That Justin Trudeau has picked a fight with Narendra Modi is, by itself, not an unwelcome development.
By making supportive-sounding remarks about the farmers’ protests that have exploded across some northern states of India in response to Mr. Modi’s agriculture reform bills, the Canadian Prime Minister has managed to upset his Indian counterpart enough that New Delhi has called Canada’s high commissioner on the carpet and cancelled its officials’ appearances at Canadian-hosted events this week.
As with many of Mr. Trudeau’s international incidents, it doesn’t feel like a carefully calculated move; it emerged from an ethnic outreach campaign (in this case a town hall for Sikh voters), and his intended message isn’t terribly clear.
Which is too bad, because there are good reasons to be at odds with Mr. Modi.
India’s Hindu-nationalist Prime Minister has turned the courts, police, military and other institutions into partisan operations that persecute opposition figures and religious minorities. He has escalated the pointless and dangerous war with Pakistan in Kashmir. He has banished international organizations such as Amnesty International. He has allowed anti-Muslim sentiments, under cover of the pandemic, to spiral into deadly violence. So there is good cause for international criticism.
There is one problem with Mr. Trudeau’s choice of target, though: The Indian farmers are wrong.
India, despite a huge decline in poverty in recent decades, is home to between 71 million and 88 million extremely poor people – that is, people whose family incomes are less than $1.25 a day, placing them close to starvation. The number of Indians who are undernourished is even higher, around 180 million.
The great majority of those in poverty are farmers, and their persistent poverty is a direct result of India’s approach to agriculture.
The Indian system provides subsidies unrelated to business results and markets in which the government buys produce at a guaranteed price, which comes in at well below world market prices, effectively making this a small welfare payment. That guaranteed price is, in many states, an incentive to stay on the land and make a meagre living just above poverty without the ability to improve their lot, rather than to move on and consolidate.
Indeed, the average farm size in India is an unsustainably small 1.15 hectares and shrinking, as the land is subdivided through inheritance; 85 per cent of Indian farms are tiny subsistence operations that exist to support the people living on the land, rather than to produce as much food as possible.
So, while India’s other industries have grown productive and competitive, bringing commensurate improvements in people’s livelihoods, agriculture has remained trapped in the past. That has grave consequences for all of India, and much of the world.
Given its favourable climate and its investments in irrigation, fertilizers and seeds, India should be producing vastly more food than it does. Its wheat and rice yields per hectare are a third what they are in similar Asian countries. In other vegetable and fruit crops, yields are between two and seven times lower than what they should be.
India’s climate is capable of producing three harvests a year in many crops, but marginal farmers dependent on inflexible subsidies are unable to or uninterested in planting more than one. India could be producing three times as much food, which would mean lower food prices, and therefore much lower urban poverty rates.
Even if they do grow more crops, farmers often have trouble getting them to market. The inefficient system of single-buyer government markets, which are usually located a great distance from farmers, means a large part of the harvest – as much as 16 per cent, for some crops – spoils before reaching market. Because food producers and retailers can’t buy directly from farmers, and because most Indian farmers can’t sell their produce internationally, food prices stay high, and India fails to develop much of a value-added food production industry.
This stunted farm sector is the largest root cause of India’s developmental lag behind other “middle-income” countries. The reform bills would do much to fix this, by connecting farmers directly to markets and turning subsidies into instruments of socioeconomic mobility rather than guarantees of poverty.
Mr. Modi’s most grotesque error is having failed to make such reforms six years ago, when he took office; indeed, he has largely disappointed his claims to be a great reformer. And he has delivered the bill with characteristic bad timing – in the middle of a pandemic – while allowing authorities to crack down violently on protests.
Justin Trudeau was right to condemn that violence, and defend the right to protest. But in making it about the farmers, he picked the wrong target. Their resistance to change is Asia’s biggest source of poverty and misery.
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