Agriculture under Modi Govt.: A Downward Spiral to Abyss

Special Election Issue

The last five years of Modi government witnessed unprecedented crisis in the agrarian economy leading to massive protests by farmers throughout the country. The images of protesting farmers in Madhya Pradesh, Rajasthan, Tamil Nadu, Maharashtra, New Delhi and other places are still fresh in the minds of all. Many of the protesting farmers hit the streets for days, thereby forsaking their daily wage that they would have earned by staying back in their villages – such was the spirit of their protest. However, the ruling dispensation shied away from discussing the real issues that directly affect 59% of the working population (as of 2016) [1] in the run up to the 2019 elections; rather they were busy drumming up a sense of false nationalism in the country and discuss whether ‘Mandir wohi banega’. They pretended that the killing of 40 jawans in Pulwama mattered to them, but paid no heed to the fact that 35 farmers commit suicide everyday (according to the last available data from 2015) [2] due to structural policy failures, the number being a gross underestimate [11].

False promises, faulty policies driven by neo-liberal agenda and fooling the agricultural community has been a regular feature of the Modi government. In the 2014 election campaign the BJP promised farmers of this country that the minimum support price (MSP) would be increased as suggested by the Swaminathan Commission report at 50% above the total cost C2 (comprehensive cost including imputed rent and interest on owned land and capital). The BJP government at Centre claimed that they fulfilled their promise on this last year; however, a closer analysis [3] reveals that the MSP has been set at 50% greater than A2+FL (actual paid out cost plus imputed value of family labour). As C2>A2+FL, the announced MSP is significantly lower than the promised level. Also, in some cases, the previous MSP was found to be greater than A2+FL by more than 50%.

The BJP announced in 2016 that it would double farmers’ income by 2022. Apart from creating a Committee on Doubling of Farmers’ Income, there has not been much tangible effect on ground. The Committee mentioned that to meet the 2022 target, a 10.4% compound annual growth rate would be required [4]. The government has, since then, not released any farmers’ income growth figure. The unrealistic nature of the promise can be gauged from the fact that farmers’ income in the country grew at 0.44% per year between 2011 and 2016 in real terms according to a NITI Aayog report [5].

India’s agriculture budget doubled over five years to Rs 57,600 crore in 2018-19 under the National Democratic Alliance (NDA) government. However, this happened by only jugglery of numbers rather than through any real increases. Firstly, this claim by the government was based on the fact that the increase was calculated on nominal terms which mean that the effect of inflation was not accounted for it. Secondly, it shifted a part of the subsidies paid on interest from the books of the Finance Ministry to the agriculture budget. The net result was that the allocation as a % of the total Union Budget remained same – around 1.75% [6], which is measly.

The Modi government came out with Pradhan Mantri Fasal Bima Yojana in 2016. The new scheme was advertised as incorporating the best features of earlier schemes while removing all their shortcomings [7]. However, the insurance policy continues to do what it does best – using public money to provide profits to insurance companies, allowing corporations to raise equity through the money invested by these insurance companies in the stock markets while denying poor farmers their rightful compensation. The government, in most cases, forcibly sold farmers these policies by including a part of the premium paid in the loans that farmers would take from banks for agricultural purposes [8].

 The effect of demonetization in the agricultural sector was also palpable. As the agricultural sector is almost entirely informal in nature involving cash transactions, farmers were one of the worst sufferers. This not only affected their timely purchase of various inputs of agriculture, but also made it hard for them to sell their produce. It took two years for the Agriculture Ministry to admit the catastrophe that had been created by demonetization [9].

The list of the anti-farmer policies of the Modi government is unending. However, it has made it increasingly difficult to understand the impact in entirety. Since 2016, the government has stopped publishing the suicide data of farmers; in the same year the government came out with a new manual to define drought which has made it more difficult to classify a drought situation as one, leading to denial of relief compensation to suffering farmers [10]. It must be understood that all of this is just an extension of the neo-liberal policies adopted by the Indian state since the early 90s and finds resonance in the Washington Consensus which was formulated by IMF, World Bank and the US Treasury. The aggressiveness with which the Modi government has bootlicked corporate capital at the cost of the common man has few comparisons in recent Indian history. The result has been large scale agricultural distress, massive migration of farmers to the cities in search of livelihood and creation of large labor reserve forces for industries to exploit [12].














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