Reassessing the “Agrarian Miracle” of Gujarat

While the popular media portrayal of the ongoing farmers’ protests has highlighted the agitation by farmers from Punjab and Haryana, the protest has spread rapidly to several other states. The initial response to protest calls in Gujarat was reported to be muted, but in reality, the farmers from Gujarat faced several restrictions in mobilising, with key leaders being placed under house arrest.

On December 15, while Prime Minister Modi was speaking to farmers in Kutch, a group of around 150 farmers from Gujarat managed to evade the police, after disguising themselves to join an ongoing protest at the Delhi-Jaipur highway. This series of events appears to be in stark contrast to the narrative of agrarian prosperity in Gujarat, which was touted as a key achievement of the state government, in the run-up to the 2014 general elections. The ‘Gujarat model’ of economic development became a major selling point for the Bhartiya Janata Party (BJP), and arguably a strong factor in securing their win.

The ‘Gujarat model’ refers to a period from 2002–03 to 2011–12 during which the state of Gujarat witnessed an impressive growth rate. The growth is credited to be driven by the state government’s interpretation of neoliberal policies, under the leadership of Narendra Modi, the then chief minister of the state. Focussed on increasing corporate investment, the government addressed the requirements of corporate units through infrastructure development and substantial incentives and subsidies. The semi-arid region also witnessed high agricultural growth, in what came to be known as the “agrarian miracle”.

The agricultural GDP in Gujarat registered a growth of 8% per annum, during 2002–03 to 2013–14, much higher than the country’s average of 3.3% per annum during the period. This growth was achieved through sustained seasonal rainfall for nearly nine years, extension through Krushi Mahotsav Scheme, promotion of modern agricultural practices, 24-hour electricity for farmers, and government initiatives to improve seed quality (primarily for bt-cotton).

On the downside, this growth has neither been sustainable (groundwater became a key source of irrigation, and inadequate effort to recharge supply caused massive depletion) nor equitable (poor farmers received limited benefits from improved technology, and agricultural wages for labours remained low). After 2011–12, frequent droughts and groundwater depletion brought down the agricultural GDP growth rate to 3.7%. In addition, agriculture suffered from low minimum support price, high cost of cultivation, poor crop insurance, and declining public investment.

An analysis of more recent years shows that depleted resources, along with heavy pollution, have reduced agricultural productivity in Gujarat. Faced with poor monsoon and paucity of Narmada water, estimated food grain production in the state declined by 11% year-on-year, and cotton production declined 21% year-on-year, in 2018–2019. Tribal and small farmers have been the worst affected, with thousands being forced to migrate or live under squalid conditions. The fears of marginal farmers have only been exacerbated by the 2020 farm legislations, particularly with regard to contract farming.

Proponents of the legislation have touted it as a step towards creating a free market for agricultural products. However, a free market in agriculture is a fallacy since in most countries, agricultural markets are strictly regulated by governments, oligopolies, or a combination of both. Under the new act, private players are allowed to impose a range of conditions which include complying with quality, grade, and standards, which are often arbitrary and can be used to impose unfair terms on the farmers. While expressing his opposition to the laws, Nipulbhai Patel, a leader of farmers from the Bharuch district in Gujarat, told the Ahmedabad Mirror,In contract farming, farmers will cease to become owners of their land and become labourers. Currently, we can raise our voice if the price for our produce is not up to the mark. But that might not be possible once the new act comes into force.”

Despite the façade of prosperity, Gujarat has been afflicted by similar agricultural crises that are pervasive across the rest of country. The net result is that the growth in Gujarat has remained discriminatory, with 22% of the state’s population below the multi-dimensional poverty line (as of 2015–16). Though there are several central and state programmes targeting the poor, their efficacy and implementation remain unclear. These problems are not confined to Gujarat but are a component of the larger Indian narrative of inequitable growth.

Shruti Jha received her BA in Business Economics from the University of Delhi and is a member of the Rethinking Economics India Network. The author can be reached at shrutijha2405@gmail.com.