After Dec 11, agriculture has been pushed to the center stage of Indian politics. But will it usher in a new renaissance?

The writing was on the wall. The anger that rural Gujarat voters had exhibited in last year’s Gujarat Assembly elections, edging the ruling BJP overwhelmingly in the Saurashtra region, was a clear pointer to the serious agrarian distress that prevails in the hinterland. Failing to keep a tab on the rural pulse, and unable to assuage the growing farmers anger that was spilling on to the streets, the electoral debacle in the predominantly agricultural belt of central Hindi heartland – Madhya Pradesh, Chhattisgarh and Rajasthan – was already scripted.

Interestingly, while Congress romped home riding on the promise of farm loan waiver and a higher procurement price for paddy, K Chandrashekhar Rao in neighbouring Telangana swept the Assembly polls riding the popularity of a direct income support scheme Rythu Bandhu for farmers. Under the novel investment scheme, the first of its kind in the country, land-owning farmers will get a support of Rs 8,000 per year, to be split in two -- Rs 4,000 each for kharif and rabi crop season. Benefitting nearly 58 lakh farmers, Telangana government has made a budgetary provision of Rs 12,000-crore for this scheme for 2018-19. The direct payment amount has since been raised to Rs 10,000 per farmer, and soon thereafter Jharkhand has been quick to follow up by launching a similar scheme providing Rs 5,000 per acre.

The speed at which the newly elected Congress governments in Madhya Pradesh, Chhattisgarh and Rajasthan implemented the farm loan waiver promise clearly shows the political urgency the party felt it needs to accord to agriculture. While Madhya Pradesh has waived outstanding farm loans to a maximum of Rs 2 lakh per farmer, which is expected to cost Rs 35,000-crores, Rajasthan and Chhattisgarh have announced a full loan waiver costing the state exchequer Rs 18,000-crores and Rs 6,100-crores, respectively. More than 8.3 million small and marginal farmers stand to benefit from the loan waiver when fully implemented.

Undeterred by the warnings being issued by economists, bankers and planners saying that farm loan waiver will upset the balance sheets and set in a bad precedence, Congress President Rahul Gandhi has warned “My message to farmers is that this country belongs to you and the Congress and other opposition parties will work together to ask Prime Minister Narendra Modi to write off your loans. We’ll not let him sleep until he waives your loans. If Modi doesn’t act, the Congress will do it 100%.” 

His argument is backed by sound reasoning. After all, when corporate bad loans to the tune of Rs 3.16 lakh crore between April 2014 and April 2018, were written-off, there was no hue and cry from the economists or bankers. Travelling through the rural belt before the elections, angry farmers did confront me at a number of places asking if huge loans of corporate can be written-off why not for farmers. In fact, their anger was specifically directed at former Chief Economic Advisor, Arvind Subramanian, who had gone on record saying that corporate loan write-off leads to economic growth. On the other hand, when farm loan waivers were first announced in Uttar Pradesh after the Yogi Adityanath government was sworn in, former RBI governor Urjit Patel had said that it will upset the national balance sheets and lead or moral hazard.

Nevertheless, the clear electoral verdict in the Hindi heartland has finally brought agriculture to the centre stage of Indian politics. Agriculture has emerged on the top of the political agenda, and the message has gone loud and clear. It is probably for the first time that the electoral verdict has brought in a visibly renewed confidence among the farming community. Rising above the divisive electoral policies that kept them split on the basis on religion, caste and ideologies, they now feel their collective electoral strength. The recent election results have shown them the power to topple governments. This is a major factor that will certainly influence the 2019 general elections.

After all, in a country which roughly has 50 per cent population engaged directly or indirectly in farming, farmers are finally in a position to be a lot more assertive. For over four decades now, real agricultural incomes have remained frozen. A recent OECD study has shown farm incomes have remained static in India for the past two decades. Earlier, an UNCTAD study had shown farm gate prices across the globe, factored against inflation, had remained static between 1985 and 2005. A recent Niti Aayog study has concluded that real farm income had only grown at less than half a percent, 0.44 per cent to be exact, in the five year period between 2011-12 and 2015-16 despite the fact that production had gone up steadily.  

Farmers in reality are being penalised to grow food. Barring a few exceptions, they have been consistently paid less than the cost of production over the years. To maintain food inflation under control, the entire economic burden has been conveniently passed on to farmers. To be born in debt and live in debt all through his life is virtually like living in a hell. Credit pe credit, was the only way to survive, and the debt kept mounting. Such is the economic deprivation that prevails, that even the Economic Survey 2016 stating that the average income of a farming family in 17 states of India or roughly half the country stands at a mere Rs 20,000 per year failed to shock the nation. With policies and economics failing farmers, the emergence of farmers on the political horizon is the only way forward. Only time will tell whether this political turnaround will usher in the new renaissance. #

After Dec 11, farm crisis on top of political agenda. Deccan Herald. Dec 23, 2018

https://www.deccanherald.com/specials/sunday-spotlight/after-dec-11-farm-crisis-top-709477.html

READ MORE - After Dec 11, agriculture has been pushed to the center stage of Indian politics. But will it usher in a new renaissance?

When electoral promises shower, ask where is the money left for agriculture

The only time farmers appear on the economic radar screen of the country is when elections are around the corner. I have seen this happening for nearly 30 years now, and all political parties irrespective of their colour and ideology have been following the same approach. The forthcoming elections in the three major agrarian states of Madhya Pradesh, Rajasthan and Chhattisgarh too follow the same trend, and all political parties are vying with one another to lure the farming community.

In the run up to the 2019 general elections, two demands which have now become central to every protest that happens across the country pertains to writing-off farm loans and the implementation of the government’s own promise of providing Minimum Support Price (MSP) plus 50 per cent profit as per the recommendation of the Swaminathan Commission. While every political party is promising to waive all outstanding farm loans, in reality only a fraction of the bad loans is being written off. Irrespective of the party in power, majority farmers in Uttar Pradesh, Punjab, Maharashtra and Karnataka have been left high and dry. Nor I am expecting all bad loans in agriculture to be waived in the three predominantly agricultural states going to elections.

Coming to the second demand, while there is a definite need to implement the Swaminathan Commission’s pricing formula in letter and spirit, the fact remains that even if the enhanced price was announced accordingly it would benefit only a small percentage of the farming community. As per the Shanta Kumar high-powered committee, only 6 per cent farmers get the benefit of procurement prices. In other words, the MSP plus 50 per cent profit that is being demanded, even if it is implemented, will benefit only those farmers who are already getting procurement prices. What about the remaining 94 per cent farmers who do not have enough marketable surpluses or are deprived of procurement operations because of the lack of adequate infrastructure? In Madhya Pradesh, for instance, there are 94-lakh farming families, and in 2017 wheat harvesting season only 10.5-lakh farmers were able to sell at the procurement price. What about the remaining 83-lakh farming families?

While there is a definite need to implement the Swaminathan Commission’s pricing formula in letter and spirit, a higher price does not help unless every produce the farmer brings to the mandis is officially procured. Chhattisgarh, Madhya Pradesh and Rajasthan have failed to provide adequate procurement and defaulted time and again thereby building farmers’ anger. Even under the newly rolled out PM-AASHA scheme, the government has made it clear that only 25 per cent of the marketable surplus will be procured. What about the remaining 75 per cent? Who will bear the loss a farmer incurs in selling his produce at a lower price in the market?

The debate therefore has to move beyond the two demands. Little effort has been made to understand the economic design that hardly leaves any policy space for farmers. To illustrate, soon after the UP Chief Minister Yogi Adityanath announced the farm loan waiver, Finance Minister Arun Jaitley had made it clear that the States will have to find their own resources for farm loan waivers. But between April 2014 and April 2018 more than Rs 3.16 lakh crore of corporate bad loans have been written-off the Finance Minister never asked any State government to take the burden. While both the industry and farmers take loans from the same banks, the question that should be asked by farmer leaders is why the industry bad loans do not become State’s responsibility? And just like the industry, why doesn’t RBI direct the nationalised banks to waive the outstanding farm debt also? Why pass on the burden to State governments?

At the heart of the problem is the Fiscal Responsibility & Budget Management (FRBM) Act, 2003 that restricts the current annual borrowing limit to 3 per cent of the Gross State Domestic Product (GSDP). Look at the budgetary provisions and it becomes obvious that there is little money left for agriculture. Let me explain. In Chhattisgarh, as per the revised budgetary estimates, 93 per cent of the state’s own revenue goes to pay for salaries, pension liabilities and interest payments. Just salaries and pensions eat away bulk of the budget. In Madhya Pradesh, the figure is 87 per cent and in Rajasthan it hovers around 116 per cent. If such is the huge burden of government salaries and pensions, there is hardly any resource left for the rest of the population, including farmers. If it is not for Centre’s contribution, all that the three State governments in reality are left with is to keep its employees and pensioners happy, who constitute only a fraction of the total population. For instance, in MP, of the 8.1-crore projected population in 2017-18, there are only 7.5-lakh government employees, including 4.50-lakh in permanent employment.

Where is the money left for farm loan waivers and for undertaking procurement operations? Unless the farm movements are able to understand the dynamics of fiscal management, the political parties will continue to get away with hollow promises made in their manifestos. They need to seek details from political party leaders on how the new party, if elected, will be able to find adequate resources for what they promise for agriculture. It has to begin by seeking an amendment to the FRBM Act, 2003, and demanding the setting up of a State Farmers Income Commission, with the mandate to provide every farming family an assured monthly income of Rs 18,000. This entails working out the present average income in each district, and then ensuring the gap with the minimum guaranteed income is paid by income transfer. #  

READ MORE - When electoral promises shower, ask where is the money left for agriculture

Where does a farmer figure in electoral politics?

Courtesy: BBC.com

Superstar Amitabh Bachchan couldn’t believe his ears. On the hot seat in front him on the Kaun Banega Crorepati show sat a small farmer from Maharashtra, farming in 4-acres of land. When asked how much would he be earning in a year, Anant Kumar replied something like this: “Not more than Rs 50 to 60,000 a year, and he spends half of it on buying seed, and can only feed his family one meal ..”

The question was repeated again. After listening to the plight of the annadata, Amitabh Bachchan appealed to the nation to come and help farmers. While I appreciate the concern shown by the legendary film star I wonder what would have been his reaction had he known that Anant Kumar is no exception. What he said is largely true of Indian agriculture. Several studies have shown that more than 58 per cent farmers go to bed hungry every night. Ironically, the people who produce food for the country are sleeping hungry.

According to the Economic Survey 2016, the average income of a farming family in 17 States of India, which means roughly half the country, stands at a paltry Rs 20,000 a year. Niti Aayog tells that for past five years in a row – between 2010 and 2015 – the annual increase in the real income of farmers across the country had remained below half a percent, 0.44 per cent per year to be exact. And for the past 40 years, the income of farmers has remained more or less frozen when adjusted against inflation. Agrarian distress is at its worst.  

Primarily for this reason, farmers’ anger has spilled onto the streets. There is hardly a week when we don’t see a farmers protest in one part of the country or another. According to the National Crime Record Bureau, from 687 protests in 2014, these demonstrations increased to 2,683 in 2015, and then doubled to 4,837 a year later, in 2016. In other words, protests have multiplied 7 times in a period of three years, a clear reflection of the growing farmers’ anger. After the long march from Nashik to Mumbai and the recent Kisan yatra from Haridwar to New Delhi, some more big protests are planned, including a big march of adivasis and landless, the angry farm protests are only multiplying. The large scale farmer protests are an outcome of farmers’ anger over the crash in farm prices for three years in a row.

In the run up to 2019 parliament elections, there are still 5 more assembly elections to go. Among these are States like Madhya Pradesh, Rajasthan and Chhattisgarh, where the rural vote share is very large. These are also the States where farmers’ protests have been quite regular and predominant, with farmers even resorting to stopping vegetable and milk supplies to the urban centres in Maharashtra and Madhya Pradesh leading to gunning down of five farmers in police firing. But while the farmers’ anger is quite clearly visible the bigger question is whether it will force political parties to redefine their electoral agenda, bringing agriculture to be the mainstay of economic growth. Why is it that come elections, and all political parties irrespective of their colour and ideology, swear in the name of farmers promising them all they want? But once the elections are over, farmers disappear from the economic radar screen and are easily left abandoned.

I have seen this happening for at least 30 years now. At every election time, political parties seduce farmers with financial baits luring the farming community to vote for the ruling dispensation. For four years, they wield the stick and in the final year before elections a few carrots are dangled. Even these promises remain unfulfilled. Yogi Adityanath had promised to waive all outstanding loans in Uttar Pradesh but in reality waived a maximum of Rs 1 lakh per small farmer. In Punjab, Capt Amarinder Singh had promised to take on farmers debt and also write-off all loans – including from private banks and the nationalised bank – but when in power he has been able to waive only Rs 900-crore bad loans so far. The total outstanding loans exceed Rs 86,000-crore.  In Maharashtra, the total farm loan waiver has remained around Rs 16,000-crore, less than half of the promised Rs 34,000-crores.

It is true that farmer movements have failed to bring about a change, a change in perceptions and a change in economic policies. They have struggled a lot, but the movements are still struck around two major demands – waiving all farm loans and increasing MSP as per the recommendations of the Swaminathan Commission – which is certainly needed but unless the farm unions are able to study, analyse and articulate as to what all investments and financial support the governments provides to other section of the society and make a comparison, I don’t think it will be easy to drive home the point as to how the agrarian crisis is an outcome of public policy.

Economic policies are designed deliberately to make farming economically unviable. That’s the stick the governments have always applied. Except for a little sop here and there like the introduction of bhavantar bhugtan scheme in Madhya Pradesh or to announce a higher MSP for crops without making any provisions to procure it, no structural changes have come up. The malaise runs much deeper and would require a complete overhaul of policies to bring cheers to the farming sector. . In fact, the way the marking set up is being designed the push is clearly towards bringing in corporate agriculture. On top of it land laws are being conveniently amended to make it easy for the industry to usurp farm land at will. Agriculture in reality is being sacrificed to keep economic reforms alive.

Will the ensuing 2019 elections see a change? I am not sure. Unless of course the farmers realise that enough is enough. They have been driven to the wall and to quite an extent they have no one to blame but themselves. For 70 years, they have been taken for an easy ride by politicians of all colours, from all parties. The day the farmers rise above caste, religion and political ideology and vote as farmers, the political landscape will change. The economic policies will also change the day farmers vote as farmers. #

READ MORE - Where does a farmer figure in electoral politics?