A Plague Of Promises

What the Modi economy has done to farmers / Agriculture

- Yogendra Yadav

On his way to the prime ministership in 2014, Narendra Modi promised that, if his Bharatiya Janata Party won power, the government would raise the minimum support prices paid for crops such as rice and wheat to guarantee farmers a 50-percent profit on their production costs. The benchmark was first proposed by the Swaminathan Commission, formed in 2004 to address farmers’ economic plight, and Modi castigated the incumbent Congress-led administration for not implementing the commission’s recommendations. The BJP’s campaign manifesto repeated Modi’s pledge, and promised other measures “to enhance the profitability in agriculture,” such as lowering the cost of agriculture inputs and credit.

After Modi was elected, the gargantuan Food Corporation of India stopped procuring food grain from states that paid farmers bonuses on top of existing minimum prices. This led states to curb the practice, and so pushed farmers’ incomes down. By February 2015, the Modi government admitted before the Supreme Court that it had reneged on its pre-election promise. In response to a petition by a farmers’ organisation asking for measures to make agriculture more commercially sustainable, the government stated that minimum support prices, or MSPs, are set based on “objective criteria considering variety of relevant factors. Hence, prescribing an increase of at least 50 percent on cost may distort the market.”