Why you should care
Because 34 Indian farmers kill themselves every day.
Praveen Kumar, 42, a wheat farmer in Mugalwali village in the north Indian state of Haryana, took a $1,700 loan in 2007 to invest in increasing his farm yield. But the crop failed amid drought-like conditions. When Kumar was unable to repay the loan, the government and the bank filed a lawsuit against him that’s ongoing in the state’s High Court.
Now, Kumar wants his loan written off. And with India in the middle of a heated election to pick its next government, farmers like him have the ear of both the ruling Bharatiya Janata Party (BJP) and the opposition Congress party like never before.
Campaign slogans and political hoardings dotting India’s cities might suggest that these elections are being fought over corruption or national security, following recent tensions with Pakistan. Yet it’s the quieter but sharpening battle for farming votes between India’s two political behemoths, the Congress and the BJP, that could prove the most decisive in determining who comes to power when results are declared on May 23.
[Loan waivers are] not the complete resolution to all issues afflicting the farming community.
Jitender Kumar Bhatia, scientist, Haryana Agricultural University
The parties are offering competing fixes for India’s burgeoning farm sector crisis. Agriculture is the primary source of livelihood for 58 percent of India’s 1.3 billion people, making farmers the country’s single-largest voting bloc with an estimated strength of 500 million voters. More than half of them — 52 percent — are in debt, unable to repay loans totaling $200 billion. On average, 34 farmers kill themselves every day in India, many leaving behind notes mentioning indebtedness.
The Congress has waived farm loans in the states of Chhattisgarh, Madhya Pradesh and Rajasthan, where it came to power in December, and is now promising to do the same across India if it wins nationally. Prime Minister Narendra Modi of the BJP has criticized the waivers as a one-time solution that won’t fix the crisis that’s leading to lower yields and rising indebtedness. But his government is offering its own version of a solution. In February, interim Finance Minister Piyush Goyal announced a program under which farmers owning fewer than 5 acres of land will be paid Rs 6,000 ($90) annually. This could help 120 million farmers, costing $10.8 billion annually.
Which of these approaches clicks with more voters could determine not just which party wins, but how much the exchequer in the world’s fastest-growing major economy is burdened with in coming years. And farmers like Kumar are unwilling to let either side get away with tokenism.
“What good is Rs 6,000 to a farmer?” asks Kumar of the BJP plan. “It is not sufficient.” Hiring farm labor costs $5 a day, he says — so just that would exhaust the annual payout in 18 days.
This isn’t the parties’ first rodeo: They’ve promised farm loan waivers or a broader solution to India’s agricultural challenges before, and the country spends $20 billion in food imports every year. In 2008, the then-Congress-led government wrote off loans worth $10 billion. But until now, all such waivers were targeted — aimed at helping only the most vulnerable farmers. And never before has one of the two biggest parties instituted a basic minimum income for small farmers — the Congress, on its part, is countering the BJP’s farm plan with its own proposal of $1,100 in basic guaranteed annual income for the urban poor.
Critics say politicians will reap what they sow. This race to write off loans and hand out cash isn’t healthy for the Indian economy, argues Dr. P. Indira Devi, director of the Centre of Excellence in Environmental Economics at the Kerala Agricultural University. “Waiving off farm loans … impacts the financial health of the credit agencies, and of course, it leads to willful defaulters,” she says, noting how it creates an impression that government will write off bad debts in the future too.
Waivers also don’t account for other crises farmers face, such as natural disasters and crop damage, says Dr. Jitender Kumar Bhatia, a scientist at Haryana Agricultural University. Often, he says, farm laborers are more economically vulnerable than those who hire them. “[Waivers are] not the complete resolution,” he says.
There’s growing recognition of that reality within the political class. The BJP, apart from the minimum income for small farmers, is also promising zero-interest loans of up to Rs 100,000 ($1,600) to all farmers, and a pension for small and marginal farmers, if it returns to power. These programs, the BJP and its partner organizations believe, will help it secure farmer support. “[Modi’s] manifesto is the best,” says Sanjeev Sharma, Punjab state president of the Bharatiya Kisan Sangh, the farmers union of the Rashtriya Swayamsevak Sangh (RSS), the ideological mother ship of the BJP.
But winning the farm vote won’t be easy for the BJP. Traditionally a party that wins mostly in cities, the BJP rode to national power in 2014 by winning large pockets of rural India too. But the growing agrarian crisis has led to some of the largest farmer protests India has seen in decades. Between October and December, tens of thousands of farmers traveled to New Delhi and Mumbai — the two biggest cities — to protest Modi’s government.
Meanwhile, the Congress Party also is offering solutions beyond the farm loan waiver. It has for the first time promised to amend the Essential Commodities Act, which allows the government to set the price and production volume of crops, thereby often denying farmers what they can earn in a free market, says Bhupinder Singh Mann, national president of the All India Kisan Coordination Committee, a platform of more than 200 farm organizations.
And for indebted farmers pushed to the brink of suicide, the promise of a loan waiver is difficult to ignore. “So far, it looks like [the] Congress has better policies,” says Mann. “They are saying they will write off the farmer loans; this is good news for the farmers.” The BJP will hope they can change that narrative — or, given the electoral clout India’s farmers wield, it won’t be good news for Modi.