India’s richest state Maharashtra is witnessing a farmer agitation of a massive magnitude, where even huge loan waivers are not helping the cause. Meanwhile, farmer protests have gone sporadically violent in Madhya Pradesh too, where farmers have died and gotten injured in reported firings. Incidentally, Karnataka BJP Leader Jagadish Shettar has also reportedly demanded that the state government should announce a farm loan waiver in the wake of the severe drought and warned of an agitation if the demand was not conceded. While several Indian states are jumping on the bandwagon of farmer agitations, is it a warning sign of the crisis Indian agricultural sector is in, is it just a case of aping the recent farm loan waiver in UP?
The CM Devendra Fadnavis led Maharashtra government, on June 3 waived off loans of Rs 30,000 crore which was owed by farmers who had up to five acres of land by October 2016. The way farmers have been revolting, it is unclear if the amount will be raised further. Meanwhile, in MP, internet services have been suspended due to the protests and the Rashtriya Kisan Mazdoor Sangh has called for a state-wide bandh tomorrow. CM Shivraj Singh Chouhan has said that, to purchase the farm produce at the minimum support price (MSP) a price stabilisation fund of Rs 1,000 crore would be set up. The Opposition has been asking why the situation is seen only in BJP ruled states?
Meanwhile, the Madhya Pradesh farmers have been demanding a minimum support price for their farm produce and several other things. They have been protesting in the state since the beginning of this month. From that day itself, farmers from at many districts in Maharashtra came out on the streets to shut down wholesale markets as well as vandalised vehicles carrying vegetables. These farmers spilt gallons of milk on the road and sent vegetable prices soaring in bigger cities. But why are farmers protesting in a year when agriculture growth for the entire country shot up to a five-year high of 4.9 percent?
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These protests were started when the new BJP governemnt in Uttar Pradesh announced a Rs 36,359 crore farm loan waiver for the farmers in the state. That event prompted farmers in other places to ask for a similar waiver since they are also BJP ruled states. Another big concern was nose-diving crop prices, as at the root of the crisis is the steep fall in the prices of agricultural goods. This decline in prices has mainly come against the backdrop of a great monsoon season which had led to bumper crops. However, despite the price fluctuations, MSPs are meant for farmers so that the can sell their produce at remunerative prices. Yet it is a well-known fact that crop procurement at MSP value has traditionally been quite low for many crops. These things together have has forced farmers in distress to sell their crops at really low prices, which have added to the debt burden.
After the Modi government took the decision of demonetising high-value currency in India, there was reportedly a collapse of wholesale vegetable prices as there was a severe cash crunch in the market. But much before these, farmers had to face consecutive droughts in 2014 and 2015, which was the key reason they could not repay their loans and lead to a slew of suicides.
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Nation Crime Records Bureau (NCRB) data: Maharashtra witnessed one-third (4,291) of the total suicides by farmers and agricultural labourers in India (total 12,602) in 2015.
A whopping 43 percent of the farmer suicides in the state were due to debts and bankruptcy. Just 18 percent farmer suicides were due to the failure of crops.
National Sample Survey Organisation survey: A survey of farm households was released in December 2014. According to the date, 57 percent of families were indebted in Maharashtra. In comparison, the average in India is 52 percent. The survey said that the average debt of a farm household in Maharashtra was Rs 54,700 in 2013, while the average in India was Rs 47,000.
Meanwhile, various state governments are expected to waive off $40 billion, or Rs 2,57,000 crore, of farmers’ loans in the run-up to the 2019 general elections in the country, a global banking group has said. Farm loan waivers will amount to 2 percent of gross domestic product (GDP) by the 2019 polls, as other states are also likely to follow the BJP’s Maharashtra and UP governments, according to a Bank of America Merrill Lynch (BofA-ML) report. At a time when the states should be focusing on investing in more irrigation, creating more roads and get more resources, can they afford to spend on crop loan waivers? Can the quick fixes push aside the structural issues behind the agricultural crisis?