Part 1: Ahead of Farm Laws, an NRI Seeded Idea to Corporatise Agriculture

A BJP-friendly NRI businessman’s proposal to Niti Aayog paved the way for the creation of a task force that authored a report pushing for corporatisation of agriculture as a way to double farmers’ income, documents reveal.

Sharad Marathe, who hooked Niti Aayog with his proposal, isn’t an expert on agriculture, farming or any allied subject but a businessman running a software company.

Documents obtained by The Reporters’ Collective reveal Niti Aayog moved quickly and eagerly to push the businessman’s questionable vision: a future where farmers lease out farmland to corporate-style agribusiness companies and effectively work as their cogs.

Aayog later appointed the businessman on the task force, which consulted mostly big corporations involved in agriculture commodities trade, such as the Adani Group, Patanjali, BigBasket, Mahindra Group and ITC.

But no farmers, economists or farmer organisations were consulted before submitting the report in 2018 to the government, whose aim was to double the income of around 60% of Indians who depend on agriculture as imagined by Prime Minister Narendra Modi. The report has not been made public till now.

Two years later, India saw the longest-running farmers’ protest over the Modi government’s decision to bring in three controversial laws aimed at allowing corporate players in farming and deregulating agriculture markets. Thousands of farmers sat in protest at Delhi’s borders, and at least 500 of them died from heat, cold and Covid, forcing the government to repeal the laws.

Part 1 of this two-part series reveals how the government actually went about chalking out its plan to double farmers’ incomes – an ambitious promise made by the Prime Minister. The documents, which show how a proposal by someone with no experience in agriculture travelled all the way to the Prime Minister’s Office, expose the ham-handedness of the government in one of the country’s most crucial sectors.

It all began with a letter.

In October 2017, Sharad Marathe wrote a letter to then Vice Chairman of Niti Aayog Rajiv Kumar outlining a grand vision and concept note to revamp agriculture.

Marathe and Kumar were acquaintances, which partly explains why the letter got cherry picked from among the thousands of unlucky cold mails containing ideas and letters that land in government organisations like Niti Aayog every year. But most important is his proximity to BJP – Marathe boasted of his friendship with the head of BJP’s overseas friend’s unit.

Marathe’s ties with the ruling dispensation are deep enough to have earned him a place in a government delegation that met the Princess of Spain at the National Bank for Agriculture and Rural Development, the apex rural bank regulator of India, in September 2019.

Marathe, a mechanical engineer with Masters in Business Administration from the US, runs a software company in the US called Universal Technical Systems Inc. and another in India, called Universal Technical Systems (India) Pvt Ltd.

Marathe told us, “I have lived in America since the 60s.” “My interest goes into topics that have a larger impact on society. Part of my time I spend running my software company … And the other part I look at saying what have I learned in life that I can bring to the table that will have a bigger impact on the society.”

But his claim to fame in policy circles of India was something else. Public documents suggest he was involved in suggesting the idea of setting up software parks in India during the rule of former prime minister and BJP leader AB Vajpayee.

In 2016, while addressing a farmers’ rally in Uttar Pradesh, Modi spoke about his dream of doubling farmers’ income by 2022. Ideas were being corralled to achieve it. Marathe’s blueprint headlined, “Doubling of Farmers’ Incomes Through Market Driven, Agri-Linked Made in India” found an eager buyer in Niti Aayog.

Marathe claimed he had a radical new practical solution that the government should test and rapidly scale up: stitch together land leased from farmers, make a big marketing company with government help, and create smaller companies for processing and farming. These companies work together to make and sell farming products. Farmers who lease their land can also be part of it and get a share of the profits. This helps them earn more money and makes farming better.

He recommended setting up a special ‘Task Force’ to oversee it. And went another step ahead, he listed the 11 people who should be part of the Task Force. He included himself on that list and the then minister of state for agriculture, Gajendra Singh Shekhawat.

This wasn’t the only taskforce Marathe was part of. In 2018, the software company owner was also appointed chairman of an Ayush Ministry’s task force for enhancing the Ayush (traditional medicine) sector, a job that didn’t dovetail with his area of expertise just like the farmers’ income taskforce.

Marathe would later go on to set up a separate non-profit company with Sanjaya Mariwala, a well-established businessman running eighteen companies involved in food and nutraceutical business, to capitalise on the growing nutraceutical market. Mariwala was among the 11 names Marathe recommended to be made part of the taskforce on farmers’ income.

Marathe’s concept note to Niti Aayog also proposed an outreach campaign to seek suggestions from Non-Resident Indians and entrepreneurs on doubling farmers’ income. He specifically mentioned involving a person he knew – Vijay Chauthaiwale, who is known for successfully organising Prime Minister Narendra Modi’s international events and holds important positions in the Bharatiya Janata Party’s foreign policy department and Overseas Friends unit. While the Aayog expressed interest in the idea, Chauthaiwale ultimately did not participate, leaving the reasons behind the choice of a party member for official outreach unclear.

Aayog followed up Marathe’s plans diligently. Within days, Niti Aayog decided that Marathe’s concept note be discussed in a high-level meeting. Suggesting that there had already been backroom conversations on Marathe’s concept note, the minister of state for agriculture at that time, Gajendra Singh Shekhawat was asked to join the meeting along with other top bureaucrats from across the government and the government’s think tank. He did.

Niti Aayog held the high-level meeting of government officials with seven of sixteen participants picked as recommended by Marathe. They decided to constitute the task force that “would develop the framework” with “details of a business plan”.

On 8 December, 2017, Niti Aayog Member Ramesh Chand wrote in a file noting, “The proposal for establishing the taskforce has been discussed with PMO (Prime Minister’s Office) and we will await their response before proceeding further”.

The Niti Aayog does not mention PMO’s response but one can guess it. By January 2018 – within three months Marathe first sent his draft plan – Aayog had officially constituted the taskforce.

In a memo announcing its creation, the Aayog said, “Preference would be to do this through a social entrepreneur and market driven agri-linked Make in India approach.”

Niti Aayog records do not show why the special task force on Marathe’s trigger was set up in a hush-hush manner when the government had already set up a massive official inter-ministerial committee on ways to double farmers’ income. The task force is briefly mentioned in the Aayog’s annual reports without details of members or whom it consulted. The task force’s report was not made public, either.

The inter-ministerial committee was set up within two months of Prime Minister Narendra Modi’s speech on doubling farmers’ income. One year and four months later the committee began submitting a report in 14 volumes.

The report addressed all aspects relating to farming, farmed products and enhancing rural livelihoods. It did not lead to doubling of farmers’ income by the deadline the Prime Minister committed. The report with more than 3,000 pages may not have been read by many in the first place. But it was made public.

In fact, the month the Marathe’s task force was set up, this official committee submitted the 13th and penultimate volume of its report. The committee in fact called for a task force dedicated to devising business models for doubling farmers’ incomes – along the lines of Marathe’s proposal.

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But Niti Aayog’s task force was now in full swing. The mundane but essentials were quickly put in place. Marathe asked for a range of amenities – from a working space and desktop to travel allowance. Aayog promptly granted him that.

Unlike the inter-ministerial committee that consulted a wide range of stakeholders that included agricultural activists, the Marathe-envisioned task force served as a platform primarily for big corporate houses.

In its first meeting, the task force chalked out its agenda. “The time is right,” Marathe said, “to move from agriculture to agribusiness.”

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Part 2: Adani Group Lobbied to Remove Curbs on Hoarding. Farm Laws Did Just That

In 2020, the Narendra Modi government introduced contentious new farm laws. They allowed corporate entities to hoard commodities like rice, wheat and pulses. And also enabled farm commodities to be sold outside the regulated markets, undermining assured floor prices and laid the ground for large-scale corporate contract farming.

It sparked an uprising of farmers. Tens of thousands of them camped out on the outskirts of Delhi braving the waves of heat, cold and coronavirus for a year. The farmers believed the laws helped friendly businessmen. Adani Group, whose fortunes locked step with Narendra Modi’s rise and is often alleged to have close ties to the Union government, was at the centre of severe criticism as the conglomerate was perceived to benefit the most from the laws.

Previously unpublished documents accessed by The Reporters’ Collective now reveal the Adani Group discreetly lobbied with the government in April 2018 for the removal of restrictions on hoarding agricultural commodities. One of the centre’s three contentious farm laws, enacted two years later, did just that.

As far back as two and a half years before the farm law ordinances were enacted, the Adani Group’s representative at a meeting of the task force set up by Niti Aayog aimed at doubling farmers’ income by 2022 said: “The Essential Commodities Act is proving to be a deterrence for industries/entrepreneurs.”

This is the first recorded instance of the Adani group’s official advocacy for the repeal of the Essential Commodities Act that limits companies from hoarding agricultural produce. Repealing the law, critics argued, allowed corporations in the agri business, such as the Adani group, to hoard agri produce unchecked, at the expense of farmers.

In the first part of this investigative series, we delved into the hush-hush origins of the task force that consulted mostly with businessmen to find ways to better the lives of farmers. In this concluding part of the series, we uncover the candid discussions behind closed doors where corporations revealed their hand and the government its intentions.

Niti Aayog set up the task force – for getting corporates to double farmers’ incomes – in 2018 under the advice of an NRI software businessman close to the BJP.

It partially usurped the mandate from the formal inter-ministerial committee on doubling farmers’ income that was in place since 2016, set up two months after the Prime Minister first announced his dream of doubling farmers’ incomes.

While the inter-ministerial committee consulted a diverse set of activists, economists and industry leaders and released 14 volumes analysing problems plaguing India’s agricultural sector and recommended ways to augment farmers’ incomes, the task force consulted handpicked big corporates such as the Adani Group, Patanjali Ayurved, Mahindra Group, and BigBasket. Both the panels, oddly, were led by the same man, Ashok Dalwai. The Collective sent detailed queries to Dalwai who did not respond despite reminders.

The task force was created intentionally to seek out answers that differed from those previously presented by the committee, disclosed a member of the task force under the condition of anonymity.

The member told The Collective, “The Doubling Farmers’ Income committee was coming up with stacks and stacks of reports with sarkari solutions. We wanted to do things differently. We were looking for market-led solutions.”

On April 3, 2018, the task force consulted representatives of private firms. One by one, they gave their garden-variety inputs.

Mahindra & Mahindra, for example, spoke about Ab Tractor Call Karo – its tractor rental service – which it claimed falls into a “Farming as a Service” model. Patanjali Ayurved’s representative said the company provides seeds with high yield to farmers with a buyback assurance. It also proposed to sign agreements with farmers that would establish “direct link between farmer and consumer”. ITC elaborated on how it is “strengthening rural livelihoods” through its Mission Sunehra Kal. None of the companies at the meeting shared data on how their model led to any quantifiable increase in farmers’ incomes.

The Adani Group spoke of setting up a centre of excellence in Gujarat on land owned by Adani Ports and SEZ for information dissemination with farmers. Sixty per cent of the cost for setting this up, it proposed, would come out of the government’s kitty.

Nine of ten corporates that were consulted by the task force asked for policy tweaks for their model. Of these nine, four asked for monetary support from the government.

What Corporates asked from the Niti Aayog in the name of doubling farmers’ incomes

In the same meeting, Adani Agro cut to the chase and spoke about the obstacles they face in growing their agri-business.

“The Essential Commodities Act is proving to be a deterrent for industries/entrepreneurs and in turn to the farmers,” the company’s representative Atul Chaturvedi said at the meeting.

The underlying message was what’s good for the company would be good for the farmers. But farmers later protested the move, when the Centre amended the Essential Commodities Act in favour of corporates.

While the Dalwai-led Doubling Farmers’ Income committee had also recommended liberalising stock limits, it added safeguards for farmers. “It is recommended that conditional exemption from stock limits be optioned to private organisations that procure stock at Minimum Support Price rates directly from farmers, along with exemption from variable export limitations,” it said in its final volume that enlists specific policy recommendations.

When the government finally curtailed the Essential Commodities Act through one of the farm laws, it did not include proposed safeguards by the Dalwai-led committee. Instead, the laws prioritised business interests with the August 2020 amendment Bill tabled in Parliament stating, “there was a need to create an environment based on ease of doing business”.

Enacted in 1955, the Essential Commodities Act is a tool for the government to regulate food stocks to check price fluctuations in the market and as an anti-hoarding measure. Traders often hoard large amounts of food grain and sell them during food shortages when prices zoom.

The September 2020 amendments to the Act – one of the three farm laws – removed these powers given to states. The Centre could impose stock limits only under extraordinary circumstances such as famine or when retail prices of food commodities rise by more than 50% compared to the previous year. But food exporters and “value chain participants” (the Act did not define the phrase) were exempt from such limits.

This particular clause was a boon for conglomerates such as the Adani Group, which has been developing and operating grain silos for Food Corporation of India since 2005 besides its business interests in storage, transportation (it owns railway rakes used for transporting foodgrain) and ports from where food grains are exported.

The firms that the task force consulted have seen their toplines grow on the back of agriculture with revenues running into hundreds of crores.

For example, ITC witnessed a notable increase in its agribusiness profit before tax during the last quarter of the financial year 2022-23. The profits rose by 25.9%, reaching Rs 300 crore, when compared to the same period in the preceding financial year. For United Phosphorus Limited, FY23 revenues grew 16% to Rs 53,576 crore over its FY22 numbers.

The farmers, on the other hand, have only experienced small increases in their income. According to government’s 2018-19 data, which is the latest available, the average monthly income of a farmer has reached Rs 10,218 from Rs 8,059 in 2015-16. This is only 48% of the intended goal of doubling incomes by 2022.

Experts told The Collective corporate companies’ entry into agriculture in itself is not a problem but cautioned that any firm’s business model would be “self-serving”. Such business models, they said, will be about maximising profits for which a firm will save on costs by paying farmers less – defeating the purpose of doubling farmers’ income. The models will instead serve as an entry point for businesses to rake in more profits.

“Most processing technology is really large scale so the sector needs big players. But a corporate will try to squeeze its costs by reducing money spent on procuring farm produce. In the end, they will think about their profit margins,” said Sudha Narayanan, associate professor at Indira Gandhi Institute for Development Research. The fact that farmers or agricultural activists were kept out of the discussions, she said, is a red flag.

The brazen efforts to corporatise agriculture, purportedly to help farmers earn more, sharply contrast with the Modi government’s handling of farmers’ concerns.

Between 2014 and 2018, the country witnessed around 13,000 farmer protests. Their long-standing demands, such as a legally mandated Minimum Support Price (MSP) to safeguard against market fluctuations and crop insurance against disasters, were completely overlooked in the task force discussions. The government had promised to create a committee to investigate the legal enforcement of MSP after a year-long farmers’ protest that gained global attention and resulted in 700 deaths. However, no such committee was formed. But it had previously moved with alacrity to set up a task force for giving corporations an entry into agriculture.

The Collective sent detailed queries to the Adani Group, Niti Aayog, Department of Agriculture and Farmers’ Welfare and the firms the task force consulted. None of them responded despite reminders.

In a column written for The Print by former Agriculture secretary Siraj Hussain, and former rural development secretary Jugal Mohapatra, they observed that this particular amendment was the most “business friendly” one. “The moot question is whether the corporates will give a fair price to farmers when the crop is harvested and prices tend to be the lowest,” they wrote. “There is no easy answer to this,” they said.

While the former secretaries remained uncertain whether corporatising the sector would benefit farmers, they ended the column with a warning: “It is the consumers who may have to worry more if monopolies develop in this business. At present, the government has no way of knowing the quantities of privately held stocks.”

The Aayog’s file on the business-friendly task force ends with a July 6, 2020 letter by Ashok Dalwai celebrating the farm ordinances the government had brought in a month earlier.

Eight months later, during the farm protests, Niti Aayog’s Ramesh Chand warned that if the laws were to be repealed doubling of farmers’ income would not happen. In December 2021, farm laws were repealed.

(Courtesy: The Reporters’ Collective, a group of like-minded Indian journalists who collaborate to report on stories that put the spotlight on those in power; and who shed light on how India’s political economy and governance functions.)