India’s government claims to subsidise farmers, but actually hurts them

INDIA’S farmers should be the happiest in the world. For decades governments have showered them with perks including a blanket tax exemption; subsidies on fertiliser, seeds, energy and water for irrigation; low-interest loans; cheap crop insurance; high tariffs to block food imports; and price supports for more than 20 crops. Lately, the authorities have become more generous still. Since 2014 no fewer than eight states have waived a total of well over $25bn in farmers’ debts.

Narendra Modi, the prime minister, for whom elections loom, has promised to double farm incomes by 2022. Recently he announced a fresh bonanza. Sharply raising support prices for the coming harvest, he vowed that henceforth the government would pay growers 150% of the cost of their inputs, guaranteeing a healthy profit.