Economic Highlights

New Delhi, 6 February 2015

Agriculture In Crisis

FOOD SECURITY CRITICAL

By Shivaji Sarkar

India may face a severe food shortage. Agriculture is in acute crisis. Farmers are quitting for becoming labourers in cities. Rural migration is taking menacing proportion. Neglect of agriculture for decades and considering it to be a burden by economists is taking a toll on the economy itself.

Agriculture is nowhere in the economic radar of the past many five-year Plans. Prime Minister Narendra Modi has said that the country planned for 4 per cent growth each year and settles for 2 to 2.5 per cent. Nobody has tried to correct it.

The latest National Sample Survey (NSSO) survey has exposed the lopsided development of the country. It points out that about 58 per cent of the farmers starve every day. It says they get no more than one meal a day. Its findings present an appalling picture that the farm sector has become a losing proposition for most farmers. They are forced to leave it, sell their land and look for alternative by migrating to the cities.

It is not surprising. In 1996, World Bank (WB) had predicted the dismal picture. It had estimated that in the next 20 years – till 2015 – rural migration to the cities would be about 20 crore, equal to the combined population of France, Britain and Germany. However, the bank is not giving a solution to improve the farm conditions. It somewhere endorses it. In 2008, its World Development Report pressed for land acquisition and said that for improving the skills of the rural youth, training centres should be set up all over the country so that they could become industrial labourers, something the nation is talking now.

The WB design is simple. It wants to provide cheap labour to the world corporate at the cost of Indian agriculture. Surprisingly, even RBI Governor Raghuram Rajan endorsed the view. He had said that India would progress if we could take people out of agriculture and to the cities.

This is a pernicious mindset. The official figures state that 54 to 58 per cent of the population, over 70 crore, are still employed in the farm sector. The latest NSSO figures say that of the 15.61 crore rural households (about 75 crore people) 57 per cent are dependent on agriculture. Since the 1991 Manmohanomics, the country leaps from one to the other crisis.

In mid-1990s, the “progressive” economists had been saying that India need not produce food grain. It could take to cash crops, earn dollars and import food grain. Now there are the new generation of economists, some are supposed experts in foreign trade, who say that India should buy large patches of land in Africa, produce food grain there and bring it back (import)! The land should be utilised for industrial purposes to give the GDP a boost.

The mindset has harmed the entire economy and agriculture in particular. The farmers are not only starving but also are forced to move out of the fields. The 2011 census figures reveal that every day at least 2400 farmers are migrating to cities. The estimated migration figures touch 50 lakh a year. In addition, about three lakh farmers have committed suicide during the past 17 years. Many of them were unable to repay a loan of as low as Rs 50,000. About 42 per cent others are willing to leave farming if they get a better employment.

How improperly the farmer has been dealt with is evident from the growing numbers of farmers turning into MNREGA job card labourers. The NSSO says that 40 per cent of farmers constitute this force. Even landholding is becoming smaller. Over 70 per cent farmers have less than a hectare of land. Quite often for the marriage of children or to meet other needs a part of the land is sold out.

According to the NSSO survey, a five-member farm family earns Rs 3078 from sale of farm products, Rs 765 from dairy-related activities. If Rs 2069 earned from MREGA or other labour-related activities and Rs 514 from non-farm activities are added, they have total household income of Rs 6426. It means not more than 60 per cent of a farm family income comes from the core farm activity. This is so after 45 years of the green revolution. If funds spent on R&D do not yield result, it calls for introspection.

It is also a fact that public investment in agriculture has been abysmal. The 11^th Plan allocated Rs 1 lakh crore and the 12^th Plan 1.5 lakh crore for agriculture. In 2014-15, the farm sector employing about 58 core people was allocated a mere Rs 24,000 crore. In contrast, the incentives paid to corporate were a few lakh crore. (This is apart from the figure of tax forgone stated in the budget papers).

There is another contrast. The incentives benefit each corporate house. The Government farm allocations do not make the farmer richer by even a rupee. Virtually agriculture does not get any public funding. The only aspect that is said to be taken care of by public funding is the minimum support price (MSP). During the past three years wheat and rice MSP have increased by about Rs 50 a quintal a year.

This is not even neutralising the inflationary pressures on the farmer. His seed, fertiliser and all other input costs have increased manifold.

Instead suggestions have been given for abolition of MSP and even stoppage of government purchases. The critics of MSP want it removed, to reduce an annual food purchase bill of about Rs 26,000 crore. Even developed countries such as the US, Canada, and European nations continue subsidising farmers, despite WTO negotiations. In India, we do not have any subsidy for the farming class. Even the Agriculture Prices Commission has echoed this. None of them say that the MSP benefits mere 8 per cent of those employed in farm activities.

The rest of the 98 per cent are directly dependent on market forces that includes large exploitative corporate. The MSP benefits Punjab farmers but it does not benefit those in Bihar. If MSP is abolished, Punjab farmers may face the distress of those in Bihar. The latest sermon of the food ministry to States to stop payment of additional bonus of over MSP is a step to add to the woes of the farmers.

If the Indian economy has to make strides it cannot do so hiving off agriculture, ignoring the needs of rural labour markets and the dynamics that add growth to the economy. ---INFA

(Copyright, India News and Feature Alliance)