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Massive farmers’ protests are a headache for Narendra Modi

Even if the recent ones have been contained, discontent remains

The Economist, Feb 29th 2024

Protesting farmers are an alarming sight for India’s government. With nearly two-
thirds of Indians dependent on farming for their livelihood, agricultural workers can
make or break elections. They can also stymie policy making. Prime Minister Narendra
Modi and his Bharatiya Janata Party (BJP) discovered this three years ago, when farmers
marched on Delhi, the capital, eventually forcing the government to repeal a big set of
reforms intended to deregulate India’s agricultural market. It was one of the few
political defeats Mr Modi has suffered in a decade in power.
Given this, the decision by several groups of farmers earlier this month to resume
protests ahead of an election due by May clearly alarmed officials. With a fractured
opposition that looks unable to mount a serious challenge to Mr Modi, the farmers
could pose the biggest threat to his smooth return to power this year.
India’s warped farm policy is partly to blame. Because the main aim is to provide
enough cheap food to a population that is still mostly poor, it is heavily tilted towards
consumers. More than 800m of India’s 1.4bn people are eligible for free food grains,
distributed by the state at an annual cost of $28.4bn.
That is the single biggest outlay for a subsidy in the budget. It also makes the
government an important customer for farmers. The biggest share of the wheat and
rice distributed by the government is procured from the northern state of Punjab,
where farmers sell their produce mostly through brokers in highly regulated wholesale
markets known as mandis. The system is supposed to ensure that farmers receive
guaranteed minimum prices for their produce, but it is beset by price-fixing, lack of
transparency and collusion among traders. Alternative local markets are hampered by
government export bans and stockpiling limits.
The reforms Mr Modi was forced to abandon in 2021 would have radically
liberalised the sector. They would have given farmers more of a say over how to sell
their produce and allowed them to build stockpiles to take advantage of price
fluctuations. But farmers were not convinced. Those who produce wheat and rice in
northern India benefit from a range of subsidies and price guarantees which they would
lose if the system was reformed. Smaller farmers also feared that more competition
would further reduce prices and allow bigger competitors to force them out of the
market.
On February 11th farmers from Punjab and Haryana, two agricultural states close
to Delhi, assembled at their common border and announced that they would embark
on another march to the capital. The farmers’ main demand was a higher guaranteed
price for all their produce, not just the rice and wheat distributed by the government.
Farm workers also want higher minimum wages and pensions.
In contrast to the protests in 2021, when the government was forced into an
about-turn after a year, this time it has been keen not to lose control from the start. It
says it will not meet the farmers’ main demand, which economists reckon would raise
prices for 23 crops by at least 25%. It blocked the social-media accounts of many farm
leaders and turned off the internet across parts of Punjab and Haryana. Police met the
protesting farmers with barricades and tear gas dropped from drones.
Some have criticised this approach. But because of the emphasis on containing
the protests, there have been far fewer chaotic scenes like those of three years ago.
Back then farmers reached the Red Fort, an important landmark in central Delhi, and
scuffled with police. After one protester was killed in clashes with the police last week,
the farmers put their march to the capital on hold; a planned tractor parade from
western Uttar Pradesh to Delhi fizzled out before it reached the motorway.
The government has been helped by a lack of unity among the farmers, who
agree on their demands but not on how to get them. Groups that organised the protests
of 2021 have stayed away from the march on Delhi, citing political differences.
Yet even though the protests pose no serious threat for now, the dissatisfaction
they reflect is likely to persist. The farmers have rejected the government’s offer of
minimum prices on a selection of crops for five years. There are plans for another
protest in Delhi later in March—around the time the date of the election is expected to
be announced. Without the major overhaul of agriculture that Mr Modi attempted and
failed to push through back in 2020, farmers will remain a major headache for the
government.