Saturday 14 July 2018

India’s government claims to subsidise farmers, but actually hurts them

INDIA’S farmers should be the happiest in the world. For decades governments have showered them with perks including a blanket tax exemption; subsidies on fertiliser, seeds, energy and water for irrigation; low-interest loans; cheap crop insurance; high tariffs to block food imports; and price supports for more than 20 crops. Lately, the authorities have become more generous still. Since 2014 no fewer than eight states have waived a total of well over $25bn in farmers’ debts.

Narendra Modi, the prime minister, for whom elections loom, has promised to double farm incomes by 2022. Recently he announced a fresh bonanza. Sharply raising support prices for the coming harvest, he vowed that henceforth the government would pay growers 150% of the cost of their inputs, guaranteeing a healthy profit.

How can it be, then, that experts speak of a chronic and deepening crisis in agriculture, that polls show mounting rural anger and that farmers are protesting ever more forcefully? Last year, for...Continue reading

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