A clueless govt's policies worsen farmer crisis

Problems of agriculture are rooted in policies, institutions and market structures, which political parties have failed to change

On December 23, India celebrates National Farmers Day in honour of former Prime Minister Choudhary Charan Singh’s birthday and his contributions to agriculture. The low income levels of farmers and farmers’ income inequality in poor states such as Odisha and prosperous states such as Punjab indicate the policy dissonance among the states when it comes to prioritising agriculture.

The homogenous policy frameworks are inadequate to capture the nuances and subtleties that are crucial to remove income disparities among agricultural labourers and cultivators. An attempt is made to highlight the transition from agrarian to industrial development of the economy.

A targeted approach is essential in dealing with agriculture-related issues owing to the diversification of the field. Institutional, administrative and governance issues deprive agricultural labourers in availing formal credit, thereby pushing them into a vicious cycle of indebtedness.

It must be understood that states, or for that matter, Union government programmes and schemes are unable to lend a supporting hand to small and marginal farmers in providing the necessary institutional credit with an effective insurance backup. Debt waiver schemes have become an instrument of vote-bank politics and remain more rhetoric than practice.

Farm loan waivers are utilised as electoral instruments by political parties to attract votes of the farming community rather than as a sincere effort to mitigate the distress situation. Policies of agricultural development are failing to take into account the political economy factors that determine the policy response to the problems of farmers and agricultural labourers by the state.

Most of the policies are distantly related to the nature and role of the state, which is critical for agricultural development. The withdrawal of the state in agricultural development is evident in the era of neoliberalism.

The changing role of the state in the neoliberal era from regulator to facilitator of governance has widened the unequal access to land and the appropriation of land.

Even the modest socialist agenda of land reforms has taken a back seat, perpetuating the existing socio-economic inequalities among the farming community and forcing migration of farmers from rural to nearby towns and urban areas. It’s high time for both Union and state governments to bring in the long-due structural reforms in agriculture to rekindle the spirit of farmers through institutionalisation of the credit system and necessary changes in the agricultural produce market committees (APMCs).

The role of big farmers (erstwhile landlords or Zamindars) in regulating the APMCs through their local political affiliations is one of the institutionalised control mechanisms.

The political-business cycle between the large farmers, traders, contractors and their connections to local politics comes in handy at the time of elections for both funding and meeting other necessary expenditures. The nuances of the land governance regime operating in a neoliberal era reveal the different facets of market forces, including capital and private actors, in pushing farmers into a vicious cycle of indebtedness.

It is surprising why there is not much policy discussion on the risks associated with the credit system available to farmers through informal modes.

The structural hindrances such as jaati (caste-based) discrimination, unreachability to the landless, small and medium farmers, issues of collateral security and high interest rates are effectively denying the credit system, adding to farmers’ vulnerability to the financial crisis.

For example, in the states of Telangana, Odisha, Madhya Pradesh and West Bengal, interest rates charged by the informal money lenders range between 30-80%. This figure is just an approximation and the actual rates may be higher than the indicated percentage.

The agrarian crisis has deepened since the adoption of neoliberal model of governance and development. The ongoing farmers’ protests, which sometimes turned violent, signify the acute rural agrarian distress that has seen unprecedented farmer suicides.

This reflects the continued neglect of agriculture by the successive governments of all the mainstream political parties in the post-independence period, specifically in the post-economic reform period.

The Union and state governments are not showing a keen interest in addressing the problems of agriculture that are rooted in policies, institutions, market structures; instead, they are pursuing their vote-bank politics through populist schemes.

In the context of the political economy of agrarian crisis and rural distress, it is pertinent to understand the political motivations behind the ongoing protests. The question is, will political parties draw the right inferences from the protests to re-channelise their focus on agriculture?

Developmental State

The State’s withdrawal facilitates and even strengthens the role of private players, thereby creating a monopoly of private entities in the long run.

The detrimental effect of this voluntary stepping back has pushed agriculture into a vicious cycle of non-entrepreneurial enterprise for farmers. The policy deficits in terms of not providing minimum support prices for crops other than rice and wheat discourage farmers from innovating or diversification of crops.

The rising cost of agricultural production and the withdrawal of the state in addressing the structural impediments are one of the main determining factors of the agricultural development in the country.

The policies of the state need to be in consonance with the agro-climatic zones of the country rather than a general policy framework. Each state has to formulate agricultural policy keeping in view of the specific local conditions and needs of the people.

Most importantly, agriculture being one of the biggest sources of employment for more than 50% of the workforce means that it be given prime importance along with industry and the services sector.

The nation’s well-being is directly dependent upon reducing farmer suicides in the country through relevant policies. This can be done only by the state's sensitivity to the needs of farmers and actions towards agricultural development.

(The writer is a lecturer at Siddhartha Law College, Vijayawada)