How The BJP Failed Modi… And India’s Farmers

How does an economy transform a sector which employs over 40% of its workforce but accounts for barely 16% of its output? How does a nation migrate from the neither-low-nor-middle-income economy status if the bulk of its rural populace must survive on one-sixth of the national income?India’s aspiration for a $5 trillion economy is daunted by the state of its farm sector. The unviability of the sector is illuminated by agitations by land-owning communities in India—the Jats, Marathas, and Patels—for quotas in government jobs..Agriculture, which is India’s largest private sector, is burdened with an archaic business model suffering from government controls. The farmer must be able to leverage land, labour, and capital like any other entrepreneur to be viable but lacks access to affordable credit, a reliable supply chain of inputs, and access to markets. The denial of forward and backward linkages has reduced farming to a case for political charity.The cause and consequence are manifest in data. Per capita income in rural India (net value added based on 2011-12) at Rs 40,925 is less than half of the urban per capita income. In 2020, over 10,677 farmers, that is 29 in a day or over one every hour, committed suicide and estimates place the cumulative figure for two decades at over 4 lakh..Hope Wrenched Away.In September 2020, the government decided to liberate the sector by legislating laws affording access to open markets by dismantling the stranglehold of Agricultural Produce Market Committees, enabling contracts with private buyers, and easing limits on stocks.A year later, on Nov. 19, 2021, the government backtracked from its promise and announced the repeal of the three crucial laws. The package had flaws – for instance, the inadequacy of dispute redressal and assurance of rights and continuance of government participation in the sector. But with all its warts, this was still a gigantic step for the sector.Hope, though, has been wrenched away. The irony is that the most prosperous farmers of the nation got together and upended a law meant to improve the lot of subsistence farmers owning less than a hectare of land. Jawaharlal Nehru famously said in the 1950s that “everything else can wait but not agriculture”. India’s farmers who waited for over seven decades for deliverance must wait longer for economic liberation.The narrative around the repeal of the laws is riveted in seductive speculation about the ‘why’ of the U-turn. The theories range from the fallout on elections in Uttar Pradesh and Punjab to worries about rising discontent post the pandemic and income distress visible in the usage of MGNREGS allocations. The speculation carries some truth but is only a contextual and partial explanation..No Champions For The Cause.Failure is often more about what was not done rather than what was done. The BJP simply could not line up champions to carry the cause – for instance, a Verghese Kurien or a C Subramaniam. It would seem as if the party itself had not bought into the vision of its leader.The Bharatiya Janata Party describes itself as the world’s largest political party. The bulk of its elected representatives and leaders classify themselves as farmers and yet the party struggled to articulate the positives of the new template for improving the viability of farming and farmers’ incomes.The BJP has bagged historic mandates in successive general elections – it has 301 seats in the Lok Sabha and 97 seats in the Rajya Sabha. The party is in power on its own in a dozen states and in alliance in six others. These include states which are the largest, the most populated, and which host predominantly agrarian economies..The political heft represented by the BJP’s footprint, particularly in the states that it is in power, could have been leveraged to present the promise of the potential..Farm Laws Repeal: The Constitutional Design Of Factor Market Reform In India.There is no disputing the gaps in the consultative process and the need for collaboration and consensus. The reach of the party could have been deployed to assuage the many fears—for instance, the withdrawal of minimum support price or the end of government procurement—at the granular level. That sadly was not to be..Politics Of Convenience.The tragedy about India’s political landscape is that ideological conviction for political parties rests on electoral expedience. This is as true for the BJP as it is for the Indian National Congress and other parties.The reforms in the farm laws have been proposed by successive governments and have been on the agenda for two decades. It has been argued that a decentralised approach, as against promulgation of central laws, would have fared better. The fact is, states failed to implement templates for change for decades.A model APMC and contract law were shared with states as early as 2003. In 2007, under the Congress-led United Progressive Alliance, model rules were released – indeed Uttar Pradesh and Punjab adopted the Model APLM Act, 2017. In 2013, vegetables and fruits were shifted out of APMCs. The need for reforms was underlined by successive committees including the one on doubling farmer income and ratified in the January 2019 report of the Parliamentary Standing Committee..The sad fact is that India’s political parties revel in opposing exactly the very reforms they promise in manifestos or which they promote while in power..In 2019, the Congress in its manifesto explicitly stated that “Congress will repeal the Agricultural Produce Market Committees Act and make trade in agricultural produce—including exports and inter-state trade—free from all restrictions.”Manifest in this saga is the fact that ideology is less about conviction and more about political convenience..Modi’s Farm Misadventure Will Hurt Urbanization.Absence Of Mass Propagation.It is arguable that the role of the opposition parties, who leveraged the fear factor, was duplicitous given their stance earlier. Equally, the BJP must face up to the fact that as an entity aspiring to be the party of governance it simply flailed at mounting a counter-mobilisation to promote the idea.The BJP could convince neither the prosperous nor the penurious of the potential for transformation. The focus of the agitation in three states is explained by the fact that the bulk of the procurement is from a few states such as Punjab, Haryana, and Uttar Pradesh. The standing committee 2019 report notes that government procurement accounted for barely a fourth of total wheat output and a third of rice output between 2002-03 and 2017-18..The party, particularly in BJP-governed states, could not credibly assure the farmers that the new system was optional and that the existing ‘grow-harvest-sell’ sustaining them was not at risk..Central to the angst and anger of the farmers from these states is the worry about a weakening of the existing MSP-based procurement system and inadequacy of regulatory framework to manage the opening up of markets to private procurement. The fact is the National Food Security Act, a justiciable law, obliges the government to procure and supply grains to 75% of the rural population and 50% of the urban population. The process depends on MSP-based public procurement to provide subsidised food grains to the disadvantaged.Lessons from history and the immediate past could have been deployed for a counter-narrative. In the 1960s when India embarked on the Green Revolution, its champion C Subramaniam faced a backlash from within and outside – members of the Planning Commission even suggested that cattle dung was a better alternative to fertiliser import. Subramaniam arranged for setting up over 1,000 experimental farms across India to demonstrate and bring home to farmers the potential for change..A more recent example is the promotion of financial inclusion through the Pradhan Mantri Jan Dhan Yojana leveraging the Aadhaar identity platform. The target of 7 crore new accounts required the buy-in of stakeholders. To make this happen, a personal letter signed by Prime Minister Narendra Modi was sent to 7.25 lakh bank officers across India. The idea of financial inclusion was promoted across state capitals, cities, and district headquarters. In all, 76 functions were planned across the country, to be attended by Union ministers, chief ministers, and dignitaries. Public sector banks lined up 77,892 camps in rural and urban areas on the day.In fact, the 2019 standing committee report reveals many of the states governed by the BJP – including the agrarian states of Assam, Haryana, Madhya Pradesh, Himachal Pradesh, Uttarakhand– allow contract farming and direct wholesale purchase of produce from agriculturists. Surely the states could have found case studies of farmers benefiting from open access to markets and that it could be a win-win solution.The lack of imagination of BJP chief ministers in championing a cause is stark. The fear of the small farmer being overwhelmed by big, private corporations is real. The chief ministers could have set up Kisan Camps to meet with and assure farmers and woo their subscription. BJP-governed states could have expanded the network of cooperatives/farmer produce organisations to aggregate farmers and ensure the advantage of collectives.The transformation of agriculture is critical for shifting India from the trenches of disguised unemployment and income-poverty to a more balanced economy..A party known for its organisational strength, best-placed in a quarter of a century to enable transformative change, could not rise to the challenge..Tragically, the BJP, its chief ministers and leaders, have failed farmers and Modi. The reversal extends the life of the myth perpetuated by politicians – that the farmers need their protection..Shankkar Aiyar, political-economy analyst, is the author of The Gated Republic: India’s Public Policy Failures and Private Solutions, ‘Aadhaar: A Biometric History of India’s 12-Digit Revolution’; and ‘Accidental India..The views expressed here are those of the author and do not necessarily represent the views of BloombergQuint or its editorial team.

How The BJP Failed Modi… And India’s Farmers

It would seem as if the party itself had not bought into the vision of its leader, writes Shankkar Aiyar.

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