2. The Crisis in Indian Agriculture: Genesis, Response and Future Prospects

Last five years have been witness to a spate of farmer protests in India. These protests which have been witnessed in almost all major states have been on different issues but are unified by a common thread of declining farm incomes and increasing distress in the agrarian economy. This paper examines the genesis of the crisis using available data from different sources. The preliminary analysis suggests that the crisis is a result of long neglect of structural factors by successive governments since the early 1990s. The crisis has been aggravated in recent years by policies which have contributed to shifting terms of trade against agriculture, rising input prices and declining output prices. Exogenous shocks such as demonetisation have also contributed to intensification of the crisis. The response of the government in the form of loan waivers and cash transfers is unlikely to resolve the primary contradiction in the agrarian economy. The recent attempt to withdraw state support to agriculture through various reforms is further likely to worsen the situation of farmers’ incomes.