Is the Centre paying attention to the lessons from Gujarat?

The lower-than-expected performance by BJP in keenly-watched Gujarat elections has been largely attributed to farmers’ anger arising from the continuing agrarian crisis. While the effort by the BJP leadership is to play it down, the rebuff by rural Gujarat can fuel a nationwide electoral trend bringing out the stark India-Bharat divide.

In the run up to 2019 parliament elections, there are still 8 more assembly elections to go. Among these are states like Madhya Pradesh, Rajasthan, Karnataka and Chhattisgarh, where the rural vote share is very large. These are also the states where farmers’ protests have been quite regular and predominant, with farmers even resorting to stopping vegetable and milk supplies to the urban centres in Maharashtra and Madhya Pradesh leading to gunning down of five farmers in police firing.

What has been happening in Gujarat is happening across the country. In fact, the rural distress is more pronounced in other parts of the country reflected in soaring farmer suicide numbers. Maharashtra alone has recorded 1,497 farm suicides since the loan waiver was announced six months ago. Two years of back-to-back drought, followed by the demonetisation blow has taken a severe toll on farm incomes. While the cost of production has increased, farmers are unable to get a reasonable price often forcing them to throw their produce onto the streets.

Even in Gujarat, farmers were unable to realise the minimum support price of Rs 4,450 per quintal for groundnut, often selling at prices ranging between a minimum of Rs 2,675 per quintal and a high of Rs 2,750 per quintal. In cotton, the prices had slumped from Rs 6,000 a quintal a couple of years ago to around Rs 4,400 per quintal. Although just before elections, the government declared a bonus of Rs 500 per quintal for cotton and another Rs 50 per quintal for groundnut, farmers do see through the intent which is primarily aimed as an election sop. This is an encouraging trend. If farmers across the country were to express their anger by exercising their franchise against the ruling dispensation then only the ruling elite will understand that something is terribly going wrong in the hinterland.

Let’s look at some other crops. For urad dal, against the MSP (including bonus) of Rs 5,400 per quintal, farmers across the country suffered a loss between Rs 1,000 and Rs 1,800 per quintal.  For soyabean, the prices had prevailed at a low of Rs 2,660 and 2,800 against the MSP of Rs 3,050 per quintal. In case of groundnut, it becomes clear that farmers have, in reality, been forced to incur a net loss of Rs 1,740 per quintal. For moong, against the MSP of Rs 5,575 per quintal, farmers’ earning was in the negative, a loss of more than Rs 1,600 per quintal on an average. Wheat, paddy, bajra, sunflower, mustard, onion, potato and tomato did not fare any better.

The slump in prices had aggravated farmers’ anger. But it’s not only low prices that plague agriculture pushing farmers deeper and deeper into a livelihood crisis, it is a whole plethora of structural changes that farming is crying for. Applying a tincture of iodine here and there will not address the agrarian crisis; it requires a radical overhaul with the economic growth model shifting to rural India. But what I read in the newspapers as the bold measures Finance Minister Arun Jaitley is expected to announce in the forthcoming budget to fix rural distress do not give me hope. It only shows that the mandarins in the corridors of power have not come to grips with what ails agriculture.

The proposal to direct state governments to procure all crops from farmers for which MSP is announced so as to provide a ‘minimum assured price’ to farmers is in reality a meaningless initiative. It is simply an exercise to pass the buck to the state governments, who will then be alone blamed for farm distress. Absolving itself of any responsibility, the Centre knows that the state governments are already under pressure to raise finances for the promised farm loan waivers, where is the money for undertaking procurement.  

There are 24 crops for which MSP is announced every year but in reality only two crops, wheat and rice, are procured. To some extent, cotton and sugarcane growers also get assured prices. But considering that only 6 percent farmers get the benefit of MSP, the challenge is to extend the MSP regime to the remaining 94 percent farmers, who are dependent on the exploitative markets, is certainly monumental. It cannot happen unless the government shifts its investment priorities to constructing APMC-regulated mandis. At present, the country has only 7,600 mandis against the requirement of 42,000 mandis in five km radius. It requires shifting bulk of the Rs 6.9 lakh crore allocated budget for constructing more mandis instead of more roads.

Increasing credit to farmers by another Rs 1 lakh crore or extending the eNAM (National Agriculture Market) platform too is aimed to help commodity trading and not farmers. More of the same is not the answer.

The author is an agricultural policy analyst. Views expressed are personal.