The Indian prime minister, Narendra Modi, announced last week that his controversial farm laws would be withdrawn. With five state elections looming, and his ruling Bharatiya Janata party (BJP) vulnerable in several contests, Mr Modi told the country how important farming had been to him and did something out of character: he ate humble pie in public, apologised and dropped his plans. This was the right thing to do.
Mr Modi had proposed the major changes, which threatened the livelihoods of two-thirds of India’s 1.4 billion people, during the country’s Covid lockdown in 2020. The measures had been drafted in secret and then whipped through both houses of the Indian parliament without debate. Agriculture in India does need reform, but not of the kind Mr Modi envisaged – which many farmers reasonably believed would leave them at the mercy of a government in hock to big business.
The result was widespread resentment across the farming belt of northern India, and produced probably the largest peaceful protests in the world. Mr Modi’s government responded with water cannon and internet shutdowns. The demonstrators were shamefully characterised by the BJP and its troll army as Maoists and jihadis. There were signs of growing alienation in the breadbasket state of Punjab, which the ruling party foolishly fed by alleging that the protests were being run by Sikh separatists.
Instead of the protesters bowing to intimidation, it was the Indian prime minister who was forced to retreat. The mobilisation shattered the strongman image Mr Modi likes to project. It also signals a wider policy failure by the ruling BJP. In 2016, the Indian prime minister promised that farmers’ incomes would be doubled by 2022. This would have needed a rural family’s fortune to grow about 10% a year in real terms. Not only has this never happened under Mr Modi, it has never happened under any leader.
Within India’s borders lies about a third of all the arable land in the Asia Pacific region. Size matters and this year India broke into the ranks of the top 10 agricultural exporters of the world. In an economy still reeling from the pandemic and with industrial investment and employment still not picking up, farming GDP has experienced growth in the last year.
Mr Modi should hold constructive talks with farmers and develop new proposals that could help deliver better agricultural prices, while keeping essential food stuffs affordable for India’s urban working class. The case is made for India to replicate the success of its giant dairy cooperative by both free-market and left-leaning economists. This would be a way of augmenting incomes and productivity without leaving cultivators vulnerable to corporate exploitation.
The Indian government’s biggest obstacle remains a trust deficit. Sections of Mr Modi’s own party question his imperious leadership. The opposition leader Rahul Gandhi’s prediction a year ago that the BJP would be forced to scrap farm reforms will do him no harm. With a poor record, India’s prime minister may fall back to reigniting culture wars in the forthcoming elections. That would be a bitter harvest for farmers who were promised a much better deal by Mr Modi.