Showing posts with label Punjab. Show all posts
Showing posts with label Punjab. Show all posts

Thursday, January 6, 2022

Why freebies at the time of elections?


Image courtesy: Economic Times 

Suddenly it looks as if the sky has opened up. It is raining freebies.

It happens every five years. Six months before the State Assembly elections (and for that matter the General elections) political leaders open the purse. Cutting across party lines, and with the kind of promises they make, it looks as if they are ready to perform the magical trick – to take a rabbit out of the hat for you if they win elections. Not their hat of course, for they have learnt the art of seducing the voters with public money.

How much the promise of Rs 15-lakh in your bank accounts must have swayed the 2014 election result in favour of BJP is for the experts to work out but there is no denying that all kinds of electoral promises that are thrown at voters as allurements obviously do work. Otherwise I see no reason why would politicians try to excel each other in make tall promises before elections knowing well they would not be held accountable once they are voted to power. All you need is to be a little more imaginative when making a promise, to ensure that you are able to tickle the voter’s nerve.

At a time when the youth in Punjab seems to be in a great hurry to settle abroad, I thought the political leadership would be trying their best to check the brain drain by creating economic conditions that meet their aspirations back home. But political parties on the other hand are actually in a race to facilitate their exit. Knowing well that several studies have shown that roughly 1.5-lakh students leave Punjab every year for studies abroad, and find ways to settle there, political parties it seems are not even remotely concerned at stemming this dangerous tide. After all, at this rate, many believe that in the years to come Punjab will be bereft of its enterprising youth, with the brightest of the lot having already migrated abroad.   

Instead, the two major political parties are providing sops that would make it relatively easy for students to migrate. Ahead of the State Assembly polls, Punjab Chief Minister Charanjit Singh Channi has announced interest-free loans to students for going abroad, along with free coaching for IELTS, TOEFL and PTE exams. Earlier in August, president of Shriomani Akali Dal (SAD) and a former Deputy Chief Minister, Sukhbir Singh Badal, had announced an interest-free loan package of Rs 10-lakh for students that would also cover the coaching expenses for IELTS courses that enable students to study abroad.

Given the continuing crisis in farming, and the lack of appropriate employment opportunities, the youth is looking for greener pastures abroad. This is a sad reflection of the failure of successive governments to bring in policies and approaches that could make agriculture a vibrant proposition, that too in a frontline agricultural state, and at the same time provide an effective and functional public health and educational infrastructure. Call it freebies or populism, the fact is that because the government fail to work for the people when they are in power, these kinds of temptations are thrown at them during the electioneering phase.    

In what appears to be a competition of sorts, first the Aam Aadmi Party (APP) promised Rs 1,000 per month for women (not only in Punjab but also in Goa and Uttarakhand) along with 300 units of free power for every household, and this was followed by a promise of doubling this amount to Rs 2,000 per month by the Congress party head, Navjot Singh Sidhu. In a timely editorial: No Freebie lunch, Times of India has also listed other promises including a financial assistance of Rs 5,000 to Rs 20,000 for girl children in Classes 5 to 12, free e-scooter for girl college students in Punjab. For Uttar Pradesh, BJP has promised Rs 1,100 for primary school students for buying school stuff, and Rs 2,000 to 1-lakh girl students. Congress general secretary Priyanka Gandhi has promised smart phones and e-scooty to girl students if voted to power.

The freebies list is quite long.      

In the 2017 State Assembly elections, the former Chief Minister Capt Amarinder Singh for instance had proposed to waive off all outstanding farm loans saying: Karza kurki khatam, Fasal di puri rakam (waiving off of farm debt, outlawing land auctioning and dispassion; and time-bound procurement of grains at MSP). Although only about Rs 4.600-crore of farm debt has been waived off since then, against an estimated Rs 80,000-core plus outstanding, I only wish he had instead of making a half-hearted promise set in a process of rebuilding agriculture. If Punjab had managed to resurrect agriculture, by initiating crop diversification and moving away from intensive farming to agro-ecological farming systems, it would have brought out the government’s intent to help improve agriculture and restore environmental health.

Why only Punjab, I have never understood why State governments are reluctant to set up a commission for farmers income and welfare. Why can’t the State governments make an effort to ensure an economically-viable farm livelihood by taking steps that are within their reach? For instance, why can’t State governments on their own entrust Agriculture Universities and Departments of Agriculture to prepare an Ease of Doing Farming index? Most problems farmers are faced with are linked to governance failure, and this is something the State’s should address. Why wait for directions from the World Bank to start such an exercise.   

This is primarily because when in power the government’s focus invariably shifts to corporate. Whether at the Centre or in the States, economics only means providing sops, tax concessions and stimulus packages to companies. Whenever there is an effort to provide financial assistance and support to the poor including farmers, a dominant section of the media tries to run it down as populism. Popular leaders succumb to media pressure (and also from mainline economists who say the same), and encourage policies that feature on the failed concept of ‘trickle down’. More sops and that includes huge tax cuts for corporate is seen as a sign of economic growth, as it is generally believed to ‘trickle down’ to the poor at a later stage. But it hasn’t. As a study by London School of Economics shows that 50 years of tax cuts for the rich have failed to ‘trickle down’. It has only helped the rich amass wealth.

If only when in power, the political leadership instead of only aiding the companies also makes a sincere effort to uplift the people at the bottom and the middle rung, there would be no need to shower freebies at the time of elections. What some people term as ‘populism’ actually constitutes what real economics should be. If you deprive people of what they really need, you will have to throw allurements at them. This can only be stopped if political masters try to follow what economist E A Schumacher had conveyed through his seminal work Small is beautiful–- treat economics as if people matter. #

Source: Only uplifting people at the bottom can stop politics of freebies in India. Bizz Buzz. Jan 7, 2022. https://www.thehansindia.com/business/only-uplifting-people-at-the-bottom-can-stop-freebies-politics-in-india-723860


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Friday, September 10, 2021

Time ripe for farmers to take the next leap -- enter active politics.


Political party leaders line up to meet protesting farmer's leaders in Chandigarh. 

Pic courtesy- Scroll.in 

The massive show of strength at the Muzaffarnagar Kisan Mahapanchayat on Sunday (Sept 5) has brought back the pressure on the Government to repeal the contentious central farm laws. Nine months after protesting farmers began demonstrating at the borders of New Delhi, the record-breaking turnout at the Uttar Pradesh rally will surely act as a booster dose.

That the mega event will have socio-political fallout with a message for unity among various caste configurations being seen as a tilting factor in the forthcoming elections to the Uttar Pradesh Assembly in February-March 2022, it also signals a renewed resolve by protesting farmers to take the battle pan-India against what they perceive as a policy shift towards a ‘corporate take-over of agriculture’.  

The unprecedented distress that prevails in agriculture, and the ill-effects of leaving farmers and farming in the hands of private markets, is what infuriates the Sanyukt Kisan Morcha (SKM) leading the farmers’ protests. Frustrated at the prolonged stalemate in negotiations, with no deliberations taking place since the fag end of January, SKM has shifted the focus of the agitation to severely impact where it matters most – electoral outcomes. Considering that Uttar Pradesh is where the political fortunes are written and rewritten, the call is for the rural communities to vote against the ruling dispensation. 

Whether it upsets the BJP’s winning calculations in the forthcoming elections only time will tell. But the call for ‘Mission Uttar Pradesh’ and ‘Mission Uttarakhand’ – since both the states are going to elections, along with Punjab – is sure to create fears of poll prospects going awry. Howsoever be a defiant public stand, this is something no political party will like to take chances with, and that is what makes protesting farmers hopeful. Nevertheless, building pressure in a peaceful manner is what matters in a democracy, and farmers are only beginning to learn to flex their political muscles.

After all, with nearly 50 per cent of the country’s population engaged in farming, the growing realisation among farmers that they alone constitute the largest political constituency, if at all it happens to make a dent, will certainly impact the political future of the country. While many believe that farmers should remain apolitical, and for obvious reasons, I feel the time is ripe for farmers to go political. Unless they control decision making, farmers will always be treated as a vote bank. This has to change. 

And this change in thinking, where farmers emerge at the centre stage of the economic growth design, can only happen when farmers themselves will redesign the economic paradigm. Despite all the pre-poll claims and promises, political parties of all hues have actually failed to reverse the economic design – that actually sucks income from the bottom of the pyramid to the top – so as to ensure that the benefits of growth reaches the farmers and farm workers, and in turn revitalises the rural economy. Farmers are considered to be burden on the society, and all efforts are to offload the burden as quickly as possible. Farm incomes and rural wages have been deliberately kept low so as to increase urban migration. 

In addition to the call to withdraw the central laws, the demand to make the Minimum Support Price (MSP) a legal tight for farmers, meaning that no trading be allowed below that price range, has to be seen as a corrective measure emancipating farmers from the clutches of a ‘farm-to-fork’ value chain design that actually ends up exploiting the farming community. Let me explain. The $210-billion confectionary industry, of which chocolate is a dominant segment, is often talked about as an illustrious example of how profitable a food value chain can be. 

But what is not talked about is how the market-drive model that has brought huge profits to the chocolate industry actually is based on exploiting the small cocoa farmers. According to the biennial Cocoa Barometer 2020 study, a majority of the cocoa farmers in Western Africa have been driven to acute poverty with the average daily income being just around $ 1.30 (Rs 100). Imagine the economic gains for the cocoa growers, and the vibrant livelihoods it would have created, if only the chocolate industry was made to provide the cocoa growers with a guaranteed MSP. Economist and policy makers can go on harping on the need to enhance competition to deliver a better price. But let us not forget that several multi-nationals are in the chocolate business, and all the marketing principles they claim to have been applied have failed to pull the primary growers out of abject poverty.  

Similarly, the need to ensure a guaranteed price for other food crops is also an economic necessity. Considering that nowhere in the world have free markets helped prop up farm incomes, a point I have repeatedly made, what the protesting farmers are therefore demanding actually has international ramifications. All the catchy phrases used to justify the need to push robust private markets in the name of enhancing competition, improving efficiency leading to price discovery have failed to translate into higher incomes for farmers. 

To reverse this economic design, which is biased against the primary producer, the need is for the farmers to take another step towards the political centre stage. Although, it requires a serious campaign to educate a heterogeneous farming population, divided deeply in caste considerations and religious and political ideologies, to emerge out of the vote bank mindset, but I think the challenge is worth taking. Intervening in the forthcoming assembly elections may be the first step, but I feel at some stage in the immediate near future the farmers must take a direct leap into active politics. 

After all, how long can farmers go on protesting on the streets, facing water cannons and lathi-charge at times, for seeking economic parity? #

Source: Time ripe for farmers to go political. Bizz Buzz. Sept 10, 2021. https://epaper.bizzbuzz.news/Home/ShareArticle?OrgId=109ba21be5a&imageview=0


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Sunday, June 14, 2020

Best reforms would be if the APMC mandi network is expanded


Pic courtesy: Indian Express

The year was 2006. There was excitement in the air. Throwing out the Agricultural Produce Market Committee (APMC) Act, Bihar had undertaken futuristic agricultural market reforms. With no mandis coming in the way, sarkarieconomists and policy makers were exuberant at the immense possibilities of providing more income into the hands of the farming community thereby turning Bihar into a land of prosperity.

In the absence of regulated mandis, economists had predicted a lot of private investments to flow in thereby helping in the setting up of modern private market yards and purchase centres. Since there would be no APMC mandis there would also be no Minimum Support Price (MSP), which means private players would be able to give farmers a higher price. That is what was said at that time.  

Fourteen years later, Bihar still leads the pack of States that form the BIMARU States. There is hardly a year when unscrupulous traders have not transported truck loads of wheat and paddy to be sold in Punjab and Haryana mandis. The reason why traders found it economical to transport wheat and paddy all the way from Bihar was primarily because the prices private trade offered back home was much less. Against a procurement price of wheat at Rs 1,925 per quintal this year, wheat farmers in Bihar were not getting more than Rs 1,500 to 1,600. No wonder, while Punjab and Haryana farmers have gained from the delivery of MSP year after year, farmers in Bihar continued to suffer. The argument that Bihar farmers could sell to anyone, anywhere within the State failed to pull them out of poverty.

There are two ways of looking at this. First, in the absence of an assured MSP being given to farmers year after year, the average income of a rural household in Bihar remains low at Rs 7,175 per month. Compare this with the average in Punjab, which according to a study by NABARD stands at Rs 23,133 per household. Much of it is because of a higher price realisation from the MSP system. This year alone for the wheat harvesting season, Punjab farmers received a total of Rs 26,000-crore by way of wheat MSP. This has bolstered the rural economy of Punjab. Secondly, a majority of the lakhs of migrant workers who underwent the trauma of walking home or cycling home, or travelled by buses and trains to return home, comprised workers from Bihar. Imagine if instead of dismantling APMC mandis Bihar had in turn laid a strong network of mandisand village roads like in Punjab, perhaps the number of migrants from Bihar would have been far less. If agriculture was profitable in Bihar I see no reason why rural population from Bihar would have migrated in such a big proportion.

The Bihar experiment with agricultural market reforms has failed. If the APMC mandis are gradually dismantled in Punjab, and government subsequently withdraws from procuring wheat and paddy at MSP, will Punjab farmers also become like Bihar farmers? Although Agriculture Minister, Narender Singh Tomar, has clearly said that the series of reforms being introduced through the three Ordinances will not touch MSP and APMC mandis, senior Cabinet Minister Nitin Gadkari has said that MSP is higher than domestic market prices as well as international prices, and the government will need to find a viable solution. This is exactly what the CII and FICCI have been demanding for several years now.

Even though the Minister for Agriculture has said that the government does not intend to dilute the provisions of MSP, the fact that the despite the claims government has in reality come up with ‘One Country, Two Markets’ system whereby traders and private players buying outside the APMC market yards will not have to pay any tax whereas those trading inside the premises will pay 3 per cent manditax and 3 per cent towards rural development fund (total of 6 per cent in Punjab) actually is discriminatory against the APMC network. As the Chamber of Association of Maharashtra and Trade (CMIAT) has said that in the absence of a level-playing field, the APMC mandiswill gradually become redundant over a period of time. This is something that Punjab and Haryana, with a robust APMC mandinetwork, have to be worried about.

Further, let us not forget that a few months back citing the recommendation of the Commission for Agricultural Costs and Prices (CACP) the Prime Minister Office had written to the Punjab government asking why should the open-ended procurement of wheat and rice not be discontinued, which means the government is keen to reduce procurement thereby also reducing the outgo on MSP. The Chief Economic Advisor had recently called for restricting food procurement for only 20 per cent population as compared to providing rations for 67 per cent population under the National Food Security Act. Reducing procurement automatically means reducing the payment of MSP to farmers.

Over the past few decades, Punjab has built a strong network of APMC mandis. With roughly 1,840 mandis, sub yards and purchase centres spread across the state, along with 70,000 kms of village roads, the vast agricultural marketing infrastructure is certainly neighbour’s envy. Instead of opening these mandis to private competition, the challenge should be to set up private market yards in Bihar, Uttar Pradesh and other deficit areas. In 2019, only 3,000 tonnes was procured in Bihar, and in Uttar Pradesh only 7 per cent procurement is undertaken. In Punjab, 128-lakh tonnes of wheat have been procured this season.

In any case, Shanta Kumar Committee tells us that only 6 per cent farmers across the country get the benefit of MSP. In other words, 94 per cent farmers are dependent on the markets. If markets were so efficient, I see no reason why agriculture distress should be so huge. If markets were so efficient farmers wouldn’t have been demanding a higher MSP and also seek more crops to be included under the MSP regime. Considering that India has only about 7,000 APMC mandis, the best reforms would be if the APMC mandinetwork is expanded to 42,000 mandiswith the aim to provide a marketing platform in every 5 kms radius. At the same time, trading should be mandatory on the MSP announced. Even in eNAM mandis MSP should become the modal price. This is the reform that the country’s farmers need.  # 

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Saturday, February 15, 2020

Stubble Burning: Examining Possible Policy Interventions




A few Days before Diwali, New Delhi had been left choking with polluted air, foul and poisonous, leading to a health emergency. If air pollution during the three weeks period around Diwali in 2017 was bad, 2019 was still worse. The spike in air pollution, measured through the worsening air quality index (AQI) was blamed on the burning of paddy stubbles in the fields of north India. There is no denying that paddy harvesting season in Punjab, Haryana and parts of western Uttar Pradesh does aggravate the bad air quality in New Delhi and also causes severe air pollution in the
Indo-Gangetic plains itself but a continuous media howl had projected farmers as the culprit, as if they were doing it deliberately.

Facing flak from various agencies, including the National Green Tribunal (NGT), a large number of farmers indulging in burning the stubble left in the fields were hounded, imposed with fines , threatened with withdrawal of subsidies, and First Information Reports (FIRs) lodged against them. Treating the fire incidents as cognisable offence, farmers have been treated like petty criminals. While state governments were using satellite data to pin down farmers who resorted to crop residue burning, there is no denying that a lot of initiatives were taken by farmers, including mulching and composting, in an effort to look for alternatives. The Prime
Minister himself had mentioned in his radio talk Mann ki baat on 28 October, 2018 at least two initiatives by Punjab farmers who had vowed not to resort to stubble burning. But a large section of farmers had remained defiant, more so as
an expression of indignation, at the refusal of the policy makers to understand the difficulties they faced. 

Knowing that coercive methods against farmers will not work, and realising that farmers have little choice but to put the paddy stubbles on fire given the short window before the wheat sowing season begins, the Punjab Chief Minister Captain Amarinder Singh had written to the Prime Minister seeking an incentive of Rs 100 per quintal to be given to farmers, which comes to roughly Rs 2,500 per acre, so as to offset the additional cost that farmers are expected to incur to manage the paddy stubbles without resorting to flaming. 2017 was the third year in a row when the Punjab Chief Minister had literally pleaded for an incentive to be given to farmers to stamp-out stubble burning. While his plea was summarily turned down, a senior official of the Ministry of Agriculture had even told the NGT in October that the government was not at all considering any incentive to be provided to farmers. It clearly showed that the thrust to control stubble burning was not on directly engaging farmers but more on pushing machine as the answer. 

Citing lack of resources, not only the Chief Minister’s request for an economic stimulus package of Rs 2,000-crore, but a joint proposal two years back by Niti Aayog and Confederation of Indian Industry (CII) seeking Rs 3,000-crore to tide over the air pollution crisis emanating from burning of paddy straw was also turned down. It becomes pertinent to mention here that in 2017, Rs. 3000 crore was required by Punjab, Haryana, Rajasthan and UP to combat the air pollution problem out of which Rs. 1500 crore was needed by Punjab alone. But the requirement could not be fulfilled as both the central and the state governments said that there was lack of funds. If only the government had put on hold the one  per cent increase in dearness allowance (DA) for employees in 2017, and diverted the resources to find an amicable solution for in situ management of paddy stubble, probably New Delhi would have escaped the fury of deadly smog in 2019. This would have also brought relief to people living in the farming belt of northwest region.

If only wiser sense had prevailed in 2019 and the Centre had allocated
Rs 3,000-crores from the prescribed outlay of Rs 16,000-crore for DA installment announced before Diwali to tackle stubble burning, New Delhi would have been saved from  substantial healthcare costs. More so at a time when farmer unions had been demanding an incentive of Rs 200 per quintal to cover the cost of managing paddy stubbles without burning, and had promised not to put the paddy straw on fire, there appears to be no plausible reason for denying them the stimulus. Instead, farmers were chased, and FIRs filed against them.

A few weeks ago, the Supreme Court saw merit in the argument and directed the
Punjab, Haryana and UP governments to provide a bonus of Rs 100 per quintal to paddy growers. Coming a little late in the season, when almost 90 per cent of the standing crop had been harvested, the Supreme Court’s directive has not  had any visible impact. The damage in 2019 had already been done. But if implemented in the right earnest, after careful strategic planning and scrutiny, the incentive that Supreme Court has provided for the farmers can truly serve as the motivating factor to put an end to stubble burning in future. Let the farmer use manual labour or machines or a combination of both to clear the stubble. A beginning can be made by first withdrawing the FIRs filed against farmers to build up their confidence, and then engage with them to find ways and means to successfully dispose the huge biomass generated.

Farmers do realise that putting the crop fields on fire is first and foremost bad for the health of their families, understand its ill-effects on soil microbial structure and the environment, but find it uneconomical to take care of the paddy stubble. After the paddy has been harvested by Combine Harvesters and the grain taken to the mandis, clearing the field for the next sowing of wheat or potato, all in a short period of two to three weeks, adds to the farmer’s input costs. With or without straw management machines, what has not been acknowledged is that there is an additional cost which farmers have to incur. Considering that farm incomes are very low, and agriculture is already in the throes of a severe crisis, putting the harvested fields on fire is therefore the cheapest and easiest way of clearing the crop fields. Knowing the tremendous role farmers play in producing food for the country, here was an opportunity for the society, government and the private sector to come together and
find a workable solution. 

Let us not forget, Punjab alone produces more than 20-million tonnes of paddy straw every year and it is not that easy to manage the huge volume generated. The only possible way to manage the huge biomass is to work with farmers. Considering that Punjab has 10.78 Lakhs active MNREGA job cards, here was an opportunity to use farm labour judiciously in combating the crisis. To address the recurring problem, agricultural scientists and farm officials had suggested a set of machines as a‘fitting solution' to curb stubble burning. In the past two years, more than 50,000 crop residue management machines have been made available to farmers in Punjab at 50 per cent subsidy if purchased individually, or at 80 per cent subsidy for cooperative societies or farm clubs. Of the nearly Rs 1,152-crores allocated as subsidy for machines in the northwest region by the Centre for, about Rs 669-crores have been spent by Punjab on subsidising the machines in the past two years. Machines like Happy Seeder, chopper, cutter, mulcher, mould board plough, shrub cutter etc., in addition to making it compulsory for combine harvester machines to come attached with super straw management equipment that will cut and spread the biomass in the field. For machines, which are used barely for a few days during the season, farmers find it uneconomical to spend an astronomical amount initially and then see these machines lying idle for the rest of the year.

Already, in Punjab there are about 4.5-lakh. Tractors against the requirement of 1-lakh tractors. In addition, there are numerous other machines, including heavy machinery, that are used on the farm. The addition of a newer set of machines to manage paddy crop residue will certainly lead to over-mechanisation, which is increasingly being seen as a significant factor behind agrarian distress. The way the machines were pushed, with the government more than willing to provide subsidy, stubble burning seems to have come as a bonanza for farm equipment manufacturers. The lobbies had worked overtime, with many newspapers suggesting that these machines should be made available at 90 per cent subsidy to individual farmers. At this suggested rate of mechanisation, many fear that Punjab will sooner than later turn into a junkyard for farm machinery.

Instead of dwelling into a blame game, and building up a public hysteria against farmers, the effort should be to first understand and ascertain the root cause that has led to the crisis. The intensive wheat-paddy crop rotation that Punjab was pushed into was based on a calculated decision taken by policy makers at a time when India was living in “ship-to-mouth" existence, when food would come directly from the ship into the hungry mouths. After the remarkable turnaround in wheat production,
following the planting of dwarf wheat varieties in the mid-1960s, rice was added to the crop rotation. Punjab was traditionally not a paddy growing area, but the country needed to be food secure. With assured prices by way of a minimum support price (MSP) to farmers and an assured procurement system wherein the Food Corporation of India (FCI) was set up to mop the huge crop harvest, Punjab (including regions that now form Haryana) became the food bowl of the country.

Over the years, as wheat-rice crop rotation stabilised, efforts were to push for increased crop productivity. The resulting second-generation environmental impacts, essentially from depletion of soil nutrients from an exhaustive crop rotation, and the fall in groundwater table at an alarming rate, became clearly visible in the early 1980s. The policy response was to diversify the cropping pattern, moving away from water guzzling paddy to other crops, including maize. Two reports on crop
diversification by the noted economist Dr S S Johl had spelled out a number of measures to diversify the cropping pattern. Punjab did try for pushing in sunflower and maize to replace paddy, but in a half-hearted manner, and the experiments failed. 

Unless there was a guaranteed price and added procurement benefits farmers found it unreasonable to make a shift from paddy, and rightly so. Although the MSP for paddy (and for that matter any other crop) does not even cover the cost of production, farmers still prefer to grow paddy as the minimum price announced is at least guaranteed. At the same time, while a lot of blame is being shifted to the policy of providing free power in agriculture, the fact remains that with MSP being deliberately kept low to provide cheaper food to consumer, free power was a political answer to partly offset the losses farmers were incurring. Farmer unions
had time and again said that if they were provided with the legitimate output prices there would have been no need for free electricity. In other words, the point that has been completely missed from public debates is that what seems to be a subsidy for farmers was in reality a subsidy for consumers.

Free electricity certainly led to an increased withdrawal of ground water. With 5,337 litres of water required to produce one kilogram of rice, Punjab is literally mining ground water. But then farmers cannot be blamed entirely (some savings could have been made) for pulling out precious groundwater. They did what was expected from them to increase production. For the state government, knowing that water table was getting depleted, one plausible policy response to reduce over exploitation of groundwater was to do away with the short duration sathi crop, cultivated in April-May, and to delay the sowing of paddy. In view of the urgent need to save water, it enacted the Punjab Preservation of Subsoil Water Act 2009, which shifted the date of paddy transplanting from June 1 to June 20 (and after the Congress government was sworn in, it was advanced to June 13). The shift in paddy transplanting by a fortnight surely delayed the harvest, which meant that stubble burning coincided with the period when movement of air over Delhi NCR remains subdued.

The delay in transplanting paddy therefore came in for a lot of criticism. But as a senior Punjab government official explained, a delay in transplanting by seven days saves 1,000 billion litres of water. In other words, the delay in transplanting by roughly a fortnight – by shifting transplanting period from June 1 to June 13 -- would save Punjab 2,000 billion litres of water. Considering the studies that say Punjab will run out of water in another 25 years, any effort to save ground water should be lauded. This assumes importance given the findings of a study by Centre for International Projects Trust (CIPT), a non-profit backed by the Colombia University, which has on the basis of elaborate simulation studies, concluded that crop diversification may not eventually help in checking the groundwater balance. The shift to maize, which is considered to be less water-guzzling, may therefore not make much of a difference to ground water balance eventually but because it doesn’t leave any stubble to be burnt may still be a better option. But this has to be accompanied with a guaranteed price support system supported by the Centre. 

To say at a time when India ranks 102 in the Global Hunger Index spanning 117 countries, that paddy production is in surplus and the granaries are overflowing is a reflection on gross food (mis)management. When the country needed food, farmers were applauded for turning the country self-sufficient. They were the country’s heroes. Instead of painting them now as villains and blaming them squarely for the unmanageable food surpluses as well as the resulting environmental damages, the need is to examine where and how policies went wrong, and what appropriate policy corrections could have been made. 

Policy makers will now have to visualise the kind of policy mix required in the short-term, medium-term and beyond. While shifting from paddy cultivation may take some time, the immediate focus should be on how to curtail stubble burning. With Punjab agreeing to provide farmers with an incentive of Rs 2,500 per acre for in situ management of paddy stubble, and hoping that Haryana and Uttar Pradesh will follow suit, stamping out crop residue burning will require combination of approaches, including looking for alternatives like power generation. But more importantly, knowing the ill-will that has been generated over the years, it will require deft handling involving the farming community, various stake holders and more importantly the society at large. The bigger question however is whether the Centre and the State governments are willing to take on priority the urgent need to reduce stubble burning. #

Source: Curbing Stubble Burning: Examining Possible Policy Interventions. Economic & Political Weekly, Vol. 55, Issue No. 7, 15 Feb, 2020



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Friday, March 15, 2019

Punjab agriculture is crying for a change




Presenting this year’s budget, Punjab Finance Minister Manpreet Badal sounded an ominous warning. Not that it wasn’t known earlier but coming from him was yet again an official acknowledgement of a worrisome futuristic scenario that is fast pushing the frontline agricultural state towards desertification and an impending ecological disaster. “76 per cent of the assessed blocks are over-exploited and the estimated ground water availability for future irrigation use is negative.”

The warning had been sounded earlier. The two reports on crop diversification in 1986 and 2002, authored by the eminent agricultural economist Dr S S Johl, were essentially in response to the depleting ground water situation. I remember Dr Johl many a times making a very strong point as to how Punjab ends up virtually exporting water when it transports surplus wheat and paddy every year to the deficit areas. Later, in 2009, the observations of NASA’s Gravity Recovery and Climate Experiment (GRACE) satellite data showed an equally worrisome trend. “We don’t know the absolute volume of water in the Northern Indian aquifers, but GRACE provides strong evidence that current rates of water extraction are not sustainable, hydrologist Matt Rodell of NASA was quoted as saying. Subsequently, a number of international and even national studies by the Indian Council of Agricultural Research, Central Ground Water Board and even the Punjab Agricultural University, among others, have pointed to a grim future ahead. 

Chief Minister Amarinder Singh too has been very concerned at the depleting water resources. Speaking in the Vidhan Sabha, he sounded a poignant note when he said that the state has run out of all options and there was an urgency required to tackle the water crisis, which may include changing the cropping pattern, going in for crop diversification and so on. But after all these warnings, if the Finance Minster simply ends up reiterating the government’s resolve to address the problem of groundwater depletion using the common popular jargons like judicious, sustainable and equitable use to manage water availability and eventually informed that the government is in dialogue with the World Bank to find a workable solution, clearly showed the lack of political courage to take the bull by the horn.

Like the previous governments, the present Congress regime too has shied away from initiating any significant step to move away from water guzzling crops, primarily paddy, lest it upsets the predominant vote bank. Interestingly, almost at the same time the budget session was in progress, the Coordinator of the All India Kisan Coordination Committee, Yudhvir Singh, while addressing a series of meetings organised by the Bhartiya Kisan Union (Lakhowal) was asking farmers to shift not only from paddy cultivation to restore ground water but also move away from intensive farming to agro-ecological practices. He wanted them to devote at least one acre out of the total land area they have to non-chemical agriculture. In fact, he made an impassionate plea urging farmers to reduce crop output. “Your problem is you produce more. If you were to reduce production by 10 per cent on an average, you’ll get a better price for your crop harvest and also save on chemical inputs.”

With 98 per cent assured irrigation, and having the highest crop productivity in wheat, rice and maize – the cereal crops – Punjab has the dubious distinction of turning into a hotbed of farmer suicide. With over 16,600 farm suicides, including farm labourers, documented in a house-to-house survey between the year 2000 and 2017 by the three public sector universities – Punjab Agricultural University, Ludhiana; Punjabi University, Patiala; and the Guru Nanak Dev University, Amritsar, there was ample evidence to relook at the intensive farming model that the state had adopted. World Bank had played a crucial role in pushing the intensive and exhaustive farming model, and to expect the same institution to help in improving the management of its scarce resources clearly showed that the state had not learnt any lessons and was not willing to change.

Albert Einstein had once said: “We cannot solve problems by using the same kind of thinking we used when we created them.” I have always maintained that we cannot ask the same people who were in a way responsible for the crisis, to provide solutions. First and foremost, the time is appropriate to move away from intensive farming, which has triggered massive environmental degradation and has brought the food bowl onto the edge of sustainability. The impending ecological disaster will not be addressed by changing the cropping pattern. A recent study by the Centers for International Projects Trust (CIPT), a Columbia University initiative, has after a detailed study on water budgeting shown that crop diversification will not make much of a difference in ultimate water balance.

What Punjab needs in fact is a change in farming systems. It is time the Punjab government does a complete rethink of the integrated farming systems that needs to be evolved, if it is serious in protecting its future. If Andhra Pradesh (AP) can launch Zero Budget Natural Farming with the aim to convert all its 60-lakh farmers to non-chemical agriculture by the years 2024, I see no reason why Punjab cannot at least initiative agro-ecological methods of farming for the marginal and small farmers to begin with. Considering that every third farmer in Punjab is below the poverty line, this is the community that needs immediate hand holding. Instead of pushing more machines and more chemicals into farming, using the Rs 6,000 per year direct income support allocated under the PM-Kisan scheme, Punjab should supplement with its own contribution and like AP provide at least Rs 15,000 per year. This package should be linked to agro-ecological farming systems. In Karnataka, for instance a direct income support of Rs 10,000 per year is announced for farmers cultivating millet crops.

In Chhattisgarh, instead of going in for increasing crop productivity to emerge out of the prevailing farm crisis, the new Congress government, has incorporated the traditional “Narwa (water), Garuwa (livestock), Ghurawa (compost/biofertiliser), and Baadi (backyard cultivation)” in an interesting agro-ecological approach to be accomplished at panchayat level. These are just a couple of examples to show there exists a way out provided the state government is willing. After all, extraordinary problems need extraordinary solutions. More of the same will only acerbate the crisis.

Punjab agriculture is in fact crying for change. A change that will save it from the impending ecological disaster that Manpreet Badal warned about. It has to begin with reframing and redesigning the farming systems. But this will be strongly resisted by a powerful cartel that exists -- among politicians, bureaucrats, agricultural scientists, and economists – who will call for business as usual. Unless the Chief Minister can break through that cordon, Punjab will continue to suffer. #

Review farming methods to tackle water crisis. The Tribune. Mar 14, 2019

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Tuesday, February 26, 2019

The noose of blank cheques around farmers neck




Gurpreet Singh is a small farmer from Kishangarh village in Moga district of Punjab. He owns 3.5 acres of land and had defaulted in repaying an instalment on a Rs 5.6-lakh crop loan that he had taken from State Bank of India (SBI). A year ago, he was sentenced to two years rigorous imprisonment for two years. His fault, he had failed to make repayment as per the schedule. “As I had an SBI account, they took blank cheques from me,” he told the Indian Express.

Gurpreet Singh is among thousands of farmers who have been served legal notices under Section 138 of the Negotiable Instrument Act, 1881. Hundreds of them have served jail terms over the years and numerous others are on bail and await trial. In all cases, the modus operandi is the same. Banks take blank cheques from farmers at the time when they seek loans, and fill in the amount due when it becomes apparent that farmer is unable to repay an instalment, and file for a criminal case. What should otherwise be a civil case thereby turns into a criminal offence, which I think is patently wrong. “Almost 99 per cent farmers’ who draw loans from the banks, whether private, cooperative or nationalised, and fail to pay back face this ordeal, “says Bharti Kisan Union (Ugrahan) leader Sukhdev Singh Kokrikalan.

Seven farmer unions had joined hands against the unsavoury practice by banks of using blank cheques to recover the unpaid dues. “These days, banks are taking triple securities from farmers – pledging of land, signing by a guarantor and blank/post-dated cheques, “Buta Singh Burjgill, president of the BKU (Dakunda) faction was quoted in a newspaper. While numerous reports have appeared from Haryana, Uttar Pradesh, Rajasthan and Madhya Pradesh of public auction of farm lands or tractors mortgaged with the banks, it is invariably the blank cheques that land more and more defaulting farmers behind bars in Punjab. This is primarily because Punjab has banned auction of mortgaged land or ‘kurki. Even this is denied by farmers who say that ‘kurki’ orders are issued frequently but it’s only because of pressure from farm unions that auctions are not allowed.

Now compare this with Mudra loans. Minister of State for Finance Shiv Pratap Shukla informed Parliament that loans worth Rs 7,277.31-crore of public sector banks till March 2018 under the Pradhan Mantri Mudra Yojna (PMMY) had turned bad. Subsequently, an RTI revealed that Rs 11,000-crore of Mudra loans belonging to 13.85 lakh account holders had turned into non-performing assets (NPA) till Aug 3, 2018. Interestingly, while the government has set up a Credit Guarantee Fund for Micro Units (CGFMU) which guarantees payments against default in micro loans up to Rs 10 lakh to eligible borrowers, no such provision exists for defaulting farmers. Bad loans of Punjab farmers are in reality far less when compared with Mudra loan defaults.

Strange, while post dated/blank cheques are taken from farmers at the time of applying for bank loans, there is no such condition for Mudra loans. In fact, borrowers don’t need to pay processing charges or offer any collateral. Or else 13.85 lakh borrowers who have defaulted on Mudra loans would have been served legal notices, and hundreds of them would have been behind bars. Therefore the question that arises is why the practice of taking blank cheques at the time of granting a loan only confined to farmers? Is it because given the level of illiteracy and economic depravity, farmer is a soft target?   

Take the case of the new scheme offering loans up to Rs 1-crore within an hour, or 59 minutes to be exact. For the medium, small and micro-enterprises (MSME) an automated, contact-less provision has been enacted for providing loans from Rs 10-lakh to Rs 1-crore. For these loans, collateral is not mandatory considering that these loans are covered with a Credit Guarantee Fund Trust for Micro and Small Enterprises (CGFTMSE).  Again, if the State can act as a guarantee for defaults for MSME business loans, I see no reason why a similar guarantee fund should not be created for farm loans. After all, farmer is an entrepreneur and farming too is a business activity.

Bank’s argument that the practice of obtaining blank cheques serves as a security for farm loans is in fact discriminatory. The high handedness being shown by banks to use the blank cheques from gullible farmers so as to easily convert these civil cases into criminal, defies any logic. Meanwhile, Punjab’s Cooperation Minister Sukhjinder Singh Randhawa, who after prolonged negotiation with agitating farmers and bankers, has assured that banks will withdraw cases and return blank cheques back to farmers owning up to 5 acres of land and loan up to Rs 10-lakh. Roughly about 6,000 small farmers will benefit if the bounced checks are returned back, but protesting farmers want this practice to be withdrawn completely.  

Although banks have promised before the Punjab & Haryana High Court to return blank cheques for the small farmers in a week or so, I don’t see any reason why the practice of drawing blank cheques is not completely dispensed with. Banks cannot be allowed to wilfully exercise a discriminatory policy against farmers. There have been cases when banks have attached farmer’s pension to recover outstanding dues. According to National Crime Record Bureau statistics, 80 percent indebted farmers who committed suicide in 2015 had taken loans from banks and registered microfinance institutions. This defies the common understanding which blames private money lenders for adopting unlawful recovery tools.

Farming is a risky enterprise, which operates under difficult economic as well as climatic conditions. But the dual approach adopted by banks to recover outstanding farm loans from farmers using coercive means, while going soft on massive corporate loan defaults besides other business loans, clearly shows that the credit policy is designed to benefit the rich at the cost of the poor. Let me illustrate. As per a report presented by the Public Accounts Committee of Parliament the total outstanding loans of the public sector banks, termed as NPAs, stood at Rs 6.8 lakh crores in March 2014. Out of this, 70 per cent belonged to the corporates whereas only 1 per cent default was of the farmers. Corporate NPAs presently stand at a whopping 10.3 lakh crores. Did we ever hear of any of the corporate defaulter going to jail for bounced cheques? #

The noose of blank cheques around around farmers. The Tribune. Feb 26, 2019
https://www.tribuneindia.com/news/comment/the-noose-of-blank-cheques-around-farmers/734792.html?fbclid=IwAR3GHTLP6-veVt3aw4klj-eqTIoeZHo8s0aHN99j8YzjEOqfbV0LFZx8HA0
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