- Distressed farmers are demanding loan waivers, but that should not deflect focus from what needs to be done and undone to address the root cause of the agrarian crisis
- The farmers’ unrest across the country, and particularly across several BJP-ruled States, appears to have caught the central government by surprise. But it should really not have done so. Ever since candidate Narendra Modi in 2014 promised the farmers acchhe din in the specific form of doubling of farm incomes in five years and public procurement at prices ensuring 50 per cent return over costs as recommended by the Farmer’s Commission headed by MS Swaminathan, farmers have been waiting for these promises to be fulfilled.
- Three years down the line, they feel cheated. And of course, they might feel betrayed by the whammy of demonetisation and its prolonged effects on rural markets, which have depressed all crop prices and not allowed them to reap the benefits of a bountiful monsoon.
- Several issues are at stake here, which need to be considered if we are to understand the farmers’ demands for immediate relief from debt burdens and for properly remunerative prices. The BJP’s pre-election promises struck such a chord among farmers because for some time now the issue of the viability of cultivation has been a pressing one. The first UPA regime in the decade of the 2000s went some way towards mitigating the agrarian crisis that was affecting the countryside, but since around 2012, many of the problems, which had essentially been patched over rather than comprehensively addressed, reappeared with even greater intensity.
- Indeed, this is what creates the difficulties in debt servicing that farmers are facing across the country, which in turn has given rise to promises of loan waivers in several BJP-rules States. This is a knee-jerk reaction to a deeper problem of farm viability that is still not being addressed, and it is likely to create even more problems especially when it becomes clear that the actual waivers will be much more limited than promised.
Falling short
- The background is that promise of procurement prices at 50 per cent higher than total cost has not been fulfilled by the current government over the past three years.
- First, the declared MSPs have not been at the promised levels; and then the poor implementation of even these prices in government purchases has meant that they have not operated as floor prices for agricultural markets.
3.But then there is the further issue of whether these recommended MSPs actually function as floors to the market prices that farmers face. This highlights the ineffectiveness of procurement policy in different States. The fact that farmers’ unrest has been especially marked in BJP-ruled States does not reflect ‘political conspiracy’ as has been alleged, so much as that these State governments seem to have been quite poor in ensuring that market prices stay at or above the MSP, which is an essential function of the procurement process.
And the demonetisation-induced collapse in rural liquidity has meant low prices for perishables like fruit and vegetables.
Clearly, farmers have good reason to be angry. And hasty and ill thought-out loan waivers, while unavoidable given the policy-made circumstances, will not relieve either their distress or their anger.
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