1. Farmers’ protests shake PM Modi’s 2019 bid as economy slows

Farmers’ protests shake PM Modi’s 2019 bid as economy slows

Farm and labor unions with an estimated combined membership of 30 million are also set to join the wave of demonstrations.

By: | Published: September 27, 2017 11:21 AM
For Prime Minister Narendra Modi — already grappling with a sharp slowdown in economic growth and looming job cuts in manufacturing — the protests involving hundreds of thousands of farmers highlight his struggle to deliver on the promises that swept him to power. (PTI photo)

Anger over falling farm incomes has spilled onto streets across a swathe of India’s largest states as farmers struggle with food price deflation and a breakdown of the informal agriculture economy. For Prime Minister Narendra Modi — already grappling with a sharp slowdown in economic growth and looming job cuts in manufacturing — the protests involving hundreds of thousands of farmers highlight his struggle to deliver on the promises that swept him to power.

On Sept. 15, state officials in Rajasthan joined those of Uttar Pradesh and Maharashtra — all ruled by Modi’s Bharatiya Janata Party — in promising to waive farmers’ loans after 13 days of protests. But farmers aren’t satisfied. “We’re planning a national rally on Oct. 30 when we would carry torches to show light to state administrations bumbling in the dark,” said Amra Ram, 60-year-old leader of the All India Kisan Sabha — the farmers’ assembly that represents 15 million members — on the phone from Sikar, Rajasthan. “Our farm incomes are falling and there are no jobs for us anywhere else.”

Farm and labor unions with an estimated combined membership of 30 million are also set to join the wave of demonstrations. The Bharatiya Mazdoor Sangh — which is affiliated with the Rashtriya Swayamsevak Sangh, the ideological parent of Modi’s ruling BJP — plans to march to the Parliament to protest the government’s policies on November 17, its president C K Sajjinarayanan said over phone from Thrissur in Kerala.

Deepening Slowdown

The agriculture sector — employing more than half of India’s working population — was among the worst hit by Modi’s November cash ban which led plummeting produce prices. Despite the ensuing hardship, farmers largely supported Modi’s move, which they viewed as an attempt to target illegally hoarded wealth. Their backing helped propel the ruling BJP to election wins in key states such as Uttar Pradesh.

Still, farmers’ restlessness worsened after the implementation of the nationwide goods and services tax in July, which further hurt supply chains across India at the peak of monsoons, when prices of vegetables and grains were expected to gain. “There’s an uncertainty on the farm product prices — what will we do if we aren’t getting the right prices for our produce?” asked Arun Muluk, from Vadgaon Kashimbe near Pune, who joined at least 100,000 others in protests last month that shut down India’s financial capital, Mumbai. “Farmers have the potential to bring the downfall of this government — the government won’t even know how quickly the tide will turn against it.”

The protesters belong to the Maratha community — a key vote bank in the western Indian Maharashtra state, many of whom are land owners or farmers. Their main demands included reservations for the community in jobs and higher education.

Jagdish Thakkar, a spokesman in the prime minister’s office, didn’t answer calls seeking comment.

For the main opposition Congress Party, there are plans to make this a key election issue. “This government is destroying farmers,” said Ajoy Kumar, New Delhi-based spokesman for the Indian National Congress. “And going by the huge protests across the country we can see that people are coming around to this realization. We have stood by farmers in Karnataka, Maharashtra and Haryana and our leader Rahul Gandhi is right now in Gujarat raising his voice for them.”

Tough Questions

According to Amra Ram, wheat farmers suffered after Modi cut import duties on wheat, first to 10 percent from 25 percent and then to zero in December. Compounding the stress, 52 percent of Indian farms aren’t irrigated and climate change-led variations in monsoons have only worsened their losses. Small landholdings cut access to institutional funding, while the failure to repay local loan sharks contributes to the suicide of 12,000 farmers every year, according to government figures.

In the lead up to the 2014 elections Modi promised higher prices and reforms including minimum support price for grains, protecting small farmers and addressing rising risks to farming.

“I think those are tough questions that the government will face in 2019,” said Neelkanth Misra, Credit Suisse’s India Equity Strategist. “If half your workforce has not seen an income growth, should you act on it or no?”

Yet Modi, who vowed to add 10 million jobs a year in a workforce that sees the entry of at least a million new seekers each month, hasn’t been able to keep pace with employment creation.

Farm Reforms

The government is trying its best to accelerate the pace of agriculture reforms, said Ramesh Chand, member of the government’s official think tank NITI Aayog. Allowing farmers direct access to buyers instead of forcing them to go through a chain of middlemen is high on the agenda, Chand said in New Delhi. States, responsible for implementing agriculture policy, have also been encouraged to introduce market reforms and compensate farmers for the differential between prices offered by merchants as against the government’s minimum support guarantee. “When I look at the country as a whole I am not satisfied,” said Chand of agriculture reforms. “The Prime Minister wants it, but it is a state subject.”

The answer may not be enough for protesting farmers. “This struggle is not for us, it’s for the next generation — if our kids didn’t find jobs, they would at least have comfort that they can return and rely on the traditional profession to feed themselves,” said Muluk at the Mumbai protests. “But now, where do we go?”

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