Fields of Unrest

Why are Indian farmers unhappy?

Business & Politics

June 12, 2017

/ By / New Delhi

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India is witnessing farmers’ protest in different parts of the country demanding better prices and loan waivers. Is it a spectacle for 24×7 media? Or is it solidarity for millions of farmers? Several studies and high-level committees during the last seven decades have called for hundreds of recommendations to improve the farming sector even as successive governments at the central and state levels have slept over it.

Prohibitory order, internet ban and gunning down protesters are often the norm in the terror-infested Kashmir valley. But as farmers protest in Mandsaur district, the Malwa region of Madhya Pradesh grew violent and five people were killed and several other injured due to police firing. The BJP government led by Shivraj Singh Chauhan adopted a tough stance against protestors and blamed the opposition for instigating the farming community.
It is not only Mandsaur that felt the heat, but adjoining districts – Neemach, Dhar, Khargaoun, Dewas, Indore, Ratlam, Ujjain and Badwani too were on the boil. Into the end of his third term, Chauhan has been busy with Narmada Seva Yatra and seems to have neglected the concerns of farmers’ which has been simmering over a year now.

Why are farmers in Madhya Pradesh on protests, a state often held by the ruling Bharatiya Janata Party as a model of agricultural progress?

In fact, the Modi government plans to replicate the MP model of agriculture whose agri-gross state domestic product has shown a growth of 9.7 pc compared to national average of 3.5 pc.

As the state had a bumper wheat production, the government promoted crop diversification with farmers taking up onion production. This led to a bumper crop. However, it failed to match even the input cost of INR 4 to 5 per kilo grams of onions. Instead, they were forced to sell onion produce at INR 1.50 per kg. After many protests, petition and pressure, the Chouhan government hiked the Minimum Support Price (MSP) for onions to INR 8 from INR 6. By the way, India is the largest producer of onions.

In neighbouring Maharashtra, farmers are on strike – spilling milk on streets and demanding INR 50 per litre as against INR 21-28 price realisation paid by dairy companies depending on the demand-supply situation. Last month, farmers in southern states like Telangana and Andhra Pradesh, staged protests and burnt their red chilli crop. Farmers in these regions grow commercial crops. Compared to farmers in drought-prone regions of Marathwada, Bundelkhand, Vidharba dependent on subsistence agriculture farmers have seen good remunerative prices.

In April this year, a group of farmers from Tamil Nadu displayed skulls of farmers who had committed suicide, shaving half of their heads and drinking their urine in a bid to get Prime Minister Narendra Modi’s attention.
About 318,528 farmers have committed suicide in India during 1995-2015. However, it has failed to stir the conscience of policy makers in successive governments who often boast of inclusive development and one of the fastest growing economies in the world. Farm issues have failed to move beyond occasional media coverage, questions in Parliament and State Assemblies and expert committees.

Often this is accompanied by a lack of sensitivity. Madhya Pradesh home minister, Bupendra Singh, once described that farmers took the extreme step because they were “possessed by ghosts”.
One of the immediate reasons being cited for the current farm crisis is being attributed to the impact of demonetisation decision taken by Prime Minister Narendra Modi on November 8, 2016, to ban high-value currency notes. For every crop marketed since demonetisation – soyabean, green gram, pigeon-pea, potatoes, tomatos, onions, garlic, red chili, fenugreek, grapes and pomegranates — farmers have experienced huge price declines. Despite selling their produce in March this year, many farmers are yet to receive payments. This is because agro commodity trading in India is predominantly cash-based.

On the back of a normal monsoon, production of food grains rose 8.7 pc year-on-year to cross 273 million tonnes in 2016-17, surpassing the past record of 265 million tonnes. Similarly, a 37 pc year-on-year rise in pulses output—from 16.4 million tonnes in 2015-16 to 22.4 million tonnes in 2016-17 has been recorded. So, why farmers are agitating despite bumper crop? The bumper crop has led to wholesale prices dipping below government announced minimum support prices for varieties of pulses severely affecting farm incomes.

To insure farmers against any fall in prices, India practices a system called Minimum Support Price (MSP) – a form of market intervention. MSPs are announced at the beginning of sowing season for certain crops on the recommendation by the Commission for Agricultural Costs and Prices (CACP) and announced by the Cabinet Committee on Economic Affairs (CCEA) chaired by the prime minister. Currently, it covers 26 commodities, which include paddy (rice), wheat, pulses, etc. A counterpart of MSP is the market intervention scheme (MIS), under which state governments procure perishable commodities-vegetable items.

Has it improved the plight of farmers?
Demands to increase MSP have plagued farming community in India for long. Food policy expert Devender Sharma, points out that the procurement price of wheat in 1970 was INR 76 (around EUR 1.0) per quintal. In 2015, the MSP for wheat was fixed at INR 1,450 (EUR 20) per quintal – an increase by 19 times in 45 years. Now, compare this with the hike in incomes of various other sections in the same period.

The jump in salaries of government employees in the same period has been 120 to 150 times; the increase in salaries of college/university teachers is 150 to 170 times; of school teachers in the range of 280 to 320 times. What’s more, in the 7th Pay Commission, the salary of a chaprasi (peon) has been fixed at INR 18,000 (EUR 249) per month.

Despite heavy funding of schemes on socio-economic development, why has Indian agriculture come to such a state? Why the interest of farming sector has fallen through when 118.7 million of India’s total 1.30 billion population are cultivators, another 144.3 million agricultural labourers.

However, there has been a fall of nine million cultivators and an increase of about 33 million in agricultural labourers. Jointly they account for 55 pc of India’s total workforce of 481.7 million in 2011 and contributing 17 to the GDP.

One short-term measure most political parties cutting across ideologies in India have responded to farm crisis is through farm loan waivers without addressing structural fault lines in the Indian agriculture.
Recently the newly elected Uttar Pradesh Chief Minister Yogi Adityanath sanctioned a loan waiver to the tune of INR 36,359 crore taken by about 9.4 million small and marginal farmers in the state fulfilling BJP’s pre-poll promise. No sooner it triggered a demand from farmers in Maharashtra, Punjab, Haryana, Tamil Nadu, Telangana and Andhra Pradesh. The BJP-led Maharashtra government announced a INR 30,000 (EUR 415) crore debt waiver scheme on Saturday, wherein farmers with less than 5 acres of land will benefit.

According to a Bank of America Merrill Lynch (BofA-ML) report, various state governments in India are expected to waive off USD 40 billion of farmers’ loans in the run-up to the 2019 general elections. The UPA government headed Manmohan Singh announced a loan waiver scheme involving INR 650 billion and three crore small and marginal farmers. The National Commission on Farmers (NCF) chaired by noted agriculturalist and Professor M S Swaminathan in their five volume reports had recommended pricing and procurement based on total cost of production plus 50 pc principle. In a recent affidavit submitted in the Supreme Court, the Centre had said the increase in MSP as per Swaminathan Commission report is unfeasible.

“In more than 400 public meetings (ahead of the elections), Narendra Modi ji had promised implementation of Swaminathan Commission report. Why were we shown such dreams with no intent to fulfil?,” questioned All India Kisan Sabha general secretary Vijoo Krishnan.

Even as Rahul Gandhi, Congress Vice President, who tried to meet protesting farmers in Madhya Pradesh, was arrested all seems to be normal as far union agriculture minister Radha Mohan Singh who cancelled a press conference and instead attended a public yoga function, demonstrating a variety of health exercises with televangelist-turned-consumer goods tycoon Ramdev.

As politics will be played over Mandsaur firing in coming weeks, the rot in Indian agriculture will be conveniently forgotten till the next incident.

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