The illusion that “good days are coming” will not last long if the current regime opts for a free-fall towards a free market economy rather than structured liberalisation.

Consider this paradox. The Congress-led United Progressive Alliance (UPA) was decimated in the elections in spite of several years of good monsoon and rising agricultural production. Consider another paradox. The UPA regime was the one implementing policies that were presumed to be pro-farmer: the Mahatma Gandhi National Rural Employment Guarantee Act, the Land Acquisition Act, increasing minimum support prices (MSPs), foreign direct investment in multi-brand retail, regular export bans and so on.

It would be no exaggeration to say, however, that most of these policies have eroded the profitability of the farmer. Simply put, the cost of inputs (especially labour) increased substantially over the years and these increases were not fully compensated by increases that farmers received in the prices of agriculture commodities. Yet, the UPA continued to tout them as success stories. As far as the impact of increasing agriculture production is concerned, that issue is as removed from farmer profitability as agriculture economists are from farmers.

The misalignment between perception and reality is the price that the UPA paid for not engaging with the farm community for the decade of its tenure. This was clearly brought out in a “Survey on the State of Indian farmers” conducted by CSDS for the Bharat Krishak Samaj. Of the over one thousand farmers interviewed, only three per cent believe that poor and small farmers benefited from farmer-related schemes. Farmers lack organised lobbying power and were not taken seriously. Also their consent for policies was taken for granted. Their voices were lost and both the farmers and the ruling regime suffered as a result.

It would be fair to say the inertia of the previous National Democratic Alliance helped the UPA in its first few years in power. Similarly, Narendra Modi has inherited an agri-economy that is burdened with the legacy of misconstrued socialism and lethargy. However, having suffered from years of misguided left-wing policies thrust on them by non-state players (read: the National Advisory Council), farmers are worried that the new regime may shift to a farming policy dictated by business houses and right-wing economists. Coupled with this is the sinking feeling in the villages that the Bharatiya Janata Party (BJP) will prioritise bringing “achche din” (good days) for the urban population by sacrificing farmer interests.

There is an apprehension that, in the urgency to show results and juggle between the competing demands of dues of ₹100,000 crore from P. Chidambaram’s tenure in the finance ministry, the subsidy bills, welfare schemes and boosting infrastructure, the new government will find it extremely difficult to allocate the funds needed to make agriculture a remunerative activity. This is especially so because returns on investment in agriculture take time to become visible and transform into voting behaviour.

On the immediate horizon are the farmers’ anxieties about the government’s policies to tackle inflation, the key issue on which the UPA floundered. Some economists have suggested reducing import duties on fresh fruit and vegetables, which will squeeze producer margins. Others have talked of offloading excess food stock, which is a good idea, even though it will not reduce food inflation beyond a point. Still others want to see the dismantling of the MSP policy, which is in place for selected agri-commodities at a few places, rather than expanded across India. In the absence of an income policy and competitive market in which the private sector also plays a role as buyer, abolishing MSP would be an ill-advised move.

Food inflation can be controlled within bearable limits with better governance, but the real price of fruit and vegetable will not fall. Much, for instance, has been made of the fact that the states need to scrap their Agriculture Produce Market Committees (APMC) Act, which requires farmers produce to be sold to designated mandis and buyers (middlemen or artiyas).  This is only part of the story though. A concomitant expansion of marketing infrastructure and the enforcement of existing regulations is critical to break the monopolies of the mandis such as Azadpur (Delhi) and Navi Mumbai (Mumbai), which effectively control the national market for fruit and vegetable.

It is equally important to have investment in cold chains and other facilities that promote the growth of the food processing industry. Bihar is a case in point. It abolished APMCs but this did not transform farmers’ incomes nor attract private capital to the state. The new Agriculture Minister, Radha Mohan Singh, is from Bihar and would have experienced this anomaly. Another apprehension among farmers is about the growing clamour for abolishing the fertiliser subsidy to balance the fiscal deficit. Farmers would not object to the abolition if there was a corresponding increase in their real incomes. As of now, however, the increased price of fertilisers will not translate into a higher price realisation for the farmer, thereby increasing losses.

Many also blame the subsidy for an imbalance in soil nutrients. Urea, a primary fertiliser, is subsidised more heavily than phosphates or potash, which is why it is used more heavily. Redistributing the subsidy across the three nutrients could easily correct this imbalance. Every plot of land needs to be mapped for soil quality, ownership and tenancy rights, even for the direct nutrient subsidy scheme to be successful. The Bharat Krishak Samaj has regularly proposed that all farm subsidies be inversely proportional to land rights to address inequality.

To be sure, the task of making farmers prosperous and happy is never easy. First, because agriculture is a state subject and part of the implementation of a central policy takes place at the state level. Second, at the central level, the complementary ministries such as fertiliser, food processing, irrigation, environment or rural development do not form a part of the mega-agriculture ministry. In the last government, the problem was not that the officials of the agriculture ministry let the minister down but that governance suffered because the agriculture minister was not supported by the UPA. Advice contrary to the National Advisory Council was muffled even when it came from cabinet ministers, Congress chief ministers of states or from leaders of the opposition belonging to the Congress party.

As far as the current regime is concerned, these fears could be unfounded for one very good reason. The current union council of ministers, including the Prime Minister, has experience of working at the state level unlike the earlier leadership. As a result, they are more connected to the masses, aware of problems and policy implementation constraints and react better to political compulsions. They will not allow academics to lead them blindfolded like their predecessors. For example, Raman Singh in Chhattisgarh and Shivraj Chouhan in Madhya Pradesh understood the political expediency of offering farmers a bonus on the declared MSP. Vasundhara Raje Scindia in Rajasthan did the same.

Reviving farmer prosperity is more essential for inclusive growth than promoting urban development. The need of the hour is sticking to a plan in the face of stiff criticism and the BJP is adept at handling pressure. The illusion that “good days are coming” will not last long if the current regime opts for a free-fall towards a free market economy rather than structured liberalisation. The BKS believes that the BJP will not fall prey to educated articulation and sincerely hopes that it is not wrong.