Prioritise assured income for farmers

Devinder Sharma

Food & Agriculture Specialist

EVEN as farmers from Punjab, Haryana, western Uttar Pradesh and Rajasthan are getting ready for their protest march to Delhi, an unprecedented surge in farm protests is being witnessed in Europe.

Indian farmers are seeking a legal framework for the minimum support price. Their demand is globally relevant.

Beginning in France, the protests spilled over to Germany, where enraged farmers brought Berlin to a near standstill. Now it’s back to France, where irate farmers have threatened to bring Paris ‘under siege’ with tractors. The farm stir has also spread to Romania, the Netherlands, Poland and Belgium. News reports say Spanish farmers are also contemplating joining the protests. Farmers have been blocking traffic and spraying manure on government buildings. At a number of places, they have been setting old tyres and agricultural waste afire, besides stopping vehicles carrying imported foodstuff and dumping it on the streets.

Initiating a discussion in European Parliament in Brussels, Ursula von der Leyen, President of the European Commission, began by acknowledging the growing disenchantment and frustration being felt by the agricultural community in the member nations. “We all agree that the challenges are, without any question, mounting. Be it competition from abroad, overregulation at home, climate change or the loss of biodiversity, or a demographic decline, just to name a few...,” she said.

But perhaps what she failed to mention was that the outrage is primarily against the denial of an assured and rightful price to farmers. Whether it is imports from Ukraine (and elsewhere) that have caused prices to fall or the withdrawal of diesel subsidy for agricultural vehicles that was being given for several decades, the reality is that farm income has been steadily on the decline. “We don’t want incentives. We want our products to be valued and sold at good prices,” said an enraged Belgian farmer, summing up the desperation that drives European farmers to drive thousands of tractors in protest. “We’re being left to die,” another Belgian farmer told the media.

In France, one-third of the farmers live on 300 euros (around Rs 27,000) each per month, a French MP had recently said, opposing the hike in MPs’ allowances by 300 euros. Expecting stiff opposition to the raise at a time when farmers are protesting, it has been temporarily withdrawn. In Germany, between 2016 and 2023, the economic barometer index for agriculture shows that farm economy has worsened. In Romania, the net farm income declined by 17.4 per cent in 2023.

This situation is not confined to Europe. It reminds me of media reports which quoted small farmers in the US as saying: “They’re trying to wipe us off the map.” With rural suicides in America being 3.5 times the national average, tackling a growing tide in farm depression is becoming a national issue. In India, 11,290 suicides by farmers and farm workers were recorded in 2022. If markets were farmer-savvy, farmers would not have been facing an existential crisis across the globe. Further, instead of finding a permanent solution to the farm crisis, climate change is coming in handy for governments of European nations to increasingly push farmers out of agriculture.

While Romanian Prime Minister Marcel Ciolacu admitted that the “farmers’ protests were justified”, newly appointed French Prime Minister Gabriel Attal says that his government has decided to “put agriculture above all.” Germany, meanwhile, has already decided to phase out diesel subsidy for agriculture instead of scraping it in one go. Despite these assurances, the fact remains that none of the European leaders has been able to point to the real villain behind the growing agrarian despondency: the failure of markets to provide an assured income to farmers.

If de-regulating agricultural markets and bringing corporate control over agriculture were a viable alternative, there is no reason why Europe should be faced with recurring farmers’ unrest in one part or the other for over a decade now. Surely, it should be clear by now that liberalising markets have failed to enhance farm incomes. It shows that the macro-economic policies tailored to keep economic reforms viable by keeping farm prices low were fundamentally flawed. While the focus remained on keeping food inflation low, the real drivers of inflation — housing, education and health — were deliberately kept out. That’s a macro-economic deception.

It has become absolutely clear that providing more incentives to make up for the losses farmers frequently incur is not a permanent solution. Pumping in a huge support of $107 billion per year during 2020-22 (European farmers, in any case, are among the highest recipient of subsidies and direct income support) has failed to keep the farm population intact. Nor did it reduce the fury of European farm protests in 2023. The onset of 2024 shows that the agitation is spreading and intensifying.

It is here that I see the demand by farmer groups in India to be globally relevant. Instead of asking for incentives, Indian farmers are seeking a legal framework for the minimum support price (MSP). Although the formula to work out the MSP needs a revision, European farmers must understand that the farming population, if left at the mercy of the markets, would become extinct sooner rather than later. To make farming a viable enterprise, guaranteeing farm prices by ensuring that no purchases are allowed below the benchmark price is the only way forward.

Mainline economists will argue that assured farm prices will distort markets. While the markets will adjust, farmers cannot be denied a living income. It’s, therefore, time for a historic correction in price policies which ensures that no farmer suffers distress or is forced to end his life.

Join Whatsapp Channel of The Tribune for latest updates.

#Agriculture #Europe #Minimum Support Price MSP #Rajasthan #Uttar Pradesh