Why India’s Farmers Will Continue To Suffer, No Matter What The Govt Says

By Richard Mahapatra:

Note: This article has been republished from Down To Earth.

There is no end to the woes of Indian farmers. They have not been cheered by the forecast of a second consecutive normal monsoon. Rather, they have taken to the streets, demanding a new deal from the government. Farmers in more than 12 states have been protesting for the past eight months, spanning two major crop seasons (see ‘Farm rut’). But their demands offer a picture of contradiction.

In the southern states, which are reeling from the effects of the worst drought in over a century, farmers are demanding agricultural loan waivers and government assurance on better prices for their produce. At the same time, farmers in the northern and western states are also demanding the same despite a historic harvest. For the latter group, this is the second normal monsoon after three years of low rainfall and the resulting severe agrarian crisis.

Yet, not a single day has passed in the recent past without farmers’ protests. The killing of six farmers by the police in Madhya Pradesh was just a brutal turn of events in this never-seen-before agrarian unrest.

Ideally, at this time, farmers and governments should have been out in the streets celebrating two milestones the country has achieved recently: a record food grain production in 2016-17 and the 50th year of the Green Revolution that propelled India to self-sufficiency, as regards food. Instead, farmers dumped potatoes, tomatoes, milk and other produce on the roads to protest the ‘historically low’ prices they got.

The starkest example of this is onion, a vegetable whose high price has always triggered political storms. Arguably, this is the first time that farmers and politicians are worried about the dipping price of onions. It is also a sign that there is something seriously wrong in the agricultural sector – and we either do not care about it or prefer to dismiss it conveniently.

The current crisis is a culmination of decades of such negligence. Increasing the production of food grains has always been the strategy to sustain farmers – and indirectly, making the country self-sufficient in food. That is why, whenever there is a drought, the immediate focus is on bringing water to the farmers’ fields. Expansion of irrigation networks and regular drought relief in terms of temporary income generation activities (such as public wage programmes) become the most important agricultural interventions.

While this strategy has helped mitigate the woes of farmers to some extent, it has failed to keep pace with the booming production of food grains. With more produce, the market has become the most important point of intervention. This is where the government has failed – and this is where the seeds of the current crisis have been sown. Farmers with bumper crops need markets to trade – that too at a price that allows them to earn returns on their investments, at least.

At the core of the current farmers’ protests is the dip in prices of their produce. The market is not favourable to farmers anyway. Instead of ensuring a better deal for them, the government allowed large-scale imports of agricultural produce. This, while being aware of the bumper harvest riding on last year’s normal monsoon!

Farmers throw onions in Indore
For how long do farmers have to resort to such means, so that the politicians address their issues? (Photo by Arun Mondhe/Hindustan Times via Getty Images)

This is a criminal step, because common sense says when farmers are harvesting a normal crop after three years of inadequate yields, the government needs to ensure that they get a fair price for the produce to recover the past losses. However, the farmers earned almost nothing from their crops, as the markets were flooded with imported produce.

In Maharashtra and Madhya Pradesh, farmers earned about ₹3 per kilogram of onions and ₹4 per kilogram of wheat. For them, that’s a loss of around 70% on their investments. This added to their past pile of debt. Therefore, it is no wonder that most of the recent farmer suicides have happened in places where the harvests have actually been better.

Is there a way out? Judging from the government’s strategy, it seems that India is no longer worried about self-sufficiency in food production. It has almost made up its mind to depend on food imports. This is an undeclared detour from the national objective.

So, under this strategy, the produce of Indian farmers and the price they get for it are no longer the concerns of the government. This is evident from the obsessive focus on taming inflation, particularly food inflation. Currently, India is witnessing one of the lowest levels of inflation in recent years. And to reach this level, the government has flooded the market with imported agricultural produce.

But what about the government’s commitment to enforce the minimum support price (MSP) for select farm produce?

In fact, currently, the government has a plethora of schemes and strategies to ensure that the farmers are protected from the vagaries of the market. From setting up a price stabilisation fund to maintaining prices of certain products and insuring crops against the uncertainties of weather, the Union government and the state governments have implemented close to 200 schemes that cover the complete agricultural cycle of a farmer. But none of these schemes cover even 10% of the country’s farmers. Furthermore, the MSP does not cover 94% of the farmers and does not ensure a profit for those who are covered by it.

On the other hand, agriculture as an economic sector has never received the kind of strategic nurturing that it has deserved. Since the Green Revolution, India has witnessed many changes in its economic profile. Today, there are many new economic sectors that could never have been imagined 50 years ago. But the country has adapted to them and has also claimed global accolades. Take the information technology (IT) sector, for instance. In the two decades since IT made its presence in the country, India has jumped on the bandwagon and nurtured a booming new workforce to take the leap forward. Today, it is a global leader in the IT market, and its services have become essential worldwide.

Now compare this with the government’s approach towards farmers and farming. This sector has never received consistent support, except for politically-correct schemes and budgets. Rather, there is a national plan to shift people from agriculture to other sectors. While there are valid arguments for this, the reality in India is that a significant number of people still depend on agriculture. And shifting people from farming to non-farming activities would require the latter sector to grow at a stupendous rate, which isn’t possible yet.

In June 2015, in a cover story, Down To Earth warned that India was staring at a very severe agrarian crisis that could hurt the national economy. Two years later, it is already unfolding. India’s annual food import bill is now at Rs 1.40 lakh crore, which is 5.63% of the country’s total import bill, and second only to the country’s oil import bill.

Sooner or later, economists will bring this out as a major fiscal constraint – just like the case of oil, for which we do not have any alternative. After a few years, the food subsidy bill will be talked about and subjected to major cuts, with the government citing the increasing food import bill. Even though farmers in India do not directly get subsidies, it goes to an important input – fertilisers.

To compensate the high import bill, the government will look at other cuts in agriculture-related schemes, such as irrigation and power. These will be supported by the same argument: if food is being imported and paid for, why should local producers be supported?

To sum it up, the farmers are not going to get a better deal for their produce. That is the reason why they now dread a normal monsoon. Be it a drought or a more-than-normal monsoon, if you can’t sell your produce with a profit, then it’s not a trade for sustenance!