The recent assembly election results data has shown that though BJP governments in three heartland states—Chhattisgarh, Rajasthan and Madhya Pradesh— provided substantial assets and facilities such as houses, roads, toilets, LPG, broadband connectivity, the party’s seat share in rural and especially agricultural areas, declined considerably. The data suggests that farmers’ distress turned out to be a key factor that led to the ouster of the BJP from large parts of the Hindi heartland, its traditional bastion.
The stress in agriculture sector is an outcome of several factors— low productivity, two successive years of drought, inadequate irrigation, collapsing farm prices, unavailability of modern technology, fragmented supply chains, lack of food processing clusters, delayed FCI reforms, etc.
However, among the broad range of causes, the failure of the 2016 Pradhan Mantri Fasal Bima Yojana which was to provide insurance and financial support to farmers in the event of failure of crops and stabilize farm income, is quite significant. The scheme hasn’t taken off because of high premiums. As a result the anguish among farmers is understandable, especially post-demonetization.
Congress has promised to waive farm loans. In the run up to 2019 Lok Sabha elections, several political parties will also be tempted to go down the same path. However, waiving farm loans would be detrimental to India’s financial system and overall economy. Such a policy is at best a short-term one as it fails to fix systemic deficiencies and failures. Political parties must focus on how to boost agricultural productivity, ensure that farmers receive remunerative prices through market mechanisms, and create jobs — especially nonagricultural employment as the farming sector cannot possibly support all those engaged in farming today.
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