Agriculture has no safety net
OGujarat shows that parties will pay if they ignore farmers ne of the big takeaways from the Gujarat results is that the schism between India and Bharat is for real. BJP’s victory is due to its dominance in urban areas. The Congress won a majority of the rural vote.
Farm distress is not confined to Gujarat alone. The economic viability of farming is increasingly under stress. Demonetisation and GST are bound to have put a squeeze on incomes as well. Perishables suffered a sharp crash in prices after demonetisation. Most agricultural business in India has been traditionally conducted in the informal sector (read outside the tax net). A growing clamour for farm loan waivers across states is proof of entrenched rural distress. The Congress had promised one in Gujarat. It performed well in rural areas. Same was the case with the Congress in Punjab and the BJP in Uttar Pradesh earlier this year. Barring Karnataka, the BJP would be facing rural anti-incumbency in major state elections in 2018 and the 2019 general elections. The next budget will probably do something to protect the ruling party from the now palpable rural discontent. One can expect more loan waivers and a hike in minimum support prices. While such policies do bring temporary relief, they are not enough to address the structural crisis of Indian agriculture. Growing fragmentation of land holdings, environmentally unsustainable practices in groundwater and fertiliser use, and climate change are some factors. Indian farmers do not have income protection or social security cover unlike their counterparts in the west.
The younger generation in farmer households is even more worried about its future. A 24 year old Hardik Patel emerging as the leader of a powerful but disgruntled farming community is the biggest proof of this. Given the fact that almost half of our workforce is still dependent on farming; such policies are bound to be prohibitively expensive. This is the biggest fault line in India’s political economy. Bharat needs a lot of resources to come even close to the living standards that India enjoys. India is hard pressed to marshal them. Political fortunes are a function of the ability to balance this contradiction.