Rising input costs and lack of remunerative prices have turned the terms of trade against the Indian farmer
While the Bharatiya Janata Party (BJP) managed to retain its stronghold of Gujarat in the recent state assembly elections, it conceded significant ground to the Congress in rural and semi-rural constituencies. The results bring to the fore the problem of rural discontent, as farmers intensify their protests against non-remunerative prices for their produce across India.
The problem of farm discontent is not confined to Gujarat—India has witnessed an almost eight-fold rise in ‘agrarian riots’ between 2014 and 2016, data from the National Crime Records Bureau (NCRB) shows. Bihar and Uttar Pradesh alone accounted for 84% of the total reported incidents, while Gujarat ranked fifth among all states. These riots include conflict over land and water which have increasingly come under stress owing to weather-related shocks and inadequate policy attention.
In his 2014 Lok Sabha campaign, Narendra Modi had promised to raise farmer incomes and rework the minimum support price (MSP) formula to deliver “50% profits” to farmers. Many farmers, especially among the land-owning class, seem to have been taken in by his promise and voted for him in large numbers.
But the inability to fulfil that promise or make a success of other initiatives such as crop insurance seems to have led to a sense of betrayal among this class. It is worth noting that many of the recent agitations across rural India have been led by land-owning caste groups such as the Marathas in Maharashtra, the Patidars in Gujarat and the Jats in Haryana.
The disappointment among farmers becomes easier to comprehend when one considers the deterioration in their terms of trade, i.e. the movement in prices of items sold by farmers as against the prices of items they buy, either as farm inputs or for personal consumption.
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