Lollipops and laddus: PM’s selective amnesia on farm loan waivers amuse observers

Earlier this year, a hapless farmer from Dhule, Maharashtra, committed suicide as he felt helpless after the Devendra Fadnavis government gave his family paltry compensation for acquiring five acres of his land for a solar power plant. He was 84 years old.

The unfortunate Dharma Patil is one among thousands of farmers who have ended their lives in sheer frustration at being stonewalled by an insensitive, even callous BJP government. In any other country, Patil’s death would not have been just another number in the escalating fatalities that have been symptomatic of rural anguish. But, barring a casual mention, media headlines changed quickly to some fanciful propaganda telling us about Modi’s miraculous magic wand that was going to give us all Acche Din.

It is clear that Modi had either never heard of Patil, or forgotten about him or more likely, chose to willfully ignore it. Nothing else can explain his cynical trashing of farmer loan waivers announced by the recently elected Congress state governments in Rajasthan, MP and Chhattisgarh as “lollipops”. Paradoxically enough, Modi waged the UP Assembly election battle in 2017 with the promise of assured loan waivers. Selective amnesia?

BJP-ruled states have all recognised the severity of farmers’ distress, which has got further aggravated because the central government never gave them the priority they deserved. On the contrary, they have willfully misled the farmers with brazen impunity. The perfect example is PM Modi’s high-pitched assurance to the farmers that he would increase MSPs by over 50% over and above the cost of production. The BJP has indulged in daylight tomfoolery here.

The core foundation of measuring MSP itself is flawed; instead of taking the comprehensive cost (C2), they have absorbed only a part of it (FL). This is called a sleight of hand. Hardly surprising that even as rural distress has morphed into a cataclysmic disaster, the Union Agriculture Minister thought that it was just melodramatic posturing to grab media attention. It demonstrated either prodigious nonchalance, incalculable ignorance or calibrated artifice. Or perhaps all.

Former Prime Minister Dr Manmohan Singh’s UPA government recognised the astronomical crisis among farmers and appointed renowned agricultural economist MS Swaminathan to recommend structural rural reforms aimed at alleviating poverty, increasing land productivity, enhancing crop yield, channeling public investment in modern technology, improving irrigation systems, encouraging crop diversification and creating sustainable livelihoods.

Several measures were undertaken to ameliorate living standards of farmers in India, many of whom hold small plots, and are extremely susceptible to external factors like adequate rainfall, export-import of agricultural commodities, extortionist middlemen and government procurement. The National Food Security Act (ensuring minimum food-grain supply at subsidised rates), MNREGA (giving minimum 100 days employment for off-season work to those at the subsistence level), Kisan credit cards, crop insurance, Direct Benefits Transfer (to mitigate crooked intermediaries), E-Chaupals were some of the pragmatic long-term solutions that were pioneered during the UPA period.

Factual data establishes the truth that Modi chooses to bludgeon with his rehearsed chicanery. For instance, in the last four years of UPA -2, agriculture growth was at an impressive 5.2% per annum, almost double of Modi’s 2.5%.

Now there is a significant takeaway here; the rising income inequalities in India under Modi. While official data has indicated that 1% of Indians own 60% of its aggregate wealth ( admittedly this is not a recent phenomenon), under Modi we have seen a lopsided focus on issues that made for more attractive pink-paper headlines and got the stock-market bulls snorting, like Make in India, Digital India, Start Up India etc. which incidentally have all come a cropper.

The farmers however remained discombobulated with the usual rhetoric of doubling income in five years which was just another jumla. Even in the crop insurance scheme, private insurance firms have made whopping profits (over ₹10000 crore) based on CAG reports, while claim settlements are pathetically low. This is called robbing Peter to pay Paul.

Figures fortunately do not lie; our gross investment in agriculture has has come down drastically from 17.7% in 2013-14 to 15.5% in 2016-17. The value or profitability of major crops has diminished by over 30% in 2017-18. The gross margins on several commercial crops and agricultural commodities has shrunk. There is a declining terms of trade for farmers; their price realisation has seen a downward trajectory.

Increased output has not led to higher income levels, while adding to costs substantially. That explains why farmers are marching from all over the country to Delhi to be heard by a government that is oblivious of their worsening problems. With general elections 2019 just a few months away, Modi has woken up from a deep slumber (with Congress president Rahul Gandhi guaranteeing him sleepless nights if he did not propose a national level waiver plan).

Dr Manmohan Singh had addressed the nation on Foreign Direct Investment in multi-brand retail that was meant to increase large capital inflows into the agricultural sector from global retail behemoths who see the farm- to- fork model as the long-term cash cow. Modi expectedly dumped it as it threatened to obliterate his voter constituency of traders and middlemen.

FDI would have led to sophisticated, mechanised farm management, cold storages, modern logistics, advanced transportation and distribution methods, lesser leakages, and guaranteed income for farmers. A myopic government wasted a Parliament-approved Act. The farmers continued to suffer with 2018 being another annus horribilis for them.

Ultimately, it all boils down to political intentions. Modi tried hard to dilute UPA’s Land Acquisition Act, and failed, but his principal agenda to boost big business crony capitalists at the cost of the middle class, small and marginalised farmers and the dispossessed was unambiguous. His boneheaded demonetisation made matters worse for the informal economy.

Modi refuses to reveal the large defaulters’ list given to him by former RBI Governor Dr Raghuram Rajan, while corporate debt write-offs continued their protuberance beyond ₹350,000 crore. India’s PSU banks’ NPA’s have crossed ₹11 lakh crore. For Modi, giving farm loan waivers (which establishes a somewhat level playing field even if it is not a long-term panacea) is tragically like a lollipop. That is adding insult to injury.

But giving laddus to corporate cronies who do BJP’s campaign-funding is kosher, I assume. Even in his grave, Dharma Patil deserves better.