After Dec 11, farm crisis tops political agenda

The writing was on the wall. The anger that rural Gujarat voters had exhibited in last year’s assembly elections there, edging out the ruling BJP overwhelmingly in the Saurashtra region, was a clear pointer to the serious agrarian distress that prevails in the hinterland. Failing to keep a tab on the rural pulse, and unable to assuage the growing farmers’ anger that was spilling on to the streets, the electoral debacle in the predominantly agricultural belt of the Hindi heartland – Madhya Pradesh, Chhattisgarh and Rajasthan – was already scripted.

Interestingly, while Congress romped home riding on the promise of farm loan waiver and a higher procurement price for paddy, K Chandrashekhar Rao in neighbouring Telangana swept the assembly polls riding on the popularity of a direct income support scheme ‘Rythu Bandhu’ for farmers. Under the novel investment scheme, the first of its kind in the country, land-owning farmers get a support of Rs 8,000 per year, to be split in two -- Rs 4,000 each for kharif and rabi crop seasons. Benefitting nearly 58 lakh farmers, the Telangana government has made a budgetary provision of Rs 12,000 crore for the scheme for 2018-19. The direct payment amount has since been raised to Rs 10,000 per farmer, and soon thereafter Jharkhand has been quick to follow up by launching a similar scheme providing Rs 5,000 per acre.

The speed at which the newly elected Congress governments implemented the farm loan waiver promise clearly shows the political urgency the party felt it needs to accord to agriculture. While Madhya Pradesh has waived outstanding farm loans to a maximum of Rs 2 lakh per farmer, which is expected to cost Rs 35,000 crore, Rajasthan and Chhattisgarh have announced full loan waivers, costing the respective state exchequers Rs 18,000 crore and Rs 6,100 crore. More than 8.3 million small and marginal farmers stand to benefit from the loan waivers when fully implemented.

Undeterred by the warnings being issued by economists, bankers and planners that farm loan waivers will upset the balance sheets and set a bad precedence, Congress president Rahul Gandhi has asked Prime Minister Narendra Modi to write off loans.

His argument is backed by sound reasoning. After all, when corporate bad loans to the tune of Rs 3.16 lakh crore between April 2014 and April 2018 were written off, there was no hue and cry from the economists or bankers.

Travelling through the rural belt before the elections, angry farmers did confront me at a number of places asking if huge loans of corporates can be written off, why not for farmers. In fact, their anger was specifically directed at former chief economic adviser Arvind Subramanian, who had gone on record saying that corporate loan write off leads to economic growth.

Nevertheless, the clear electoral verdict in the Hindi heartland has finally brought agriculture to the centre stage of Indian politics. Agriculture has emerged on the top of the political agenda, and the message has gone out loud and clear.

It is probably for the first time that the electoral verdict has brought in a visibly renewed confidence among the farming community. Rising above the divisive electoral policies that kept them split on the basis of religion, caste and ideologies, they now feel their collective electoral strength. The recent election results have shown them the power to topple governments. This is a major factor that will influence the 2019 general elections.

After all, in a country where roughly 50% of the population is engaged directly or indirectly in farming, farmers are finally in a position to be a lot more assertive. For over four decades now, real agricultural incomes have remained frozen. A recent OECD study has shown farm incomes have remained static in India for the past two decades. Earlier, an UNCTAD study had shown farm gate prices across the globe, factored against inflation, had remained static between 1985 and 2005. A recent Niti Aayog study has concluded that real farm income had only grown at less than half a percent -- 0.44% to be exact -- in the five-year period between 2011-12 and 2015-16 despite the fact that production had gone up steadily.  

Farmers, in reality, are being penalised for growing food. Barring a few exceptions, they have been consistently paid less than the cost of production over the years. To maintain food inflation under control, the entire economic burden has been conveniently passed on to farmers.

To be born in debt and live in debt all through one’s life is virtually like living in hell. ‘Credit pe credit’ was the only way to survive, and the debt kept mounting. Such is the economic deprivation that prevails that even the Economic Survey 2016 stating that the average income of a farming family in 17 states of India, or roughly half the country, stands at a mere Rs 20,000 per year failed to shock the nation. With policies and economics failing farmers, the emergence of farmers on the political horizon is the only way forward. Only time will tell whether this political turnaround will usher in a new renaissance.

(The writer is a commentator on issues concerning agriculture and related topics)