Showing posts with label Farmers income. Show all posts
Showing posts with label Farmers income. Show all posts

Tuesday, September 28, 2021

No transition to sustainable food systems possible without a living income for farmers


Pic courtesy: Indian Express

In the run-up to the UN Food Systems Summit aimed at achieving more sustainable, equitable and resilient food systems, the UN Secretary General, Antonio Guterres, said: “A well-functioning food system can help prevent conflict, protect the environment and provide health and livelihoods for all.”  

“In food, there is hope.” 

Laudable words, indeed. As the world faces a growing risk of food shortages due to climate change, with several studies warning of the dismal scenario ahead when production of staple crops is expected to contract by almost a third by 2050 in case temperature rise continues unabated, transforming the global food systems to meet the future needs of the people, so as to attain health and nutritional security for one and all, is certainly a timely initiative. More so at a time when increasing desertification, loss of biodiversity, air and water pollution and the devastation intensive farming practices have wrought to soil health and environment had set the alarm bells ringing for long. 

Coming at a time when growing corporate control over agriculture has pushed small farmers to the margins, with monocultures leading to destruction of natural resources, only time will tell whether partnerships between different stake-holders and the commitments from national governments really help to radically transform the existing highly unsustainable food systems. This becomes more difficult to achieve given that high levels of income insecurity is either leading indebted farmers to take the fatal route or abandon agriculture to move to the cities, and those who are left on the farm seem to be somehow surviving against all odds. 

While there is no denying that food provides hope, as the UN Chief said, but unfortunately the people who produce food do not see any hope. 

“Every genuine farmer is now struck unfairly on a treadmill with accumulating debts to meet unless he goes bankrupt, commits suicide or finds another source of income,” a British farmer had summed up the plight of the agrarian community. A banner put up recently by dairy farmers in Northern Ireland loudly announcing -- We can’t afford to feed you anymore – is a telling sign of the crisis that dairy farming are faced with. With prices remaining more or less static for eight years in a row, dairy farmers are unable to recover the cost of production. 

For the same reason, 93 per cent of the dairy farms have closed down since the 1970s in America. Not only dairy farmers, small farmers have also quit agriculture in large numbers. With median incomes in the negative for almost a decade now, and saddled with a huge bankruptcy, farmers have been forced out, hastening the decline of rural America. Mary Rieckmanns is one such farmer, whose family has been raising cows in Wisconsin for generations. “I sometimes feel they are trying to wipe us off the map,” she told the TIME magazine. 

In early March this year, French farmers had hung suicide dolls on trees outside Parliament drawing attention to the economic hardship they were faced with. In neighbouring Germany, farmers too have been protesting, expressing their anger by driving tractors to the cities. In most other European countries, farmers have time and again demonstrated against the sliding farm gate prices, which have rendered farming unprofitable. “What is point to being in debt all the time, and toiling for no reason? We are sacrificed, so the consumer is always happy with low prices,” Dominique Metenier, a French farmer had lamented. 

Concentration of power in the hands of a few multinational companies has resulted in unfair trade practices hitting livelihoods of millions of small farmers and workers in Latin American and African countries. Take the case of chocolate, which is a dominant player in the $210 billion global confectionary industry. While the industry rakes in huge profits, hundreds of thousands of cocoa producers in Africa live on meagre incomes. With child labour rampant in the cocoa plantations, a study has shown that the average income for a large percentage of small cocoa farmers is less than the retail price of a chocolate bar. 

In case of banana, the most eaten fruit in Europe and North America, for growers in Ecuador, Colombia, Costa Rica and Dominican Republic, from where the fruit is largely imported, their earning is anything between 5 to 9 per cent of the end consumer price. The situation is no better for coffee growers, where a majority of the growers live on less than the extreme international poverty line of $1.9 per day. 

To draw attention to the deplorable economic conditions that growers were living with, the World Coffee Growers Forum had roped in the well-known economist Jeffrey Sachs who has proposed a global fund of $ 10 billion a year to help pull out growers from the clutches of extreme poverty. 

In India, which has the largest population engaged in agriculture globally, for almost ten months now tens of thousands of farmers have been protesting at the borders of New Delhi. While the protesting farmers are calling for a repeal of the three farm laws that the government had brought in September last year, which facilitate the entry of free markets in agriculture, farmers are also demanding a law that provides a guaranteed price. Meanwhile, the latest report of the Situational Assessment Survey of Agricultural Households 2018-19, an extensive and elaborate nation-wide survey, shows that the farm incomes have been steadily on a decline. Increasingly, non-farm income occupies a bigger share of the average farm incomes, with earning from crop cultivation alone dropping to a paltry Rs 27 (US$ 0.37) a day. 

What emerges clear is that farming is no longer a viable livelihood. While farmers grow food for the world, they themselves live in hunger. To expect the same beleaguered global farming community, already reeling under indebtedness, suicides and exploited ruthlessly by the markets, to be the strong pillar buttressing the proposed transition towards a sustainable food system will remain a dream. The entire global focus therefore must be to first come up with structural transformation required to provide farmers with an assured and guaranteed income. 

Or else, we’ll continue hoping against hope. #

Source: No sustainable world without a living income for farmers. Sept 22, 2021. Fairfood.nl https://fairfood.nl/en/resources/un-food-systems-summit-no-sustainable-world-without-a-living-income-for-farmers/?fbclid=IwAR0G-iOvRueKOUCx8Gc_vbXDTG1tohRvXsHhci3EFC_rEkrLZkBTLlSbsmE

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Wednesday, September 15, 2021

Farmers are being penalized to grow food


With an income of Rs 27 (US $ 0.37) per day, an average Indian farmer fares worse than a labourer. 
Pic courtesy: downtoearth.org.in 

A few years after the World Trade Organisation (WTO) came into existence in 1995, I was invited by The Ecologist, London, to write an essay comparing the Indian farmer with a European farmer. The idea being to see how the Indian farmer, considering the relatively low cost of production in India, had gained economically after the opening up of international trade. 

This was the general impression that mainline economists had created to justify the need to join the trade agreement, despite the growing farmers’ opposition, with one of them going to the extent of terming the immense opportunities that WTO Agreement on Agriculture will provide for farmers as a ‘big bang’ opening. With agricultural exports expected to boom, farm incomes were slated to increase thereby transforming the face of Indian agriculture. With no such evidence available, and not finding any merit in the correlation, I actually ended up comparing an Indian farmer with a European cow. 

Almost 26 years after the WTO was launched, the latest report of the National Statistical Organisation (NSO) on agricultural households and incomes in rural India, released last week, paints a rather gloomy picture. This Situation Assessment Survey (SAS) was conducted in 2018-19. While the survey report hasn’t drawn any correlation between a farmer and a cow, what it has clearly brought out is no less frightening -- an average Indian farmer fares much worse than a labourer. If 75 years after Independence, farmers are earning more from wages than from crop cultivation, it only shows that the overarching economic design of keeping farm incomes deliberately low so as to accelerate rural to urban migration, because cities need cheap labour, is on track. 

In 2012-13, when the last SAS was conducted, an agricultural household earned 48 per cent of the income from crop cultivation; which declined to 38 per cent under the 2018-19 survey. During the same period, share of farm income from wages alone rose from 32 per cent to 40 per cent. Increasingly, wages have begun to form a larger chunk of an average agricultural household income, a trend that will hopefully continue in the years to come. Calculated on the basis of ‘paid out expenses’ the total monthly income has been computed at Rs 10, 218 for an agricultural household. Compared to Rs 6,426 per month in 2012-13, and adjusted for inflation, it represents a nominal increase of 16 per cent. Using the ‘paid out expenses and imputed expenses’ approach, average income per agricultural household has been shown as Rs 8,337 in 2018-19. For this, the imputed expenses mean the input coming from home, unpaid labour, own machinery, own seed etc.   

Nevertheless, as far as crop cultivation is concerned, an average agricultural household earned Rs 3,798 in 2018-19. In real terms, when adjusted for inflation, the earnings from cultivation declined by 8.9 per cent between 2012-13 and 2018-19. Further, broken on a per day basis, a newspaper has in an interesting analysis, worked out the income from crop cultivation at Rs 27 per day. Even a MANREGA worker earns more. It only establishes what I have been saying for long – farmers are in reality being penalised to grow food. And in any case, income from cultivation is certainly less than the earnings from an average lactating cow on a per day basis, given the farm gate price of approximately Rs 30 per litre. 

Obviously, the lesser the farm income, the more is the effort to draw credit, sometimes from multiple sources. The average farm debt increased to Rs 74,100 in 2018-19 from Rs 47,000 in 2012-13. About half of the agricultural households, 50.2 per cent to be exact, carried outstanding loans. Strangely, Mizoram sees a whopping increase of 709 per cent in outstanding farm loans, followed by Assam and Tripura in the Northeast.  

More recently, Parliament was informed that by the end of March 2021, outstanding farm loans totalled Rs 16.8-lakh crore, with Tamil Nadu topping the chart. 

Considering that nearly 77 per cent of the agricultural households are self-employed, what is worrying is that 70.8 per cent of the landholdings are less than 1 hectare. Only 9.9 per cent of the landholdings are between one to two hectares. An agricultural household has been defined as a household receiving more than Rs 4,000 as value of produce from agriculture and allied activities with at least one member engaged primarily in farm activities in a year. 

With only 0.2 per cent of the rural households having more than 10 hectares of land, it belies the narrative being drummed up accusing the farm protests to be the work of big farmers.  

Big or small, the denial of rightful income to farmers’ goes well with the policy thrust being exercised by successive governments over the past few decades to push people out of agriculture. Following the World Bank/IMF emphasis on shifting population from rural areas, also resonating with the dominant economic thinking that increasing urbanisation pace will lead to faster economic growth, keeping agriculture deliberately impoverished creates conditions for farmers to abandon farming and move out. I will not be surprised if the findings of the SAS 2018-19 are used by mainline economists to call for policy changes to hasten the process of urban migration. 

This has to be reversed. While India’s foodgrain production has hit a record 308.65 million tonnes in 2020-21, with production increasing year after year, farm incomes certainly have been on a downward spiral. Take a look at the Producer Subsidy Estimate prepared by the Organisation for Economic Cooperation and Development (OECD) for the 20 year period, from 2000-02 to 2018-20. It tells us that India along with Vietnam and Argentina, are the three countries that are negatively taxing their farmers. In terms of percentage of gross farm receipts, India is taxing its farmers approximately to the tune of minus five percent. 

Farmers are aware that the central laws the government is promising will further exacerbate the agrarian crisis. What they are asking for is a rethinking in farm income policies, whereby farming, without non-farm wages to supplement farm income, becomes an economically-viable enterprise on its own. #

Source: All pain, no gain for farmers. The Tribune. Sept 15, 2021 https://www.tribuneindia.com/news/comment/all-pain-no-gain-for-farmers-311197

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