In this pair of articles, Dr. Manuj Mukherjee looks at how the new bills play into a dynamic between the global North and the global South that continues the legacies of colonial extraction. References backing up the assertions to this piece can be found in its companion notes, which you can access here.
The three farm bills passed by the Indian government have been met with massive protests from farming communities, and have been critiqued extensively in the media. However, what has received less coverage is how these acts fit the grand scheme of things for not just the BJP and their corporate friends, but the agenda of the global north and capitalism as a whole.
Let me begin by making two quick claims: First, these acts are designed to shrink agricultural production, including food grains. Second, the number of people dependent on agriculture will shrink accordingly, thereby generating a pool of surplus laborers bereft of any means of subsistence. Utsa Patnaik’s “The Global Angle to the Farmer Protests” has already argued that the farm bill will allow the global north to dump its surplus food grains in India, something countries like the US, Canada, and the European Union, “who cannot produce the tropical and subtropical crops in high demand by their own consumers,” have been pushing via the UN Agreement on Agriculture. In this article, we will focus our attention on my second point, that these bills will render agriculture nonviable as an occupation, creating a class of surplus labor.
Before proceeding, let’s consider the following question: Do we need to move people away from the agricultural sector? This question has long received attention, and the answer is yes. To see why, we refer to an old article by none other than Dr. B. R. Ambedkar, entitled “Small Land Holdings in India and Their Remedies.” Ambedkar begins by explaining why agriculture is not economically productive in India. First, farming families, due to fragmentation during inheritance, imply severe acreage loss over only a few generations. Second, farmlands in India are not contiguous: land owned by farming families is split, making even farmers owning larger amounts of land overall being forced to farm separate, small plots. In short, Ambedkar shows there are too many farmers working the land, resulting in diminishing returns. All this makes modern methods of agriculture impossible, since farmers simply don’t have the resources to invest in them. A lack of modern methods contributes to a further diminishment of returns. Yet, Ambedkar says that these returns are all that is available to the farmers, since there are not enough industrial jobs for farmers to migrate into. His solution was to stimulate industry in order to shift people out of the agricultural sector. All of this had one aim: to improve the quality of life for the populace.
At this stage, the reader might inquire: What is so wrong with the farm bills if they are doing exactly what Ambedkar wanted? The answer lies in the intent. Ambedkar was concerned with the quality of life of the populace. In the case of these Farm bills, the changes to Labor laws, the national waterways act and the new education policy that have accompanied them, it is clear that the intent is to help the powerful economies and militaries of the global North keep the global South underdeveloped in order to maintain its models of parasitic accumulation. The model all these bills promote is one that will further deteriorate the standard of living of Indians and render them even more precarious.
After political decolonization, the nations of the global South needed to industrialize. The Argentinian economist Raúl Prebisch argued that continuing to export raw materials to and import finished products from the global North would perpetuate the status quo of colonization. In the same vein as Ambedkar, he argued that the governments of the global South needed to invest in “progressively raising the standard of living of the masses” by building housing, schools, hospitals, and other infrastructure. Nationalized industries were needed to raise these funds. Of course, this money could have been provided by a reparation from the global North, something akin to the Marshall plan. But to expect such kinds of basic justice from the global North, the perpetrators of colonialism, is a fool’s errand. Instead, Prebisch called for import-substitution industrialization to raise capital: the use of high import duties to ensure people only buy from local industries, thus providing them a safe haven to grow. Industries were to initially utilize the remnant colonial infrastructure, and generous aid from the Soviet Union was to help them set themselves up.
Despite having its own set of trade barriers enshrined in the General Agreement on Tariffs and Trade (GATT), Prebisch’s methods irked the global North, who knew very well that a uniformly developed world meant the end of its means of parasitic accumulation. Instead, the global North laid out its own counterproposal via economists like W. W. Rostow: that the global South should surrender their industrialization to global private players, and instead focus on commercializing agriculture and improving communication networks (in other words to reduce freight charges for goods movement, making industrial deployment lucrative). The global North’s aid wings—the World Bank and the IMF—would fund some of these communication and infrastructure development projects if they deemed that the nation in question met the necessary criteria. These criteria turned postcolonial nations into neocolonial sites for industrial capital. Indeed, Eugene Black, the former President of the World Bank simply revealed their designs by stating:
“Our foreign aid products constitute a distinct benefit to American business. The three major benefits are (1) foreign aid provides a substantial and immediate market for United States goods and services, (2) foreign aid stimulates the development of new overseas markets for United States’ companies, (3) foreign aid orients national economies toward a free enterprise system in which United States’ firms can prosper.”
The IMF, on the other hand, would broadly demand the following criteria from its target state:
- Devaluation of currency (that is to ensure easier exports, or in other words easier for global North farms to import from their supply chains, as well as extract raw materials).
- Pushing down minimum wages and creating conditions that reduce the cost of setting up and running industries, thereby bolstering profits for the firms from the global North as well as their local allies.
- Loosening regulations.
Once sanctified by the IMF, even commercial banks of the global North would make a beeline to provide developmental loans to sanctified states from the global South, and as Emma Rothschild has shown in 1975, some US banks would make at least 40 percent of their profits from the interest on those loans.
Instead of focusing on Prebisch’s idea of raising the standard of living for the masses, the IMF and World Bank turned postcolonial nations into what Susanne Soederberg calls “competition states,” competing for capitalist investment. The industrialists only developed infrastructure in order to aid profits, not raise living standards. This is why you will have eight-lane highways for easy movement of goods, but not decent housing for workers (there are plenty of workers to replace already employed workers, so workers’ health is not necessarily a priority here for the industrialist). Without public industries and extremely meager taxes paid by the private ones (otherwise how could you be competitive), actual infrastructure for public welfare will never appear.
So, the question arises, where did India, which followed Prebisch’s plan of import-substitution industrialization, stumble? G. Aloysius showed how, with the advent of colonial industrialization and later nationalist industries, horizontal barriers within the dominant castes gradually dissolved to form the class of the urban gentleman, or a nationalized upper caste, taking up managerial and bureaucratic positions. The state apparatus, itself a dominant caste enterprise, put a premium on ensuring a luxurious and modern life for its massive bureaucratic machinery. Money that that could have gone into “progressively raising the standard of living of the masses” was instead directed to improving the quality of life of this bureaucratic class. This nationalized upper caste further saved money on industries by simply buying off cheap, aged infrastructure from the global North, which would otherwise be thrown away. Trends in other nations of the global South were similar (see Kwame Nkrumah’s Class Struggle in Africa), where instead of caste, their parasitic bureaucracy was built on the basis of their own local elitist groupings, for example ex-tribal chiefs in the case of some African nations. This was, in effect, a duplication of the model of colonial rulers using local compradors to maintain their rule.
Secondly, with the Indo–China war of 1962, the defense budget literally skyrocketed. Between 1951–1961, the Indian government spent only 2 percent of the gross product on defense. Post 1961 it immediately doubled to 4 percent, and, by 1990, India became one of the largest importers of arms in the world. In other words, public infrastructure, modernization, and urbanization took a back seat to the military budget, and feeding and subsidizing the burgeoning military bureaucratic class. In a similar manner, local wars, mostly results of cultural nativism constructed primarily through the means of colonial pedagogy, ripped apart other nations of the global South. The global North happily turned arms dealer and inciter, as the global South not only bled, but ended up with colossal military budgets draining away any gains from import-substitution.
To conclude this part, in present day India, agriculturally we are in no better shape than the catastrophic reality which made Ambedkar take up the pen almost a century ago. Nationalized firms are almost a thing of the past, with the deathblow being dealt by the end of the Soviet Union and its corollary, Manmohan Singh’s economic liberalization of 1990. Even the IMF maintains that inequalities have shot up. It is in this theater of underdevelopment and misery that the drama of these farm bills and their like get enacted, as India veers off Raul Prebisch’s path and surrenders to the IMF line. We shall examine this trajectory in greater detail in the second part.
A more detailed rough note on both parts, including references, is available here.