Budget 2004-05 : Farmers are the new untouchables
For
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 ungrateful nation.
The
writing is clearly on the wall: farmers can go on committing suicide.
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 own lives.
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 th 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 diversification
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
world provides.
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)