In the follow up to BJP’s defeat in the three major states in central India viz. Madhya Pradesh, Rajasthan and Chhattisgarh last year, there was a widespread perception that a major factor behind this was resentment among farmers [besides the unemployed youth] with the alleged anti-farmer policies of incumbent governments in these states as also those pursued by the union government.
Under Modi – dispensation, the prices of farm products had increased at a slower pace than those of the non-farm products or the ‘terms of trade’ moved against agriculture [a jargon used by economists to describe the phenomenon]. As a consequence, farmers’ income grew slower than non-farm income which – analysts argued – prompted them to vote against BJP. This also led them to believe that the party would meet similar fate in Lok Sabha elections in April/May, 2019.
The opposition parties [especially the grand old party which formed government in the above-mentioned three states] were hopeful that this time around also, they would be able to leverage farmers’ anger to deal a body blow to Modi.
The expectations were belied. Far from defeat, the electorate gave a resounding mandate to Modi – a mandate that was bigger than the one in 2014 – with NDA [National Democratic Alliance] led by him getting 353 seats and BJP alone securing 303, way above the majority mark 272. The NDA vote share at 45% [of this BJP alone was 37.4%] was significantly higher than 39% in 2014. This would not have been possible without farmers also expressing their choice in favor of NDA/BJP.
Clearly, the analysts had got it wrong. Forget resentment, the farmers were more than satisfied with the performance of Team Modi. Besides, they were willing to put more faith in his determination and ability to deliver on his promise of doubling their income – come 2022. So, where did they go wrong in reading what the farmers got [or didn’t get] and their orientation towards Modi?
Two plain but basic facts will help explain the riddle. First, according to 2011-12 consumption expenditure survey done by NSSO [National Sample Survey Office], 80% of the rural households [they consist predominantly of farming families] spend more than 50% of their monthly spending on food alone as against 40% of such households in urban areas. Second, as per NSSO report [2013], net receipt from cultivation activity accounts for only 50% of the total monthly income of an agricultural household [an agricultural household is defined as one who has drawn Rs 3000/- a month from cultivation activity in the preceding 365 days].
In view of the food alone accounting for a sizeable chunk of the monthly expenditure, if its price is kept low, that would mean less spending on food – for a given level of calorie intake – which would leave more money for spending on non-food items implying better living. Further, with 50% of income coming from non-farming activities, the household gets to absorb the shock if any, due to increase in food price.
If, any government reins in food inflation which Modi has done [during the last 5 years, it has been consistently in single digit – indeed well below 5%], this is bound to bring cheer to majority of the farmers. A majority of the farmers are subsistence farmers [those with holding size less than 2 hectares] who produce food mostly for self-consumption and hardly have any surplus to sell. In fact, a good slice of them may even have to purchase. They are all relieved when food prices go down.
The present government has vastly extended the coverage of public distribution system [PDS] of the National Food Security Act [NFSA] under which food is available to the poor at heavily subsidized rate Rs 1/2/3 per kg for coarse cereals, wheat and rice respectively. This includes almost all of the poor rural households [subsistence farmers included] thereby immunizing them from even small hike in food price as all their food needs are met at subsidized rates.
Apart from arranging low cost food, Modi gave them financial support under PM Kisan Samman Nidhi [PM – KISAN] @ Rs 6,000/- per annum to be given in three installments of Rs 2000/- each. He followed it up by immediate release of the first installment ‘retrospectively’ and ensuring that the money reaches in full to their account using the DBT [direct benefit transfer] platform.
Clearly, an overwhelming number of farm households were the beneficiaries of policies followed by Team Modi which were anchored on reining in food prices. The ‘adverse movement in the terms of trade [T.O.T] against agriculture’ argument trumpeted to show that Modi – government was acting against the interests of farmers was in fact hurting only a small section i.e. farmers having large holding [> 4 hectares] and producing marketable surplus.
A majority of the poor farmers have also been the beneficiary of other welfare schemes of Modi – government viz. PM Awas Yojna; Ujjwala Yojna [free gas connection], Saubhagya Yojna [free electricity connection], Ayushman Bharat [free medical treatment covering expense up to Rs 500,000/-], Swachh Bharat [free toilet] etc.
In view of above, it is not surprising that farmers voted resoundingly for NDA/BJP in the general elections. However, we need to recognize that for now the ‘feel good’ for Modi is predicated mostly on the financial assistance extended by the state [for instance, PM – KISAN alone costs the exchequer Rs 87,000 crore annually]. The available budgetary resources may not permit continuation of the support perpetually.
The government should focus more on farmers’ empowerment by increasing their capacity to increase their income – both on-farm and off-farm – so that they are able to lead better life without having to depend on the state for doles. In this regard, Modi is doing a lot via increase in irrigation, more and better roads, market access etc. But, these efforts are not yielding the desired results due to multitude of archaic laws such as Essential Commodities Act [ECA], APMC [agriculture produce market committee] Act etc which come in the way of farmers realizing a good price for their produce. These need to be dismantled without losing time.
Sans timely action, Modi may not be able to sustain the ‘feel good’ factor among the farming community which could cost him dearly in 2024.