the BJP-led National Democratic Alliance, and now the
Congress-led United Progressive Alliance, farmers have
become the new untouchables. If the two Budgets presented
in 2004 are any indication – first the interim Budget
by the outgoing Finance Minister Mr. Jaswant Singh, and
then the Budget 2004-05 presented by his successor Mr.
P. Chidambaram – agriculture has become a burden on an
writing is clearly on the wall: farmers can go on committing
Amidst the rhetoric of strengthening agriculture or
emphasis on agriculture to make villages smile, Mr P
Chidambaram has followed the age-old principle: repeat
the promise a hundred times and it will be taken as
truth. With the ignorant electronic media, and the print
journalist latching on to the right vocabulary that
Mr. Chidambaram used, an impression is being given that
the Budget 2004-05 promises to ‘tax India, fund Bharat'.
In reality, it has failed Bharat.
This is exactly what happened with the ''India Shining''
promos. The media, including the newspapers, had accepted
it without any question. In fact, the media was used
by the ruling party to disseminate the message far and
wide. The media is once again being used very effectively
and has become a convenient ally to political rhetoric,
manipulations and machinations.
''We've shown that we are a caring government by addressing
agriculture, rural economy and infrastructure,'' the
Finance Minister was quoted as saying in one of his
routine post-Budget interviews on the television. In
reality, Mr. P. Chidambaram did not provide any additional
outlay for agriculture or the allied sector. Nor did
he provide any indication of a road map for boosting
agriculture growth. Such is the insensitivity to agriculture
that he did not even make a mention of the growing crisis
on the farm front that was forcing farmers to take their
It is true that agriculture sector requires massive
investments. To say that such investments have to be
made through credit-enabled private investment and enhanced
public investment (for which no indication is available)
shows the step-motherly treatment being doled out for
agriculture. When it comes to industry and corporate
sector, the government never shies away in making a
direct investment in the name of boosting efficiency
and competitiveness but for agriculture it has to be
through enhanced credit!
Doubling the flow of agricultural credit in the next
three years is not the answer to the blood bath that
is being enacted in the ravaged farm sector, a direct
fallout from the green revolution equation going wrong.
A majority of the thousands of farmers who continue
to take the fatal route to escape the humiliation that
comes along with increasing indebtedness, are actually
dying because of their inability to repay the loans.
Credit is therefore part of the problem, and how the
policy makers think of solving the problem (inability
to repay the loans) by extending more loans surely defies
any sensible logic.
What the farmers need is an assured income. Like everyone
else who lives in the urban centres, he too needs an
adequate monthly package that takes care of his family
needs and leaves him with a little surplus to sow the
next crop. Successive governments, through the process
of annual Budgets, have actually ignored the plight
of the farming community thereby acerbating the agrarian
crisis. Such was the contempt against anything rural,
that for the BJP-led coalition, Bharat had simply disappeared
from the economic radar screen. Unfortunately, the UPA
too is following the same model of economic growth.
Studies by the Ministry of Agriculture have clearly
demonstrated that farm incomes have fallen in the past
five years. Rice farmers in West Bengal for instance
earn less by 28 per cent in 2002-03 than what they earned
in 1996-97. Incomes of sugarcane farmers decreased in
Uttar Pradesh by 32 per cent and in Maharashtra by 40
per cent. Farm incomes of north Indian farmers eroded
by 10 per cent on an average. The sharp decline
in farm incomes is happening at a time when incomes
in the urban areas is on an upswing. If
nothing better, Mr. Chidambaram could have at least extended
the crop insurance cover. For the past 20 years, the
government has been talking of introducing crop insurance.
It hasn't gone beyond the pilot testing stages. Even
at times when insurance has become a strong plank of
globalisation, this service industry refuses to touch
the farm sector. Instead of saying that the crop insurance
scheme will be extended on a trial basis to 20 rain
gauge stations in the current crop season, Mr. P. Chidambaram
should have learnt a lesson or two from the newspaper
industry. Some newspapers had announced a life insurance
cover of Rs 2 lakh to each of their subscribers if they
buy the newspaper for three months.
If only Mr. Chidambaram had extended this cover to the
farm sector, thousands of farmers who sacrificed their
lives at the altar of development could have been saved
from the gallows. All that the government needed to
do was to provide them with a newspaper subscription
for three months.
Doubling horticulture production in the next ten years,
and launching a National Horticulture Mission is a faulty
prescription. The fault is further compounded by the
assertion that horticulture production will be enhanced
by following the cooperative dairy structure. First,
it has to be known that India is amongst the world's
top producers of fruits and vegetables. The average
availability of horticultural products is around 780
grams per day. However, against the prescribed minimum
nutritional norms of 90 grams to be consumed daily,
an average Indian only manages to eat 40 grams.
Increasing horticulture production therefore is not
the answer. The challenge is to see how to increase
the consumption of existing horticultural produce. Add
to it the declining consumption of cereals in real terms,
the message is crystal clear. For bulk of the population,
the capacity to buy food is eroding fast. This is leading
to worsening of poverty and thereby leading to acute
malnutrition. The Economic Survey, presented a day before
the Budget, clearly stated that cereal consumption within
a year had fallen drastically, from Rs 1,58,621 crore
in 2001-02 to Rs 1,24,560 crore in 2002-03, indicating
worsening poverty levels.
Moreover, if the dairy cooperative system is such a
wonderful mechanism to boost production, there seems
to be no justification for all the efforts being made
to dismantle the Amul cooperatives. The milkman of India,
Dr George Verghese, is unhappy today, tired of pleading
with the bureaucrats not to tinker with the Amul cooperatives.
Isn't it therefore surprising that on the one hand the
government is increasing joint ventures in dairy cooperatives
thereby taking away the spirit of cooperation and on
the other the same system is being advocated for another
new thrust area.
Exemption granted to the tractor industry by scrapping
the excise duty of 15 per cent comes only few months
after the industry reaped in a bonanza by the lowering
of the bank interest rates for farm sector. What is
being hailed as a right step for modernising agriculture
is in reality emerged as the biggest killer on the farm
front. Aggressive tractor marketing has lured small
and marginal farmers to buy tractors on easily available
loans. Since the majority land holdings fall much below
the viability criteria of at least ten hectares of land
needed to maintain the machine, a majority of them get
into a debt trap within a year of buying a tractor.
A large number of such farmers end up committing suicides.
Tractor availability has already crossed the thresh-hold
limit. It is time the government makes tractors out
of the reach of the farming community despite the industry
crying foul. Too much is also being made out of the
new scheme promised for water harvesting. There are
already 70-plus scheme for water harvesting operating
in the country, another scheme with an additional outlay
of Rs 100-crore is not going to make any difference
unless we remove the structural flaws in cropping pattern
that leads to water crisis.
It seems the policy makers and planners have exhausted
all other options to prop up the farm sector. It reminds
me of the five blind men and the elephant. No wonder,
crop diversification has become the easy escape route
to those who are trying to find ways to help agriculture.
This is exactly what the World Bank and the IMF have
been telling the developing countries to do, and this
is exactly what is being perpetuated under the free
trade regime being enforced through the World Trade
Organisation. The developing world is being repeatedly
asked to stop growing crops that are being negatively
impacted by monumental subsidies that the rich and industrialised
countries provide for their agriculture. This is exactly
what I have been warning all these years. Let us therefore
first understand the politics behind the emphasis on
The World Bank/IMF have under the Structural Adjustment
Programmes (SAP) very clearly tied up credit with crop
diversification. It continues to force developing countries
to shift from staple foods (crucial for food security
needs) to cash crops that meet the luxury requirement
of the western countries. It has therefore been forcing
developing countries to dismantle state support to food
procurement, withdraw price support to farmers, dismantle
food procurement, and relax land ceiling laws enabling
corporates to move into agriculture. Farmers need to
be left at the mercy of the market forces. Since they
are ‘inefficient' producers, they need to be replaced
by the industry.
The same prescription for farming has never been suggested
for the rich and industrialised countries. Let us be
very clear, one part of the world that needs to go in
for immediate crop diversification is the industrial
world. These are the countries that produce mounting
surpluses of wheat, rice, corn, soybean, sugar beat,
cotton, and that too under environmentally unsound conditions
leading to an ecological catastrophe. These are the
countries that inflict double the damage – first destroy
the land by highly intensive crop practices, pollute
ground water, contaminate the environment, and then
receive massive subsidies to keep these unsustainable
practices artificially viable. These are the countries
that are faced with the tragic consequences of massive
farm displacements, and are in the grip of food calamities
arising from industrial farming.
If India or for that matter other developing countries
fail to understand the prevailing politics that drives
the agriculture trade agenda, the world will soon have
two kinds of agriculture systems – the rich countries
will produce staple foods for the world's 6 billion
plus people, and developing countries will grow cash
crops like tomato, cut flowers, peas, sunflower, strawberries
and vegetables. The dollars that developing countries
earn from exporting these crops will eventually be used
to buy foodgrains from the developed nations – in reality,
back to the days of ‘ship-to-mouth' existence. All this
is being attempted in the name of growth and development.
All this is being pushed by the corporate sector, which
has shown no responsibility towards the social sectors,
including agriculture. This is where the economic thinking
has gone wrong. And this is where the media has fallen
an easy prey to the glamour and glitter that the corporate
This reminds me of what the former Finance Minister
of Pakistan and the author of the UNDP's Human Development
Report, the late Mahbub-ul-Haq (who was a personal friend
of Dr Manmohan Singh) had once remarked, ''We were wrongly
taught that we should take care of GDP and it will automatically
take care of poverty. Let us reverse it. We need to
take care of poverty and it will automatically take
care of GDP". And the World Bank reluctantly acknowledged,
though belatedly, ''the gap between some of India's largest
and poorest states exhibit slow progress in human development
indicators; low growth rates particularly in the agricultural
sector. If the present trends continue, the bulk of
the poor in these states will be unable to participate
in future growth.''
Like Mr. Chidambaram, Mahbub-ul-Haq too refused to accept
the stark reality – economic growth will not reduce
poverty and deprivation. He too believed firmly in the
conviction that the real purpose of development was
to increase savings and attract foreign investments.
As Pakistan's Finance Minister in the 1960s, he was
able to generate a GDP growth rate of seven per cent.
''And still people voted us out,'' he told me once, adding
''it was a rude awakening for me. I realised that economic
growth is no indicator of human development."
He had admitted that, expressing certain exuberance
that is the privilege of youth, he had all along argued
that GDP growth must supersede all other goals. Not
realising that in the bargain, poverty actually grows
whereas the benefits of economic development are reaped
by a handful of the rich industrialists and the elite.
On the other hand, revitalise agriculture and poverty
and growth are automatically taken care of.
(Devinder Sharma is a
New Delhi-based food policy analyst)