CULTIVATION OF INEQUALITY: INDIA'S FARM POLICY LEAVES ITS FARMERS HUNGRY

INDIA'S FARM ECONOMY feeds millions, but its policies nourish inequality.

- By Vikas Singh

Every election season, India's politicians rediscover their love for the farmer. Manifestoes promise higher support prices, free power, and loan waivers. Yet beneath this ritual compassion lies a deeper rot: decades of policy that have entrenched privilege and misallocated subsidies that have left most cultivators poorer. Farming contributes to barely 15 per cent to the GDP but sustains nearly half the population. The paradox is not that India is short of food, but that its farmers remain short of fortune.

Over 86 per cent of Indian farmers cultivate less than two hectares, controlling under half the country's farmland. Average holdings have shrunk to just over a hectare as inheritance continues to divide land further. Despite frequent higher yields per hectare, rising costs erode viability. Net returns average Rs 10,000 annually, barely covering subsistence. A 2023 Crux study found that 68 per cent of smallholders live below the poverty line, with debt averaging 40 per cent of assets, making farming a slow surrender for many.

Subsidies that Sow Inequality: India allocates ~2% of GDP to agricultural subsidies, dominated by fertiliser (~$25b), power ($15b projected for 2025), and irrigation - disproportionately aiding large irrigated farmers while marginal rain-fed cultivators gain little. In Punjab and Haryana, free electricity has fuelled groundwater depletion by tubewell “miners.” Fertiliser aid sees hoarding and premium resales, shorting smallholders on quality inputs. Indonesia curbed similar issues in 2015 via targeted vouchers, halving leakages - yet India clings to inefficiencies for electoral gains. Dealers hoard stocks and resell at premiums, leaving smallholders with poor-quality inputs. Subsidies are votes disguised as welfare; their inequity is the price of popularity.