Economic Highlights

New Delhi, 14 March 2015

Unending Suicides

MAKE FARMING PIVOTAL

By Shivaji Sarkar

A number of farmers in UP and neighbouring areas committed suicide owing to untimely rains damaging their crops. Ironical isn’t it when the Union Budget has given some sops to agriculture. It has announced financial support to extend irrigation and soil health, raise agricultural credit limit and promises to create a unified national agricultural market.

The budgetary steps are expected to increase agricultural productivity and fetch a fair price for the farm produce. Over the decades food grain production has doubled to 264 million tonnes in 2014. Despite this, farmers and those associated with agriculture remain in deep crisis – be it food grain, cotton, dairy, spices or now rubber. There is hardly any measurable improvement in the lives of millions of poor and marginal farmers, who till the land to fill the food basket.

The corporate politics of cornering subsidies, in the guise of incentives, has made farm subsidies a bad word. In reality, never any subsidy by any regime was paid to the farmers. It was restricted to some farm inputs like fertilizer or minimum support price (MSP). The benefit of fertilizer subsidy went to the corporate.

The MSP benefited the mammoth Food Corporation of India and indirectly even the corporate as FCI acted as their hoarders that helped them hike food prices in the market. Galloping inflation can be attributed to this phenomenon.

What is there for elation in higher farm credit limit? The society or the Government does not pay a penny. The banks are asked to do it. These are no angels. Many suicides by farmers could be attributed to highhanded manner the farmers are dealt with by the banks and their officers.

The recent suicides in Bundelkhand, a parched region had to bear the worst. Untimely heavy showers and hailstorm damaged crops in thousands of hectare area. Poor farmers having raised the crops with debt were in severe depression as they did not know how to repay.

It is agonizing. The erstwhile Planning Commission always rued the poor 14 to 18 per cent GDP generated by agriculture. It is almost the same as from manufacturing, which employs a mere 12.5 per cent of the work force about 14 crore. In contrast, agriculture employs 58 per cent – almost 75 crore. The manufacturing and industry gets tremendous stress from the official quarters. The agriculture virtually remains a neglected sector.

It is peculiar. The sector that gives livelihood to the largest number of people is in acute crisis. More people are keen to leave this sector. Farming entrepreneurs are being treated poorly. They want to go to white collar jobs or just are clogging the cities to eke out a living.

This is reflecting in bad statistics. It says the number of poor is coming down. In reality income equality is increasing. Urban infrastructure is collapsing. The country may be having an imaginary high GDP but the high prices and poor quality of life, owing to neglect of agriculture is reflecting in all sectors.

Without improvement and stability of living conditions of those in the farm sector, a boost to demand, that leads to manufacturing and all other sector growth, is difficult if not impossible.

The new “avatar” NITI Ayog needs to understand. Policymakers need to focus on increasing inequality. Much of the increase in income inequality is on account of those being dependent on agriculture remaining poor. On a per capita basis farm worker earns much less than those working in the services and the manufacturing sectors.  Factors aggravating distribution of income are of two kinds: Those specific to agriculture and those pertaining to the farm sector's linkages to industry and services.

The Manmohanomics stress on middle class proved an ethereal proposition. The rising prices owing to mismanagement of agriculture, corporate-Food Corporation nexus and cartelization has proved too expensive. It has brought down the middle class to the poverty level, large joblessness as industry turned whimsical and fall in demand in all sectors.

The obvious corollary was the circumspection of the investors. Even now the UK and other EU governments have asked for more tax concessions to make investments possible. Unless the rural sector conditions improve, foreign or Indian investment would remain on papers.

For changing the rural sector conditions, many World Bank and regional studies stress on increasing farm investment pattern. Again it is being done through corporatization. This means further exit from the farm sector but to no benefit of the country.

It calls for a change in changing the orientation of the economy. Farm sector is being treated as a pariah or at best an instrument that could be exploited by the corporate. In a softer way they want it to be subservient to the corporate interest.

Sadly, that is the fallacy. Mere tokenism in agriculture would no more do. Neither corporate has the capacity to ameliorate the conditions of 75 crore people nor it can give them employment. Large number of farmers is entrepreneurs. They need to be treated better. The approach of most government bodies and advisories are restricted to turn them into corporate labourers – a pernicious approach that has severely caused distress to the Indian economy. At least to that extent Mahatma Gandhi and ideologically divergent Deen Dayal Upadhyay were on the same page.

The Indian farmer can do more than feeding the people. If they feed properly at affordable costs, Indian economy is bound to get the needed boost. This has to come through an imminent policy change and prioritization by Prime Minister Narendra Modi. The approach would make a lot of difference. The farmer since ancient times has been a multi-tasking person. Many of the rural skills and businesses have developed because it was the farmer who was managing it be it khadi, dairy, pisciculture, cash crops in addition to food production. The British deliberately convoluted it.

Farmers are looking up to Modi. His support, financial and otherwise, can change the face of rural sector and with that of the country. It can happen with the farm sector being made the pivot or at least treating it as the booster for the economy. There is a clamour for change. Modi needs to do it. –INFA