Bumper crops do not always make a prosperous farmer. What better demonstration of this than the recent spurt in incidents centred around farmer-related unrest in quick succession in Tamil Nadu, Maharashtra and Madhya Pradesh in spite of a good monsoon and bountiful harvest. What was simmering for a long time culminated in the June 6 incident in which five farmers were killed in police firing in Mandsaur in MP, setting off a chain of reactions.
Preceding this was the prolonged agitation by farmers in Maharashtra which saw farmers venting their anger by dumping crops and spilling milk on the roads, seeking a loan waiver from the government and better crop prices. What is more, the trouble started in the relatively prosperous region of Ahmednagar and Nashik, the rich belt known in Maharashtra for its cash crops.
Equally worrisome was the spilling over of farmers’ wrath when ryots from Tamil Nadu literally camped in Delhi’s Jantar Mantar in March and April and threatened to eat rats, paraded the streets without a stitch on them, and even resorted to drinking urine to force the Prime Minister take note of their abysmal plight. However, all this fell on deaf ears and shut eyes. The farmers from the southern State have again threatened to re-start their protests.
Years of cumulative neglect, lack of an effective price stabilisation mechanism for crops, absence of basic infrastructure in the farming sector, dwindling public investment over the years, a faulty minimum support price (MSP) apparatus wherein barring rice and wheat, there is no serious compliance with the prices fixed by the government for other crops, and finally an exponential increase in the prices of inputs such as fertilizers, which particularly saw the doubling of prices in seven years, farm labourers wages, power tariff and irrigation facilities.
As if this was not enough, the liquidity crunch on account of the recent demonetisation hit the farming sector really hard, reflecting in bank credit slowdown, complete breakdown of the rural banking sector, shrinking of trade in farm commodities and a sharp crash in crop prices.
Since Independence the phases under which Indian agriculture has gone through can be divided into three eras. First, the period between the 1950s and 1960s when it was a period of consolidation and large irrigation projects such as the Bhakra Nangal and Nagarjunasagar were built and there was an accent on irrigation and infrastructure.
The second phase saw the era of the Green Revolution between the 70s and 80s where productivity took centrestage and mechanisation and science helped farmers consolidate their gains.
The third phase, which began post-90s and exposed the farming sector to liberalisation has been disastrous because it laid bare the vulnerability of Indian agriculture and pushed into an uneven playing field. This was when the rampant suicides of farmers began.
In India, one just cannot ignore the prime place which agriculture has only because its contribution to the nation’s GDP hovers around just 15%. The task of feeding a massive population of 1.25 billion people and providing a meaningful livelihood to 45% of the population dependent on agriculture rests on the farm sector.
How should the government or the other stakeholders address the agrarian distress or farmer-related issues which are going from bad to worse?
According to P Sainath, Magsaysay award winner, journalist and long-time observer of agrarian issues, there is need for a proper understanding of the farm crisis today through the lives of farmers, farm labourers and people dependent on agriculture. He says that things have come to such a pass today that about 15 million people have been pushed off farming, leading to questions where they are headed to, vis-a-vis the much touted promise of creating one crore jobs by the Modi government.
Ironically, the moot question against this backdrop is if the government really wants to improve the lives of farmers or wants them out of farming!
Some analysts suggest that it is the latter. According to Himanshu, economist and Associate Professor at JNU’s Centre for Economic Studies and Planning, farming today has become a multidimensional problem hinging on factors such as timely credit, loan waivers, mechanisation, remunerative crop prices and lastly timely rains.
Several experts such as former RBI Governor, Raghuram Rajan, agree that loan waivers are not a solution to the farm crisis. They are just a temporary or a stop-gap measure, they argue. In fact, Rajan favours an end to the “culture of waivers.” Analysts also believe that waivers undermine people who repay their loans early and an effective credit culture goes for a toss.
Only Quick Fix
However, in the current political climate of ad hocism and ‘quick fix solutions’ the loan waiver has become a vehicle for political parties to ride to power.
Right from the days of the mega waiver of the UPA government in 2008 to the latest promised by the BJP-led government of over Rs 30,000 crore in Maharashtra, the trend shows a pattern so much so that Union Finance Minister Arun Jaitley, in a latest missive, has cautioned the State governments that they will have to honour the promise of a waiver all by themselves and the Centre will not have anything to do with it.
While it is agreed that loan waivers make for bad economics, but do we have a workable solution for a persistent problem affecting the lives of millions of farmers?
Looking at the long term, India needs systemic reforms in the farm sector, remunerative prices for crops, better safety nets for farmers and price stabilisation. There is need for higher public investment in agriculture and more funds to shore up infrastructural facilities such as irrigation, power, good roads and warehouses.
On the question of minimum support prices, some 25 crops come in this net. However, according to a study, just six per cent of farmers are the real beneficiaries of MSP.
If the nation is looking seriously at inclusive growth on its agenda, agriculture needs to take centrestage again and steadily increase its contribution to the GDP from the low 15% at which it stands today.
The problem plaguing the sector will only resolve when the annadata gets his due.