Two Indian states ruled by Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) have rushed to stem protests by farmers, with one state writing off farmers' loans and another offering better rates for agricultural produce amid opposition criticism that the ruling party is "anti-farmer".
The western state of Maharashtra has agreed to pay off loans in a decision set to benefit 3.1 million farmers. The move has ended weeks of protests during which farmers dumped milk, vegetable and fruits on streets. The measure is estimated to cost the state over 300 billion rupees (S$6.4 million).
"The government agrees for loan waiver for farmers... Conditions and detailing will be finalised..." tweeted Maharashtra Chief Minister Devendra Fadnavis, who had earlier refused to give loan waivers.
But farmers in the central state of Madhya Pradesh - where five farmers were shot dead by police last week - said yesterday that they were not satisfied with Chief Minister Shivraj Singh Chouhan's assurance of higher produce prices and markets where farmers can sell directly to consumers.
"Our two major demands are fair price increases and loan waivers. The protests will go on till these demands are met," Mr Kedar Sirohi, one of the farmer leaders and head of the Aam Kisan Union, said.
Farmers in the two states have been protesting for days, seeking relief following a crash in prices due to a bountiful monsoon.
Prices of everything from pulses to vegetables have fallen, even halved in some cases. India's agriculture is beset by problems, including a failure to boost productivity, dependence on the rains for water and poor irrigation infrastructure. A crop failure or lower prices for produce sends farmers, who are already weighed down by loans, into financial crisis.
Farmers in Punjab state also staged protests yesterday.
Political analysts said the stakes are high for Mr Modi who is trying to increase his party's political influence ahead of elections in 2019 but is facing charges of running an anti-farmer government.
"This (farm crisis) will affect him... The farmers' vote is important for the BJP, which was dependant on the urban middle class. As it is growing it has gone to depend on others like farmers. Which is why they are concerned by what is happening in Madhya Pradesh and Maharashtra," said Delhi-based political analyst Amulya Ganguli.
"Agriculture is a mess. The government has not been able to build up cold storage. So when there is a bumper crop - it all goes to waste," he said.
Agriculture is among the slowest-growing sectors, averaging 2 per cent annual growth. It is also a huge component of the economy, accounting for roughly a fifth of its gross domestic product and employing about half the workforce.
The BJP has also run into demands for loan waivers after Mr Modi, during the hotly contested elections in Uttar Pradesh early this year, promised farmers in that state that their loans would be waived. After winning, the BJP fulfilled its promise.
This has triggered demands from farmers in other BJP-ruled states, and loan waivers could prove to be a useful political tool during the 2019 elections, said Dr Aftab Alam, associate professor of political science at Aligarh Muslim University.
