SOUMYAJIT SAHA
KADWALI BUZURG, India — Anjabai slogged through ankle-deep mud, trying to salvage as many soybean plants as she could from creeping rot and infestation due to recent unseasonably heavy rains.
The harvest this season from her own half-hectare field outside the village of Kadwali Buzurg was just 80 kilograms, far below the 500 kg Anjabai needed to be able to sell to cover the cost of supplies received on credit to grow the beans and to pay for her living expenses for the coming months. Consequently, on days like this, she works for other farmers with bigger fields although the backbreaking labor brings her just 250 rupees ($2.83) a day.
Debt misery is all too common here in Madhya Pradesh as in other Indian farming states. On Oct. 7, a male farmer died by suicide in a village 90 kilometers northwest of Anjabai’s farm after a soybean harvest as disappointing as hers. Two other farmers in his district died the same way the following week, with their relatives blaming the stress of ruined crops and mounting debt in comments to local media. An outbreak of yellow mosaic virus is also ruining soy crops in the state.
Meanwhile, soybean prices in the government-backed wholesale market, or mandi, in the nearby city of Indore have slipped 10% since mid-August despite the ongoing poor harvest, according to data from the government’s Unified Portal for Agricultural Statistics. Some worry local prices could drop much further should the Indian government yield to U.S. demands to slash import tariffs or weaken its ban on genetically modified soybeans as part of a trade deal.
“Lower prices will hit the larger farmers, who employ us and lend money to us,” Anjabai, 60, said. “If they’re hit, we’re hit.”
A woman working as a day laborer carries corn out of a field in Kadwali Buzurg, India: Struggling small farmers have been forced to work on bigger farms due to weather damage to their own crops. (Photo by Nipun Prabhakar)
For Prime Minister Narendra Modi, the precarious position of farmers like Anjabai poses a great dilemma.
On the one hand, almost half of India’s 1.4 billion people, the world’s largest population, depend on agriculture for a living. Most of the country’s farmers are insecure and often indebted smallholders like Anjabai. Millions of them grow crops like soybeans that are currently protected from competition with industrialized plantations overseas by import tariffs in the range of 35% to 45% and other restrictive measures.
Modi is well aware of the potent political power of unhappy Indian farmers. Since he became prime minister in 2014, tens of thousands of farmers have marched on New Delhi from the countryside roughly every three years to press demands on the government. Twice they have pushed Modi’s government into legislative retreats, checking his agenda more effectively than virtually any other force in India. Farmers also make up a key voting bloc, particularly in states like Bihar, which will begin going to the polls on Thursday.
Farmers demand debt relief and higher prices at a rally in New Delhi in June 2017: Sustained demonstrations have twice forced Modi’s government into legislative retreats. © AP
On the other hand, the country’s leading exporters, including textile and jewelry makers, have seen shipments to the U.S. — their largest market — plunge since the administration of President Donald Trump in August began collecting a 50% tariff from the import of most Indian goods after the two countries failed to reach a “reciprocal” trade deal. Overall, Indian exports to the U.S. dropped 20.7% in September from a year earlier. Chief Economic Adviser V. Anantha Nageswaran has estimated that the tariffs could depress India’s annual economic growth rate by 0.5 to 0.6 of a percentage point.
In exchange for lowering the 50% rate — among the highest Trump has assigned to any nation — Washington has demanded that New Delhi halt imports of Russian oil and lower barriers to American agricultural goods, including soybeans, corn, wheat and dairy products.
Soybeans have been a particular priority since China, previously the biggest foreign buyer of the American crop, switched to purchasing from South America earlier this year. For Washington, India’s ban on GM beans is a key issue since they represent the bulk of American output.
India now appears to be pulling back from Russian oil in the face of new U.S. sanctions on top Russian producers, but Modi and his team have so far drawn the line at agricultural concessions despite recurrent reports of a potential compromise.
Prime Minister Narendra Modi vowed not to compromise the interests of India’s farmers in his Independence Day speech in August at the Red Fort in New Delhi. © Reuters
“India’s farmers, cattle rearers and fishers are our topmost priority,” the prime minister said in a defiant Independence Day speech on Aug. 15 in New Delhi. “I have stood as a wall for the farmers and livestock keepers against any detrimental policy, protecting their rights and livelihood. … India will not compromise on its farmers’ interests.”
The country’s farmers hope to hold the prime minister to his word.
A field of soybeans in Kadwali Buzurg ruined by heavy rains in late September: An outbreak of yellow mosaic virus has also devastated crops in Madhya Pradesh. (Photo by Nipun Prabhakar)
About half of them were in debt as of 2019, according to a survey by the National Statistical Office, with the average agricultural household owing 74,121 rupees. Much of the debt is owed to the owners of large farms whose financial support often comes in the form of seeds and fertilizer provided on credit.
The helping hand often comes with the thorn of an effective annual interest rate of more than 30%, according to Madhya Pradesh farmers. At that rate, debt can accumulate to crushing levels quickly, an important factor in the 10,786 rural deaths by suicide recorded in 2023 by the National Crime Records Bureau.
In Madhya Pradesh, which produces 42% of the country’s soybeans, farmers have borne with declining prices for their crop for much of the past four years. While imports of soybeans have been stable, inbound shipments of soybean oil have surged. At the same time, many domestic producers of animal feed, long key buyers of soybeans, have been switching to corn byproducts.
Dampened demand has kept soybean prices in Madhya Pradesh well below the official minimum support price of 5,328 rupees per 100 kilograms. The government does purchase some soybeans at this price but only periodically.
Traders study a farmer’s soybeans in the Indore mandi while an official uses a meter to measure their moisture level. (Photo by Nipun Prabhakar)
In early October, soybeans were trading between 1,500 and 4,500 rupees per 100 kg at the Indore mandi, depending on quality.
Some farmers were just trying to get rid of damaged crops, holding back on better beans for a round of government purchases expected before the end of the month. Others were simply desperate for cash to finance their next crop, which they hoped would be more successful. Many intended to plant wheat in the upcoming growing season.
In a long open shed at the mandi, a government official threaded between tractors laden with produce, armed with an instrument to measure moisture in the soybeans and surrounded by a gaggle of traders.
A farmer’s receipts from selling his soybeans at the Indore mandi in mid-October: Despite this season’s poor harvest, prices have been falling lately. (Photo by Nipun Prabhakar)
“He is God, but he’s a blind god,” said Rajesh Chaudhary, a farmer whose 3.5 hectares had yielded only a quarter of the soybeans he needed to repay vendors for the seeds and fertilizer he used to grow the crop and finance his next round of planting. His soybeans were measured as 16% moist, above the ideal ceiling of 10% but well below the 30% level of some other farmers’ offerings that day.
The main customer for the soybeans that Indore trader Anshuman Dhakad buys in the mandi is food processing company Patanjali Foods. He is typically paid 300 rupees more per 100 kg by the company than he pays out in the market to cover cleaning and transportation costs as well as his trading profit.
“There are many factors like crude soya oil imports that impact prices, but generally, if imports grow too much and too quickly, whether that is from the U.S. or from Brazil, it hurts us as well as the farmer,” he said.
According to calculations by Nikkei Asia based on spot prices from the Chicago Board of Trade and India’s National Commodity & Derivatives Exchange, soybeans traded in the U.S. are selling for around 30% less than they do in India at current exchange rates, due in large part to a combination of the efficiencies of American industrial agriculture, U.S. use of GM soybean seeds to grow higher yielding plants with heightened resistance to pests and bad weather, and the absence of Chinese buying this year.
A field worker harvests cotton fibers in Kadwali Buzurg: Many farmers’ crops have been damaged by this year’s late rains. (Photo by Nipun Prabhakar)
“American farmers enjoy a host of government subsidies and have huge land holdings, so it’s impossible to compete with them,” said Shiv Kumar Kakka, a leader of Samyukt Kisan Morcha, an alliance of farming unions that coordinated the successful drive for the repeal of three agricultural reform laws the Modi government pushed through in 2020.
“We believe any concessions in negotiations with the U.S. will be even more harmful than those three farm laws,” Kakka said. Members of his organization held protests in September against the government’s decision to temporarily waive tariffs on imports of cotton — another Madhya Pradesh crop damaged by this year’s late rains — to support hard-hit domestic textile producers.
While most small farmers in the state have not been following news about New Delhi’s trade talks with Washington, younger, more tech-savvy ones are starting to tune in, according to Kedar Sirohi, who leads agricultural outreach efforts in the state for the Indian National Congress, the country’s largest opposition party.
“They are quick to search about an issue like this on YouTube and discuss (it) over WhatsApp groups,” he said. “You will find more people who are aware of the implications than you’d expect.”
Modi’s Bharatiya Janata Party may get some sense of the mood among farmers from voters in Bihar, where more than 60% of the workforce is employed in agriculture. A big win for the party this month “would be taken as an endorsement of its refusal to open up India’s agriculture sector in trade negotiations,” wrote Shilan Shah, deputy chief emerging markets economist for Capital Economics, in an October client note.
Trump’s tariffs have exacted a heavy toll on India’s exports of fox nuts, which have become a trendy “superfood” in the U.S. in recent years. Bihar produces more than three quarters of the world’s fox nuts, known locally as makhana.
Yet this downturn has coincided with a prescient surge in support for the fox nut sector tucked into the government budget for the fiscal year that began in April. This has resulted in improved domestic distribution that appears to have offset much of the impact of the U.S. tariff.
Soybeans offered for sale to traders in the Indore mandi in mid-October: Some farmers held back their crop awaiting the next round of government purchasing. (Photo by Nipun Prabhakar)
“Previously, you might not have seen makhana at (domestic) airports,” said N.R. Bhanumurthy, director of the Madras School of Economics in Chennai. “Now you go to every airport, and you would see makhana. You go to every grocery store, you’ll see a lot of makhana.”
Wheat and corn are even bigger crops in Bihar, however, so the state’s farmers still have much on the line as New Delhi and Washington pursue a deal. Yet observers believe many of those in the fields are not yet aware of the stakes involved with the trade talks.
“This matter has not reached the farmers, and so far, India too hasn’t made any compromise on agriculture for them to be impacted,” said Manoj Gairola, who closely covers Bihar as editor-in-chief of the television channel News Nation. “At ground level, this is not an issue even.”
The article was published in the asia.nikkei
