Farmers’ woes and Modi

First thing on Monday morning, I read Amy Kazmin’s piece in FT on Indian farmers’ woes. The headline stumped me.

This article has about 1050 words. About 80 words deal with the Modi government. Yet, the header links their woes to the government plans! That is a bit disingenuous.

The government cannot moderate rural spending. This government allowed only modest increases in minimum support prices overall, for various crops. That process began with the previous government actually which, after several years of outsized increases in prices it offered farmers for their produce, slowed down the rate of increase in such prices in its last year in office. This government went a step further. Food inflation was a big scourge of the Indian economy until last year.

As for the amendments to the Land Acquisition Bill that this government is trying to pass – as alluded to, in the last paragraph – they do not reduce the compensation norms set in the original Bill passed by the Parliament in 2013. If anything, the amendments have brought land acquisition for many other purposes into the ambit of the Bill’s generous compensation provisions. The amendments aim to do away with consent clause and social impact assessment for land acquisition for five specific purposes.

Indian farmers, for the most part, are marginal farmers. Their landholding is too small. The compensation that India’s parliament has come up with for their land is far too generous in relation to the productivity of their land and the revenues they will generate even over long periods. So, there is every economic incentive for small and marginal farmers to sell their and find other things to do. All that this government is trying to do is to facilitate more land transactions by removing cumbersome and time-consuming procedures that would cause inordinate delays in land acquisition. Most small and marginal farmers welcome it, as per the CSDS survey of farmers conducted in 2013-14.

Farming needs size, scale, assured irrigation and an unrestricted market. For most small and marginal farmers and the landless, the sooner they cut their ties with farming, the better it is for them, of course, subject to the government enabling generous compensation and alternative vocation. The important thing is that these amendments are not passed by the Parliament yet.

Hence, to tie the farmers’ plight in India caused by rains in the last one year to the Modi-led government – too little first and too much later – is neither correct nor warranted.


2 thoughts on “Farmers’ woes and Modi

  1. Dear sir,

    All this LAB discussion is getting too much of attentions because the main oppositions party has been successful to propagate the myth that, the amendments are anti farmers and meant to acquire land land forcefully.

    What amuses me is that, why the Govt and BJP MP’s are silent and they should bring out the objective comparison of the new Land bill and the old one. PM, himself being well known as good orator and other good communicators in party, they are unable to stop this illusion getting bigger as the regional local language newspapers are carrying these false information to rural areas.

    Congress VP yesterday tarred the Govt in LS without giving any specific information/stat. People are just throwing allegations in air which has got attention of global media it appears.

    One need to take on this aggressively and present the facts in series of sustained articles, interviews. Modi as campaigner was successful set the agenda for LS election in 2014 with help of social media, however as PM; he is failing to set the agenda for legislative work as well as communicating with people what he is trying to do.

    Warm Regards


    1. you have diagnosed the problem quite well. But, the new LAB is not radical enough. The compensation clauses are still too generous. That will still be a huge deterrent for transactions. In the end, small and marginal farmers may not benefit. On paper, they have generous compensation. But, it is generous only if transactions take place. At those rates, transactions might be fewer. That is my hunch and fear.


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