A not just another I-told-you-so thesis

    AgricultureA not just another I-told-you-so thesis
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    A not just another I-told-you-so thesis

    OWSA reproduces a blog put up by distinguished food and agricultural policy specialist, author and writer, Devinder Sharma, who in turn, brought out a three-year-old paper wherein he had said that the “farmers’ patience is running out.”

    Sharma presented this paper titled ‘Addressing Agrarian Crisis: Agriculture Needs to be Reinvented’ at the third B V Rangarao Memorial Lecture at the Indian Social Science Congress in December 2018 – about two years before the farmers’ protests at the doorsteps of Delhi.

    OWSA is publishing the three-year old paper with Devinder Sharma’s permission.

    By Devinder Sharma

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    Their patience is running out. The remarkable resilience that farmers have demonstrated over the years in the face of growing stress, adversity and trauma is now beginning to break down.

    For two decades now, farmer’s real income stands frozen. Yes, you heard it right, frozen. A Niti Aayog paper has worked out that the real income of a cultivator has increased barely by 0.44 per cent every year over a five-year period leading to 2015-16. In other words, farm incomes have stagnated. This was followed by the severe blow inflicted by demonetisation in 2016. The pressure to sell their produce at whatever price they are able to get resulted in an unprecedented crash in farm prices, forcing farmers to throw their produce onto the streets across the country. Tomato, potato and onions have been the worst hit. The impact is still lingering. For instance, an analysis published recently by Agrowon showed that by invariably buying at a distress price, Maharashtra farmers have been short changed to the tune of Rs 2,579-crore for pulses, and Rs 769-crore for oilseeds, this season.

    Cultivating losses

    A recent CRISIL report points to the denial of a rightful income as the major reason behind the agrarian crisis sweeping through the country. “While the average annual growth in Minimum Support Price (MSP) was 19.3 per cent between 2009 and 2013, it was only 3.6 per cent between 2014 and 2017,” the report states. A recent OECD report concludes that farm incomes have remained frozen for two decades. Which means, in order to keep food inflation under control, successive governments have denied farmers their rightful income. The entire burden of keeping food prices low has been conveniently passed on to farmers. In other words, it is the farmers who are bearing the entire cost of subsidising the consumers. Farmers are being deliberately paid less, kept impoverished. Still, what farmers don’t realise is that every time they take to cultivation, they actually cultivate losses.

    Even in Punjab, the frontline agricultural state, there is hardly a day when reports of farmers committing suicide do not appear in newspapers. Punjab, the country’s food bowl, is no exception; the serial death dance across the country shows no signs of abating. At a time when it is generally believed that expanding irrigation and raising crop productivity is the way to enhance farmers’ income, Punjab shows that the time has come to look beyond. If irrigation and high productivity alone could raise farmers’ income I see no reason why Punjab, the food bowl of the country, has lately turned into a suicide hotspot. Punjab, with 98 per cent cultivable area under assured irrigation and the crop productivity, matches the best in the world. With 45 quintals per hectare productivity of wheat and 60 quintals per hectare for rice, Punjab tops the global chart. And yet, Punjab is witness to a spate of suicides every week.

    14 protests a day

    The tragedy that struck these farming families symbolises the agony that the entire farming community is living with. There is hardly a day when farm suicides are not reported from one part of the country or other. In the past 21 years, more than 3.20-lakh farmers have committed suicide; every 41 minute a farmer ending his life somewhere in the country. Those who have refrained from taking the extreme step are no better. They continue to somehow survive, living in acute distress, and hoping against hope. Several studies have shown that almost 58 to 62 per cent farmers sleep empty stomach.

    Farmers are in reality the victims of an economic design. The terrible agrarian crisis that prevails has brought farmer’s anger to the fore. Over the year, farmers’ anger has spilled to the streets. Between 2014 and 2016, a period of two years, farmers’ protests across the country increased by a whopping 680 per cent. In 2016, the National Crime Record Bureau (NCRB) recorded 4,837 protests, roughly 14 protests a day. Since then the number and intensity of farmers’ protests have only multiplied. The heat is now being felt at the electoral hustling. The electoral turnaround in the Hindi heartland in the recent Assembly elections is being increasingly attributed to growing farmers’ anger.

    Pushing farmers out of agriculture

    It is generally believed that unless the ongoing agrarian crisis is able to sway the electoral outcomes the political leadership will never understand the severity of the socio-economic fallout. The latest round of elections will perhaps change that perception. The dominant economic thinking otherwise is that agriculture has to be sacrificed to achieve economic growth. Agriculture therefore is being deliberately kept impoverished to keep the reforms viable. Former RBI Governor Raghuram Rajan has time and again iterated that the biggest reform would be when a sizeable percentage of population in agriculture is moved to the cities which are in need of cheaper labour. The National Skill Development Council already has spelled out plans to bring down the population in farming from the existing 52 per cent to 38 percent by 2022. This is what the World Bank had directed way back in 1996, seeking 400 million people to be moved out of the rural areas in the next 20 years, by 2015. Successive governments have merely followed the economic design. Left, Right or Centre, the underlying economic thinking remains the same. Keeping agriculture starved of public sector investments, and turning farming into an uneconomical enterprise was (and is still) considered to be the best way to push farmers out of agriculture.

    In such depressing times, agriculture needs to be reinvented. It needs a booster dose. More so considering that employment in the cities has been shrinking over the years. Since 2004-04, despite the high GDP growth rate, against the requirement of 1.25- crore jobs a year, only 1.6-crore jobs in the labour intensive industry have been created. In other words, against the expectation of 17.5-crore jobs, only 1.6-crore new jobs have come.

    Debt and farming become synonymous

    Since the job market has dried up, common sense tells us that the challenge should be to make farming economically viable and ecologically sustainable. With 52 per cent population dependent on agriculture, almost 60-crore people, the emphasis should be on providing gainful employment in rural areas. This can only happen if the economic thinking shifts from creating an army of dehari mazdoor in the cities to rebuilding farming.

    Keeping agriculture starved deliberately on the other hand, with farm incomes remain almost frozen or bare enough to cover not even the cost of production, the economic disparity has only worsened over the years. Keeping food prices low is also in consonance with the dominant economic thinking aimed at drastically reducing the work force in agriculture.

    For all practical purposes, debt and farming have now become synonym. Seventy years after Independence, and 55 years after the Green Revolution was launched, economic freedom continues to elude farmers. Economic Survey 2016 made it abundantly clear. Accordingly, the average income of a farming family in 17 States of India does not exceed Rs 20,000 a year. In other words, farming families in roughly half the country are surviving on less than Rs 1,700 a month. Knowing that it is not possible to rear a cow in the same amount, I shudder to think how these families survive year after year.

    Assured monthly income

    It is a question of priorities. The seventh pay commission is expected to benefit 45 lakh central government employees and 50 lakh pensioners. Finance minister says it will cost an additional Rs. 1.02-lakh crore every year. But when implemented by state governments, PSUs and colleges across the country, Credit Suisse bank tells us that the additional burden will be around Rs 4.5-lakh crore. This will benefit an estimated 1 to 2 per cent of the population, the salaried class. Surprisingly, no economist has ever asked where the money will come from nor has anyone raised the question of widening fiscal deficit. In fact, the industry calls it a booster dose since the additional money into the hands of employees is expected to create more demand.

    Imagine the demand that will be created if agriculture is to receive an annual additional budgetary provision of Rs 4-lakh crore. Much of it should be in the form of direct income support and a higher MSP. This has to be accompanied by a mechanism of an assured monthly income package corresponding to the salary of the lowest government employee. Although economists will raise heckles of widening fiscal deficit and the elite is going to question the source of money, the fact remains that the huge demand created in the rural areas will propel the economy in a rocket dose. This is not only good politics, but also good economics.

    I am of the firm opinion that a tinkering here and there is not going to address the agrarian crisis. It needs a holistic approach, a paradigm shift in economic thinking. To begin with, the effort should be to make farming economically viable. After all, everything boils down to how much net income a farmer gets in his hand at the end.


    Image: Wikimedia     l     Photograph by Randeep Maddoke

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