There is a bidding war for farmer votes in India
- Political parties are promising massive financial support for farmers ahead of elections
- Congress president Rahul Gandhi has raised the stake by offering farm loan waiver across India
- The economic distress in rural India has become a political issue
India is headed for an election in the upcoming summer and political parties are placing their bids to bag the biggest and the most distressed section of the country's polity-- the farmers.
Both the ruling government led by the Bharatiya Janata Party (BJP) and its biggest national rival, the Indian National Congress (INC), are raising the stakes at every turn to woo the country's rural votes.
Congress president Rahul Gandhi pre-empted a move by the Narendra Modi government by promising a minimum income guarantee for the country's farmers, but without any details, just days before the annual budget. So, when the ruling government took the stage on February 1, to announce the budget, it offered a minimum income of ₹6,000 a year to the country's small and marginal farmers.
Within a couple of days, Gandhi raised the bar one more time and offered a pan-India loan waiver for farmers. "I have said that if the Congress party forms a government in Delhi, we will do what we did in Rajasthan, Chhattisgarh and Madhya Pradesh in the entire country," Gandhi said at a political rally on February 4. "You didn’t do anything in the four-and-a-half years, you didn’t waive the loans of farmers," he said accusing the government.
India's rural distress has been worsening over the last few years. The farm sector supports about half of the country's population and makes less than a fifth of the gross domestic product (GDP).
Despite good monsoons and good crop output, the farmers have been struggling to make ends meet. The prime minister promised in 2017 that the government would ensure the farmers' income doubles in the following five years, but the crisis has only worsened since then.
A report of the Committee on Strategy for Doubling Farmers' Income by 2022 stated that “The WPI (wholesale price index) of food articles was lower than that of agricultural inputs for most years, indicating that farmers received lower market prices for agricultural commodities than the prices paid for the purchase of inputs.”
Meanwhile, rural wage growth has slowed down significantly while the debt has been piling up.
Over 12,000 farmers committed suicide in 2015 mostly due to bankruptcy and indebtedness, according to data from the National Crime Records Bureau (NCRB). No similar record has been published since then.
India's farmers are still at the mercy of local moneylenders as opening of new bank accounts has not led to more loans.
In 2017, some of the farmers from the southern state of Tamil Nadu protested in the national captial New Delhi by drinking urine and eating faeces. In 2018, nearly 50,000 farmers marched for five days on foot, 180 kilometres from Nasik in Maharashtra to the state capital, Mumbai, demanding rights over the land they till.
The opposition has been able to sway the unrest in some states by offering farm loan waivers. In Chhatisgarh, Madhya Pradesh and Rajasthan, the rural outrage was a big factor in the incumbent governments getting voted out in December 2018.
The government is aware of the political risks of not assuaging the concerns of the farmers. So aside from assuring minimum income to the small farmers, the latest budget also proposed to allocate a record amount for the rural employment guarantee scheme.
Currently, the total central and state subsidies going for agriculture sector are estimated to be over ₹2.2 trillion, constituting close to 10% of agricultural GDP and 12% of average farm income, Niti Aayog member Ramesh Chand wrote in the Hindustan Times last month.
However, at this point, the last bid has come from the opposition, once again in the form of a farm loan waiver. Will the Modi government seeking re-election raise one more time?
What is minimum income guarantee and how it may work