PL-480 & The Indian Farmers’ Protest
By: Caleb Tyler and Victor Hibbeln
american university farm bill practicum, may 2023
In 1954, President Dwight Eisenhower signed PL-480, the Agricultural Trade Development and Assistance Act into law. Colloquially known as Food for Peace, the law positioned the United States to be able to dump its excess agricultural production upon developing nations in the post-World War II era. In the decades that followed, PL-480 was expanded exponentially. The essay that follows provides a broad overview of key dates in America’s agricultural trade history, the legislative journey of the burgeoning power that the law afforded the American government, and how its effects can be seen in the modern day as reflected in the Indian Farmers’ Protest of 2020.
PL-480 & Subsequent Expansion
In the Post World War Two period, the United States found itself in a unique position compared to the rest of the world’s superpowers. The United States had sustained minimal damage to its industry, infrastructure, and agriculture, which allowed the country to expand its global trade reach into new markets. One of the methods that this was developed was through food aid programs that provided assistance to nations in need, but also sought to reduce government owned food surplus stocks. (Riley, 2017) In 1954, President Dwight D Eisenhower signed the Agricultural Trade Development and Assistance Act. also referred to as PL-480 and the Food for Peace Act. (DOS Office of the Historian) Prior to Pl-480, the United States administered stand-alone food aid programs which were developed on a situational basis. However, the post-World War Two period led U.S. leaders to seek multiple new avenues to assert its international presence in order to combat the rising influence of the Soviet Union. (Riley, 2017) International food aid became one of the vessels that the Eisenhower Administration used in this effort. The development of food aid policy was developed using two primary principles. Secretary of State John Foster Dulles supported programs that could be used to influence foreign governments and secure international alliances. On the contrary, Secretary of Agriculture Ezra Taft Benson supported a policy that would reduce the United States’ government owned agriculture stocks. (Riley, 2017) These perspectives became the cornerstone of the Agricultural Trade Development and Assistance Act, a food aid program and foreign policy that enabled the administration to extend assistance to nations on a continuous basis.
In the years following the implementation of PL-480, the food aid legislation continued to develop into a program that constitutes more than basic food aid. This was accomplished through subsequent pieces of legislation. The foreign policy aspect of PL-480 began to develop further in 1961 with the implementation of Executive Order 10915. Formulated by President John F Kennedy, the order stated, “whereas it is of fundamental importance that we have a national food policy directed toward using our agricultural abundance as a national asset to meet foreign policy objectives.” (Ex. Order 10915) Later that same year, Congress passed the Foreign Assistance Act of 1961 in tandem with Executive Order 10973 which established the Agency for International Development, more commonly known as USAID. This federal agency has since overseen the administration of major international aid programs, including PL-480. The 1966 Food for Peace Act led to a further expansion of PL-480’s role in foreign policy formulation. This piece of legislation, led by President Lyndon B. Johnson, was the more substantive expansion of PL-480. This instituted benchmarks in PL-480 agreements for recipient nations to meet to receive food aid. These recipients had to provide documentation detailing the country's efforts to address food insecurities within their borders. Additionally, the Food for Peace Act provided avenues for the nations to receive food aid shipments to redirect funding towards military and security budgets. Finally, the Food for Peace Act of 1966 allowed President Johnson to begin using PL-480 in negotiations to deter recipients from seeking assistance from the U.S. Adversaries. (DOS Office of the Historian) Further expansion of PL-480 occurred in 1983 with the Agriculture Export Expansion Act. This legislation delegated further powers over the use of PL-480 to the Executive Branch, but also expanded its financial mechanisms and capabilities through H.R. 2550 and S. 18. These pieces of legislation are best summarized as:
Amends the Agricultural Trade Development and Assistance Act of 1954 to authorize the President to use agricultural commodities and products acquired by the Commodity Credit Corporation to increase the level of agricultural exports under the Food for Development Program and under the program for the sale of agricultural commodities for foreign currencies and long-term dollar-credit. (H.R. 2550)
In 1990, Congress passed the Food, Agriculture, Conservation and Trade Act, which was the first comprehensive reorganization of PL-480 since its inception in 1954. This was the first step in Pl-480’s inclusion in the larger Farm Bill omnibus legislation. (S.2830) The final stage of PL-480’s expansion into the Farm Bill occurred with the passage of the Food for Peace Act of 2008. (PL-110-246) Food for Peace replaced the Agricultural Trade Development and Trade Assistance Act and led to its inclusion in Title III, the Trade Title of the Farm Bill. From this point forward, all food aid programs have been authorized through the Farm Bill.
The passage of the Agricultural Trade Development and Assistance Act. also referred to as PL-480 and the Food for Peace Act, has added a new level of complexity to the United States’ foreign policy formulation. The use of food aid as a diplomatic leverage has been implemented in multiple instances and has left lasting impacts on developing nations’ agrifood systems.
In the case of India specifically, the influence of America’s export policies are visible. Pricing parity, minimum support prices and favorable policies for commodity crops were the ingredients which lead to the world’s largest protest. The next section will explore how agricultural policies that were once championed by the United States are now viewed as being at odds with the free market.
Indian Farmers’ Protest
Sparked in September of 2020 with the passage of the Agricultural Acts, Indian farmers descended on the nation’s capital, New Delhi. Known colloquially as the Farm Acts, the legislation itself is three distinct acts that, if implemented, would have radically altered the agricultural sector of India. Lasting for over a year, the protests by farmers and their allies from across India were successful in achieving not only the suspension of the laws, but their eventual repeal.
The Farm Acts are made up of three distinct pieces of legislation, which are The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, and the Essential Commodities (Amendment) Act. Helmed by Prime Minister Narendra Modi, the Indian government sought to minimize its own role in the agricultural market, while simultaneously expanding the role of private industry. In doing so, the government rationalized that this would be beneficial to farmers, allowing them to take a more active and independent role in the market. Contrary to this belief that market competition would benefit farmers, instead farmers and their allies from across India rose up in protest. One of the core issues at the heart of their discontent was the virtual elimination of minimum support prices (MSPs). Although the laws did not explicitly end these protections, the minimization of government influence and the more direct relations farmers would be able to have with private industries clearly shifted the balance of power in favor of the private sector. Specifically, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act effectively ended the current structure that is overseen by the Commission for Agricultural Costs and Prices (CACP) by stipulating that farmers and buyers could independently enter into agreements with agreed upon guaranteed prices for the agricultural produce (PRSIndia, 2021). However, the guaranteed prices would not have a minimum stipulated amount and would be up to the discretion of the farmers and the private entity that they negotiated with. As such, the farmers argued that the government should include the continuation of MSPs as part of the laws, asserting that the government’s word was not enough. This pressure eventually led the Supreme Court to temporarily suspend the laws’ implementation, and the establishment of a committee to negotiate with the protesters.
Minimum support prices for farmers have been in place for Indian farmers for decades, beginning in the 1960s as part of the Green Revolution. Two notable organizations were established during this time in the interests of the agricultural sector and overall food security. The Food Corporation of India (FCI) in 1964 and the Agricultural Price Commission in 1965. The Food Corporation of India’s main objectives were to protect farmers and to manage the distribution of agricultural grains. Specifically, their three objectives are to manage price support operations, distribute food-grains via a public distribution system and maintain effective levels of food-grains for operational and buffer stocks (FCI.gov). All of these directives make for stronger national food security. The FCI has thus played a critical role in stabilizing the food security of the country.
Tangentially, in 1965, the Agricultural Price Commission was established, with one of their duties being to announce fixed MSPs at the start of every planting season. In 1985, the commission was reconstituted as the Commission for Agricultural Costs and Prices. The setting of minimum prices for a select group of crops meant that farmers would receive some economic protection from market forces and environmental disasters, since the price floor for crops would be guaranteed. However, because the CACP decides what crops are covered rather than being blanket coverage, there has been sentiment among Indian farmers that the existing framework is not sufficient. Not only has it resulted in an overproduction of crops, but it has unfairly favored crops such as cereals and cotton (Das, 2021). As was aforementioned, by essentially eliminating the MSP program in an effort to allow farmers more freedom to operate in the free market, farmers will be at a distinct disadvantage when negotiating and conversing with private investors and industries. This is because 68% of farmers in India own less than 1 hectare, slightly larger than approximately 10,000 square feet, of land. Concurrently, in some states the average annual income of farmers is 20,000 rupees, or $271USD (Saaliq, 2021). Taken together, while the Agricultural Acts are an attempt at economic liberalization, the potential risks to Indian farmers is evident. Already operating on razor-thin margins and with over two thirds of the demographic owning small pieces of land, the elimination of the government safety net could prove catastrophic. While imperfect, the current MSP system employed by the Indian government is vital to the protection of Indian farmers and there is a clear sentiment that they should be left in place and improved upon.
Exasperating the widespread discontent over the proposed agriculture laws is the fact that, according to Devinder Sharma, 50% of the Indian population is either dependent on or involved in agriculture (Gyamlani, 2022). Paired with the knowledge that the majority of Indian farmers oversee small-scale operations and bring in very little income, the elimination of MSPs and the absence of guaranteed income is devastating for farmers. As such, Sharma posits that it is important that MSPs become a formal legal mechanism, rather than just opening up the agricultural market without them (Gyamlani, 2022). By offering MSPs that provide more blanket coverage, rather than the current model which only provides support to select crops, the agricultural sector would be more secure and better equipped to engage with private industries and investors. Doing so without these income or price guarantees however will only leave the farmers in a more tenuous and exploitable position than they already are.
To capture the scope of the discontent, it is necessary to showcase the sheer number of Indians participating in the protests. According to the India Brand Equity Foundation (IBEF), anywhere between 55-58% of India’s population relies on farming as its primary source of income (IBEF, 2023). This makes farmers the largest voting block in the country. Consequently, tens of thousands of farmers descended upon New Delhi to protest the 2020 Agricultural Acts. Blocking railways on their way to New Delhi with tractors and other farm equipment, the farmers, notably those from the northern states of Punjab and Haryana, two states that rely heavily on agriculture, made their presence felt. On November 26, 2020, in a show of support, 250 million workers went on strike across the country (Business & Human Rights Resource Centre, 2020). With approximately 17.8% of the India population taking part in the 24 hour solidarity strike, entire states were effectively shut down. By this time, the farmers had encamped themselves on the outskirts of New Delhi. Still enduring violent reprisals from the police force in New Delhi, as well as those around the country, the farmers nevertheless prepared for the long haul (Patel, 2021). The farmers’ efforts yielded results at the start of the new year. On January 12, 2021, the Supreme Court of India ordered an indefinite stay on the Agricultural Acts (Al-Jazeera, 2021). By staying the legislation indefinitely, this created an opportunity for the Indian government to negotiate with the protesting farmers. Despite this momentous decision, the farmers took to the roads of New Delhi once more. To celebrate Republic Day on January 26, 2021, tens of thousands of farmers, many riding horses or driving tractors, broke through barricades across the city, notably at the historic Red Fort (Business & Human Rights Resource Centre, 2021). While this did lead to widespread clashes with police, it reaffirmed that for many farmers full repeal was the ultimate goal (Saaliq, 2021).
With protests and sit-ins continuing to take place over the course of the year, Prime Minister Modi felt the pressure. In September, over 500,000 farmers gathered in the state of Uttar-Pradesh to carry out monthlong protests. A leader of the farmers’ Bharatiya Kisan Union, Balbir Singh Rajewal stated that the government should “either repeal the laws or face defeat in the state election” (BBC, 2021). Reiterating the sentiment that repealing the laws was the only acceptable outcome, the protests in Uttar-Pradesh put distinct political pressure on Prime Minister Modi, as the upcoming elections for the state’s legislative assembly were a major source of support for his party.
The unrelenting pressure of the Indian farmers’ yielded its desired outcome when, on November 19, 2021, Prime Minister Modi announced that he would repeal the 2020 Agricultural Acts (Nazir, 2022). Less than two weeks later, the Farm Laws Repeal Bill, 2021, was introduced and passed by the Indian Parliament (PRSIndia, 2021). Lasting just over a year, the Indian Farmers’ Protest shows the influence that such a large segment of the population and economy can have. Not without hardship, the efforts of the farmers and their allies across India were able to force the government to acquiesce. While the farmers of India are once again protected from full market liberalization, it remains to be seen if reforms such as income price parity and a revamped, more fair and general MSP program, are able to be realized.
Conclusion
The prioritization that the U.S. government placed on establishing foreign markets for the nation’s agricultural surplus over the decades is evident. Not only was the policy an aspiration of empire, but America’s use of its economic might and leverage in the post-WW2 era meant that the frameworks of the agricultural sector accompanied these policies. The Indian Farmers’ Protest illustrated how divisive the concepts of minimum support prices, price parity and a guaranteed income have become. However, it was partially due to U.S. influence that first exposed India to the MSP and price parity programs. Like in America, these programs that were once in favor were eliminated and still remain heavily politicized. A piece of a larger trend, the history of PL-480 sheds light on the exploitative roots of America’s international agricultural policy and provides reference about the now divisive economic policies in India.
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