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India: Narendra Modi faces a rural backlash as election looms

A prime minister who appealed to the urban middle class must now confront discontent among farmers

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Standing amid mounds of dried soyabeans and chickpeas at Ujjain’s agricultural market, Rahul Chauhan, a 27-year-old farmers’ son, sheepishly recalls his optimism back in 2014, when Narendra Modi, whom he ardently supported, was elected prime minister of India.

A graduate, Mr Chauhan was eager to escape the arduous, uncertain life of a farmer and find salaried employment. With the ascent of Mr Modi, who promised to create millions of jobs, the young villager from the central state of Madhya Pradesh felt sure his dreams would be realised.

Yet today, Mr Chauhan remains dependent on his parents’ 2.7 hectares of unirrigated land to survive, having failed to secure a job in government or the private sector. Meanwhile, prices paid to his family for their annual crop of chickpeas, lentils and other legumes — all staples of the Indian diet — have sunk, as two years of bumper crops in India have coincided with a rising tide of imports. With his family now struggling financially, Mr Chauhan’s ardour for Mr Modi has turned to bitterness.

“He never focused on farmers,” Mr Chauhan says, waiting for traders to bid on soyabeans harvested from his land. “He is worried only for the corporate lobby, not for us. India is an agricultural society, and a leader should work for the farmers. After this kind of performance, we will never support Modi again.”
Balu Choudhury, 32, nods vigorously in agreement. In 2014, Mr Choudhury — who supports 11 family members with his 2.2-hectare farm — had encouraged his friends and relatives to vote for Mr Modi. But he, too, is disillusioned. “I thought he would make our country strong, but he has not made the farmers strong,” Mr Choudhury says. “There is zero profit for us. We are under a lot of tension.”

The gloomy mood of farmers at the Ujjain agricultural market — and the low prices they receive for their pulses — reflects one of the biggest challenges now confronting Mr Modi, as he seeks a second term for himself and his Hindu nationalist Bharatiya Janata party in the upcoming general election, starting April 11.

During his last campaign, Mr Modi won over both India’s expanding urban middle-class and many rural voters with compelling promises of economic modernisation, faster growth and new jobs for youth. But as he bids for re-election, the BJP — traditionally a more urban party — is facing a wave of deep discontent among farmers and other rural dwellers who account for around two-thirds of the electorate.

Far from improving farmers’ lives, Mr Modi’s policies have squeezed a sector wrestling with tiny, fragmented landholdings, low yields and environmental challenges, such as water scarcity. Frustration has been compounded by the lack of jobs for youth trying to escape unprofitable farming, or at least supplement their families’ agricultural earnings.

“What was given to farmers five years ago was the promise of profound transformation, which hasn’t been followed up with concrete results,” says Gilles Verniers, a political science professor at Ashoka University near New Delhi. “They raised expectations a lot and now they are likely to be punished for it.”

When Mr Modi took office in May 2014, his top priority was to combat the persistent high food price inflation that had fuelled urban anger towards the previous Congress-led government.

Within weeks of taking power, his government had raided traders and warehouses suspected of hoarding fruit and vegetables. New Delhi moved swiftly to curb exports of crops such as onions and potatoes. It also significantly increased imports of other products such as pulses, which continued even after record Indian pulse harvests in 2016 and 2017.

While these measures succeeded in damping food prices, economists and farmer activists say this has come at a huge cost to India’s farmers, who are now getting paid less for their crops than they did a few years ago, even as their production costs, including labour, fertilisers and pesticides, have surged.

“The whole effort of this government was to bring down food prices in the name of the poor, and so you have made the farmers poor,” says Ashok Gulati, an agricultural economist at the Indian Council for Research on International Economic Relations.

Mr Modi’s draconian November 2016 cash ban and subsequent digital payments drive — a bid to limit tax evasion — has added to farmers’ woes. Previously, farmers received full cash payment immediately on selling their crops. But now state banks have been instructed to restrict traders’ access to cash, forcing farmers to wait days or even weeks to be paid through the banking system.
The restrictions on cash use appear to have damped wholesale commodity prices. “Rural agriculture was very cash-intensive,” says Arvind Subramanian, the government’s former chief economic adviser. “Now with all these limits on how much cash you can hold and deposit, liquidity is not as available as it used to be. Buyers don’t have access to cash, and they don’t have the power to grease the system.”

The BJP’s disruption of north India’s once-thriving livestock trade — by restrictions on the interstate trade of cows, revered as sacred by devout Hindus — have also hit rural incomes. Stray cows have become a major threat to crops, requiring farmers to invest in fencing and guards. Their inability to sell aged livestock has also upended the economics of dairy farming, compounding hardships from a sharp drop in milk prices, due to a boom in domestic production — and a global glut.

The erosion of farmers’ income has come amid sharply rising socio-economic expectations, fuelled by Mr Modi’s ambitious promise to double farmers’ incomes by 2022. The proliferation of satellite television and low-cost smartphones has also brought images of affluence and consumerism to once isolated rural villages.

“Aspirations of farmers have increased very much and the growth in income is not keeping pace,” says Ramesh Chand, an agricultural expert with Niti Aayog, a government think-tank. “Income of farmers is rising, but it’s not keeping pace with the rate of growth of income of non-farmers.”

Kedar Sirohi, a 36-year-old who owns a large farm in Madhya Pradesh and who started a farmers’ lobby group, says farmers today feel left behind if they cannot have “branded jeans”, a mobile phone for every family member and other markers of social status. “Everyone is watching TV — and they see the standard in the US and big Indian cities,” he says. “They see the screen and feel, ‘why can’t we live like that?’.”

Over the past two years, a series of large farmers’ protests have ended in lethal violence. In 2016, six farmers in Madhya Pradesh were killed when police opened fire on a huge crowd agitating for higher crop prices. Agrarian discontent has also eroded the BJP’s popularity, leading to election setbacks in its stronghold of the Hindi heartland states.

“The sense among many rural voters is that Modi looks like every other politician — he made promises he couldn’t deliver,” says Milan Vaishnav, a senior fellow at the Carnegie Endowment for International Peace.

But as he gears up for the vote, Mr Modi has tried to assuage simmering rural pique. Last year, New Delhi sharply increased the “minimum support price” that state agencies pay to procure crops for its subsidised food distribution system, and emergency stocks. But the impact on farmers’ finances has been limited, as state agencies buy just a fraction of India’s harvest, with most crops still sold to private traders at prices far below the MSP.

In February, the government said it would provide Rs6,000 ($86) a year — in three equal instalments — to an estimated 120m farmers with less than 2 hectares of land. The first payments are already rolling out, and the second payment is likely before voting starts.

UBS says the scheme could shore up flagging rural support for Mr Modi, “The scheme remains a wildcard that — if implemented and marketed well — could influence voting behaviour,” analyst Gautam Chhaochharia wrote in a recent report. But New Delhi faces formidable implementation challenges in identifying eligible farmers. In the first round of payouts on February 24, just 10m farmers received cash.

The scheme also risks angering the 30 per cent of farmers whose landholdings are above the 2-hectare threshold. “What is our mistake that we are not included?,” complains Dassrat Jat, a 38-year-old farmer, whose family has 9 hectares of land, at the Ujjain market. “Modi came from the grassroots and we thought he would work for the grassroots but we are all disappointed.”

For its part, the opposition Congress — buoyed by its trio of state election victories in BJP bastions in December — is hoping to ride rural discontent to a national political comeback. On Twitter, Congress president Rahul Gandhi accused Mr Modi of destroying farmers’ lives through “incompetence and arrogance”, declaring that “giving them Rs17 a day is an insult to everything they stand and work for.”

P Chidambaram, who was finance minister in the previous Congress government, has described the prime minister’s promise of Rs6,000 per poor farming family as a “cash for votes” scheme. “The BJP will officially give a bribe of Rs2,000 per agricultural family to get their votes,” he said on Twitter.

Congress hopes to persuade farmers that it can improve their lot with alternative policies, including a nationwide farm loan waiver, further increases in government procurement prices for crops, and a minimum income support scheme. Though details remain sketchy, some farmers are receptive. “Congress is thinking of farmers and we are willing to believe them,” says Mr Jat.

But agricultural experts say neither Mr Modi’s income support scheme nor the Congress plan for loan waivers will help India achieve its twin goals of a decent income for farmers and affordable fruit, vegetables and proteins for the urban masses. That, experts agree, requires a fundamental overhaul of an outdated agricultural policy framework, designed decades ago to ensure sufficient grains at times of shortages.

India urgently needs major investments in food storage, processing and transport facilities to meet the demands of an increasingly affluent population for more diverse, nutritious foods. Socialist-era rules require farmers to sell their crops to local traders in a licensed market, which creates powerful buyers’ monopolies.

These traders, traditional BJP supporters, wield vast clout over farmers. But they have no incentive to invest in an improved supply chain. In Maharashtra, efforts by the BJP state government to deregulate and give farmers the right to sell their crops to whomever they choose were abandoned after a strike by traders and market labourers.

Yet many farmers say they are still not ready to give up on Mr Modi. “People are disillusioned, but we’re not very certain about the impact,” says Mr Vaishnav. “At the end of the day, they are going to have to choose the BJP or one of the alternatives.”

At the Indore agricultural market in Madhya Pradesh, Jagdish Patidar, who grows potatoes and onions on two hectares, cites a litany of government decisions — from Mr Modi’s cash ban to recent tax reforms and export curbs — that he says has made agriculture unprofitable. He is dismissive, too, of the Rs6,000 annual payout promised to farmers — insignificant, he says, given the high cost of cultivation.

Yet Mr Patidar, 42, says he still has faith in a prime minister who he sees as honest and hardworking. “We’ll vote one more time for Modi,” he says.

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