Let 2019 be an Year of Agricultural Reforms

For four years in a row, Pradeep Sharma, a potato grower from Agra district in UttarPradesh has been suffering losses. Cultivating potatoes in 10 acres this year, he brought 19,000 kg to the mandi only to get a profit of Rs 490 after selling his entire produce. In anger, he sent his paltry earnings to the Prime Minister saying perhaps he will come to understand my problems. A few days earlier, a Madhya Pradesh farmer, Bherulal Malviya, had died of shock after selling his 27,000 kg of onions for just Rs 10,000 in Mandsaur market.

Such distressing media reports depicting the misery of the farming community have donned the media headlines for quite some time now. With losses mounting over the years, farmers have been literally surviving on loans, taking credit from both formal and informal sources. As of Sept 2016, Rs 12.60-lakh crores was the outstanding agricultural loan. Compare this with the average income of Rs 20,000 per year in 17 states, roughly half the country, the desolation is clear. 

Picture the terrible agrarian distress that prevails in the ongoing debate over whether farm loan waiver is the right answers to address farmer’s woes, and secondly, how will the state governments bear the fiscal burden? The speed at which the newly elected Chief Minister’s of Madhya Pradesh, Rajasthan and Chhattisgarh have announced farm loan waivers soon after assuming office, questions are being asked over the ‘economic viability’ of an otherwise ‘politically sound’ measure, the bigger question being tossed around is where will the money come from?  

It doesn’t end here. After Telangana launched the trend-setting Rythu Bandhu programme providing a fixed amount of Rs 8,000 per acre (now raised to Rs 10,000) per year as direct income support to farmers, it has triggered a chain reaction among States to announce similar or improved versions of financial aid. First, the erstwhile Congress government in Karnataka came up with similar package to provide Rs 5,000 per hectare to dryland farmers, and after the recent electoral debacle in the Hindi heartland, and fearing the Congress and BJP’s promise to waive farm loans if voted to power, and obviously in an effort to woo farmers ahead of the forthcoming Assembly elections, Odisha declared an economic package. Instead of a loan waiver, Odisha announced Rs 10,180-crore package for three years under the Krushak Assistance for Livelihood and Income Augmentation (KALIA) programme for land owning farmers, tenant farmers as well as landless labourers and sharecroppers. This will benefit 57-lakh households.

Jharkhand was quick to follow it up with Rs 2,250-crore schemes to help 22.76 lakh small and marginal farmers with a financial support of Rs 5,000 per acre per year, with an upper limit of 5 acres. And while Haryana is contemplating a pension scheme for farmers, West Bengal was quick to come up with Krishak Bandhu Scheme under which each farmer will get cash support of Rs 10,000 per acre per year. In addition, it will provide a life insurance cover of Rs 2 lakh per farmer, irrespective of the cause, for farmers between the age of 18 and 60. The premium will also be paid by the state government.

Let’s first look at the loan waivers. After Chhattisgarh announced the farm loan waiver, Rs 1,248-crore has already been transferred to bank accounts of 3.5 lakh farmers in the first phase, waiving a maximum of Rs 2-lakh each. In Punjab, despite the slow progress, a total of 4.14 lakh small and marginal farmers who had defaulted on cooperative and commercial banks have got a loan waiver of approximately Rs 3,500-crore. For the country as a whole, a total of Rs 2.3-lakh crore of farm loans announced by Karnataka, Madhya Pradesh, Maharashtra, Andhra Pradesh, Rajasthan, Telangana, Punjab, Rajasthan, Chhattisgarh and Tamil Nadu will benefit and estimated 3.4-crore farm families.

Compare this with corporate loan write-offs. This will tell us where the money is getting siphoned-off. According to the Reserve Bank of India, in the four year period between April 2014 and April 2018, Rs 3.16-lakh crore has been written-off while only Rs 32,693-crore of the outstanding amount has been recovered. Accordingly, as on Sept 30, 2018, besides the public sector undertakings, there were only 528 borrowers who had non-performing assets (NPAs) of Rs 6.28-lakh crore while only 95 of them had defaults exceeding Rs 1,000-crore. While no questions are being asked about the ‘economic viability’ of the massive write-offs of a handful of corporate waivers, a lot of heat is being unnecessarily generated over farm loans depicting a clear-cut bias in economic thinking.

Meanwhile, gross NPAs have further increased by a whopping 11.2 per cent reaching Rs 10.39-lakh crore in 2017-18, and only Rs 40,400-crores have been recovered through the much touted Insolvency and Bankruptcy Code (IBC) and Sarfaesi Act. The surge in NPAs is happening despite providing an economic stimulus of Rs 18.60-lakh crore to the industry in the past 10 years. It was in 2008-09 that the government started a stimulus package of Rs 1.86-lakh crore to the industry at the time of global economic meltdown in 2008-09, a package that still continues. In simple terms, the industry is getting a direct income support every year.  

Although considered to be ‘less distorting’ than farm loan waivers, reports indicate that the Centre is looking at the possibility of providing a direct income support of Rs 4,000 to farmers. Estimates point that the proposed direct support will cost the exchequer Rs 2-lakh crore. While this amount may appear big, the fact of the matter is that Rs 4,000 a year comes to less than Rs 340 a month, almost equal to the price of two cups of coffee/tea at any trendy coffee shop. If Rs 340 per month is considered to be an appropriate financial sop for the beleaguered farming community, it only shows the extent of deprivation and income inequality that prevails.  

While farm loan waivers are an economic necessity, and the state governments will have to find adequate resources, direct income support should not be seen as a permanent solution to the agrarian crisis. Agriculture needs a set of robust reforms in addition to the immediate sops being considered. Let 2019 be the year of agricultural reforms, and if the government can provide 7,000 steps, both small and big, for ease of doing business I see no reason why a similar amount of initiatives cannot be considered for ease of doing agriculture. After all, it involves 52 per cent of the country’s population. There lies the perfect economic prescription for Sabka saath, Sabka Vikas.

Let it be year of farm reforms. The Tribune. Jan 4, 2019
https://www.tribuneindia.com/news/comment/let-it-be-year-of-farm-reforms/708313.html

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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?

Direct Income Support is the need of the hour

Riding on the popularity of the Rythu Bandhu scheme, which provides Telangana farmers with a direct income support of Rs 8,000 per acre per year, Chief Minister K Chandrashekhar Rao romped home sweeping the electoral verdict in recent Assembly elections. Encouraged by the positive response, and knowing it could pay him rich dividends, he had raised the amount to Rs 10,000 per year just before the elections.  

The first of its kind in the country, and what essentially began as an exercise to work out an input subsidy scheme to offset the cost of seed, fertiliser and pesticides, the Rythu Bandhu scheme has finally turned into a direct income support for the debt-ridden farming community. Under the novel investment scheme, land-owning farmers will get a support of 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. More than the budget provisions, what makes this scheme effective is the way it was implemented. Within a month the land records were put in order, and the distribution of money has been as per the promise. Buoyed by the public response, and the appreciation it has received from a wide array of experts, economists and others, KCR is now keen to replicate it across the country. “This will require an additional Rs 3.5-lakh crore. It shouldn’t be a problem allocating the amount for farmers. It will be fruitful for them,” he said.

It is a question of priorities. Finding financial resources for a terribly distressed farming community should not be a problem, if the intent is clear. According to the 2016-17 NABARD All India Rural Financial Inclusion Survey, Telengana (79%), Andhra Pradesh (77%) and Karnataka (76%) are among the top in the chart in the list of States with highest indebtedness. That farmer’s had expressed their gratitude for a slender income support of Rs 8,000 per year, which narrows down to roughly Rs 666 per month, is only a reflection of the acute rural deprivation that prevails. This shows the urgent need to pullout majority households from indebtedness. Writing-off outstanding loans is one way to address the complicated issue, providing direct income support is perhaps less distorting and more beneficial in the long run. After the loan waiver, direct income support followed by a more comprehensive assured income programme must begin. 

Several years back, when I first called for providing farmers with direct income support, mainline economists had laughed it off. At a time of globalisation and economic liberalisation, where markets ruled the roost, a number of questions were thrown up. It has taken some years for the people to grasp the implications, understand what I meant, and while the idea was sinking in, KCR certainly set the ball rolling. There are gaps but with the passage of time the scheme will get better. I am sure tenant farmers will subsequently be included, and there will be mechanisms to draw out absentee landlords and government/private sector employees who also hold agricultural lands. 

Telangana’s example was soon followed by Karnataka in a much truncated form. Just before the last Assembly elections in May, the outgoing Karnataka Chief Minister Siddaramaiah launched a new scheme, called Raitha Belaku, extending a direct income support of Rs 5,000 per hectare for dryland farmers, with an upper cap of Rs 10,000. The scheme entailed an expenditure of Rs 3,500-crore every year, and around 70-lakh farmers would directly benefit, he had claimed. And with news reports of Congress toying with the idea of providing Rs 3,000 per month by way of income transfer to small and marginal farmers in Madhya Pradesh, I am sure assured farm income will eventually become a norm rather than an exception. Even in Punjab, considering that every third farmer is below the poverty line, direct payments for marginal farmers should be tried.

Agriculture has been on the receiving end for over four decades now. As per Economic Survey 2016, the average income of a farming family in 17 States of India, which means roughly half the country, stands at a meagre Rs 20,000 a year. According to Niti Aayog real farm incomes in the five year period, between 2011-12 and 2015-16, grew at less than half a percent every year, 0.44 per cent to be exact. No wonder, the rural landscape remains equally depressing – falling incomes, mounting rural indebtedness, rising farm suicides, unmanageable glut at the time of harvest, and swelling rural to urban migration. At a time when tax concessions to the tune of 5 per cent of GDP are given to big business, public investment in agriculture has remained as low as 0.3 to 0.5 per cent of GDP.

With declining farm incomes and public sector investment shrinking over the years, agriculture has been a victim of a deliberate bias in economic thinking. For all practical purposes, agriculture is considered to be a non-economic activity. The macro-economic policies are heavily tilted against agriculture. While farm loan waivers, for instance, are considered to be a drag on the national economy, it is believed that huge corporate write-offs lead to economic growth. Unlike farm loan waivers, which become a State government’s headache, the corporate loans are the responsibility of banks and are seen as non-performing assets (NPAs) of the banking sector.

Direct income support will to some extent help in addressing these glaring disparities. At a time when farmers face extreme volatility in markets at times of harvest, and price distortions because of unwanted imports, direct payments will act as an agricultural safety net. It has to be accompanied by several initiatives in agricultural reforms, including redesigning credit, markets and cropping patterns and finally leading to an assured monthly income package to make an everlasting impact. 

To begin with, two steps are important:

 1.  Farm loan waivers too needs be clubbed with bank NPAs, and should be treated the same way as corporate write-offs. Since both the corporate and the farmers take loans from the same banks, how can the default by farmers become a State’s headache, which is expected to provide for loan waivers thereby adding on to its fiscal responsibility? While at the same time corporate bad loans are treated as a bank's headache? Why not treat farm loans as also bank's responsibility? Freeing up farm waivers will give State governments more room to provide for direct payments and to enhance farm incomes.

       2.  The Commission for Agricultural Cost and Prices (CACP) which fixes the MSP for 24 crops, needs to be now renamed as Commission for Farmers Income and Welfare with the mandate to ensure an assured monthly farm income of at least Rs 18,000 per month per family. This should be based on the average income derived from direct payments, MSP, FPOs etc, at a district level and the balance should be paid by income transfer.  #

Direct payment to farmers is a safety net. The Tribune. Dec 20, 2018.
https://www.tribuneindia.com/news/comment/direct-payment-to-farmers-is-a-safety-net/701050.html?fbclid=IwAR1XMZR5etyN73eficpO81b7optg7Ecw64qcqEUQ9w8jYC4bVAGae43zoDc

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Onion price crash: It's a bloodbath

Pic: LiveMint

Shreyas Aabhale is a young farmer from Sangamner in Ahmednagar district in Gujarat. This 21-year-old farmer was aghast when he found that he had earned only Rs 6 after selling 53.14 quintals of onions. In frustration, he sent a cheque of Rs 6 to Chief Minister Devendra Fadnavis. A few days later, another farmer, Chandrakant Bhikan Deshmukh, from Andarsul in Yeola tehsil in Maharashtra was able to sell onions at a price of 51 paise per kg. As a mark of protest, he also sent a money order of Rs 216 to Chief Minister Devendra Fadnavis. This is what he had earned after deducting mandi charges, and the transportation cost.

Both of them were probably inspired by Sanjay Sathe from Nashik in Maharashtra who had earlier sent a money order of Rs 1,066 to the Prime Minister’s Disaster Relief Fund. This is all he had earned, after deducting the expenses he had incurred, selling 750 kgs of onions. He received another shock when the Prime Minister’s Office returned the money order he sent, probably unable to accept the contribution in view of the shock waves the news had already created.

As onion prices are tumbling, a real bloodbath is being enacted on the farms. In Lasalgaon mandi, the biggest trading centre for onions in the country, prices had crashed to Rs 100 to Rs 300 per quintal. On an average, farmers were getting not more than 15 per cent of the cost they had incurred in cultivation. Unable to bear the shock, two farmers in Nashik district had reportedly committed suicide.  

In Neemuch mandi in Madhya Pradesh, onion prices had crashed to 50 paise per kg. In several other instances, irate farmers had thrown onion on the streets and some had heaped onions on the roadside giving it free to people passing by. The same is the story for garlic. Last year, the farmers of Hadoti, which comprises four districts of Kota, Bundi, Baran and Jhalawar in Rajasthan, shifted to garlic, a lucrative crop. In March when the crop was harvested, a glut in the market saw prices crash to Rs 1 per kg, making it unviable to even transport the crop to the mandi. Newspaper reports say the abysmally low garlic prices forced five farmers to commit suicide in the same belt.

Subsequently, garlic prices crashed in Madhya Pradesh mandis too forcing farmers to dump the produce in frustration. Some even emptied their bags in wells and ponds.

The plight of onion or garlic growers is no exception. A few months earlier, 65 per cent drop in wholesale prices of tomato in Nashik market forced a number of farmers to dump tomatoes on the roads. This pattern of price crash is nothing new. For past three years in a row, reports of angry farmers throwing onion, potato, tomato and other vegetables like peas, cabbage, cauliflower etc on the streets have appeared regularly. In fact, a video of an angry farmer sitting on a roadside and breaking pomegranate in exasperation one after another for not getting a price that covers up his cost of cultivation has already gone viral. It shows how severe and widespread is the malaise of price crash after a bountiful harvest ruining in the process tens of hundreds of farm livelihoods.     

What do you expect farmers to do when open market prices fall to considerably less than the Minimum Support Price? In the month of November alone, prices for farmers across the board dropped between 15 to 25 per cent approximately. Even in the case of paddy, where the government steps in to procure surplus paddy at the Minimum Support Price (MSP), prices dropped by 20 per cent. Some studies have shown that out of the 23 agricultural commodities for which the MSP is announced every year, excess production of 21 crops actually lead to an unmanageable surplus as a result of which the prices crashed.

Attracted by higher prices and favourable weather conditions, farmers put in their best to achieve record production. But their excitement is short-lived. Price crash across the country over the last few years, for instance has left farmers in the lurch. While it is perfectly alright to blame the ad hoc export import policy for the failure to find a stable market for exports, the promise of a Market Intervention Scheme (MIS) has failed to rescues loss making farmers. In fact, the assurance of launching Operation Green – on the lines of Operation Flood – aimed at market intervention for the TOP crops – an acronym for tomato, onion and potato -- at time of a price drop still remains on paper. It is time to think that if an effective cooperative system could be evolved for the highly perishable commodity – milk – there is no reason why India cannot envision a similar strategy for other perishables.  

In the US, when private markets fail to rescue farmers from a price crash, the US Department of Agriculture (USDA) had time and again moved in to manage the surplus. In 2016, when there was a crash in market prices, the USDA procured 11 million tonnes of cheese worth $20 million from farmers. “This commodity purchase is part of a robust, comprehensive safety net that will help reduce a cheese surplus that is at a 30-year high, while moving high-protein food to the tables of those most in need,” the then Agriculture Secretary Tom Vilsack had said

Earlier too, the USDA purchased 10 million pounds of strawberries, and directed the procurement to schools as well as to the needy. It purchased $6 million of fresh tomatoes in 2011 to help growers faced with oversupply. I wonder why India’s Ministry of Food and Civil Supplies is unable to buy in bulk tomato, onion and potato from farmers in a similar manner. Why can't the perishables be immediately moved to areas which are food insecure? After all, how can one explain food being thrown on streets at a time when 200 million people go to be hungry every night.

Not that US has been able to address the price sump every time a glut takes place but since 2002, the US Farm Bill provides for income support to farmers under what is called ‘price-loss coverage’ system. In 2014, the income support helped peanut growers emerge out of the crisis emanating from a price crash. Unlike the Market Intervention System in India, which is essentially aimed at consumers when food inflation soars, the US has instead put in a strong safety-net mechanism for farmers. #

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With high productivity, assured irrigation, a higher MSP and loan waivers in progress, why are Punjab farmers dying?

At a farm widow congregation in Punjab 

A day after the massive farmer protest in New Delhi, hundreds of farmer widows had assembled at Mansa in Punjab. I sat there listening to the heart-rending testimonies of several farm widows, among the hundreds who had assembled at Mansa. In the land of Green Revolution, to see and meet hundreds of farm widows was not so easy. As they stood to narrate their painful stories, more often than not they just stood in front of the mike, said a few words and wept. The silence that followed said everything.

There is hardly a day when I don’t find news reports of farmers committing suicide. A study conducted jointly by the Punjab Agricultural University, Ludhiana; Punjabi University, Patiala; and the Guru Nanak Dev University in Amritsar had in a house-to-house survey put the alarming death toll figures at 16,600 in the 17 year period, between the year 2000 and 2017. In other words, roughly 1,000 farmers and farm workers have taken the extreme step of ending their life every year in the agriculture frontline State. As the serial death dance on the farm continues unabated, another study by the Punjabi University estimates that one in every three farmers in Punjab is living below the poverty line.

As the widows narrated their agony and enormous struggle, as to how they were coping with the huge void left behind by the only bread-earner in their family, I sat wondering why had Punjab, often called as the food bowl of the country, turned into a hotbed of farmer suicides. Why nearly 98 per cent of the rural household were in debt, and 94 per cent of these households had reported more monthly expenditure as compared to their gross incomes. In other words, the rural households in progressive Punjab were living in debt. To live in perpetual indebtedness, and that to year after year, generation after generation, is the worst humiliation that any human being can suffer. Former Prime Minister Charan Singh had rightly remarked that a farmer is born in debt and dies in debt. What he did not say was that living in indebtedness all through your life is akin to living in hell.  

 

Listening to the farm widows, I tried to put the puzzle in place. If providing an assured Minimum Support Price (MSP) for crops, writing-off of outstanding farm loans, and expanding the irrigation network is primarily the recipe for ensuring farm prosperity then Punjab already has these in place. With 98 per cent assured irrigation, meaning that every farm gets an assured irrigation supply, and with the highest productivity of cereal crops – wheat, rice and maize – in the world, why is it that hundreds of farmers are still forced to commit suicide every year? If productivity and irrigation were the answer to the prevailing agrarian crisis then there is no reason why Punjab farmers should be dying. This only shows that the reasons behind the terrible agrarian crisis that prevail lie much beyond crop productivity and irrigation.  

On top of it, Punjab has a very extensive and elaborate system of procurement of food crops. With a huge network of APMC mandis and purchase centres, Punjab has the best infrastructure for procurement of crops in the country. It also has a vast network of rural roads linking the mandiswith the villages. With mandis and rural link roads in place, whatever stocks are brought to these purchase centres and if it meets the quality specifications are purchase at the fixed support price. Over 98 per cent of the wheat and paddy that is brought to the mandis by farmers is purchased at the fixed price. Farmers are able to sell their produce at the officially declared Minimum Support price, which is much higher than the prevailing market prices. That’s the reason why truckloads of paddy are illegally transported all the way from Uttar Pradesh and Bihar to be sold in Punjab mandis.

In addition, Punjab has also announced a farm loan waiver for a maximum of Rs 2-lakh per small and marginal farmer. Although the electoral promise was to waive all kinds of outstanding loans drawn on cooperative, private and nationalised banks, the State has so far promised to waive roughly about Rs 9,000-crore of farm loans of small and marginal farmers. Of which, approximately Rs 1,000-crore worth of farm loans have been waived off so far. In Maharashtra, against the initial estimate of Rs 34-lakh worth of farm loans to be waived, an estimated Rs 14-lakh crore is now planned to be struck out. Similarly, in Uttar Pradesh, Karnataka, Tamil Nadu and Rajasthan where only a fraction of the promised loan amount is being actually waived. The problem is that despite the election promises the State governments do not have the resources to provide for writing-off the entire outstanding farm loans.

Each of the farm widows reeled out an amount of farm loan, varying between Rs 2-lakh to Rs 12-lakh that their deceased husbands left behind. And that made me wonder how come the economic situation had reached such a despicable levels despite Punjab offering the best of rural infrastructure, irrigation and technological advance.

Punjab, therefore offers an excellent case study to understand, re-strategise and formulate a set of agricultural reforms that are more meaningful and effective. A set of reforms that actually go beyond the rhetoric and lay out a roadmap for the future where the society doesn’t have to treat the small and marginal farmers as a national burden. Instead of treating them as abandoned people, the challenge should be to ensure how the rural masses base could benefit from as well as become part of economic growth. That’s why I have always been saying that the time has come to move away from price policy to income policy. The need is to provide farmers with an assured monthly income, which is not only WTO compatible but also provides economic security to farmers. The demand should be to convert the CACP into a Commission for Farmers Income and Welfare with the mandate to assure a monthly living income of at least Rs 18,000 per farm family. That will be the beginning of Sabka Saath, Sabka Vilas. It’s time to think again. #

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India must keep agriculture out of RCEP

Map of the RCEP trade block --   From the web

At a time when the call for deglobalisation is gaining momentum and increasing protectionism has lead to pulling down of global growth in merchandise trade for the second quarter this year, India’s foray into the Regional Comprehensive Economic Partnership (RCEP) treaty, a mega trade agreement between 16 countries of Asia-Pacific region, is being seen as an overtly risky adventure. More so at a time when agriculture is passing through a terrible agrarian crisis and manufacturing sector continuous to limp.

The latest round of negotiations that ended at Singapore in mid-November abandoned the proposal of reaching a basic agreement by the end of this year, and set a new goal for reaching a final conclusion by the end of 2019. This is primarily because India, Thailand and Indonesia are scheduled to go for general elections next year, and none of these countries is willing to bite the bullet before the formation of the new government. The news agency Nikkei quoted an Indian diplomat as saying: “if a basic deal on lowering tariffs was announced, the government in New Delhi will collapse.”

Seeking greater commitment to liberalise trade, RCEP is a mega trade agreement between 10 Asian countries and their six FTA partners – Japan, South Korea, China, Australia, New Zealand and India. This trading block, when the treaty comes into place, will cover 45 per cent of the global population and account for 25 per cent of global GDP and a whopping 40 per cent of global trade. The treaty has been under negotiations for six years, and is focused on three pillars – goods, services and investment. When signed, the RCEP will turn into world’s biggest trade block.

Since India’s trade deficit with the RCEP countries exceeds $ 100 billion, which is roughly 64 per cent of the total trade deficit, India is looking forward to bridge the yawning trade gap in the years to come. But given the huge trade deficit that India has with China, Korea, Indonesia and Australia, and given the huge domestic market that India will provide by eliminating import duties and bringing these to zero on a majority of the tradable goods will invite flood of cheaper imports. Already several Ministries have raised the red flag, and domestic industries, including steel and metal; pharmaceuticals, food processing and dairy have expressed serious concern.

The RCEP framework entails providing zero duty on 92 per cent of the tradable goods, with another 5 per cent added over the years. This is what the ASEAN nations and Japan, countries with which India has free trade agreements, are insisting; the three other major non-FTA partners are seeking elimination of import duties on 80 per cent products with an inbuilt margin of plus and minus 6 per cent. As per reports India is willing to provide tariff concessions on 72 to 74 per cent of goods to China, Australia and New Zealand. It has sought 20 years to remove these tariffs. But with China, it wants still more time to eliminate duties for which negotiation are underway.

Over the past few decades, especially after the World Trade Organisation (WTO) came into existence, rich countries have been seeking steep reduction in farm subsidies and demanding more market access. What was attempted initially under the WTO was subsequently pushed aggressively under the free-trade agreements (FTAs) and numerous bilateral agreements. While a number of studies have shown how reduction in import duties have turned a majority of the developing countries into net food importers, destroying in the process millions of farm livelihoods, the implications of the proposed RCEP treaty on India’s food security have been least studied. What makes the implications more worrisome is that the RCEP negotiations are being held in secrecy, with not even the industry and NGOs being allowed to participate.

Isn’t it strange that six years after the RCEP negotiations began India is now initiating studies to understand the implications and potential losses from the proposed trade agreement? It has belatedly entrusted the task to Centre for Regional Studies, New Delhi and IIM, Bangalore. Meanwhile, several experts and industry representatives, including steel and pharma, have expressed uneasiness. According to Jayan Mehta, senior general manager of Amul dairy cooperative, 15-crore livelihoods engaged in dairy farming will be severely hit from the current RCEP negotiations.

Let’s examine what is at stake. With production exceeding 176 million tonnes this year, India is the biggest producer of milk in the world. Presently, the imports of milk and milk products are allowed with an import duty ranging between 40 to 60 per cent. This provides enough protection for the local dairy industry to build its level of competitiveness. At a time when US/EU dairy industry is in a terrible crisis, opening up the flood gates will inundate India with cheaper milk flowing in from Australia/New Zealand. Let us not forget that while Australia which has only 6,300 dairy farmers; and New Zealand with 12,000 dairy farmers are pushing in aggressively to protect the economic interests of their small dairy farming community, India is willing to put the dairy sector on the chopping block.  

At a time when reduction in import tariffs have already flooded the country with edible oils, turning the country into world’s second biggest importer, and the zero duty import of pulses in the past three years have caused a steep fall in farm gate prices for farmers, opening up for imports of wheat from Australia, which has been wanting India to lower import duties for several years now, will be the final nail. Coupled with the WTO pressure to restrict MSP payments for public stockholding, it will only destroy India’s ability to retain food sovereignty and erode farm livelihoods.  

Still worse, such floods of imports coming in food crops, plantation crops, fruits and vegetables as well as in processed foods will strike a severe blow to Indian farming already reeling under distress. Member countries on the other hand are already seeing tremendous trade opportunities. Australia’s Trade Minister Simon Birmingham, who was in New Delhi last week, said almonds exports from Australia have grown five-fold in the past decade and items such as these showcased the opportunity to diversify the trade basket.  

I therefore wonder why agriculture can’t be kept out of RCEP. After all, if US President Donald Trump could pull out of the ambitious 12-nation Trans-Pacific Partnership (TPP) treaty to save American jobs, India too needs to protect its food security built so assiduously over the decades. Let’s not forget that importing food is akin to importing unemployment, and a vibrant agriculture has the potential to revitalise the economy more so at a time when the country is faced with jobless growth. #

India must keep agriculture out of RCEP. The Tribune. Dec 5, 2018.
https://www.tribuneindia.com/news/comment/india-must-keep-agriculture-out-of-rcep/693433.html

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Providing An Assured Monthly Income is the First Step Towards Addressing Agrarian Crisis

A decade after Avtar Singh committed suicide unable to bear the pressure to repay farm loan; his two sons took the same fatal route. Roop Singh, 40, and his younger brother Basant Singh, 32, jumped into the Bhakra canal in Punjab. They were residents of Patiala district in Punjab.

Two generations of the family were consumed by the scourge of mounting farm debt. While the two sons ended their lives in November 2017, their father had died some 10 years earlier, in 2008. Both the brothers together owned 2.5 acres of land and were cultivating another 30 acres on contract. But unable to generate any profits, the outstanding debt continued to swell. After all, how long can a farmer be expected to draw credit from multiple sources to repay the initial loan amount. The vicious cycle of mounting indebtedness eventually takes its toll.

There is hardly a day when reports of farmers committing suicide do not appear in Punjab newspapers. Punjab, the country’s food bowl, is no exception; the serial death dance across the country shows no signs of abating. The tragedy that struck these farming families symbolises the
agony that the entire farming community is living with. There is hardly a day when farm suicides are not reported from one part of the country or other. In the past 21 years, more than 3.20-lakh farmers have committed suicide; every 41 minute a farmer ending his life somewhere in the country. Those who have refrained from taking the extreme step are no better. They continue to somehow survive, living in acute distress, and hoping against hope. Several studies have shown that almost 58 to 62
per cent farmers sleep empty stomach.

Farmers are in reality the victims of an economic design. A recent report by CRISIL points to the denial of a rightful income as the major reason behind the agrarian crisis sweeping through the country. “While the average annual growth in Minimum Support Price (MSP) was 19.3 per cent between 2009 and 2013, it was only 3.6 per cent between 2014 and 2017,” the report states. This minimal increase in the MSP does not even correspond to the annual rise in DA for the government
employees. In order to keep food inflation under control, successive governments have denied farmers their rightful income. The entire burden of keeping food prices low has been very conveniently passed on to farmers. In other words, it is the farmers who are bearing the entire
cost of subsidising the consumers. Farmers are being deliberately paid less, kept impoverished. Still, what farmers don’t realise is that every time they take to cultivation, they actually cultivate losses.

The Commission for Agricultural Cost and prices (CACP) computes the net returns. Let’s try to see whether the net returns have increased. In Maharashtra, which has been faced with massive silent protests by Marathas, and which I believe is the primary reason for the discontent, the net return per hectare for paddy is Rs 966, which means if worked on a monthly basis it will come to less than Rs 300 a month. For Ragi, Maharashtra farmers actually incur a loss of Rs 10,674 per hectare; for Moong (minus Rs 5,873); for urd (minus Rs 6,663). Even for cotton, the net return is only Rs 2,949 per hectare. Considering that cotton is sown in June and its harvesting begins in October, with the
pickings going on to November, December or even January, the average income per month from cultivating cotton comes to a paltry Rs 700 per hectare. 

Viewed from the national level, the net returns for crops like paddy, sugarcane, maize, and cotton have actually declined in the past three years. For most of the dryland crops, the returns are in the negative. If the farmer is destined to harvest losses, I wonder what kind of technological and financial support can bail them out. Giving them more credit, even if it comes from institutional agencies/banks, has only pushed them further into a debt trap. As a former Prime Minister Chaudhury Charan Singh had once remarked: A farmer is born in debt and dies in debt.

The mandate for CACP, which works out the MSP for various crops, is not only to provide an assured price to farmers but also to ensure that it does not lead to inflationary pressures. The prices therefore are deliberately kept low, and in many cases are actually less than even the cost of production that the farmers have to entail. This economic design is not in any way peculiar to India, it is global. As John F Kennedy had once remarked: “Farmer is the only man in our economy who buys everything at retail, sells everything at wholesale and pays for freight both ways.” But what is not being realised is that farmers in US/Europe are being paid massive subsidies, including Direct Income Support. In
India, farmers only receive input subsidies which actually benefit the manufacturers.

The entire burden of keeping food prices low has been very conveniently passed on to farmers. In other words, it is the farmers who are bearing the entire cost of subsidising the consumers. While farmers were denied their rightful income, huge salary jumps were provided to other sections of the society. From a monthly salary of Rs 90 per month in 1970, the salary of school teachers for instance jumped by 280 to 320 times by the year 2015, a period of 45 years. In the same period, salary of
government employees went up by 120 to 150 times; and that of college professors by 150 to 170 times. Wheat price for farmers on the other hand has increased by a paltry 19 times in the same period.

Farm incomes remain almost frozen or bare enough to cover only the cost of production. Keeping food prices low is also in consonance with the dominant economic thinking aimed at drastically reducing the work force in agriculture.

This is what the World Bank had desired way back in 1996. It had expected 400 million people to be moved out from the rural to the urban areas in India by the years 2015. Since every World Bank loan comes with roughly 140 to 150 condionalities, each loan re-emphasised the urgency to move farmers out of agriculture. Former Prime Minister Manmohan Singh had time and again expressed the need to shift 70 per cent farmers. Former RBI Governor Raghuram Rajan used to say that the biggest reforms would be when farmers are moved out of agriculture, to meet the ever-growing demand of cheaper labour for the infrastructure industry. The National Skill Development Council already has spelled out plans to bring down the population in farming from the existing 52 per cent to 38 percent by 2022. For all practical purposes, debt and farming have now become synonym.

Seventy years after Independence, and 55 years after the Green Revolution was launched, economic freedom continues to elude farmers. Economic Survey 2016 made it abundantly clear. Accordingly,
the average income of a farming family in 17 States of India does not exceed Rs 20,000 a year. In other words, farming families in roughly half the country are surviving on less than Rs 1,700 a month. Knowing that it is not possible to rear a cow in the same amount, I shudder to think how
these families survive year after year. 

It is generally believed that expanding irrigation and raising crop productivity is the way to enhance farmers’ income. If irrigation and high productivity alone could raise farmers’ income I see no reason why Punjab, the food bowl of the country, has lately turned into a suicide hotspot. Punjab has 98 per cent cultivable area under assured irrigation and the crop productivity matches with the best in the world. With 45 quintals per hectare productivity of wheat and 60 quintals/hectare for rice, Punjab tops the global chart. And yet, Punjab is witness to a spate of suicides every week. Policy planners have refrained from looking beyond raising crop productivity as the answer to the worsening agrarian
crisis.

I am of the firm opinion that a tinkering here and there is not going to address the agrarian crisis. It needs a holistic approach, a paradigm shift in economic thinking. To begin with, the effort should be to make farming economically viable. After all, everything boils down to how much net income a farmer gets in his hand at the end. Therefore, three steps that immediately need to be considered are:

1) The Commission for Agricultural Costs and Prices, which works out the MSP for crops, should be directed to factor in 4 allowances in the MSP being paid to farmers – House allowance, Medical allowance, Educational allowance and Travel allowance. So far, the MSP only covers the cost of production. Compare with the government employees who get a total of 108 allowances.

2) Since MSP benefits only 6 per cent farmers, it needs to be understood that the demand for providing 50 per cent profit over MSP will benefit only these 6 per cent farmers. For the remaining 94 per cent farmers, who are dependent on the exploitative markets, the need is to redesign the CACP into a Commission for Farmers Income and Welfare, with the mandate to provide a minimum assured monthly income package of Rs 18,000 to a farmer’s family. 

3) Public sector investments must come in urgently for constructing APMC mandis, and also for storage godowns. At present, there are only 7,700 APMC mandis. What India needs is to set up 42,000 mandis for every 5 kms radius. And like in Brazil, where it is mandatory for a market
yard to procure anything a farmer brings, APMC mandis should be quipped to do the same. #

The article was first published in the State of India's Environment 2018. 
https://www.downtoearth.org.in/blog/agriculture/it-s-time-we-shift-farmers-economic-burden-62229?fbclid=IwAR11LZLo9TYdHKTpljocjIHGxougPjmkf0HRWlBNGE4HU-rrC029mKRV37g

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To create private markets, Maharashtra deregulates APMC Act

A typical mandi scene -- Pic courtesy Hindu Business Line

It is not unusual for wheat and paddy grown in adjoining areas of Uttar Pradesh to find its way into Haryana mandis. But at the peak of the paddy procurement season this year, a lot of paddy procured in Bihar has been transported all the way to be sold in Punjab and Haryana. As per news reports, more than 2.5-lakh bags of paddy from Bihar have been seized in a month-long drive conducted by the Punjab and Civil Supplies department. In addition, another 2-lakh bag of previous year’s rice meant for PDS supplies in Bihar have also been seized.

In neighbouring Haryana, more than 1.25-lakh bags of rice meant for PDS supplies in Bihar have been seized from Karnal and its adjoining areas in raids conducted during September and October. In an interesting development, The Tribune(Oct 26) reported Karnal district alone having purchased more than double the anticipated production even though the paddy procurement season was half way through. This was essentially because of a well-oiled nexus that exists between traders in Bihar, Uttar Pradesh and Haryana whereby cheaper paddy/rice purchased from as far as Bihar is made available for procurement at a higher price in Haryana.

The reason is simple. While Uttar Pradesh lacks a well-knit system of a mandis network under the Agricultural Produce Market Committee (APMC) Act, Bihar had revoked the APMC Act way back in 2006. In the absence of APMC mandis, farmers in Bihar are constrained to sell wheat and paddy in open market at prices that are far below the Minimum Support Price (MSP). That is why traders find it profitable to transport paddy (and also wheat) from a pretty long distance and that too after having incurred an additional transportation cost. While paddy sells at anything between Rs 800 to 900 per quintal for low quality grade, and a maximum of Rs 1,300 to Rs 1,500 per quintal for good quality in Bihar, paddy MSP for normal quality in Punjab and Haryana is substantially higher at Rs 1,750 per quintal.

While Bihar was the first State to have repealed the APMC Act, Maharashtra has now become the second State after Bihar to have amended the APMC Act. A few months after it had brought in a notification making it obligatory for the trade not to purchase agricultural commodities below the MSP, in a complete turnaround it has now promulgated an Ordinance on Oct 25 deregulating all produce, including foodgrains, oilseeds and flowers, from the APMC Act. The new directive allows farmers to sell their produce outside the regulated APMC markets in the State. Earlier too, in June 2016, it had passed an amendment deregulating fruits and vegetables from the APMC Act but there are no studies telling us whether the move has helped farmers in any way. We have only seen reports of farmers dumping veggies on the streets in the absence of market prices even covering the cost of production.   

“The first step is to pass an Ordinance. The rules will be notified within 15 days,” Sadabhau Khot, the state minister for agriculture and market reforms told a media channel, adding “the idea is to create private markets with similar facilities as APMCs, while ensuring healthy competition.” While I am not sure how much the APMC amendments will help Maharashtra farmers in price discovery, it will certainly be interesting to watch how soon the trade opens marketing channels to make available Maharashtra paddy for procurement in Punjab and Haryana. When Bihar revoked the APMC Act some 12 years ago, the expectations were the same. The basic idea was that removing the monopolistic control of APMC markets will allow private investments, motivate the corporate sector to undertake direct marketing and provide for more efficient markets. Nothing like this happened. In fact, Bihar has turned into a test case to know how best agriculture can be turned exploitative.

“The amendments have been made in accordance with the Centre’s Modal Agricultural Produce and Livestock Market Act 2017,” the minister stated. In fact, this is where the problem lies. The inter-ministerial task force (in 2002) that initially recommended the APMC Act to be amended did not ascertain the social fallout of withdrawing an assured market for small farmers but was driven by the industry’s prescription. Contract farming, direct marketing and public-private partnership is only aimed at dismantling an excellent social framework which so assiduously helped build food security. Even the Food and Agriculture Organisation of the UN has questioned the need to repeal the assured markets saying that its social determinants first need to be evaluated. The main argument that APMC mandishave become stronghold of cartels is certainly correct, but that’s an issue of failure of governance. Instead, dismantling the mandiinfrastructure and replacing it with still bigger cartels of private players under the PPP mode is not the way forward, and will only lead to making the available infrastructure for corporate agriculture. In other words, we are fast moving towards privatisation of profits and socialisation of costs.   

Nevertheless, deregulation of APMC Act in Maharashtra comes at a time when a few weeks back the Centre had committed to procure 25 per cent of the agricultural commodities for which a higher MSP is being announced. Although the rules have still to be notified, and the finer print is awaited, but it is quite obvious that the amendments will reduce the delivery of MSP to farmers. This is exactly what the FICCI and CII had been demanding for long, wrongly saying that a higher MSP comes in the way of farmers realising a much higher price. Punjab and Haryana face tremendous pressure to dismantle the existing APMC infrastructure. In fact, the Commission for Agricultural Costs and Prices (CACP) too had come out with a study some years back ranking the State’s as per their market friendliness. Incidentally, Bihar topped the market-friendly index, and Punjab, with its widespread network of mandis, purchase centres and rural connectivity was placed at the bottom.

At a time when only 6 per cent farmers get the benefit of MSP prices, and when 94 per cent farmers are in any way dependent on markets, how does a breakdown of a parsley available public sector market infrastructure lead to increasing competitiveness? Moreover, it leaves behind a huge cost for country’s food security. It was in 2007-08 that the then Agriculture Minister Sharad Pawar had allowed private companies to bypass APMC mandis and buy wheat directly from farmers. With pvt companies cornering as much wheat as possible, it resulted in such a massive shortfall in public procurement that the country had to eventually resort for nearly 8 million tonnes of wheat imports in two years, at roughly double the MSP that was being paid to domestic farmers.#

Tender Mercies in Open Markets. The Tribune. Nov 14, 2018
https://www.tribuneindia.com/news/comment/tender-mercies-of-open-markets/682538.html

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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. #  

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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. #

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