Unmet Demands

Three months later, Singh’s words ring true. While one of the protesters’ most important demands, the withdrawal of the farm laws, has been met, there has been limited progress in their attempts to see other demands met.

State governments have yet to withdraw several police cases filed against farmers — wrongfully, they allege — despite the demand to do so having been agreed to in principle by the government. Similarly, no action has yet been taken against a minister in Modi’s government whose son is alleged to have intentionally run over protesting farmers with his car, killing four. The accused recently received bail under controversial circumstances.

Another demand that hasn’t been met is for the government to mandate minimum support prices (MSP) as a legal right of farmers. This would guarantee that no sale made by farmers could fall below the government-specified minimum sale price for that crop, a price that takes into account the cost of production and provides a predetermined percentage of profit over it. In December, Modi’s administration announced its plan to set up a committee to look into the demand to make MSP a legal right. It has yet to materialize.

Structural Causes

The challenges India’s farmers have encountered in pushing for this demand are a product of the broad, economywide structural issues that affect the country’s agricultural workers most acutely. Chief among these is declining or stagnant agricultural incomes. In the last few years, incomes from agriculture have barely kept pace with inflation. Some even argue that they haven’t kept pace.

Evidence of declining consumption spending in rural India bears this out. According to a government survey, in 2018 rural households were spending 8.8 percent less (after accounting for inflation) than they were six years ago, even as urban spending grew by 2 percent. This was the first such decline in at least five decades. Rural households had to reduce their spending on food by a massive 10 percent, worsening India’s hunger crisis.

Declining or stagnant incomes have been the norm in India for quite some time and have been exacerbated for farmers by the relentless northward march of the price of inputs.

On the streets, frustration at incomes failing to keep at pace with costs has been visible for a while. Even before the protests of last year, which grabbed global headlines, farmers from across India had been agitating around the issue of prices that determine their incomes.

Before the 2019 national elections, pundits rightly saw that farmers’ unrest was the main obstacle that lay in the way of Modi winning a second term. That was until the prime minister and his team turned the election into a quasi-referendum on national security after a terrorist attack on India’s paramilitary personnel in the erstwhile state of Jammu and Kashmir.

The farmers’ anger had been brewing since at least the summer of 2017, when police killed six protesting farmers in central India. It is not a surprise that their key grievance was rock-bottom prices.

These protests began a little over six months after Modi’s pointless and reckless demonetization move in November 2016 that rendered 86 percent of India’s currency illegal overnight. The move — which India’s economist former prime minister Manmohan Singh described as “organized loot and legalized plunder” — caused devastation across the economy.

It wrecked the agricultural sector, too, which operated then, as it does now, almost entirely in a cash economy. As a government report has acknowledged, demonetization happened at a time when farmers were either selling their produce or sowing the crop for the next season. Cash was integral to both those operations.

But neither demonetization nor Modi alone are the sole cause of the crisis in Indian agriculture. These factors did, of course, make a terrible situation far worse, but the problem has been festering for a while. The source of the problem is that the incomes of farmers have not kept pace with rising input costs or inflation.

Observers have noted the horrific human cost of this economic backwardness. According to government data, between 1995 and 2018, in a period when both major political formations in India have held power, over 350,000 Indian farmers committed suicide due to farm distress. That is over forty suicides a day.

The crisis in Indian agriculture runs deep and is severely impacted by the problems with the structural transformation of the South Asian nation’s economy. Fifty years ago in 1971, 43 percent of the country’s GDP came from the agricultural sector, which employed 72 percent of the workforce. By 2017, agriculture’s contribution to GDP had declined to 15 percent while 45 percent of the workforce was still employed in agriculture.

Contrast this with South Korea’s transformation where, in 1970, 50 percent of the workforce was employed in agriculture contributing 27 percent of the GDP. By 2017, agriculture employed only 5 percent of the workforce and contributed only 2 percent to the national GDP.

This was possible because of South Korea’s extraordinarily rapid industrialization, which came with an export discipline that ensured that Korean firms had to compete with global manufacturers. Today, some of the leading manufacturers in the world — Samsung, LG, and Hyundai — are Korean. India, on the other hand, has only a handful of firms that are globally competitive, and most of them are in the IT sector, with limited job offerings.

According to the development economist Santosh Mehrotra, India’s agricultural crisis is inextricably linked to its failure to generate nonfarm jobs. “For growth, you have to pull people out of agriculture because productivity is higher in industry. So unless that happens, growth will remain stymied, and incomes won’t grow,” he said.

Even though many Indians employed in agriculture — especially the younger generation — want to move away from the long hours, the increasingly erratic weather patterns, and the uncertain income, they are unable to because there are simply no jobs.

“I have tried for over ten years to find a job in a factory. But there are no jobs,” says Sandeep Tomar, who is thirty-two and lives in a village about eighty kilometers from Delhi.

In 2010, he completed a diploma course at an Industrial Training Institute (ITI), which had been set up in the 1950s with the very purpose of providing vocational training for Indians looking for employment in industries right after school.

Apart from a six-month internship at the now-defunct compact disc and DVD manufacturer Moser Baer, he has not found any employment despite searching in the more industrial towns of Hapur, Meerut, Delhi, and Noida. (Ironically, the name of this last town is an acronym for New Okhla Industrial Development Authority.)

Tomar doesn’t even have the fallback option of working on his family’s farm, as his father was forced to sell it to pay for his mother’s cancer treatment some years ago. In India, medical expenditures are a major cause of people being pushed into poverty. He now works at a sugar factory near his village earning 200 rupees, or about $2, a day.

Backward Development

India’s jobs crisis is compounding its agricultural crisis. “We have to generate at least 10 million new nonfarm jobs every year. We don’t see any strategy of the government to do that,” Mehrotra said.

Instead, India has been doing the opposite. Between 2016 and 2020, the number of people employed in manufacturing fell remarkably from 51 million to 27 million. At the same time, the number employed in agriculture went up from 145 million to 151 million.

Since COVID-19, India has accelerated on this backward developmental path, adding at least 32 million more workers in agriculture, primarily due to another of Modi’s ill-thought-out decisions.

At the beginning of the pandemic, India’s prime minister announced one of the world’s most stringent lockdowns with four hours’ notice and no accompanying social relief measures. That struck fear into the hearts of migrant workers from rural India who worked with no social protections in the unorganized sectors of the country’s cities.

Millions left India’s cities in perhaps the subcontinent’s largest migration since partition. Some traveled over a thousand kilometers on foot to their villages. There, family ties and kinship provided them with a degree of safety and comfort in unprecedented times.

Since then, some have returned to the cities for work, but many have not. They have instead added to the already large surplus workforce in agriculture, putting even more downward pressure on incomes.

The problem isn’t going to go away through the withdrawal of the controversial farm laws or even through fulfillment of all the farmers’ demands. India needs broad and widespread reform across various sectors of the economy with a sharp focus on job creation, on the one hand. On the other, the Indian government needs to focus on specific issues that farmers face: nonremunerative prices for their crops; lack of incentives for crop diversification; rapidly increasing weather uncertainty due to climate change; rising costs of inputs; and soil degradation.

Indian agriculture, much like the Indian economy as a whole, needs reform and needs it urgently. But as the experience of the three farm laws shows, in India reform cannot happen by decree.