What role will farmers play in the Indian 2019 election? Leïla Choukroune (University of Portsmouth) explores how agricultural subsidies and the global agrarian economy are key factors in this year’s general election.
“This time, I will not vote”. In the populous states of Uttar Pradesh (UP) or Maharashtra, a growing number of Indian farmers are expressing their anger in refusing to cast their ballot for the Indian 2019 election. With 900 million eligible voters, 800 million Indians dependent on farming and 40% of India’s workforce in agriculture, farmers are by far the largest voting group. Disillusioned by fake electoral promises including those of the acting Prime Minister Narendra Modi who came to power in pledging for “ache din” (good days). The better days did not come and the fate of Indian farmers deteriorated with a series of droughts, poor harvests and declining commodity prices. Massive protests have been staged all across India in a general context of hate crimes against Muslims suspected of mistreating Hindu sacred cows, and a phenomenal increase in farmers’ suicide rates. Indebted farmers have repeatedly demanded loan waivers and guaranteed crop prices. Yet their grievances remain unsatisfied despite the government February announcement of a plan to support small-scale farmers across the country with a guaranteed annual income of about 6,000 rupees (£66), a move seen by some as an attempt to buy rural voters. But there is more than the 543 parliamentary seats at stake in the despair of Indian farmers.
Local Subsidies and Global Trade Wars
Largely subsidised, Indian agriculture is at the centre of a global controversy on the legality of agricultural subsidies. In March, Brazil and Australia have initiated a dispute against India at the World Trade Organisation (WTO) on alleged sugarcane and sugar subsidies. These are said to be inconsistent with the WTO Agreement on Agriculture (AoA), the Agreement on Subsidies and Countervailing Measures (SCM) and the General Agreement of Tariffs and Trade (GATT 1994). Over the past few years, the implementation of the National Food Security Act has been questioned by WTO Members arguing trade disciplines violations. The US is challenging India’s Minimum Support Price (MSP) policy for food grain or cotton. The calculation and classification of the subsidy is under scrutiny. Washington argues that New Delhi has systematically under-reported the support it provides to wheat and rice production hence exceeding the allowed 10% of the total production value. However, the US calculation reveals problematic as it takes into account the total production rather than the quantity procured and applies different currency and exchange rates than those applied by India to demonstrate the legality of its scheme. Against the backdrop of US lead trade wars, India, in a rare political rapprochement, is now uniting with China. Since 2017, they are urging developed countries to eliminate the most trade-distorting form of farm subsidies (Aggregate Measurement of Support (AMS) or ‘Amber Box’) as a prerequisite for consideration of other reforms in domestic support negotiations. This is unlikely to happen despite the fact that India’s total subsidies is much smaller than that of the US and or EU. In addition, it might well be that the window still opened to developing countries to use indirect export subsidies might well close in 2023 as agreed in the 2015 Nairobi Ministerial Conference.
No matter what the form they take, do subsidies really work? A now large number of independent studies have shown that they might be more hurtful than helpful. As a matter of example, the Indian Council for Research on International Economic Relations (ICRIER) argues that inefficient input subsidies have prevented investment in infrastructure and research, which are essential to growth. Indian government and the 2,293 registered parties know this well, but cannot afford to give up what they still use as an enticing electoral argument. Yet, the demographic structure of Indian population is fast changing. 45 million people have turned 18 since the last vote. They will make the election as they did, in 2014, in supporting a nationalist and conservative BJP, which appealed more to the youth than the pro-poor Congress party. There are 87, 000 WhatsApp election groups. Social media will play a major role in influencing young voters. This youth is hungry for change. It is a time bomb fueling the rural exodus, which populates the cities suburbs where unemployment is the norm. Reforming the agriculture sector is the very priority of a country, which should not only think in terms of farming ballots, but rather on how to maintain its population equally on its territory and distribute the benefits of growth to the next generations to guarantee social stability.
This article gives the views of the author and not the position of South Asia @ LSE blog, nor of the London School of Economics. Please read our comments policy before posting. Image: Rice farmer in Kerala | Credit: Pixabay, Nandhu Kumar
Leïla Choukroune is Professor of International Economic Law and Director of the Democratic Citizenship Theme, University of Portsmouth and former Director of the Centre for Social Sciences and Humanities. (CSH), New Delhi (India).