Tamil Nadu shows the way to rebuild agriculture

Source: web 

The maiden agriculture budget by Tamil Nadu has brought a whiff of fresh air in policy planning. Not only dedicating the budget to the farmers protesting against the three central laws, what makes Tamil Nadu’s farm budget so special is how the Minister for Agriculture and Farmer’s Welfare MRK Pannerselvam has managed to open a new chapter by bringing back the focus on revitalising agriculture. 

Tamil Nadu it seems has confided more on economist F E Schumacher concept of Small is Beautiful– emphasising on small and appropriate technologies as well as approaches, and invested on conservation and building up of the natural resource base.  

Coming at a time when Tamil Nadu tops the national chart in farm indebtedness, in fact three of the top five indebted states hail from the southern region, the integrated approach the separate budget has laid out to rebuild farm livelihoods and to also attract youth in farming, is a pathway which in reality challenges the dominant economic thinking of moving people out of agriculture in the name of economic growth. While mainline economists celebrate this in the name of growth, in my understanding speedy urbanisation actually is a reflection of the neglect and apathy agriculture has suffered over the decades. 

According to the 2011 Census, more people in Tamil Nadu have moved out of rural to urban areas than in any other state. This is a trend that needs to be reversed. In fact, the massive reverse migration the country witnessed when tens of millions of daily wage workers walked back hundreds of kilometres to their villages after Lockdown 1.0 was imposed shows the dire need to reverse the flawed economic thinking that has pushed people from the rural areas in the first instance. Keeping agriculture deliberately impoverished all these years was the easiest way to do so. No wonder, as per Economic Survey 2016, the average farm income in 17 states of India, which means roughly half the country, hovered around Rs 20,000 a year. With such meagre annual incomes, farmers are left with little choice but to migrate. 

Not only showing an intent to reverse this faulty economic design, Tamil Nadu also demonstrate an inclination to do so. Attaining village self-sufficiency in the next five years, for which a project called ‘Kalaignar’s Anaithu Grama Oruginaintha Velan Valarchi Thittam’ has been launched, is a step in the right direction. Although only 2,500 village panchayats will be covered in the first phase, the aim is to cover the entire 12, 524 village panchayats before the state goes to polls again. An allocation of Rs 250-crore has been made for it. This may seem to be insufficient but when seen with the outlays marked for various other related schemes and programmes like village pond restoration, enhance soil fertility, greening of 11.75 lakh hectares of fallow lands in the next ten years, setting up drying yards, encouraging terrace vegetable gardens, to link millets, pulses, and oilseeds cultivation with PDS supplies, setting up farmer markets and providing for agri-processing and value addition, and a horde of other initiatives shows how keen Tamil Nadu is to change the face of its rural landscape. 

What seems fascinating (and at the same time challenging) is the policy thrust to revive the rural economy, with emphasis on farmer-centric approaches. This became possible after senior officials had gone in for an elaborate and widespread consultative process, involving all kinds of stakeholders, which brought innovative ideas as well as measures that were essential to revive farming. Instead of talking only to economists and business leaders in pre-budget exercises, Tamil Nadu reached out to farmers, activists and civil society organisations. This exercise will only remain useful if the stakeholders continue to keep a tab, ensuring that the government focus does not deviate in the years to come. 

Perhaps it is primarily for this elaborate consultative process, Tamil Nadu has made allocations for setting up a Nammalvar Organic Farming Research Centre at the TN Agricultural University, and also launched a programme to conserve traditional paddy varieties, naming it after Nel Jayaraman. In addition, a separate wing for organic farming is proposed to be created under the state agricultural department. A provision for subsidy support for organic farmers has also been made. 

Turning farming into a profitable enterprise is certainly not possible till suitable policies are laid out to retain and attract youth in farming. Although Tamil Nadu has announced a ‘Rural Youth Agricultural Skill Development Mission’ with the aim to provide the right kind of skills to the youth, and also launched programmes for capacity-building for students passing out from the agriculture university, assured income by way of an assured price remains the hallmark for converting agriculture into an economic activity. The Centre has a bigger role here, first by providing the right prices, and also must collaborate with states to bring the youth back into agriculture. It’s time to know that even in the US, the number of young in agriculture has gone up by 11 per cent between 2017 and 2019. China is planning to send 10 million youth back to the villages by 2022. 

At a time when the Periodic Labour Force Survey 2019-20 estimates that 44 per cent of the country’s workforce is engaged in agriculture, and considering that the size of the farm workforce has expanded in the post-Lockdown period, policy makers need to accept that it is no longer advisable to continue with the outdated economic thinking of keeping rural wages low so as to encourage out migration. This has to change if the country is to realise the Prime Minister’s vision of Sabka Saath Sabka Vikas. Let us not forget, agriculture alone has the potential to provide gainful employment to a large section of the population. 

Tamil Nadu has shown the way. While a lot will depend on how the budget proposals are implemented, it has certainly laid out a roadmap for bringing back the focus on an economically-viable and sustainable small-scale agriculture. #

Source: Reviving Indian agriculture is a key to jump-start the economy. Bizz Buzz, Hyderabad. Aug 27, 2021. https://epaper.bizzbuzz.news/Home/ShareArticle?OrgId=278ad7b4de2&imageview=1&fbclid=IwAR0IKlTiglJSjyx5sqVxj6KJPfO8-kCATCZvHUt2hT4cpD4NS92s2aDgaV8

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Rural Economic Distress led to Slowdown

Terming the economic slowdown as unprecedented and perhaps the worst in the past 70 years, the Niti Aayog Vice Chairman Rajiv Kumar had called for extraordinary steps to fuel the economy. But strangely I did not find the Niti Aayog raise any alarm bells when it became known that Indian farmers suffered a back-breaking loss of Rs 45-lakh crores in the 17 years period, between the years 2000 and 2017.

The unprecedented crisis in agriculture, which was evidently passing through its worst phase in the past 70 years, did not evoke any response from the mainline economists as well as the policy makers. Not only the OECD-ICRIER study that pointed to the denial of rightful income to farmers and thereby leading to a loss of Rs 45-lakh crore, an earlier leaked Periodic Labour Force Survey 2017-18 report of the National Sample Survey Office (NSSO) had shown that 3.4-crore casual labourers in rural areas, of which 3-crore were farm workers, had lost their job between 2011-12 and 2017-18. The signs of a terrible rural economic distress were all there but it is only that the policy makers refused to see it.

It was as if nothing had hit the Indian economy, which strangely feels turbulence only when the industry fails to perform. It was as if rural India does not exist; as if rural India is somewhere situated in sub-Saharan Africa, so far away so not be of any concern. But if only the Niti Aayog had woken up in time to the grim realities that continued to plague Indian agriculture perhaps the economic slowdown being felt now wouldn’t have been so pronounced. The slowdown is essentially an outcome of a downward spiral in domestic demand, which emanates from a slump in real farm incomes thereby resulting in a collapse in rural demand. Low liquidity has nothing to do with the present crisis.  

With ‘near-zero’ growth in real farm income in the past two years, and with less than half a percent growth per year in the preceding five years, between 2011-12 and 2016-17, it was quite apparent that the rural economy was undergoing a sharp slump. Farm incomes are at a low in 14 years. To add to the dismal scenario, a report of the Reserve Bank of India had shown that public sector investment in agriculture had also remained very low -- between 0.3 to 0.4 per cent of the GDP between 2011-12 and 2016-17 -- clearly showed that how a sector which provides the largest employment in the country has been neglected all these years.

All efforts should therefore be to revive the rural economy. But on the contrary, while the crisis was in agriculture it was the industry which built up a sob story showcasing how auto sales were down, the inventory for the real estate was building up, underwear sales were refusing to pick up and Parle biscuits had warned of 10,000 workers at the verge of being laid off since the poor were thinking twice before buying a Rs 5-pack of biscuits. Seeking an economic stimulus package of Rs 1-lakh crore, industry lobby groups were backed by a large section of the media. In the deafening noise that the drum-beaters created, farmers and rural poor were once again forgotten. 

All measures to kickstart the slowing economy harbours on improving sentiment, provide more sops and tax concessions to the rich, and thereby providing more money into the hands of affluent sections of the society. But I wonder how will all this help in creating more demand. How will it help in providing more money into the hands of the poor? While everyone agrees that the slowdown is essentially because of a collapse in rural demand, I don’t understand how will measures that provide more money into the hands of those who are actually responsible for the slowdown, be helpful. Isn’t it like what the Chief Economic Advisor K Subramanian had said of India Inc’s tendency to “privatise profits, and socialise losses?”

After all, with almost Rs 8.5 lakh crore of bad loans written-off in the past 12 years, since 2007, and with banks staring at another Rs 17-lakh crores of stressed loans, of which many analysts say Rs 12-lakh crores is unlikely to return, it is the private sector which has already sunk a black hole. Since 2009, ever since the days of the global economic meltdown, the Indian industry has been getting an economic stimulus package of Rs 1.8 lakh crores every year. In other words, it has already received Rs 18-lakh crores by way of a bailout package in the past ten years. All this is in addition to an annual tax concession in the range of 5 per cent of GDP. The Chief Economic Advisor was right when he said that the industry should learn to fend for itself, and not run to the government every time it is faced with a slowdown. When the government provides a stimulus package to bail out loss-making Air India, the industry cries for privatising the public sector airline; but when the loss-making industries seek a bailout package to survive why shouldn’t they be nationalised? 

While all eyes are on the Rs 1.76-lakh crore lifeline that RBI has provided, the best option to revive economic growth lies in providing more money into the hands of rural poor. Considering that the average income of a farm family in 17 states of India or in roughly half the country is only Rs 20,000 a year, the cash reserve should be used to double the direct income support to farmers under the PM-Kisan scheme. At present, land owning farmers are given an income support of Rs 6,000 per year. It should be doubled to Rs 12,000 per year per family, which effectively means an income support of Rs 1,000 per month. It is also time to include the landless farmers under the ambit of PM-Kisan. 

In addition, public sector investment in agriculture needs to be enhanced significantly. To begin with, efforts should be geared up to upgrade the promised 20,000 village haats into modern mandis. #

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Agriculture can alleviate employment woes.

Pic courtesy: IVHQ

Look at these headlines. As many as 7,000 people, most of them college graduates, applied for 13 job vacancies for waiters in Maharashtra’s secretariat. Of the 4,607 applicants for 14 job vacancies of sweepers and sanitary workers in Tamil Nadu Assembly Secretariat, most have professional qualification of MBA, M Tech, B Tech, post graduate and graduates, reads another. And last year, in March 2018, an estimated 25 million people, more than the population of Australia, applied for about 90,000 positions in India Railways, screamed TV news channels.

In 2015, over 2.3 million candidates, including 2.2 million engineers and 255 Ph.D. holders had applied for 368 posts of peon in the Uttar Pradesh State Secretariat. A year later, a massive 93,000 candidates, including 20,000 graduates and 50,000 post graduates, had applied for the posts of 62 peons with a technical wing of the Uttar Pradesh police. Almost at the same time, another 19,000 people, including MBAs and post graduates had applied for 114 jobs of ‘safai karamchari (sweepers) with Amroha Municipal Corporation in Uttar Pradesh. There may not have been riots over increasing unemployment but not only in Uttar Pradesh is the job situation so appalling, it is equally bad across the country.  

This is borne by the fact that India’s unemployment rate rose to a 45-year high during 2017-18, as a newspaper reported quoting the National Sample Survey Organisation (NSSO) study conducted between July 2017 and June 2018. At a time when India’s economy has been on a growth trajectory in the past four years – growing at an average exceeding 7 per cent per annum – the failure to provide jobs to millions of people joining the employment queues is a clear cut pointer that relying on a higher GDP is not the answer to creating more jobs. Whether we like it or not, it is now becoming apparent that a higher GDP does not translate into more jobs.

Although the Finance Minister Arun Jaitley dismisses the study, saying “if the economy is growing at 12 per cent nominal growth in the past five years, it would be an economic absurdity to say that such a large growth, the highest in the world, doesn’t lead to the creation of jobs,” but the question that needs to be asked is where are the jobs? While all out efforts are being made to show that job creation is on track, a report from Centre for Monitoring of Indian Economy (CMIE) deflates the claims when it shows that in the past one year, almost 11million people lost their jobs. “An estimated 9.1 million jobs were lost in rural India while the loss in urban India was 1.8 million jobs. Rural India accounts for two-thirds of India's population, but it accounted for 84 per cent of the job losses," the report said.

Growth without jobs is meaningless. The indication that a higher GDP does not automatically lead to more jobs was clearly visible in the UPA era when despite a high growth exceeding 8.3 per cent on an average, only 15 million jobs were created in the ten years, between 2004 and 2014. This was against the annual intake of about 12 million fresh entrants in the job market every year, which meant that against the need to provide 120 million people with employment, the UPA could provide only 15 million jobs. Ten years is not a small period, and it is here that policy makers failed to realise the inability of economic growth to create more jobs.

Still worse, a Planning Commission report had worked out that between 2004-05 and 2011-12 , about 140 million jobs were lost in agriculture. Many economists term the migration from agriculture to be a welcome sign. Going by the World Bank prescription, which was doled out way back in 1996, India was directed to go for a population shift, translocating 400 million from the rural to the urban areas in the next 20 years, by the year 2015. While most government economists have blindly followed the World Bank prescription, I have always termed these 400 million people being forced to migrate from the villages as ‘agricultural refugees’. In the absence of any alternative employment opportunity, these millions are swarming into the cities looking for menial jobs.

Without any definite strategy to employ them, no one knows what these millions will do in the urban centres. If the objective is to move people out of agriculture simply to meet the growing needs of cheaper labour for infrastructure, industry and real estate, in other words to provide for dehari mazdoor, there is something terribly wrong with the way dominant economic thinking is perceived. The general understanding being that those moving out of agriculture will be automatically absorbed by the manufacturing sector. It was primarily for this consideration that the National Skill Development Policy aimed at reducing the population in agriculture from 52 per cent to 38 per cent by the year 2022. But the reality is that during the period agriculture saw an unprecedented rate of migration, manufacturing too slumped, causing a loss of 53 million jobs. More recently, another 10.6 million jobs were lost in the manufacturing sector during the four year period 2011-12 to 2015-16.

Since agriculture is the biggest employer, employing 52 per cent of the population as per 2011 Census, the answer to the monumental employment crisis that India faces actually rests in the crop fields. If only agriculture can be turned economically viable and ecologically sustainable, it can easily take away much of the pressure the country faces in creating additional employment. All it requires is a paradigm shift in economic thinking, which begins by first treating agriculture as an economic activity, which has multi-faceted roles cut out. Making farm livelihoods economically sustainable should be the first step, with the objective to ensure gainful employment to marginalised communities. Once agriculture becomes economically viable, providing more income in the hands of 600 million people, it will reignite the rural based industry, and in the process trigger a reverse migration.

Only agriculture has the ability to reboot the economy. The increased demand a refurbished agriculture will create will be phenomenal, leading to a spurt in industrial production. This may not be ascribed in the economic textbooks, which still emphasise on reducing the population in farming but it is time to look beyond. If Constitution of India can be amended umpteen numbers of time, I see no reason why dominant economic thinking (and economic curriculum) cannot undergo a transformation for better, keeping in tune with changing times. It’s time to accept that agriculture is truly the mainstay of Indian economy. #

Agriculture can alleviate employment woes. The Tribune. Feb 15, 2019

https://www.tribuneindia.com/news/comment/agriculture-can-alleviate-employment-woes/729010.html?fbclid=IwAR2pZVodlqC2VcBS-VTRCjrbwahGNZUFTv-gNzhu_x_RQXW0yuKv042oW4chunger

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