When Congress factotums bleat hosannas to this year’s Union budget for being farmer friendly one can view their enthusiasm benignly as they are only articulating the electoral hopes of the party. But the same understanding cannot be bestowed on the endorsement of M S Swaminathan that the largesse of Rs 60,000 crore as loan waiver to small and marginal farmers has re-launched them on the path to economically viable agriculture.

It may be tantamount to heresy to question the Bhishma Pitamah of Indian agricultural research but I doubt whether he has, at any time, had to make ends meet for his family based on the returns from a two hectare holding. Let’s face it.

The fundamental problem that the small and marginal farmer faces today is a negative return on investment. P Chidambaram may have rescued them from debt this time but what happens next year and the year after that? One year of drought can wipe out whatever surplus, if at all, a small farmer makes in two years of good rains. Is the government going to create a permanent Farmers’ Debt Relief Fund?

Subsistence farming

If the growth rate in farm output has been going down the tube in the last few decades, the root of the problem is that investment in agriculture has been sliding down. This again is because uncontrolled population growth in rural households in the last five decades has fragmented land holdings to below the critical sizes, where investment could be justified. What we are now having by and large is subsistence farming. This builds up no surpluses. Therefore, even a single unexpected adverse event such as partial crop damage due to a hailstorm, or a major expense like the marriage of a daughter, can upset the delicate income–expenditure applecart and lead to the one-way street of debt.

The agony of the small farmer could be mitigated to some extent if at least he got a fair price for his produce when he takes it to the market. But, here again, the whole system is stacked against him. The food storage and transport infrastructure, especially for perishables, is so hopelessly inadequate that the farmer has to relinquish his produce at whatever rates the wholesale buyer offers at the regulated mandi. These rates tend to be rock bottom at harvest time since  there is more supply than demand. We have seen this happen year in and year out with onions in Maharashtra, tomatoes in Karnataka, wheat in Punjab and so on.

If the farmer could have access to storage of his produce at reasonable rates, he could time the release into the market to avoid glut conditions.

With regard to almost all farm produce in this country, the farmer gets zilch, the wholesaler / trader swallows the cream and the ultimate consumer pays through his nose. If this year’s Union budget had been really farmer friendly, it could have earmarked a special fund for promoting farm produce warehousing. 

Lack of facilities

In fact, infrastructure is one area where the Indian farmer is ill served. Road connectivity from villages to towns is poor both in terms of quantity and quality, power in  the so-called electrified villages is available only for a few hours and that too with poor voltage and in the dead of the night, making pump irrigation difficult and costly since oversize motors have to be used. 

Overall, these conditions reduce the operational efficiency of the farmer and, in turn, the viability of agriculture. None of these issues have been addressed by the so-called farmer friendly budget. There are only two provisions in the budget which have a bearing on assisting agriculture.

One is the provision of Rs 16,000 crore for covering all the 596 rural districts under the National Rural Employment Guarantee Scheme, provided the projects taken up improve rural infrastructure on a permanent basis, such as road laying, tank desilting and deepening, rainwater harvesting schemes, etc.

The other is the proposed Irrigation and Water Resources Corporation, which will hopefully be provided with enough funds to make a difference to the area under assured irrigation, though why there should be a  new corporation for this eludes understanding. After all, we already have extensive departments and ministries of irrigation in the states and the Centre.