Farmers in India, particularly from Punjab and Haryana, have been protesting for over eleven months. While their initial demand focused on legalising Minimum Support Price (MSP) for all crops, their agenda has now broadened. The farmers are seeking India’s withdrawal from the World Trade Organisation (WTO) and an end to free trade agreements under the Agreement on Agriculture (AoA). They argue that WTO rules harm Indian farmers and threaten the country's food security.
Reason behind protest
The farmers' protests in India have been happening because of long-standing problems that started with India’s economic changes in 1991. These changes focused more on growing industries and less on farming, which left farmers facing low prices for their crops and higher costs for things like seeds, fertilisers, and other farming needs. While the government sets prices (called MSP) for some crops, it only buys rice and wheat, leaving many farmers selling their other crops at much lower prices, often lower than what it cost them to grow them. This has made it very hard for them to make money.
Another big problem is the global rules from the World Trade Organisation (WTO), which stop the Indian government from fully supporting its farmers. The rules limit how much money can be given as subsidies and MSP. These restrictions make it even harder for Indian farmers to compete. Also, because of global trade rules, cheaper imported farm products have flooded the market, which lowers the price of what Indian farmers grow. This cuts their already small income and makes it difficult for small farmers to survive.
Farmers' key demands
Farmers have outlined clear demands to address their challenges. First, they want the government to make the Minimum Support Price (MSP) a legal right, ensuring a stable income for farmers. They believe this should follow the Swaminathan Commission’s recommendation of providing a 50% profit above the total production cost (C2 + 50%). Currently, MSP calculations are based on a lower formula (A2+FL), which only includes basic expenses and unpaid family labour but not all costs. Farmers are also asking for complete debt relief, as many are struggling with heavy loans. Additionally, they are demanding compensation and pensions for those affected by financial difficulties or protests. Finally, agricultural labourers want better wages and improved working conditions to secure a more dignified livelihood.
Why do farmers want India to withdraw from the WTO?
Farmers feel that the WTO’s Agreement on Agriculture (AoA) is unfair to developing countries like India. They argue that the rules favour wealthy nations by letting them give large subsidies to their farmers, while countries like India face restrictions on providing similar support. The AoA also poses risks to India’s Public Distribution System (PDS), which helps millions of people by supplying affordable food.
Farmers worry that these policies could weaken the PDS, putting food security at risk. WTO rules further limit how much the government can spend on Minimum Support Price (MSP), capping it at just 10% of a crop’s value, without considering rising costs due to inflation. Additionally, the WTO does not allow India to increase import tariffs during sudden spikes in imports, making it harder for small farmers to compete with cheaper agricultural products flooding the market. This creates significant challenges for their livelihoods.
Why are Punjab farmers leading the protests?
Punjab's economy relies a lot on farming, especially the growing of wheat and rice. Around 90% of the crops grown in Punjab, including almost all rice and 80% of wheat, are bought by the government under the Minimum Support Price (MSP) system. If MSP or the government’s buying system changes or is reduced, it directly affects the farmers' income and jobs. Additionally, the Public Distribution System (PDS), which provides affordable food to families with low income, could be harmed if there are restrictions on the government's procurement of crops.
Many farmers in India are small-scale farmers, and about 86% of the farming population falls into this group. These small farmers often struggle because they don't have enough access to new farming tools, markets to sell their produce, or money to improve their work, making them more vulnerable to cheaper imports from other countries and price changes.
What is the government’s stand?
The government has raised several concerns about fulfilling the demands of farmers. One major issue is the idea of making Minimum Support Price (MSP) a legal guarantee. Officials say this would mean the government has to buy large amounts of crops, which could put too much pressure on the national budget and cause food prices to rise. They also argue that ensuring MSP for all crops is not practical, as it would be challenging to manage and could upset how the agricultural market works. While the government has said it is willing to talk with farmers to find solutions, it believes that some requests, like making MSP a legal right, are not realistic.
The role of the SC
The Supreme Court (SC) has stepped into the issue of farmers’ protests, highlighting the need for proper attention to their concerns. The SC criticised the government for not dealing with the farmers' problems effectively and emphasised the importance of addressing their demands. To tackle the question of legalising Minimum Support Price (MSP), the Court suggested using a High-Powered Committee to come up with a resolution. By taking on a petition related to MSP, the SC has brought more significance to the farmers’ protests and underscored the need for clear and systematic solutions to their issues.
What is the petition for MSP?
Farmers have submitted a petition asking for a legal guarantee of Minimum Support Price (MSP), which they believe was promised when the controversial farm laws were repealed in 2021. They argue that making MSP a legal right would help ensure stable and secure incomes for farmers. Additionally, they want the MSP system to be implemented fairly across all crops and regions rather than being limited to certain major crops or areas, so that all farmers can benefit equally.
What’s at stake?
The farmers' protests focus on several important issues that could impact India. First, without proper policy reforms, India’s agricultural economy may continue to struggle, leading to hardship for farmers and rural communities. Second, the current global trade rules set by the WTO need to be revised to make sure that developing countries like India have a fair chance in the global market. Lastly, if systems like the Public Distribution System (PDS) or Minimum Support Price (MSP) are weakened, it could threaten food security, making it harder for millions of people in India to access affordable food.