India election: Rural hardship hurts BJP

Faced with the police's tear gas and rubber bullets, farmers from Punjab have been protesting outside Delhi since February, a reprisal of the uprisings of 2020 and 2021, albeit on a smaller scale. Their demand for guaranteed crop prices points to poor returns from farming and rising debt of cultivators.

While the Bharatiya Janata Party (BJP) has dominated large swathes of India's rural heartland in the last 10 years, discontent and anguish among agriculturists is common. Rural dwellers do appreciate gleaming highways, cash transfers, subsidised cooking gas, piped water and free grain among a welter of welfare benefits offered by the National Democratic Alliance (NDA) government led by Prime Minister Narendra Modi. Yet, cultivators complain that farming has become increasingly unprofitable.

"The cash support of Rs.6,000 a year is very helpful. But it is not sufficient and needs to be increased," said Arun Mhatre, an onion grower from Dindori in Maharashtra, the largest producer of the kitchen staple. "The government wants to keep prices low because it only cares for city-dwellers. That's why it has banned export of food items."

India has banned the export of wheat, rice and sugar to cool local prices, which has hurt incomes of farmers and those employed in the food supply chain.

One of Prime Minister Narendra Modi's tallest promises was to double farm incomes by 2022, which didn't happen. Farm income data for the latest year is not available. Official data is available for the period 2015-2019, during which incomes from agriculture have grown from approximately Rs.8,000 a month to slightly more than Rs.10,218 on a nominal basis.

On the other hand, debt levels have soared. The average amount of debt among rural households grew from Rs.32,500 in 2012 to Rs.59,700 in 2018, according to the State Bank of India. Prices in the countryside rose at a quicker pace than in the cities between 2019 and 2024, official data showed, mainly on account of increase in food prices.

All told, adjusting for inflation, real incomes and wages for people employed in agriculture and construction, sectors which employ the poorest, have been flat during the past five years, according to data from the Centre for Monitoring Indian Economy (CMIE).

To be sure, analysts say it's too early to discern how issues in the agriculture sector, which employs half the population, played out in the Lok Sabha polls, in the absence of data and surveys on rural vote shares by occupation and demography.

In its second term, the Modi government had to face angry farmers over a set of unpopular farm laws and a demand to make minimum support prices (MSPs) for farm produce a legal right. An MSP is a floor price designed to prevent distress sales. Modi had to eventually scrap the three farm laws.

Despite world-beating economic growth of 8.2% during 2023-24, India has not been able to create enough jobs for rural youth, keeping migration to urban areas unabated. That seemed to be a bigger issue in the Lok Sabha polls, analysts say.

"The second term of the Modi government was actually better for the farm sector than the first term, during which there was serious distress," said R Mani of the Tamil Nadu Agricultural University. Back then, a collapse in crop prices was triggered by the government's decision to cancel high-value currency notes, which triggered chaos across the country.

In the second term (2019-20 to 2023-24) of the Modi government, agriculture, on average, grew at 4.2%, one percentage point higher than average growth registered during the first term. Crop realisations were also higher during the second term, driven by high global commodity prices, Mani said.

However, farmers often have to sell produce below cost of production and, at times, simply discard it rather than incurring storage costs.

In Maharashtra's onion-growing hubs of Dindori, Nashik, Dhule, Sirdi and south Ahmednagar, farmers and traders had protested a ban on exports imposed on December 8, 2023 following a price spiral. This squeezed farmers' and traders' earnings. On May 4, the Modi government finally lifted the prohibition, citing normal availability and stable prices.

"Farmers have not voted the BJP because it has been an anti-farmer government. We will not rest till we get guaranteed MSP," said Gurnam Singh Chaduni, a farm leader from Haryana who played a key role in the 2020-21 protests.

The BJP won fewer seats than it hoped to because of anti-incumbency driven by high youth unemployment in rural areas, said Tarun Vajpayi, a scholar with the Tata Institute of Social Sciences. "The demand for guaranteed prices is a separate ongoing issue. Rural distress because of a lack of adequate jobs, rather than farm distress, seemed to have influenced voting preferences in many states," he said.