Jai Kisan: Farmers Decide the Indian Election

“Common sense is, after all, very uncommon.”

- Mark Twain

With the 2004 General Election results, the kisans (farmers) of India have tarred the BJP’s “India Shining” billboards and declared in visible colors: “we too exist.” They have also said that their real material losses cannot be compensated for by the pseudo-nationalistic pride sought to be generated by sending jawans (soldiers) to the Pakistan border, a psychological affliction perhaps only limited to the elite and the urban middle classes. The farmers have said that they are unable to bask in the reflected glow of the sunshine in which 20% of Indians have been living these past 6 years.

There has been abundant reflection on the results of the elections. Although most analysts and observers seem to read a variety of political messages in the outcome, the main lesson is actually eminently simple. Read in the long-term perspective of the results of the past half a dozen Indian elections, the writing on the wall is that any government – led by the BJP, the Congress or any other – which fails to enable ordinary people, especially the rural poor, in  meeting their basic needs, does not stand a chance of keeping its hold on the seat of power in New Delhi.

Times don’t change so easily. During the past 15 years India has had 6 general elections. In every single one of them the ruling party or coalition has been thrown out of power, a fact unmatched in perhaps any other democratic country. It is for this reason that observers have cynically started assuming an anti-incumbency factor in their analyses of Indian election results, as though it was but natural that the electorate would like each time a replacement of the men in power, as though it is only to be expected that the government of the day would not be interested in delivering, or be able to deliver, the basic needs of people.

However, in West Bengal, belying nation-wide trends, the Communist government has retained power for the past 27 years, while 10 different Prime Ministers have been in and out of New Delhi. This clearly suggests that there is no inevitability about the constant change of guard in New Delhi.

There is an obvious answer to the rise of the anti-incumbency factor during the past decade and a half. In a significant break from the world-view of his mother, grounded as it was in the realities of the electoral arithmetic (and rhetoric), dominated by rural India, Rajiv Gandhi in 1984 inaugurated a new era in Indian politics. He became inordinately concerned with “taking India into the 21st century”. With him, ruling elites became increasingly obsessed with technological modernization, which essentially implied becoming more like the West (if not catching up with it). In practice this has meant focusing on high-profile urban economic growth while neglecting the agrarian countryside. The process preceded by almost a decade the inception of the economic reforms in 1991 and accelerated rapidly during the past 6 years of BJP rule (1998-2004).

In terms of electoral arithmetic, as has become obvious after the latest shock for the BJP, ruling parties and coalitions in New Delhi have been consistently neglecting (since Rajiv Gandhi in the 1989 elections) the central concerns of at least two-thirds of the electorate. Should the anti-incumbency factor or the recent “upset” of the BJP have surprised anyone? On the contrary, what should have been a matter of some surprise is how every political party concerned could ever have imagined that those on the receiving end of unfair policies would overlook their neglect of the interests of the vast majority of people and vote them back to power! Only pie-in-the-sky, self-delusional optimism could lead any politician or analyst to sanguinely arrive at such a conclusion. And yet, given the shock they expressed at the results, this is precisely what the vast majority of the Indian intelligentsia, with some honorable exceptions, seemed to have believed!

By now, based on elementary electoral arithmetic, it is safe to predict that every government which fails to bring clearly noticeable improvement in the lives of the rural poor stands absolutely no chance of being voted back to power. Two-thirds of India will in the future, as in the recent past, decide the political fate of all of India, as is only in the fitness of things. This is especially true since the gap between the overall performance and promise of the Indian economy, reflected in the high growth rates and the even more visible prosperity of the elite and the middle classes on the one hand, and the stagnant or deteriorating condition of the majority of the population on the other, has never been as perceptibly wider. Even many who claim that poverty has declined since liberalization admit that inequalities – between rich and poor and between cities and villages – have grown markedly.

The simple reality that Prime Minister Manmohan Singh has to face is that if he sidesteps the interests of the less than 2% of “shining” Indians whose fortunes are directly affected by the movements of the stock market (which involves a mere 4% of national savings) he does not risk his party’s tenure in office nearly as much as if he does not give due priority to the concerns of the two-thirds of India whose fate rests on the well-being of agriculture. If this elementary lesson is lost on the Congress and its allies, one can rest assured that the dark days of saffron rule will return to haunt India once again. No matter that many middle class voters may have voted for a secular government, the farmers and landless laborers of India have not voted so much for secularism as for survival. They will keep trying till they succeed in making the government in New Delhi do their bidding.

The Congress enjoyed its share of good fortune in the 2004 elections. By ignoring virtually three-quarters of the country (if we also take note of urban slum and pavement-dwellers), their opponents brought themselves down, leaving plenty of “default” votes for the Congress. This is not something the Congress can rely on as an electoral strategy for the future. The shoe will tend to be on the other foot next time.

More than a vote for the Congress it has been a vote against the BJP and, in fact, for good governance and the basic needs of the poor. The Congress already knows this. In the era of multi-party coalition politics – and this is the first time in its long history that the Congress is heading a coalition government – there is nothing holy and sacrosanct about it or any other party. Indian democracy is not a stage-managed, two-party system, like the American one. Unlike in many parts of the Western world, where voter apathy is rife and democratic systems are yielding cynically predictable outcomes, the underlying vitality of the democratic ethos in India survives stiff odds and its outcome is mercifully and spectacularly unpredictable.

However, in the rough and tumble of everyday politics it is easy to forget the lessons of the past. The Congress-led UPA government must keep up the wise restraint that Sonia Gandhi showed in not responding to the everyday barbs directed at her by the Sangh Parivar (nobly denying the post of Prime Minister too), and instead focus on an achievable set of goals for rural development, generation of employment and the elimination of poverty in addition to maintaining a secular peace. It just has to stay loyal to such a minimalist agenda – enunciated lavishly in the recently announced Common Minimum Programme – and the votes will come in the next elections. The Congress needs to avoid like the plague the provocations that the bankrupt BJP-led opposition is bound to send in its direction. But they will have to get defensive if their programmes are not working in the countryside and the urban slums.

The new government has to anchor its priorities in rural India. It is this India, Bharat, where the wheat and paddy fields will have to shine within a season or two if the Congress wishes to continue to be in power and be voted back to office in the next general election. The UPA speaks of introducing “economic reforms with a human face.” Clearly, the reforms introduced since 1991 – opening up of the economy to imports, privatization of public assets, engaging India more fully in globalized production and investment – have had their inhuman side, which the media, the corporate economists and the political establishment have been loathe to acknowledge. The reforms themselves stand in need of serious reform today. In particular, the reformers need to recognize the economic and political centrality of agriculture.

The re-prioritization of a devastated agriculture

For all the industrialization, and the growth in the service economy, it is most unlikely that India will ever be anything in the long run other than a country wherein most people will continue to live by agriculture. While it is true that it has contributed a mere quarter to a third of overall national output, 7 out of 10 Indians still derive their livelihood from agriculture (the figure has diminished but a little since independence). All this is exactly as, practical idealist as he was, Mahatma Gandhi foresaw rather clearly in the 1940s.

When you contemplate the catastrophe that has been brought upon the Indian countryside by the agricultural policies of the BJP government, it is in fact surprising that the electoral verdict was not even more severe. As the journalist P.Sainath has noted, only a deluded mass media obsessed with consumerist fantasies could fail to notice the banal realities of the Indian countryside. While city journalists fastened their attention on the fashion parades and the beauty contests, droughts ravaged the villages, growing millions went hungry and across India thousands of farmers drank pesticides and committed suicide in order to draw the attention of the government to their plight in the wake of agricultural policies influenced heavily by a desire to please the World Trade Organization (WTO).

The UPA, in its Common Minimum Programme (CMP) speaks of “spreading and deepening rural prosperity.” But where is the “rural prosperity” it is promising to spread and deepen? Indian agriculture has recently suffered from willful, cruel neglect and, in the wake of the Neo-liberal reforms, has had its most disastrous decade since independence. It has recorded its lowest rates of growth since 1947. The annualized rate of growth in agriculture has slipped from 3.7% to 2.3% within a decade. The Government of India’s Economic Survey for 2002 reports that capital investment in agriculture (involving key expenditures on areas like irrigation and electrification), as a proportion of GDP, has fallen from an already meagre 1.6% to 1.3% over the first decade after the reforms were introduced. Not surprisingly, as a result, the rate of growth of agricultural productivity has fallen from an annual 3% to a dismal 1.2%. Agriculture used to contribute about a third of the GDP around the time that the BJP alliance took power in 1998. Today it contributes a little under a fourth of the GDP, thanks to the declines that have taken place in rural incomes and the declining prices that agricultural producers have been receiving for their crops. (Even the share of industry in India’s GDP has fallen, thanks to government policies indifferent to small industry. Only the share of the service sector has grown, reflecting growth in the financial sector, tourism, vanity services in the cities and so on.)

The BJP, in its “India Shining”/“Feel Good” electoral campaign was claiming that national foodgrain production had never done better, growing at over 8% per annum. Its great deception lay in its concealment of the fact that the figure appears so high since 2002-03 was a drought year, when the Monsoon failed (and the rate of agricultural growth in that year was –3.7% over the previous year!). Agricultural economist Utsa Patnaik has pointed out that the output of foodgrains in 2003-04 is still 14 million tons below the high level reached in 2000-01, and is only comparable to the volume produced 7 years ago. During these past 7 years India’s population has grown by almost 100 million people! Little wonder that hunger and malnutrition have been at historically unprecedented levels. Today nearly half of India’s children below the age of three are malnourished and stunted and 40% of rural India eats only as much food as Sub-Saharan Africa. According to the UN’s Food and Agriculture Organization, India is one among 17 countries where the number of the undernourished decreased in the first half of the 1990s, before increasing in the second half to almost completely offset the gains of the earlier part of the decade.

(Research done by Abhijit Sen of Jawaharlal Nehru University shows that over the decade 1989-90 to 1999-00, while the overall consumption of the top 20% of the urban population grew by 40%, and that of the top 20% of the rural population by 20%, the consumption of the bottom 80% of the rural population actually declined! Moreover, it is worth keeping in view the fact that the data cover only the period till 2000, and the implementation of WTO-led policies in Indian agriculture has intensified in the past half-decade. One can legitimately speculate that inequalities have grown further by now.)

Utsa Patnaik computes that per capita availability of food has declined for the first time since the 1960s. This has happened not just because of growing population in a time of stagnant production (which could be compensated by increased imports if people had the necessary purchasing power to buy them), but also because more grain is being used as fodder for animals (whose meat is being exported abroad) and because more land than ever before is being devoted to the production of cash crops (including such items as prawns and flowers for export), instead of towards foodgrains for domestic consumption (area under coarse grains – a staple with the poor – declined by a shocking 7 million hectares during the 1990s). The rate of absorption of foodgrains per head of the population has dropped to the same level of 150 kilograms per year that it was in 1950-51, after peaking at 174 kilograms in 1997-98. Such a drop has not taken place in India since the Bengal famine of 1943 during the Second World War. The average Indian rural family eats 100 kilograms less food every year than it did at the time the reforms were first introduced in 1991. That is what economic reforms have meant for Indians living in the countryside.

The accumulating stocks of food in public godowns (overflowing with more than 60 million tons of foodgrains) bear witness to the hard work of India’s farmers. But even more, they stand testimony to the remarkably thoughtless policies followed by the BJP government, which repeatedly reduced food subsidies over the past 5 years, under pressure from the WTO, and thus raised the price of food distributed through the Public Distribution System (PDS), which it all but abandoned. This led to the accumulation of  stocks, since the poor lacked the purchasing power to buy costlier food. Moreover, food stocks also grew since the government failed to use them for purposes of generation of employment through Keynesian-style food-for-work programmes, which had customarily been one of the key outlets for the accumulated grain.

There were two motivations behind the reduction of food subsidies. One was to address, in part, the issue of the budget deficit, in turn directed by the IMF-dictated structural adjustment austerity policies which routinely call for balanced budgets (though only in Third World countries), which are, additionally, deflationary in their effect on the economy. The more serious motivation was to allow cheap (heavily subsidized) grain from the US and the EU to be sold in Indian markets, as per the dictates of the WTO.

Thus, the BJP government was faced with a problem of its own making: what to do with the growing public stock of foodgrains, particularly since the costs of storage were a drain on the exchequer? It was this which led some people in the government to ask for shutting down the Food Corporation of India and reducing, if not putting an end to state procurement of food from farmers, an age-old policy which, coupled with the PDS, has been instrumental in ensuring, at once, stable agricultural prices and incomes to vulnerable farmers, as much as in providing cheap food to the poor.

Not only has the BJP government’s failure to use the food surplus to feed the hungry and the undernourished been spectacular, its agricultural policies have all but neutralized within a mere 6 years the immense gains made by Indian agriculture over the decades since independence. From a point of self-sufficiency in the production of food, India now has to worry about its long-term food security.

The demands of global agri-businesses, pushed through the WTO, and heeded gladly by the BJP government, have all but undone the finely balanced system of food procurement and distribution that India had painstakingly evolved over four decades after 1947. As textbook Economics would predict, under the new “free” trade dispensation forced upon Developing countries by the WTO, producers of food in India now have to sell food at lower prices than before (leading to shrinking rural incomes) while consumers of food have to buy food at higher prices than before (resulting in an unnecessarily large number of hungry people: assuming the official estimate of 270 million people under the poverty line, the 60 million tons of food stocks in public storage could conceivably feed each hungry person to the tune of 222 kilos per head for one year!)  Unsurprisingly (and this is indeed the agenda of the agribusinesses behind WTO rulings), since 2000, food imports from the subsidized West into India have grown markedly, and by as much as 400% since the inception of WTO!

It is obvious that the  largest Multinational corporations engaged in the food business have been eyeing India (which has a sixth of the world’s population) as the great plum in planning their growth strategies for the future. This is the story behind the demands for “market-access” being made not just by the WTO, but also (more blatantly) by US trade officials. Even the new US Ambassador to India, David Mulford has emphasized that "there must be new market openings from developed and developing countries, especially those like India", and that the US is determined to "further open international markets and to mitigate trade distortions, particularly in agriculture."

From the point of view of Indian farmers however, this has meant a threat to the procurement system for the purchase of food, something which has traditionally assured them of stable prices. (As students of elementary Microeconomics know very well, agricultural prices in the best of times, thanks to production decisions lagging behind market demand, tend to wobble in cobweb-like fashion and the only protection against this is the purchase of crops and the accumulation of temporary buffer stocks by the state.)

The immense unfairness in the prevailing WTO rules for trade in agricultural produce is obvious. They overlook massive dumping of cheap, heavily subsidized food in the poor countries by giant Western agribusinesses. They permit the OECD countries to subsidize their agriculture to the tune of a billion dollars a day (compared to Indian farmers who receive a billion dollars of government support a year). But they have forced poor countries, including India, to remove import restrictions and slash tariffs on agricultural products. It is this set of issues which led to the successful breakdown of WTO talks at the Cancun summit last year.

Rising agricultural subsidies in the US and the EU have caused declines in global agricultural prices such as of wheat and cotton of between 30 and 50% over the last decade. Indian farmers have not been able to bear the force of this competition, especially so since their revenues have been falling at a time when their costs have been rising sharply.

Why have costs of agricultural production been rising? Partly as measures to address the fiscal deficit (again, driven by IMF prescriptions of austerity budgets) and to a greater extent in order to please the WTO, the BJP government slashed agricultural input subsidies during its tenure in office. Farmers now have to pay significantly higher prices for power, water, seeds, pesticides and fertilizers. The cost of Urea, for instance, rose by over 30% between 1998 and 2004. (During 2002-03 the BJP government slashed fertilizer subsidies precisely during the worst drought in 15 years!) The price of diesel, critically needed for running tube-wells and tractors, more than doubled between 1998 and 2004.

Further, thanks to gene patenting and Trade-related intellectual property rights (TRIPS), enforced by the WTO on Developing countries, farmers now often have to buy costly seeds from corporations (which they could earlier freely replenish from their own stocks).

However, most catastrophically for the small and marginal farmers of India, the past 6 years of BJP rule have witnessed a severe credit crunch. Institutional credit has traditionally constituted a key pillar of agriculture. It is needed to tide over the farmers’ short-term needs of consumption and purchase of inputs as much as for long-term investments like boring a tube-well for purposes of irrigation.

Over the past 6 years, agriculture credit became a low priority with the government. Some committees even suggested withdrawal of all credit support to farmers. The priorities of the BJP government can be judged from the fact that in addition to their under-spending last year’s earmarked budget for agriculture by 14% (including in irrigation),  there was a widely noticeable easing of credit for consumer purchases in urban areas (part of the “shining” India), while rural credit all but dried up! Thus, credit for housing and buying a car has been available at 9 to 11 per cent rate of interest while crop loans to farmers fetch a hefty interest of 17 per cent. Hardly surprisingly, the Government of India’s Economic Survey reported that almost 20% fewer tractors were purchased in the country in 2001-02, compared to 1999-00.

Thus, small and marginal farmers have had to take recourse to private sources of lending. As many as 60 per cent of them have been borrowing from private moneylenders. Poorer farmers have had to pay even higher rates of interest, ranging from 100 to as high as 460% in some of the arid districts of the country, the worst stories being reported from Orissa, Jharkhand and Madhya Pradesh. Thousands of farmers have even been sent to jail for their inability to pay back small loans. Many, many small and marginal farmers have actually lost their land over the past decade and turned into landless laborers after not being able to get out of the debt trap. According to the government’s own estimates the number of small and marginal farmers who are ending up losing their land and becoming landless laborers has been over 2 million every year since 1998! In states like Tamil Nadu, the government has had to offer one meal a day for free to small farmers and their families, together with the free meals offered to unemployed landless laborers.

These rude realities, added to the increased exposure of the Indian peasantry to international markets and the continued dependence on the Monsoons, have made agriculture increasingly unviable for any barring the rich peasantry (who have plenty of land and abundant access to cheap credit), and underlie the over 20,000 suicides by farmers reported from across the country. It needs to be noted that for every suicide committed there were reportedly scores of farmers on the brink of it. Even areas like Punjab, Haryana and Western Uttar Pradesh, traditionally successful areas under the green revolution since the 1960s, have witnessed farmers drinking pesticides and killing themselves in order to draw attention to their plight. Their hope has been that the unpayable debts against their name would be cancelled or bought by the government, and their surviving families would gain a lease of life. (The Congress-led UPA government has been busily trying to remedy this situation during its first month in office.)

The governments of various concerned states, as much as the BJP government itself, have been keen to connect the suicides with alcoholism among farmers, rooted allegedly in psychological causes to do with loss of swabhiman (self-respect). However, studies done by the governments themselves (as in the case of Karnataka), have shown a nearly perfect correlation between suicides and high debts. Death was often the only way for the afflicted farmers to redeem themselves and their families from a humiliating predicament, stemming from material hopelessness.

Log-jammed between adverse market conditions, on account of unfairly low prices induced by the WTO-led agricultural policies of the BJP government, and sharply rising costs of inputs in a time of extremely cruel credit conditions, India’s small and marginal farmers (especially in the dry districts of the country) have been all but wiped out by government policies which have not merely been insensitive but, as the election results show abundantly, in the end, politically suicidal for the ruling coalition.

It is one of the many shames of the BJP’s rule in New Delhi that its policies have all but succeeded in making agriculture unattractive, if not unviable, for the majority of rural Indians in a primarily agricultural society.