The Indian farm movement has in reality challenged the free market doctrine.

Protesting farmers welcomed back with showering of flowers. 

Pic courtesy: NDTV.com 

Flowers have already been ordered. Ladoos and sweets are being prepared. Celebrations are being planned all the way to welcome back the brave farmers who camped at the borders of New Delhi for over a year, finally returning home victorious.

Farmers are the new heroes. They came; they sat peacefully on protest, and finally forced the powers that be to listen to them. They have left an indelible mark in contemporary history.

Braving all odds, and determined to stay put till their demands are met, protesting farmers have demonstrated the strength of purpose. The courage, the perseverance and the tenacity exhibited by tens of thousands of protesting farmers has ushered in a ray of hope. Standing up against the collective power of the market forces, and that includes mainline economists and credit rating agencies; farmers have shown that all is not lost. Given the grit and resolve, ordinary people not only have the power to democratically reclaim their policy space but also sow the seeds for a new beginning.

With the sudden rollback of the three contentious farm laws, and the acceptance in principle of the need to have a guaranteed Minimum Support Price (MSP) for farmers, the Indian farm movement has in reality challenged the free market doctrine. This wasn’t easy because over the past few decades, with the corporate media blacking out the voices of economic sanity, an overwhelming impression in favour of macroeconomics was created by pushing in the TINA factor – there is no alternative. The bureaucracy too has been more of a pen pusher, living comfortably in their ivory towers. Political leaders, barring a few notable exceptions and cutting across party lines, preferred to follow the FOMO logic – fear of missing out or in other words fear of being left out. 

Take a selection of the newspaper editorials after the farm laws were repealed. An overwhelming number of editorials were left with little option but to welcome the decision to withdraw the laws in view of the ongoing protests but invariably backed the need to bring these market reforms in agriculture back at some stage. The same media had earlier expressed regret when the land acquisition laws were withdrawn and but urged the need to leave it to the sanguinity of the states to implement it if they felt it was required. Even at a time when the Nobel Prize in Economics this year has challenged the basic premise on which labour reforms are being pushed, that higher wages lead to low employment, Indian media houses are turning a blind eye to the underlying message of higher wages leading to higher employment, that the prize tries to convey.   

Not only the media, scientists and economists too floundered unable to stand up and question the credibility of sponsored research and education that backed market reforms in agriculture. Farm distress had been lingering on for several decades now, and all that scientists and economists focused on was the need to raise crop productivity as the way to increase farm incomes. Not explaining that if this argument made any economic sense then why was agriculture in deep crisis in the rich developed countries where private investments had flowed in, and where productivity was among the highest in the world. Instead of understanding why protesting farmers anger had spilled on to the streets, economists, business analysts and TV anchors spared no effort in taunting them, aligning them with separatist forces and even branding them as anti-national.

There were honorable exceptions of course, but the historic farm movement has certainly exposed the fall guys, the losers. At the same time, the unprecedented support from the society at large, which woke up from their slumber to extend a helping hand in whatever possible manner they could, will remain the hallmark of what essentially turned out to be a people’s movement. From cobblers to tailors, from dry-cleaners to doctors, from retired bureaucrats to industrialists, from students to teachers, from shop keepers to dhaba owners, support had poured in from all sections and from every corner. The outpouring of public support to back up the protesting farmers cause is a clear pointer to how disconnected are the urban elite, and that includes academicians and policy makers, from the ground realities, the kind of economic growth the majority population desires. There are lessons here, and I hope economists do not fail again to look at economics as if people matter. Perhaps it is advisable to go back to the drawing room, and dig out economist F E Schumacher’s collections of essays in his path-breaking book Small is Beautiful.  

The pro-active participation by farm women, standing shoulder to shoulder with their men-folk, was a unique feature of this farm movement. Whenever I traveled to the protest sites, I was left amazed and awe struck at the immense power that the women force brought in. In the days and months to follow, the emergence of women power as a strong pillar of the farm movement will be a topic of intense research and analysis.   

Once the jubilation's are over, and protesting farmers are back in their crop fields, it will be time to pick up from where the protesting farmers left. First and foremost, it is time to accept that we, as society, failed to acknowledge that a terrible agrarian distress prevailed in our own back yard. While we were more or less complacent given the easy availability of ample food choices on the supermarket shelves, we failed to recognise that the people, who gave us our food, were themselves living in hunger. With the farm movement bringing out the stark and harsh reality, it is time now to stand up and ask for rebuilding agriculture, where farmers are seen with dignity and pride, where farmers do not have to commit suicide or abandon agriculture and migrate, and this is only possible if farming becomes a viable enterprise.

Instead of accusing and abusing farmers for derailing market reforms, it is time to understand that markets have failed everywhere in the world to enhance farm income, to provide a living income to farmers. A guaranteed income in the form of an assured MSP is what farmers are asking for. This is the real reform that will not only revitalize agriculture but will bring in rural prosperity. Moving beyond market fundamentalism, let us not be again swayed by biased newspaper editorials and the diatribe that TV anchors have relished against farmers. Let us for a change try to understand the reasons behind the farmers’ outburst, and in our own little way call for economic justice for farmers.

Farmers have done their job. It is time for us to pick up the baton and complete the race. That’s the surest way to achieve Sabka Saath Sabka Vikas. #

Source: Farmers have done their job. It's time for us to pick the baton and complete the race. Bizz Buzz. Dec 9, 2021. https://www.thehansindia.com/business/farmers-have-done-their-job-719334

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To rebuild agriculture, make MSP a legal right for farmers.

Pic courtesy: Reuters

After the sudden withdrawal of the three contentious farm laws last week, the debate has now shifted to whether there is a need to provide farmers with an assured Minimum Support Price (MSP) or leave them to face the vagaries of the markets. While protesting farmers are demanding MSP to be made a legal right, fears are being expressed that any such move will lead to an economic crisis.

In the heated deliberations that have followed in the media, what is lost is the need to come to grips with the severity of the continuing farm distress that has prevailed over the past few decades. Looking beyond statistical figures, what is not being appreciated is that these are not just numbers; it is human lives that we are talking about. With or without the proposed farm laws (which have now been withdrawn) the challenge is how to pull these millions out of abject poverty and hunger. Take for instance the report of the Economic Survey 2016 which had shown the average annual income of a farmer in 17 States of India, which means roughly half the country, at a paltry Rs 20,000. In other words, farmers in half the country were somehow surviving on less than Rs 1,700 a month.

More recently, the report of the Situational Assessment Survey 2019, released in September, points to a severely distressed agriculture. Accordingly, the average income of a farmer from crop cultivation alone (not adding non-farm income) comes to a meager Rs 27 per day. This is at a time when the country harvests a record 308 million tonnes of foodgrains and another 325 million tonnes of fruits and vegetables. According to the FAO, in a report released in Mar 2021, the gross value of food production in India stands at $ 400,722, 025 million. With farmers producing so much of economic wealth for the country, what remains unexplained is why the annadata is living in misery.  

Using the outdated market principles, mainline economists would shift the blame on low crop productivity, and the absence of market dynamics that does not allow for price discovery. Let’s first take a look at the productivity dimension. In Punjab, the food bowl of the country, the total crop productivity (of wheat and paddy crop rotation in a year) exceeds 11 tonnes per hectare, which is among the highest in the world. And yet, Punjab has turned into a hotbed of farmer suicides. Every third farmer in Punjab is living below the poverty line, and had a record 16,600 farmers and farm workers committing suicide in the 15 year period, between 2000 and 2015. This only shows that despite high productivity levels, farm crisis persists.   

If you are still not convinced, let’s look at America. At the risk of sounding repetitive, it needs to be known that despite high productivity levels across crops and regions, and the prevalence of free markets in agriculture for over a century, US farming is fast heading towards extinction. In 2020 alone, farmers were saddled with a bankruptcy of $ 425 billion, and the median farm income had remained in the negative for more than a decade. The rate of suicide in rural America is 45 per cent higher than urban centres. A report in Down to Earth magazine shows that almost 40 per cent of the farm income is coming from federal subsidies.

In these trying circumstances, when markets have failed everywhere to increase farm incomes, the belief that markets would do wonder for Indian agriculture is utterly misplaced. Another argument that I often hear is that given the small landholdings in India (86 per cent holdings are less than 5 acres) farmers will be unable to get a higher price given the lack of bargaining power. Well, if that is so I fail to understand why in Australia, where the average arm size exceeds 12,000 acres, have 25 per cent farms closed down in the past 30 years. The rate of suicide among male farmers in Australia is twice that of other sections of the society. In France, in early March, farmers had hung suicide dolls on trees outside Parliament to draw attention to the severe agrarian distress that farmers were faced with.

Given the distressing experience of markets failing to buttress farming in the developed countries, the demand for making MSP a legal right for Indian farmers makes great economic sense. What the farmers are asking is not for the government to purchase the entire produce, but to ensure that no trading takes below the MSP announced. This is what even the Commission for Agricultural Costs and Prices (CACP) had suggested in one of its recent policy reports. It is not a welfare measure as some economists are suggesting, but is the real reform that agriculture is crying for. Studies have shown that the additional economic burden will not exceed Rs 1.5-lakh crore to Rs 2.5-lakh crore per year. But more importantly, the surge it will provide to country’s economy is something that has not been talked about.  

Considering that nearly 50 per cent of the workforce is employed in agriculture, a vibrant agriculture will certainly lead to higher economic growth. Since only six per cent farmers get the benefit of MSP, and remaining 94 per cent farmers are dependent on markets, making it obligatory for the trade to buy at the price announced will mean higher returns for the farmers. If the 7^th Pay Commission, which benefited the government employees, could be seen as a booster dose for the economy, higher income in the hands of the farming population will create a huge rural demand, thereby acting as a rocket dose for the economy. With more purchasing power, the industry would also stand to benefit. At the same time, a guaranteed price to farmers will help bridge the growing inequality that the country is witnessing. 

A guaranteed price has the potential to provide stable income for farmers, and help restore dignity in farming. That’s the freedom Indian farmers desperately need. Reducing the pressure to create more employment opportunities in the cities, making MSP a legal right is the only pathway to rebuild agriculture and thereby achieve the Prime Minister’s vision of Sabka Saath Sabka Vikas. 

Source: Farmers Protest Anniversary: Make MSP a legal right to rebuild agriculture, writes Devinder Sharma. Financial Express. Nov 26, 2021. https://www.financialexpress.com/india-news/farmers-protest-anniversary-make-msp-a-legal-right-to-rebuild-agriculture-writes-devinder-sharma/2376420/

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A battle only half won

Protesting farmers celebrating the repeal of the three contentious farm laws. 

Pic courtesy: Reuters. 

The sudden repeal of the three contentious farm laws provides a historic opportunity to rethink, reinvent and redesign the future of Indian agriculture, laying the foundations for an evergreen revolution. Once the festivities and celebrations are over, it is imperative for the political leadership to recast the economic design with the underlying objective of making agriculture a powerhouse of economic growth.

Neoliberal economists will cry hoarse but making agriculture profitable, economically viable and environmentally sustainable is the crying need of the times. At a time when the world is waking up to the urgency of transforming the unhealthy and unsustainable food systems, India has the ability to provide a roadmap that is ecologically safe, as well as healthy for the people and planet. With Prime Minister Narendra Modi’s bold but belated initiative in withdrawing the proposed market reforms in agriculture, the first step towards a reformative agriculture has already been taken.

Why I say reformative is because the proposed market reforms in agriculture have failed across countries and continents. From the United States to Australia, from Chile to the Philippines, markets have only added to the prevailing agrarian distress. If in the US, Canada and elsewhere markets have only increased farm indebtedness, succeeded in pushing small farmers out of agriculture, and turned farming into a major contributor of greenhouse gas emissions, to believe that the same markets would perform a miracle in India was a fallacy. In North America, despite higher investments, technological innovations, high productivity and the evolution of sophisticated international value chains, farm incomes had been on a steady decline for over 150 years. So much so that in 2018, the US Department of Agriculture had worked out that farmers share in every dollar of end consumer price had dropped to just eight cents, pushing farmers increasingly towards extinction.  

Whether the decision to withdraw the farm laws in India were taken in view of the impending State elections or for economic reasons knowing that markets have failed to enhance farm incomes anywhere in the world is certainly a subject of public debate, but the fact that the so-called reforms have been set aside paves the way for revitalizing agriculture, bringing back the pride in farming. The perseverance demonstrated by protesting farmers, who had braved the weather extremes for a year, while staying put at the borders of New Delhi, had drawn the nation’s attention to the plight of the farming community. It is time to build on the policy space so created, and redesign a healthy and vibrant farming system that is everlasting.

The decision to take back the controversial laws is a battle half won. Withdrawing the laws means a return to status quo, which means no respite from the severe farm crisis that farmers were living with. It is certainly a victory in the first lap for farmers, but the race is still not complete. Unless farmers are assured of a living income, the supply demand principles that many economists believe leads to price discovery, will only end up further exploiting them. Food systems transformation cannot take place without first guaranteeing farm income. That’s the reform that agriculture, not only in India but globally, is desperately looking for.

Considering that on an average farmers get nearly 40 per cent less in market price compared to the Minimum Support Price (MSP) that the government announces for 23 crops, they do not even recover the production cost. As I have often said, when farmers undertake cultivation they do not even realize they are actually cultivating losses. Except in areas where MSP regime is implemented for wheat and paddy, farmers in the rest of the country do not even know what they have been deprived of. That’s what the Economic Survey 2016 had officially acknowledged, stating that the average farm income in 17 States of India, which means roughly half the country, was only Rs 20,000 a year. The Situational Assessment Survey 2019 has worked out the average farm income from crop cultivation at a paltry Rs 27 a day.

Making MSP a legal right for the farmers, meaning that no trading be allowed below the benchmark price, is the real reform that Indian agriculture needs. This is the second step of the reformative agriculture that I talked about. With more money in the hands of farmers, agriculture will not only become economically viable, but the country’s GDP will also gallop. This will not only strengthen rural livelihoods thereby reducing the employment pressure on the cities, but create a huge rural demand that will revitalize the rural economy and thereby fast forward the wheels of development. It is therefore time to reverse the flawed economic design that was built on sacrificing agriculture for the sake of the industry. Replace it with an economics that works for the people, needing investment on the human capital.

Guaranteeing MSP will still leave a sizeable farming population out. For those small and marginal farmers who have no marketable surplus, but are significant players in ensuring household food security, the entitlements under the PM Kisan Samman Nidhi scheme will have to be accordingly raised.

Farmers’ movement in India, perhaps the largest and the longest in the world, has drawn global attention, and rightly so. Knowingly or unknowingly, protesting farmers have managed to shake up but also challenge an outdated economic thinking that relied on keeping agriculture perpetually impoverished. This is no less an achievement, and if followed with an honest appraisal and rethinking it has the potential to sow the seeds of an evergreen revolution. If I remember correctly, this term was coined by the eminent agricultural scientist Dr M S Swaminthan, and entails a production system that utilizes traditional knowledge, amply available biodiversity, and farm practices that do not destroy the environment.

Redesigning the farming systems, bringing markets closer to farmers, and developing a food distribution system that provides for household nutritional security is absolutely essential. But this cannot be achieved by people who created the crisis in the first place. It needs a fresh thinking, a fresh approach.

To make this possible, let’s begin by first providing farmers with a living income. #

Source: A battle only half won. The Tribune. Nov 22, 2021. https://www.tribuneindia.com/news/comment/a-battle-only-half-won-341193

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