Farmers protest: At heart of stir, crop glut, cash crunch

As the farm protests in Maharashtra spilled over to MP, with five people killed in police firing in Mandsaur last week, The Sunday Express looks at the economics and politics of the unrest.

Written by Kavitha Iyer , ZEESHAN SHAIKH , Milind Ghatwai | Updated: June 11, 2017 12:46:21 am
Madhya Pradesh Farmers Protest, Maharashtra Farmers Protest, Farmers Protest, MP Farmers Protest, Telangana Farmers Protest, Mandsaur Farmers Protest, India News, Indian Express, Indian Express News A scene from farmers protest in Madhya Pradesh (Express Photo)

In the last week of May, a WhatsApp message from Maharashtra, with details of the impending farmers’ protest there, began doing the rounds in Mandsaur district of Madhya Pradesh. The local administration and the district’s elected representatives paid little heed, not even when farmers in Mandsaur stopped going to mandis. Even when the protests in Maharashtra escalated, with a seven-day agitation choking supplies to major markets, things seemed relatively calm in Mandsaur and its adjoining district of Neemuch. Only they weren’t.

On June 6, five days after the unrest began simmering in Madhya Pradesh, five people were killed in police firing when protesters tried to storm the Pipalia Mandi police station in Mandsaur, following the death of a farmer in nearby Bahi village. In both states, the BJP-led governments scrambled to contain the damage. Maharashtra CM Devendra Fadnavis announced a Rs 30,000 crore loan waiver — the biggest such write-off in the state’s history. In Madhya Pradesh, Shivraj Singh Chouhan held a meeting of his Krishi Cabinet (a Cabinet sub-committee to deal with agriculture), a day after the deaths and announced, among other things, a loan settlement scheme for defaulting farmers, a commission to fix a price formula for crops and the setting up of a Rs 1,000-crore price stabilisation fund.

The agitations were primarily along two belts — Nashik-Ahmednagar-Pune extending to Satara-Sangli-Kolhapur in Maharashtra, and Ratlam-Mandsaur-Neemuch in Madhya Pradesh — both home to relatively prosperous farmers. In both stretches, apart from the usual wheat and soybean grown in these parts, farmers grew spices such as methi (fenugreek), dhaniya (coriander) and ajwain (caraway) in Ratlam-Mandsaur-Neemuch, and grapes, onions in Maharashtra’s Nashik-Kohlapur belt.

The spark for the protests was a crash in crop prices, caused partly due to bumper production but more so due to demonetisation-induced liquidity crunch in produce markets. In Mandsaur, for instance, ajwain prices, which peaked at Rs 17,500 per quintal in 2016, are now down to Rs 5,600-Rs 7,500. Across the border in Nashik, onions, which were Rs 800 a quintal last year, traded at an average of Rs 450 this rabi season.

In Maharashtra’s Marathwada region, a focal point of the state’s agrarian distress but which was relatively calmer in the recent crisis, Chandrakant Kshirsagar, 45, is a rare sarpanch who admits he attended a farmers’ protest march in Jalna rather reluctantly. “I have incurred losses worth Rs 15 lakh. But I am opposed to any blanket loan waiver scheme — I feel irritated that many who deliberately don’t repay loans in anticipation of a waiver are in the same basket as those of us who always pay.”

Kshirsagar is sarpanch of Jalna’s Kadwanchi village, home to a hugely successful watershed development programme that has led farmers to opt for water-intensive grapes. This year’s produce was excellent, but markets were saturated with produce, says Kshirsagar. When Kadwanchi’s grape-growers began to sell in January and February, prices were Rs 35 to Rs 40 a kilo. By April, when Kshirsagar had to sell 400 quintals, he couldn’t get more than Rs 20 a kg for his best fruit.

Kshirsagar says the government should have been paying closer attention when the tur crisis began. Two quintals of his tur went for Rs 4,000, when the MSP was Rs 5,050. “And that was top quality tur,” he adds. “We were all encouraged to go for tur, right? So why was the government not buying at the promised prices?” he asks. The sarpanch of Wadikalya village, Dr Srihari Kale, says the anger among small and marginal farmers of his village can be traced back to the months following demonetisation.

In February, Kale, a practising doctor in Sukhapuri village of Ambad tehsil in Jalna, sold pulses from his 20-acre land at huge losses. The effects of the note ban still fresh then, the cash-and-carry business at mandis was ruled by traders. “Farmers needed cash, and traders were paying cash if we were willing to settle for lower rates,” he says.

Some of the farmers’ willingness to engage in the week-long strike is explained by that festering discontent, says Anil Mahajan, a farmer and local journalist in Dharur taluka of Maharashtra’s Beed district. “ATMs are mostly not functioning even now. So the pressure on poor farmers, who depend on weekly markets for cash during this season, is immense,” says Mahajan.

In Mandsaur and Neemuch too, many of the farmers The Sunday Express spoke to directed their anger at traders, alleging that they bought produce at low rates only to sell to the government at MSP. “While government agencies throw the rule book at us and refuse to buy, citing lack of quality, traders face no such problem,’’ says Jagdish Vishwakarma, a farmer from Barkheda Panth in Mandsaur.

The famers believe that demonetisation gave traders the upper hand. In Pipliya Mandi, where the five men were killed, traders and shopkeepers refused to down shutters in response to the farmers’ bandh call. “We wanted to ensure supply of milk and vegetables and keep other shops closed for people to feel the pinch and understand our agony, but the traders refused. We begged them, but they said, ‘do what you want’,” says Jagdish. In hilly, drought-prone Dharur, small farmers sell milk and khowa in the bi-weekly market, each farmer bringing 2 or 3 kg of khowa that fetches Rs 130 to Rs 150 per kg.

This Monday’s weekly market was shut and hundreds of farmers saw their khowa spoil, others sold at less than one third of the usual price. “They cannot get loans from the bank, the krishi-stores no longer give seeds or fertiliser on credit, and the little cash that comes home also dried up this week,” rues Mahajan, the farmer-journalist. Worse, in Dharur, as in many talukas across Marathwada, the 2016 kharif crop insurance payouts are still being disbursed, the delay rendering hundreds of farmers unable to start sowing without resorting to approaching private money-lenders.

It is these money lending practices, says Sangeeta Shroff of Pune’s Gokhale Institute of Politics and Economics, that Maharashtra’s proposed loan waiver does not address. “What we need from the government is good quality inputs, irrigation, creation of non-farm employment and a more holistic development of the rural sector,” she says.

Besides, there are questions being raised on the soundness of loan waiver economics. In June 2009, researchers from Gokhale Institute collected data from 120 families in Vidarbha, ground zero of what was then already an epidemic of farmer suicides. The families were beneficiaries of the 2006 ‘Prime Minister’s Rehabilitation Package for Farmers in Suicide-Prone Districts of Andhra Pradesh, Karnataka, Kerala and Maharashtra’. By all accounts, the 2006 package was a comprehensive, broad-based set of schemes addressing farmers’ ability to borrow afresh, undertake watershed development and rainwater harvesting, adopt micro-irrigation methods, supplement their farm incomes with livestock rearing or other activities, access quality seeds and more. But while productivity jumped in the immediate post-implementation years of 2006-07 and 2007-08, the next year was a drought year, leading to the inevitable reversals.

“A Rs 30,000 crore loan waiver is not the solution. The next year could be a drought year and farmers will once again find they are unable to repay loans,” says Shroff. The impact on rural credit, in the long term, will also be affected by the waiver, says Devidas Tuljapurkar, joint secretary of the All India Bank Employees Association. “While in the immediate short term, the NPAs of banks will be closed and fresh finance to borrowers will be possible, in the long term, the recovery climate will be vitiated and the entire banking system will be in a crisis,” says Tuljapurkar. “First the big borrowers were defaulting, and now the farm loan waivers.”

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