of a pandemic! They just quickly passed them without any discussion,” says Jayati Ghosh, an economist at the University of Massachusetts, Amherst. “You could have gone to people, talked about it, got feedback — because these are long-term proposals.”
Instead, there’s been a lot of confusion, misinformation — even jealousy, among farmers like the tomato grower Sanap, who envies some of the subsidies his fellow farmers in northern India get.
The Power — And Plight — Of Punjabi Farmers
India’s farmer protests have been dominated by grain growers from the country’s north, particularly the states of Punjab and Haryana, north of the capital.
For months, the mostly peaceful protests in Delhi have often been a sea of colorful turbans. Punjab is the birthplace of the Sikh faith, and a majority of its residents follow that religion. On Jan. 26, when clashes erupted between protesters and police, activists raised a Sikh flag over India’s historic Red Fort – a symbol of power. Indian authorities seized on that flag to denounce the protesters as dangerous separatists.
Punjab is a rich agricultural area, long known as the breadbasket of India. It has about 3% of India’s arable land but grows nearly 20% of the country’s wheat and 12% of its rice. It was ground zero for India’s Green Revolution, and it’s where farmers have benefitted most from the status quo.
Farmland in Punjab is valuable. According to a 2013 study by Sanjoy Chakravorty, a geography and urban studies professor at Temple University in Philadelphia, the average price of farmland in Punjab (about $7,000 per acre) exceeded the price at the time in all but one U.S. state and every European country except the Netherlands, Belgium and Denmark.
Punjabi farmers are powerful. They dominate India’s national farm unions. They may also have the most to lose under Modi’s new laws.
As grain growers, they rely on those APMCs – the government-run wholesale markets — more than a tomato farmer like Sanap who can sell produce out of the back of his truck. Grain needs to be husked, crushed and milled. There are more middlemen involved in the process of bringing grain to market. That longer chain of transactions has long been supervised by the government, at APMCs.
A Lesson From Grape Growers
Under the old system, wholesalers, retailers and middlemen are the ones required to pay into the APMC system and conduct all their transactions there. The ginger and gooseberry buyer Gohad pays a 1.05% tax on all his transactions. In other states, the payments are made in the form of direct fees. The idea was to keep wholesalers under government supervision and prevent them from undercutting farmers on price.
Farmers, on the other hand, have long been allowed to sell outside the APMCs. In Maharashtra and several other states, many farmers are circumventing these government wholesale markets – and have been for years. Their experience could offer a path out of the quagmire that debate over Modi’s new laws has become.
In 2010, eight farmers in the grape-growing region of Nashik, in western India, banded together to create a collective called Sahyadri Farms, to sell their produce directly to retailers. It’s now co-owned by more than 10,000 farmers, and is India’s biggest exporter of grapes, with 17% of the European market for table grapes, the company claims.
At a farmer’s home in western India, workers clean and pack grapes for sale. Grape farmers here sympathize with their fellow farmers from northern India protesting against new farm laws in the capital, but they say they don’t share the same concerns because they don’t rely on the government as much to sell their crops.
Grape farmers are among those who were never eligible for minimum support prices. Sahyadri’s founder, Vilas Shinde, says he realized he could get better prices on the open market rather than at APMCs. He waited for successive governments to help facilitate transactions outside those yards – and then, impatient, took matters into his own hands and started the Sahyadri collective.
“If the market is ready to pay me a better price, I should capture that instead of depending on government,” Shinde says. “Another real game-changer is technology. E-commerce is becoming a common thing, auction platforms are becoming a common thing, even for our smaller farmers – especially for them.”
He supports Modi’s new laws, because he thinks they will help other farmers do what he’s already done.
Sahyadri’s farmers now have a sprawling campus just outside Nashik, with produce-packing assembly lines, banana-ripening chambers and flash-freezing machines for vegetables. As their operations become more efficient, some of them are converting their farmland for sustainable agro-tourism – converting their barns into rural hotels for weekend trippers from Mumbai, 3 hours away.
Shaken By Protests … And The Pandemic
For other Indian farmers, the pandemic has forced them to change the ways they do business.
Another Nashik-area grape farmer, Abhishek Sanjay Shalke, had the bad luck of having his harvest fall during a coronavirus lockdown last year. He couldn’t travel to his local APMC, and buyers couldn’t reach him either.
Grape farmer Abhishek Sanjay Shalke (left) and his friends started selling directly to customers on social media when wholesale markets closed due to the coronavirus last year.
“Because of the lockdown, we were forced to come up with this creative work-around. We started selling to our friends and neighbors, first by word of mouth, and then online,” Shalke, 21, explains. “We couldn’t just sit at home and let our grapes rot. We had to take the initiative.”
He and his friends – all farmers’ sons who’ve gone to college – started selling their produce on Twitter and ended up getting higher prices than before. The government-run market is now back open, but Shalke has no plans to go.
He’s not typical. Most Indian farmers have less education, and less access to the internet, than the general population. But Shalke hopes his success in trading online can be emulated elsewhere. The new farm laws do establish rules for selling produce online, through electronic trading platforms.
Meanwhile the farm laws have yet to take effect. India’s Supreme Court suspended their implementation in January, as protests raged. The Modi government has offered to keep them suspended for 18 months until a compromise can be reached with farm unions. But union representatives have refused. They want the laws scrapped altogether.