Farm protest rages across India

Farm protest rages across India

Agrarian crisis: Only a holistic, pragmatic policy can end the tragedy unfolding in rural areas since decades

Farm protest rages across India

Farmers’ anger is spilling over. The violent agitation that erupted in the Malwa belt of Madhya Pradesh, resulting in the death of five farmers in police firing, has now spread to Punjab, Haryana, Rajasthan, Gujarat and Chhattisgarh. The demand for farm loan waiver, accompanied by higher crop prices, is now gaining momentum.

More than 3.18 lakh farmers have committed suicide in the past 21 years. Every 41 minutes a farmer commits suicide in the country. While I agree that farmer suicides are a symptom of a bigger malaise that afflicts agriculture, policymakers have failed to take the massive death toll as a sign of terrible economic depravity that plagued the rural landscape. How long could we expect farmers to take the hit silently? It had to happen one day, and no one knew what will trigger it.

For nearly three decades, more so after the economic reforms were ushered in, agriculture has been a victim of neglect and apathy. Following the World Bank’s prescription of moving 400 million people from the rural to the urban areas by the year 2015, successive governments deliberately created conditions to turn farming unviable, thereby forcing an increasing number of farmers to abandon agriculture and migrate to cities. To keep food inflation under control, farmers have been routinely paid less, not even to cover the cost of production, thereby driving them against the wall.

With each passing year, the crisis worsened. The 2016 Economic Survey tells us that the average annual income of a farming family in 17 states, roughly half the country, is a mere Rs 20,000 or less than Rs 1,700 a month. Such a dismal income, merely enough for subsistence, was the outcome of economic policies over the years. I shudder to think how these farming families must be surviving all these years. After all, it is not even possible to rear a cow in less than Rs 1,700 a month.

But I doubt if such details mean anything to mainline economists and policymakers. With the markets crashing after every harvest, and with the government reluctant to save farmers by ensuring that they get at least the Minimum Support Price (MSP), farmers are pushed deeper and deeper into a never-ending cycle of debt. Even the MSP is often less than the cost of production. In Maharashtra, the production cost of tur dal has been worked out at Rs 6,240 per quintal. The MSP was Rs 5,050 per quintal, but the price at which farmers were able to sell tur, and that too after waiting for nearly a week in the ‘mandis’, was between Rs 3,500 and Rs 4,200 per quintal.

Take another case. A farmer in Haryana toils hard for three months, putting all his labour to reap a bountiful harvest of potato only to find the prices crashing, thereby forcing him to sell 40 quintals of potato for just 9 paise a kg. The shock often turns fatal. But the fact remains that the government has rarely come to his rescue. Compare this with the fall in stock markets, and the finance minister promises to monitor the crisis on an hourly basis, holding a press conference to assuage the investors. Have we ever seen the finance minister or the agriculture minister monitoring the deplorable condition when farm prices crash? 

The poor farmer has been left to live in indebtedness, which keeps multiplying with every passing year. The crisis is compounded by the denial of a rightful income to farmers for their produce. To keep food inflation under control, it is the farmers who have paid the price. In reality, it is the farmers who have been subsidising the nation all these years. Successive governments have therefore deliberately kept agriculture impoverished. An estimated 58% of the farmers go to bed hungry every night.

After Uttar Pradesh Chief Minister Yogi Adityanath announced a farm loan waiver worth Rs 36,359 crore, which will benefit 92 lakh small and marginal farmers, Maharashtra announced a loan waiver worth Rs 30,500 crore. Punjab is expected to take over at least Rs 30,000 crore of the bad loans. Though I am not in favour of loan waivers but in a deplorable situation that agriculture has been pushed into, a waiver is a short-term relief.

It is an emergency measure to bail out millions of small and marginal farmers in distress. IndiaSpend estimates a total of Rs 3.1 lakh crore of farm loan that needs to be waived. This is still far less than the Rs 4 lakh crore bailout package that the telecom industry alone is seeking. Another Rs 1.7 lakh crore of bad debt is what the steel industry hopes will be written off. 

Holistic approach
Loan waiver must be followed by policies that ensure loans don’t pile up again. A tinkering here and there is not going to address the crisis. It needs a holistic approach and a paradigm shift in economic thinking.

To begin with:

The effort should be to make farming economically viable.

The Commission for Agricultural Costs and Prices, which works out the MSP for crops, should be directed to factor in four allowances being paid to farmers – house allowance, medical allowance, educational allowance and travel allowance. So far, MSP only covers the cost of production. Government employees get a total of 108 allowances.

Since MSP benefits only 6% of the farmers, it needs to be understood that the demand for providing 50% profit over MSP will benefit only these 6% farmers. For the remaining, who are dependent on the exploitative markets, the need is to set up a National Farmers Income Commission, with the mandate to provide a minimum assured monthly income package of Rs 18,000 per farmer family.

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

(The writer is a commentator on issues relating to farmers and agriculture)

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