(Photo of peas by Jason LeBlanc)
The agricultural industry in India is in turmoil, as the national government there has been moving to open up highly regulated markets, and many farmers are resisting, fearful of change. Agriculture is the largest employer of the Indian population, and most of those are small-scale, subsistence farming operations.
The protests have numbered as many as 250 million people, taking part in a 24-hour general strike in late November, 2020, according to Slate.com, which said it “may have been the single largest protest in human history.”
The deregulation opens markets, but removes farmers’ “guaranteed, timely sale and distribution, stop businesses from hoarding produce, keep prices at a fair level, and prevent small farmers from being taken advantage of by agribusiness corporations” as Slate.com described it on Dec. 9, 2020.
If any of this sounds familiar, that’s because Canadian farmers went through a similar discourse a decade ago, and in 2012, the Canadian Wheat Board lost its monopoly. It, too, guaranteed a marketplace and prices, and back then, there was substantial resistance to change and the unknown new, free market. Now, with the better part of a decade of hindsight, Premier Scott Moe is suggesting that the Indian farmers might not need to be so afraid of what is coming, as Saskatchewan farmers have benefited from open markets.
Moe said, “While the Government of Saskatchewan does not take formal positions on internal political questions in other countries, context is important in this discussion.
“The path of agricultural reform being pursued by India is one that has been walked by Saskatchewan in the past. As a province we have moved from small scale subsistence-based farming practices in a highly regulated and government-managed production and marketing system to one in which our producers have the ability to manage and market their own produce. The elimination of the Canadian Wheat Board monopoly in 2012 removed the final piece of government involvement in the marketing of agriculture products in Saskatchewan.
“This has created tremendous prosperity for our province and literally helped feed the world through massive gains in production volumes and efficiencies. Most recently we saw records smashed with over $16B in agricultural exports in the last year alone.”
Moe continued, “The three bills that have been the catalyst for discussion with respect to India do many of the things that Saskatchewan agricultural producers takes for granted. The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act 2020 allows farmers to sell their produce anywhere outside the state-regulated markets without the burden of taxes or fees. The Farmers (Empowerment and Protection) Agreement of Price Assurance allows farmers to enter into direct contracts with companies, even prior to the production of crops; and The Farm Services Act, 2020 and The Essential Commodities (Amendment) Act, 2020, remove restrictions in production, storage, movement and distribution of major crops unless under extraordinary circumstances; stock limits may be imposed on produce only if there is a steep price rise.
“Saskatchewan greatly values our trading relationship with India. In the last two years alone, we have seen a massive 91 per cent increase in the value of exports from Saskatchewan to India. This has been the result of a concerted effort to build our political and commercial relationships in the country. This year Saskatchewan will be opening a trade office in Delhi and we will continue to work with the Government of India in building a prosperous relationship for both of our jurisdictions.”
Trade and Export Minister Jeremy Harrison expanded on those comments by phone on Feb. 19. He noted the three bills “are not well understood, because what the bills are actually doing is very much what Saskatchewan and Canadian farmers take for granted; particularly Western Canadian farmers who now, since the demise of the Wheat Board, particularly, can market and sell their own product. That was kind of the end of a long process of highly regulated, highly managed industry here in Saskatchewan.”
“In India, it's been that way. I mean it's a highly regulated, highly managed, very prescribed in terms of even crops that can be grown; all of those sort of things. You can only sell produce at state regulated markets. You couldn’t enter into any direct contracts with company to buy your product,” Harrison said. He noted it was not dissimilar to what Saskatchewan farmers went through, depending on what they grew.
“This is a process we've seen happening in jurisdictions that have gone from, you know, small scale subsistence agriculture, to larger-scale, more efficient, much more productive agriculture, which is a process we’ve walked in Saskatchewan.”
Saskatchewan and federal governments differ
There is a distinction in the stances taken between the federal government and provincial government when it comes to India. Prime Minister Justin Trudeau has been criticized by the Indian government for siding with the protesters. “Such actions, if continued, would have a seriously damaging impact on ties between India and Canada,” the Indian minister of External Affairs said in a statement on Dec. 4, as reported by the CBC and Global. "These comments have encouraged gatherings of extremist activities in front of our High Commission and consulates in Canada that raise issues of safety and security. We expect the Canadian government to ensure the fullest security of Indian diplomatic personnel and its political leaders to refrain from pronouncements that legitimize extremist activism."
Harrison said, “We've had a very, very different view of working with India and the trading relationship with India than the Trudeau government has. Their approach has been a catastrophe.
“You know Trudeau, himself, obviously everybody knows about the disastrous trip he took a couple of years back and really embarrassed the country and set back the relationship between India and Canada in a substantial way. What's less known is the fact that that trading relationship, which is a significant one between Canada and India, the majority of that trading relationship is actually between Saskatchewan and India, in that over a billion dollars a year of exports from this province go to India, being one of our most significant destinations for exports in the entire world.”
“Trudeau damaging that relationship, between Canada and India, really has a massively disproportionate and negative effect on the relationship between Saskatchewan and India.”
He said, “A disproportionate impact falls on the fact that our farmers went from exporting a huge amount of peas and lentils into that Indian market a few years ago, to exporting about a quarter of that amount of product, up until the last couple of years, when we’ve seen those export numbers really recover.
“So, it is important for us to make sure that there is a clear understanding that we, as Saskatchewan, have an interest that is separate perhaps, or different than, the interest of the national government in relationship with the national government with India.”
The location of the trade offices was announced prior to this Indian legislation, largely due to India being the fastest growing trillion-dollar economy in the world. Saskatchewan’s merchandise exports to India in 2019 were valued at approximately $775 million, a 23.2 per cent increase from 2018. The top commodity exports to India in 2019 were potash, lentils, uranium, peas, chickpeas and wood pulp.
According to the government of Saskatchewan, trade offices in India, Japan, and Singapore are set to open this year with the recent hires of a managing director for each office. In addition, a new managing director has been hired for the office in China, which was recently relocated to Shanghai.