A new round of debt forgiveness augurs a bumper financial harvest for farmers in Uttar Pradesh, the country’s largest state. At a total cost to the government of Rs 363.59 billion (US$5.6 billion), 21.5 million small and marginal farmers in the state are being handed waivers on loans of up to Rs100,000.
It appears the temptation to make a political killing was too much for Prime Minister Narendra Modi and the ruling BJP. Yet while government largesse may make good electoral sense, such band aids in the past have crippled Indian farming and stood in the way of necessary reforms.
Indebtedness is a problem that is most acute among small and marginal famers. But their borrowings are mainly from moneylenders and hence loan waivers won’t make any difference to them. In reality, bigger farmers are the main beneficiaries of debt relief polices.
The problems of small farmers are complex and require a steely political will to be properly addressed. Their landholdings are below the threshold that is economically viable. The result is a cycle of bad loans and bad harvests following poor rainfall. Loan waivers have little role in ending the conditions that lead to such problems.
In a sense, this is a story of unfinished reforms in India. The question should be why almost 55% of the population produces just 17% of agricultural output. Unless this huge swathe of the population is empowered, loan waivers will remain a recurring feature of the landscape.
Small farmers have little access to technology, and inconsistent access to irrigation, making them one of the most vulnerable groups to future climate change. Farming for them is grindingly physical work. Families plant, pick, harvest and haul by hand, with each new generation dividing up what they have into ever smaller plots of land.
Years of market-oriented reforms have unleashed a wave of capital and entrepreneurialism across India. But despite high-end sectors such as information technology making impressive strides and adulatory portrayals of India at home and abroad as an economic juggernaut, the benefits of reform have yet to extend to the hundreds of millions who toil on the land.
A decade ago, the government embraced the global marketplace and began cutting farm subsidies as it liberalized what had long been a managed socialist economy. The farmers’ costs rose as the tariffs that had protected their products were lowered.
The plight of the Indian farmer can also be linked to the World Bank’s policies in the mid-1990s which forced the country to open up its seed sector to global corporations such as Cargill, Monsanto and Syngenta.
These conglomerates made sure that India’s farmers bought seeds from them. The poor farmer, who had till then used his own seeds, became dependent on seeds supplied by the big companies which were engineered to be “non-renewable”, meaning new seeds are needed each planting season.
As the environmental scientist Vandana Shiva notes in one of her papers: “A free resource available on farms became a commodity which farmers were forced to buy every year. This increased poverty and led to indebtedness.”
A sense of deep despair runs through the lives of farmers in India. They have lost all hope – and also the will to fight
The result is a growing social crisis. Burdened by crushing debt from buying Genetically Modified (GM) seeds, failing crops on account of abuse of soil with fertilizers, a squeezing of prices by multinationals, and by government indifference, farmers are migrating to cities. There an equally cruel fate awaits them but at least they are saved the shame of humiliation in the eyes of their own fellow villagers.
A sense of deep despair runs through the lives of farmers in India. They have lost all hope – and also the will to fight. An increasing number have opted for permanent escape from their physical and emotional pain by ingesting deadly pesticides.
More than seven decades after independence, India does not have a national agriculture policy. There is a need for an integrated approach – one that addresses source sustainability, land use management, agricultural strategies, demand management and the distribution and pricing of water. Compartmentalized responses are unlikely to be adequate to address the current crises.
A longer-term strategy would be to make farming steadily profitable. This would involve proper irrigation and water conservation, better market information and access for farmers, and the development of agro-industries. The decisions and actions that the country’s leadership takes – or fails to take – now may shape the future not only of India’s agriculture but its polity as well.