CAPITALISM IN INDIAN AGRIBUSINESS
Updated: Jun 13, 2022
The provenance of capitalism in India’s agricultural sector can be traced back to the colonial period. Back in the days, the regime was more feudal than capitalist. There was the existence of the Zamindari system even when adequate protection was given to the tenant laws. Moreover, the surplus was extracted from rent and went straight into the landowner’s pocket with little or nothing left for the cultivators to sustain themselves. This landlordism somewhat suppressed the growth of agriculture.
Later, this feudalism got replaced by capitalism. The landowners lost their right over land and labour. However, this did not result in the mitigation of the cultivators’ plight. The labour became a commodity and the surplus got apportioned as capitalist profit, mercantile profit, and interest on credit.
In this day and age, increased indebtedness and widespread globalisation further augment their misery. Their status quo is now worse than ever as they lack access not only to the overseas markets but also to the local ones. They cannot even make use of the latest technology due to financial concerns and multinational companies control almost their entire produce. This pushes the farmers’ interests to the sidelines into a turbulent sea of risks with negligible protection.
A common argument propagated by the supporters of capitalism remains that it absorbs all the petty producers it displaces. However, in the Indian agricultural industry, the accumulation of capital was accompanied by labour-eliminating technological changes to an extent that the absorption of all it displaced couldn’t have been possible.
Capitalism, therefore, led to the division of farmers, putting the ones with more income at a pedestal and subjugating those with less income. What it did, in agricultural states like Punjab and Haryana, was that it substantially increased the income of the rich farmers by oppressing the poor and thus contributing to the genesis of class, the impact of which is relevant even today.
So, what happens when politics collide with business?
Figuratively speaking, an explosion: so massive that it creates a rigged game- that people have been justly calling as crony capitalism. It may seem to be a new manifestation but has been around from time immemorial. However, it cannot be considered as an outcome of categorical action taken by the government but through the imposition of several regulations.
Considering India’s political system, it would be right to say that what started as a mixed economic system ended up becoming something far from it. We fetched up in a mire that eventuated from our failure to strike a balance between socialism and capitalism. Today, there is a complete absence of healthy market competition among industrialists with only a few businesses having a successful track record, thanks to the various policy reforms introduced by the government favouring some select companies.
Since virtually every sector has succumbed to this wicked regime, the recent unfavourable development in the farm bills exudes that the agriculture sector is also not too far from being completely wreaked by it.
A highly precipitated decision- taken by the ruling party in 2020- introducing new farm bills has become a topic of much debate of late. These bills, regarding the trading and pricing of agricultural products, have incited a furore in Punjab and, its contiguous city, Delhi. People across India have come out in support of the farmers by staging protests and taking it to social media.
Farmers claim that these bills do not put in place the institutional structure for fair play, the basic framework of regulation and oversight and the broad contours of engagement (that provide confidence to them). Their resistance stems from the belief that the bills focus on the development of well-established businesses by removing government protection and shifting the power play into the hands of powerful institutions, causing a significant reduction in their revenue.
The government, on the other hand, is brazening it out and defending itself with some alleged reasons that this would give farmers more choice by enabling them to move beyond their local mandis. As such this non-committal response cuts no ice with the farmers who are intent on cleaving onto their beliefs.
This instance down rightly epitomises India’s deep-rooted capitalism and how important it is for people to take concerted action to reduce its intensity and extricate those bogged down by it. Moreover, it is evident that this system- operating on corruption and bribery- is on the verge of transmogrifying into something even worse, the likes of which we can never imagine. Strangely, in other words, we are yet to face the extreme form of capitalism.
What do you think, does capitalism escalate the lives of those involved in the Indian Agribusiness or subjugate them?