NEW DELHI: The last five years saw large scale and widespread farmer protests built, primarily, on the back of low prices of crops. Bumper harvests in the early years of the first Modi tenure and the government's dogged determination to keep inflation in check have kept food prices controlled.
The protests, particularly the long march from Nasik to Mumbai, made the ruling National Democratic Alliance (NDA) nervous to a degree. In the last year, it moved to announce a range of corrective measures – increase in minimum support prices (MSP), increased procurement and price deficiency payments under PM-AASHA and later, the PM-Kisan income support scheme.
However, despite increased support, prices for several crops continued to be below even the MSPs that had been declared last year. PM-AASHA too failed to have any positive impact on procurement and prices. Agitations and protests continued and, in fact, picked up momentum. Between September and November, Delhi saw three massive protests where farmers numbering over a lakh on one occasion were out on the streets.
The last large-scale protest was on November 30, 2018, where over 50,000 farmers gathered at Parliament Street. That particular protest even brought together heavyweights of the opposition like Rahul Gandhi, Sharad Pawar, Sitaram Yechury and Arvind Kejriwal on the same platform.
While farmer issues and rural distress formed key parts of the opposition's agenda in the last four months, it didn't translate into votes. Amidst its dominant performance in the 2019 Lok Sabha elections, the Bharatiya Janata Party (BJP) actually improved its vote share in rural India by 6.8%. The increase was higher than that in urban and peri-urban areas.
Clearly, a large proportion of those dependent on agriculture for their livelihood believes that Modi and the ruling dispensation have what it takes to solve their problems. The BJP's key promise with respect to agriculture in its manifesto for 2019 was to double farmers' income by 2022, with 2015 being the reference year. According to the NABARD's All India Rural Financial Inclusion Survey (NAFIS), the average monthly income per agricultural household in 2015-16 was Rs 8,931.
Doubling this figure by 2022 would require farmers' incomes to increase between 13% and 15% every year, according to Ashok Gulati, well-known agriculture economist and chair professor for agriculture at the Indian Council for Research on International Economic Relations. The going, however, will not be very easy. Since 2014, rural wages have shown a declining trend with periods of negative growth, according to a working paper published by the Reserve Bank of India in April 2018.
This trend has continued. December 2018 saw the lowest ever rural wage growth for the month of December at 3.8%. In February 2019, real agricultural wages grew at only 2%.
The reality, though, is that Indian agriculture has become largely a loss-making enterprise. “Farmers don't cultivate crops, they cultivate losses,” as Devinder Sharma, Chandigarh based agriculture policy expert, often laments. (Why don't farmers quit agriculture then? A lot of them – particularly the younger generation – would like to have the option of alternate employment. However, most don't as jobs are difficult to find. Unemployment is at a 45-year high.)
The impediments in the way of farmers getting a fair price for their crops range from supply gluts, low productivity, restrictions on where the produce can be sold, too many intermediaries and the disproportionate bargaining power of intermediaries.
Despite interventions like e-NAM, it's the buyers at the mandi who still call the shots. If a farmer has travelled 30 kilometres, unloaded her produce (which could be perishable), she does not have an option other than accepting the price offered by the buyer. She cannot reload and take her produce back. That would mean having wasted the cost of labour to load and unload, the cost of transport and the prospect of getting an even lower price.
Things don't look too good under the MSP regime either. Officially, MSP is declared for 25 crops. But, procurement happens in earnest only for a handful of crops in a handful of states. Only about 6% of farmers are able to sell their produce directly to procurement agencies.
Even when farmers are able to sell to procurement agencies, there is no guarantee that the price that they get will be equal to the MSP. As The Wire had analysed in October 2018, the market price for ten of the 14 Kharif crops that had declared MSPs was below the MSP.
For three crops, the market price was not only lower than the MSP declared that season, but also lower than the MSP declared in the previous season. In all, the total loss to farmers across the country amounted to Rs 1,000 crore in one month.
Recently, the government's think-tank, the NITI Aayog, has also admitted that farmers are selling at prices lower than the MSP. The government could consider accepting the recommendation of the commission for agricultural costs and prices (CACP), a statutory body under the agriculture ministry. It had suggested, in July 2018, that the right to sell at MSP be made a legal right.
Farmer organisations too have demanded the same. In the last monsoon session of parliament, farmer leader Raju Shetty, who was then an MP, introduced the 'Right to Guaranteed Remunerative Minimum Support Prices for Agricultural Commodities Bill, 2018' as a private member's bill. The Bill has lapsed with the dissolution of the 17th Lok Sabha. However, if the government wants to move towards doubling farmers' income, it could consider reintroducing the Bill or a revised version of it.