India’s farmers need a new deal beyond clichéd politics of MSP
ple using the old arrangement of ration shops to access subsidised grains. This means even without cash transfers, the ability of MSPtype policies to support farm incomes will shrink in days to come.
All this is not to say Msp-based PDS is not needed anymore. Starvation deaths have been reported because people could not get their ration due to Aadhaar-related problems. The absolute number of very poor people is still very high. Msp-based procurement is an important anchor of agricultural prices in India. It also protects country’s food security. Many farmers could switch from food crops to commercial crops if there were no procurement.
What all this does suggest is the fact that agricultural policy making has got itself into a cul-desac. The tested method of incentivising agricultural production – Msp-based procurement – is reaching its limits. Uncertainty in farm incomes is only increasing with growing weight of perishables in total agricultural production. Challenges such as climate change related adverse effects on farm production would be here much sooner. Farmers are feeling the pinch of all this, but they have no agency. Farmer politicians do not hold much clout in India’s game of thrones.
Those who do not earn their living from farming are not bothered for the moment. India’s urban middle class probably never had it so good when it comes to consumption of food products. A large variety of food items are being delivered to their doorsteps at discounted rates. The more farmers’ incomes are squeezed, the cheaper they get these things. Although much smaller in number than farmers, this class exercises a disproportionate sway in opinion building.
The political class has by and large chickened out from handling this fundamental political economy divide. It’s happy to placate one class at a time. Lower inflation for large part of the term, followed by a tactical MSP hike towards the end.
The consequences can be disastrous in the not-too-distant future. A deep rooted crisis in farming can end the supply glut largely taken for granted. Signs of growing social unrest are already visible. Any new deal to farmers would require resolution of this contradiction rather than fraudulent promises of MSP hikes.