Economic Highlights

New Delhi, 17 July 2015

Vital To Break From Past

WANTED: FARM-BASED ECONOMY

By Shivaji Sarkar

The nation is looking at Prime Minister Modi for a break from the past, rather many pasts, to usher in a regime of new people-oriented policies. Plainly, not only a change from Manmohanomics but also from the colonial anti-farmer mindset. It wants NITI Aayog to transform India and not become a poor shadow of the erstwhile Planning Commission.

Undoubtedly, India needs to change its lopsided policy for industrialization. Given that over the past 65 years the country has found that industry, from manufacturing to real estate, has been greedily acquiring fertile land because that is the cheapest wherein just by dangling a carrot one can deprive a poor unorganized owner.  

There has to be a balanced equitable development of agriculture.  The contempt for farming has to be given up. As agriculture is not just tilling of the land but in a wider term includes many activities. Namely, pisciculture, animal husbandry, dairying et al. Moreover, it is an enterprise based on systematized knowledge (science) and requires skill.

Notably, agriculture is done for the purpose of producing food and taking care of other human needs such as clothing, shelter, medicines, weapons, tools, ornaments etc. It is likewise practiced as a business for economic gain and industry should co-exist and thrive with agriculture.

Alas, India has ignored these aspects while trying to replace the colonial Land Acquisition Act of 1894. Recall, that Act had taken for granted that farmers had to lose their land for the profit of the colonial masters and their agents.

The Land Act of 2013 which seeks to replace the old one is not in variance with the basic concept, except that it adds the clauses of consent and social impact studies which officials find cumbersome and impractical.

The proposed LARR Bill which seeks to raise compensation reinforces the view that the farmer virtually has little right on the land. He has to give it up for large consolidated profits, supposedly adding to the GDP. This is how it had happened as British colonialists’ encouraged indigo plantation.

Pertinently, in 1980, arable land was roughly 180 million hectare (mha); in 2009-10 it reduced to 140.2mha according to a study by the Department of Agriculture and Cooperation. During this period, 40 mha was taken for non-agricultural use, largely industrial and real estate.

Clearly, this underscores that land acquired by industrial groups has been increasing at the cost of agriculture, that too at a critical juncture when the demand for food and population have been rising.

Worse, more industrialization has not translated in to creation of jobs. In fact, high-capital units employ fewer people while Government statistics reveal that agro-related employment has not come down.  In 1999 it was 237.67 million (23.8 crore), 2004-05 it was 258.93 million (25.89 crore), and 2009-10 it rose to 244.85 million (24.48 crore).

On the obverse, in 2010, services employed 11.16 crore (116.34 million) up from 11.12 crore (112 million) in 2005 and manufacturing 5 crore (50.74) million from 5.5 crore (55 million) in 2005.

Agriculture was employing 74 per cent in 1972-73, 56.7 per cent in 2000 and 54 per cent in 2012. Industry employed 11.4 per cent in 1972-73; in 2000 17.56 per cent and 2012 around 18 per cent. Services in 1972-73 employed 14.6 percent, which has now increased to 25.74 per cent.

Thus, the popular belief that industry or services give more jobs is lopsided.

Importantly, the Modi Government has to realize this hard fact. It has to move away from the utopian view of weaning away people from agriculture to other sectors. In reality, today about 75 crore people are dependent on agriculture. Can industry sustain such a large population?

Already, deprivation or ignoring the farm sector has caused immense problems for this country. Latest studies released recently reveal attention-grabbing data: No land acquisition has the capacity to empower farm-related people. And compensation of four times the present cost is not a solution.

This only makes land more expensive and speculation lucrative wherein a farmer continues to be the loser. He not only loses his land, livelihood but also the prospect of empowering himself.

Besides, corporates hold land much in excess of their need. Once acquired from a farmer, it becomes their property. An example: The Heavy Engineering Corporation (HEC), Ranchi acquired 7199.51 acres from 23 villages by evicting farmers who were mostly tribals, in 1958 for producing heavy machinery.

But this was far in excess of its needs. Today, the company is in a loss and needs Rs 1353 crore for its expansion with Russian and Czech companies. So it plans to sell land to raise Rs 453 crores. Each acre, which was acquired for a song, now costs Rs 10 crore resulting in HEC having land worth almost Rs 50,000 crore.

Notably, this is the reason why farmers are wary. Ditto is the case with numerous non-functioning special economic zones (SEZ). Land held by corporates is never transferred back to the original user. Bluntly, this becomes their commercial asset but also spells exploitation of the poor farmers in perpetuity.

This has to change. The outlook for industry and the farm-enterprise needs a relook. Whether IMF, World Bank or WTO likes it or not, India has to reject their prescriptions. The WTO emphasis on denying subsidies or any kind of State support to farmers has led to almost ruination of Indian farming.

In fact, NITI Aayog Chairman Aravind Panagariya reflects the same western views when he calls for liberalization of land leasing laws to push industrialization. He fails to realize that farming itself is the biggest industry and needs the necessary support to boost Indian GDP.

If the farm sector GDP has come down to 14 per cent, it is because of its utter neglect since 1991. Evidently, world bodies are conspiring with some western nations to keep Indian farming under stress so that the country is prevented from becoming a powerful competitor.

Certainly, ignoring the farm sector has caused immense rise in poverty, disparity, rural-urban divide and the rupee losing its purchasing strength. The Indian farmer needs freedom from the colonial mindset, protection from land mafia and support, financial, technical and marketing, to give the country the best produce at competitive prices.

Remember, deprived people voted Prime Minister Modi to correct the path convoluted by Manmohanomics. They have trust in him. They want Modi to take the lead to change the economic pattern. A farm-based economy ---- not farming exploited by industry --- alone can boost growth. The nation waits for the Prime Minister to take the bold giant leap for socio-economic development. ----- INFA

(Copyright, India News and Feature Alliance)