Farmers are heading towards extinction.

Some years ago, former President APJ Abdul Kalam was addressing students at an annual event organised by K Govindacharya’s Bhartiya Swabhiman Andolan at Gulbarga in Karnataka. He exhorted students to work hard, educate themselves to become doctors, engineers, civil servants, scientists, economists and entrepreneurs. After he had ended his talk, a young student got up and asked why he didn’t say they should also become farmers.

Abdul Kalam was floored. Whatever be his long winding answer, the young student had actually punctured his argument, and at the same time brought out the great bias towards farming.

This incident came to my mind when I was reading a moving essay by a farmer from the United States. Bren Smith, a shellfish and seaweed farmer writes in The New York Times, “The dirty secret of the food movement is that the much-celebrated small-scale farmer isn’t making a living. After the tools are put away, we head out to second and third jobs to keep our farms afloat.” Accordingly, 91 per cent of all farm households in the US rely on multiple sources of income. No farmer wants his children to take up farming in North America.

This is happening in a country where the Farm Bill 2014 makes a provision for $962 billion of federal subsidy support for agriculture for the next 10 years. In Europe, the situation is equally alarming. Despite 40 per cent of the European annual budget being devoted to agriculture, one farmer quits agriculture every minute. In Canada, the National Farmers Union has in a study shown that while the 70-odd agribusiness companies are raking in profits, farmers are the only segment of the food chain incurring losses. As I have been saying for long, more than 80 per cent of the agricultural subsidies in America and Europe actually go to agribusiness corporations.

Farmers are a dying breed. Writing in Newsweek magazine, Max Kutner says: “For decades, farmers across America have been dying by suicide at higher rates than the general population. The exact numbers are hard to determine, mainly because suicides by farmers are under-reported (they may get mislabelled as hunting or tractor accidents, advocates for prevention say) and because the exact definition of a farmer is elusive.” Well, what is happening in America is not an isolated development; farmers are dying across the globe.

According to news report, nearly 80 per cent of the 2,80,000 rural people who take their own lives every year in China are victims of farm land acquisition. In India, almost 300,000 farmers have ended their lives since 1995. Again, like in the US, farmer suicides are also under-reported in India with some states now trying to hide them by shifting these deaths to some other categories. Even in Europe, which provides massive subsidy support under the Common Agricultural Policy (CAP), the serial death dance continues unabated. In France, 500 suicides have been reported in a year. In Ireland, UK, Russia, and Australia farmers, are a dying breed.

In India, although we keep on saying that agriculture is the mainstay of the economy, in reality it isn’t. Employing some 52 per cent of the population, the share of agriculture in the country’s GDP has been progressively on the decline. It is less than 14 per cent now. I have been saying for long that small farmers have to get into multiple jobs to keep their chulas burning. Such is the pathetic state of Indian agriculture that some studies point to roughly 58 per cent farmers relying on MNREGA, which provides 100 days guaranteed employment.

Still worse, the people who feed the country actually sleep hungry themselves. More than 60 per cent go to bed hungry every night. Nothing can be a worse illustration of the great tragedy on the farm.

It’s not because of any unexplained natural calamity or the attack of a virus that the farms across the globe are dying. It is part of a global economic design to move farmers out of agriculture, and by doing so to shift food production into the hands of heavily subsidised and environmentally destructive agribusiness companies. It is generally believed that for any country to grow economically, the share of agriculture in the GDP must be brought down. In US, agriculture is only 4 per cent of its GDP. In India, it is less than 14 per cent now. By the end of 2020, I am sure it would be brought down to less than 10 per cent. Small scale agriculture is, therefore, deliberately being strangulated.

Such is the plight of Indian agriculture that in six years — from 2007 to 2012 — 3.2 crore farmers have abandoned farming and moved into the cities looking for menial jobs. According to census 2011, every day 2,500 farmers quit agriculture. Some other studies have shown that roughly 50,000 people migrate from a village (and that includes farmers) into a town/city every day. As per a NSSO study, 42 per cent farmers want to quit if given an alternative.

In Punjab, which is the frontline agricultural state in the country, 98 per cent rural households are under debt. Studies have shown that the average outstanding debt per household is about Rs4.5 lakh per year which accounts for 96 per cent of the yearly income. If farming is in such a terrible state in Punjab, the state of affairs in the rest of the country can be well imagined.

In my understanding, the unwritten economic prescription is to make farming non-viable so that farmers are left with no other choice but to quit. In a quest to keep food prices low, which comes in very handy to freeze the minimum support price for farmers the predominant economic thinking supports large agribusiness conglomerates. This is being made much easier by the growing demand for amending the newly enacted land acquisition law. More and more land will now pass on into the hands of industry and real estate, forcing farmers to do menial jobs in the cities. The demise of the farmer therefore is predetermined. It’s only a matter of time before the farmer as a species goes extinct. That is why Abdul Kalam doesn’t talk of the pride in farming anymore. (this article is an expanded version of one of my earlier blog posts). #

Source: 

1. Nothing to plough back, DNA Mumbai. Aug 27, 2014.

http://epaper.dnaindia.com/story.aspx?id=69990&boxid=19647&ed_date=2014-08-27&ed_code=820009&ed_page=8

2. त्रासदी की शिकार कृषि Dainik Jagran Aug 25 214. http://www.jagran.com/editorial/apnibaat-agriculture-victim-of-tragedy-11579455.html …

When will Indian agriculture become economically viable?

Speaking after inaugurating the 166-km-long four-lane-road project at Kaithal in Haryana the other day, Prime Minister Narendra Modi promised to turn farming profitable ushering in prosperity for farmers and at the same time result in overflowing foodgrain godowns.

Coming at a time when agriculture continues to reel under a terrible agrarian crisis, when an estimated 60 per cent farmers go to bed hungry, and at a time when close to 10-lakh farmers abandon agriculture and trudge into the cities looking for menial jobs every year, the promise to make farming economically viable is like a blessing from the heavens. For the 600 million farmers, somehow surviving against all odds, there can be nothing more cheerful. But will this really happen? 

Successive governments have only added on to the farm woes by continuous neglect and apathy. Going by the mainline economic prescription of cutting down drastically the population engaged in agriculture to boost economic growth, the policy thrust has been to push farmers out of agriculture. Creating economic despair, and hand over precious natural resources, including fertile land, for non-farming purposes therefore became an easy route. Perhaps the Prime Minister will see through the folly, and reverse the trend to ensure that the benefits of economic growth are judiciously and equitably distributed. India has the ability to chart out an economic development model that does not add to global warming as well as rampant destruction of natural resources.

This is possible if the policy thrust shifts to encourage sustainable agriculture and thereby in the process gainfully employ 600 million people. I don’t understand the economic rationale of displacing farmers from their meager land holding, and forcing them into the cities to work as daily wager workers or drive auto-rickshaws. Displacing people from their stable jobs in agriculture and re-locating them to the cities to work as labourers in infrastructure projects is no job creation. The challenge is to make agriculture more profitable, and ensure that improved skills are provided to farmers. An economically viable agriculture not only boosts economic growth, removes economic disparities, but also ensures food security. Let’s be very clear: a food importing country can never be economically powerful.

It is in this connection that the Prime Minister deserves all the applause for taking a bold stand by not succumbing to international pressure at the World Trade Organisation (WTO). By refusing to sign on the protocol of amendments to the Trade Facilitation Treaty unless a permanent solution to the vexed problem of providing minimum support price to Indian farmers is resolved, Narendra Modi has sent a strong message. After all, if Japan can impose 738 per cent import tariffs on rice and 328 per cent on sugar – so as to protect its domestic farmers and industry, why can’t India stand firm to protect its farmers as well as its hard-earned food self-sufficiency.

This has to be now translated into policies and actions that can revive domestic agriculture. To understand the political implications of neglecting agriculture let’s revert back to the days when Lal Bahadur Shashtri was the Prime Minister. The year was 1965 when India was hit by a devastating drought. India had imported 10 million tonnes of foodgrains under the PL-480 from North America. But later in the year, in an interview with an American journalist Shashtri was asked: “What did he think about the war in Vietnam?” To which Shashtri replied: “It is an act of aggression.” This small sentence annoyed the then US President Lyndon Johnson.

It is very easy to teach a lesson to a hungry nation. US stopped food exports to India under what is called a ‘stop-go’ policy. So much so that at one stage only food stocks for another week was left. This prompted the then Food Minister C Subramaniam to send an SOS to US president requesting him to divert the ships carrying foodgrains to India otherwise millions would die of hunger. The UN FAO had also appealed to the US President. India thus had rightly earned the epitaph as a country living in a ‘ship-to-mouth’ existence.

Mrs Indira Gandhi too had faced the brunt of food diplomacy. Soon after she took over as Prime Minister, at a time when the drought had continued for the 2^nd year in 1966, Mrs Gandhi had allowed the import of high-yielding seeds of wheat from Mexico to usher in what is now called as Green Revolution. Agriculture scientist Dr M S Swaminathan, who is hailed as the father of India’s Green Revolution, once told me that the seeds of Green Revolution were actually sown in a car journey that he took with the Prime Minister. During the short car journey Dr Swaminathan recalls Mrs Gandhi had sought a commitment from him if he could provide an assurance that “India will have a surplus of 10 million tonnes or so in a couple of years because I want the bloody Americans off my back.”

Dr Swaminathan made the commitment. The rest is history.

But a couple of decades after India become self-sufficient in foodgrains, a dangerous complacency has set in. In 2013-14, farmers produced a record harvest of 264.4 million tonnes of foodgrains. Production of oilseeds has reached a record high of 34.5 million tonnes, a jump of 4.8 per cent. Maize production increased by 8.52 per cent to reach a level of 24.2 million tones. Pulses production reached an all-time high of 19.6 million tones, an increase of 7.10 per cent over the previous year. Cotton production too touched a record high.

With such record production, the nation should be indebted to its virile and hardworking farmers. But they are not only being ignored, but penalized. Last year, in 2013-14, when farm production recorded a quantum jump, agriculture received 19,307-crore from the annual budget kitty, which is less than 1 per cent of the total budget outlay.  For 60 per cent population less than 1 per cent of is the resource allocation. In 2014-15, only Rs 22,652-crore has been given to agriculture and cooperation departments. In fact, if you look at the 11^th Plan period, the total outlay for agriculture was Rs 1-lakh crore. For the 12^thPlan period it was raised to Rs 1.5 lakh crore. Now what miracle can you expect when the governments deliberately starve the most efficient sector of the economy, which incidentally is also the biggest employer?

Just before Mr Atal Bihar Vajpayee took over as Prime Minister for the first time, a closed door meeting was held with some economists to work out the economic pathway for the new NDA government. I remember insisting that NDA would never faces anti-incumbency if it devoted 60 per cent of the annual budget to agriculture, which employs 60 per cent population. This was agreed upon, and was also talked about but in reality agriculture did not even receive 6 per cent of the annual budget. Agriculture in reality is faced with negative terms of trade meaning more money is being taken out from the rural economy than what is being invested.

It is primarily for this reason that the average income of a farming family in India, comprising five persons, has been computed to be less than Rs 2,400 a month. This is less than what a household help receives in a city. No amount of efforts to raise productivity or leaving farmers to face the vagaries of the market economy can help farmers realize a better income. Let’s be very clear, neither future trading nor by allowing big retail like Wal-Mart and Tesco to purchase directly from farmers has helped raise farm incomes even in US and European Union. It is direct income support that has made farming a profitable venture in the developed countries.

I am therefore hoping that the Prime Minister too would spearhead an economic renaissance in Indian agriculture. Mr Modi has a number of times talked of raising the procurement prices. But since procurement prices only benefit 30 per cent farmers, any tinkering in the form of ‘cost plus 50 per cent profit’ will only benefit a section of farmers. It is therefore time to set up a National Farmers Income Commission that aims at providing a monthly guaranteed take-home income package to farmers. This must be linked to production and the location of the farm.

If in the past nine years, the government has shelled out Rs 1,100-crore every day as tax concessions to India Inc, totaling Rs 36-lakh crores, which did not result in increased industrial production nor created additional jobs, I see no reason why even a quarter of it cannot be given to farmers. When I say this I am not being against industry, but at the same time I see no economic justification in why industry should be allowed to replace agriculture. It should in fact be supportive of agriculture. India needs agro-based industries.

Imagine a scenario wherein farming becomes a profitable enterprise, as the Prime Minister said, the boost it will give to the Indian economy would be unprecedented. I only hope the Prime Minister lives his dream. #

Source: The Organiser, Aug 24, 2014

What going wrong with Indian agriculture?

Reisernte in Assam (© picture-alliance/AP)

It's a paradox. With its grain silos bursting at the seams, and unable to store a massive surplus of wheat and rice, India is looking for every opportunity to export. After exporting 22 million tonnes of rice and wheat in the fiscal year 2013 (April 2012 to March 2013), India is expected to export another 18 million tonnes in 2013-14. In other words, India's food exports will touch a record 40 million tonnes in just two years. By the time the general elections are over in May 2014, another 31 million tonnes of wheat harvest is expected to be purchased by government agencies. This comes in the wake of a bountiful harvest expected this year – a record foodgrain production of over 263 million tonnes. 

Strangely, food exports are being encouraged at a time when close to 250 million Indians, one-fourth of the world's hungry population, somehow struggle to meet their basic food needs. It is primarily to address the growing food insecurity in a nation saddled with huge food reserves that the government has finally enacted the National Food Security Act 2013 making legal provisions for a monthly per capita entitlement of five kilogram of wheat, rice or millets at a highly subsidized price to those living below the poverty line. Even though this is not enough to meet the nutritional requirement of an average household, it will provide some relief to those living in absolute hunger. To meet the food distribution requirements under the new food security law, the government will annually require about 61 million tonnes of food reserves. The Act caters to 67 percent of the population or roughly 830 million people, including the destitute, the old and infirm, as well as the homeless and migrating populations. 

WTO objects

It isn't that India cannot produce enough food to feed its burgeoning population. But what is coming in the way is the international pressure that aims at limiting domestic production and opening the Indian market to cheaper food imports. At the Ministerial Conference of the World Trade Organisation (WTO) held at Bali in Indonesia in December 2013, the United States backed by the European Union had challenged the food security provisions. An agreement was reached wherein India accepted the "Peace Clause" for an interim period of four years. The clause originally provided exemption to those countries that used export subsidies for agriculture beyond the permissible limit. It had expired at the end of 2003, but is being reintroduced to ensure that India's subsidies are not challenged. 

At the heart of the problem is the increasing amount being spent on public stockholding of foodgrains and thereby the rise in administered prices for wheat and rice that is procured from small farmers every year. According to the WTO Agreement on Agriculture, the administered or subsidised price paid to farmers by the government cannot exceed the de minimis level of 10 percent of the total value of the annual production. India, however, has already exceeded the limit in case of rice where the procurement price has shot up to 24 percent from the cut-off period 1986 to 1988.

It is not the food subsidy bill that is actually under the radar, but in reality it is the procurement price system that India administers to its small farmers that is now on the chopping block. If India is forced to limit the rice procurement price at 10 percent of the total value of production, and similarly refrain from increasing the wheat procurement price in the years to come, it will spell a death knell for agriculture already reeling under a terrible distress. Procurement price cushions farmers against the distress price that markets extract at the time of harvest. 

According to the US-based Environment Working Group, America had paid a quarter of a trillion US Dollars (179,7 billion Euros) in subsidy support for agriculture between 1995 and 2009. In the 2014 Farm Bill, these subsidies have been further extended. It provides for nearly 1 trillion US Dollars (718,6 billion Euros) in support for agriculture in the next ten years, including 756 billion US-Dollars (543 billion Euros) for the food aid programmes administered under the Supplemental Nutrition Assistance Programme (SNAP). 

Agricultural subsidies results in massive dumping of foodgrains across the globe thereby dampening farm gate prices, and pushing farmers out of agriculture. In any case, 14 agricultural commodity exports organizations have written to the US Trade Representative lamenting the temporary relief accorded to India under the "Peace Clause" thereby dampening the US export opportunities. In India on the other hand, wheat and rice growers have merely received 9.4 billion US Dollars (6,8 billion Euros) as procurement price in 2012. 

Agrarian Crisis

The effort by WTO to reshape Indian agricultural policies is happening at a time when Indian agriculture itself is faced with a terrible agrarian crisis. What began to be called as Second Generation Environmental Impacts resulting from the intensively-farmed Green Revolution has now blown into a full grown crisis in agriculture sustainability. With soil fertility devastated, underground water table plummeting as a result of relentless water mining, environmental contamination from excessive use and abuse of chemical pesticides, the entire farming equation has gone wrong. 

With agriculture becoming unremunerative over the years, and with the farm incomes steadily declining, a majority of the farmers want to quit farming if given an alternative. A recent survey by the New Delhi based think-tank Centre for the Study of Developing Societies (CSDS) has shown that 76 percent farmers want to leave agriculture. This is because farming has becoming an economically unviable proposition. According to the National Sample Survey Organisation (NSSO), the average monthly income of a farming family in India stands at a paltry 2,115 Rupees (about 25 Euros). In other words, a majority of the farmers are somehow surviving below the official poverty line. Farmers as a class are certainly at the bottom of the pyramid. 

No wonder, Census 2011 has shown that on an average 2,300 people are quitting farming every day and migrating to the cities looking for a menial job. Ironically, the crisis in agriculture is happening at a time when the country's economy has been on a growth trajectory. In the past decade, India's annual GDP growth had been at an average of 7 percent. Even between 2005 and 2009 when the average rate of growth was 8.3 to 9 percent, a Planning Commission study shows that 140 million people had left agriculture. 

Normally those who abandon farming should be joining the manufacturing sector. But even in the manufacturing sector, 53 million jobs were lost. More recently, CRISIL, a global analytical company has shown in a study that since 2007, over 37 million Indian farmers had abandoned agriculture and migrated into the cities. But in the last two years – between 2012 and 2014 – when economic growth had remained sluggish, an estimated 15 million have returned back to the villages in the absence of job opportunities. 

With roughly 54 percent of the population involved directly and indirectly with farming, and with the share of agriculture in country's GDP dipping to 14 percent, all is not well on the farm front. This is also reflected in the serial death dance on the farm that continues unabated. As per the National Crime Records Bureau (NCRB), approximately 300,000 farmers have committed suicide in the past 17 years. Even in the frontline agricultural State of Punjab, the country's food bowl, two farmers on an average are taking the suicide route every day. Nearly 60 percent of the farmers are deep in debt. What is more shocking is that a majority of those who produce food for the country actually go to bed hungry. 

Green Revolution

Nearly half a century after the Green Revolution was launched in 1966 by then Prime Minister Indira Gandhi, India has emerged out of the throes of a "ship-to-mouth" existence when food aid would come directly from the ships into the hungry mouths. The quantum jump in food production over the years has turned India into a net agricultural exporter. But while the Green Revolution certainly helped the country take care of its food needs, it bypassed the small and marginal farmers. At the same time, while production increased manifold, hunger too grew. 

Technology alone did not turn the tables. It was essentially the two planks of a "famine-avoidance" strategy that sustained increased production. Setting up a Commission for Agricultural Costs and Prices (then Agricultural Prices Commission) ensured an assured minimum support price for the farmers thereby providing them with an incentive to produce more. At the same time, Food Corporation of India (FCI) was set up to mop up the surplus harvests flowing into the dedicated agricultural markets, which was used for public distribution among the needy across the country through a vast network of ration shops. 

Prior to the Green Revolution, and before the Agricultural Prices Commission was set up, farmers were free to sell their produce to anyone who offered them good prices. It was known to be an exploitative system wherein the trade squeezed the profit margin of farmers at the time of harvest. It was only when procurement prices were introduced that farmers got an assured price for their produce, and that is what encouraged them to produce more. Procurement prices help farmers realise a fair and better price for their produce. 

India's Green Revolution success story owes much to the administration of procurement prices. But the same procurement prices have now become the villain of the story. Pro-reform economists now call it as an "archaic provisions of a socialist era" and are seeking the removal of the Agricultural Produce Marketing Committee Act (APMC) that allows farmers to bring the produce to the designated mandis (markets) where the private trade is first allowed to make purchases. It's only when there are no private buyers left that the FCI or the State procurement agencies step in to lift whatever is available at the minimum support price or procurement price. 

It is therefore not only WTO that is asking India to restrict the reach of the procurement prices within the de minimis level. The Commission for Agricultural Costs and Prices itself is on the forefront asking the procurement system, built so assiduously over the decades, to be dismantled. The argument is that farmers should be left free to sell to whomsoever they want thereby encouraging better competition and thereby realize a higher price. Considering that only 30 percent of India's 600 million farmers have access to procurement prices, the markets should have helped the remaining 70 percent farmers to reap a bounty. But that did not happen. In fact, the agrarian crisis is the worst in those areas where markets operate freely. 

Take the case of paddy in Bihar, which is the only State to have repealed the APMC Act way back in 2006. It had therefore allowed farmers the freedom to sell their produce to whosoever they like. Against the procurement price of 1,310 Rupees (15,3 Euros) per quintal (100 kilogram) that Punjab farmers got this year, Bihar farmers have somehow managed to sell paddy at something around 800 to 900 Rupees (9,4 to 10,5 Euros) per quintal. This is nothing but a distress price, a classic example of ruthless exploitation by the private trade. If Punjab too is directed to remove the procurement system, Punjab farmers will go the Bihar way. 

Agriculture refugees

In a quest to move from Green Revolution to the Second Green Revolution, India is on fast track to bring agriculture under corporate control. Amending the existing laws on land acquisition, water resources, seed, fertilizer, pesticides and food processing, the government is in an overdrive to usher in contract farming and encourage organized retail. This is exactly as per the advise of the World Bank and the International Monetary Fund as well as the international financial institutes. 

The World Bank had in 1996 estimated that the number of people migrating from the rural to the urban areas in India by the year 2015 would be equal to twice the combined population of the United Kingdom, France and Germany, which is 200 million. So the World Bank had predicted that 400 million people would be moving out of rural areas in India. In the subsequent World Development Reports, especially 2008, the Bank had even suggested setting up of a vast network of training institutes where the young farmers could be trained to become industrial workers. It has also been pushing for land rentals in the rural areas enabling the industry to easily acquire farmlands. 

Although the exact estimates are not available, rural areas are on a boil as a result of the protests over land acquisitions. Foreign companies are also being allowed to get into joint collaborations for which large swaths of farmland is being made available. Industrial corridors, real estate projects, express highways, special economic zones are being aggressively pushed without ascertaining how much of farm land must be kept under cultivation for meeting the country's food security needs. 

The crisis therefore is two-fold. While the rural areas are being emptied, moving the population into the urban areas is leading to the collapse of the cities. It is expected that by 2035, roughly 50 percent of India's population will be urban based. Secondly, the population shift from rural areas along with prime farmland being diverted for non-agriculture purposes will create a food deficit thereby leading to an unforeseen crisis on the food security front. But somehow, the agrarian crisis as well as the economic growth paradigm does not pass through rural India. Nor is any political party before the elections 2014 deliberating on the consequences of the growth model sans a sustainable and economically viable agriculture. 

But what is crystal clear is that sooner than later, India will be heading back to the days of a "ship-to-mouth" existence. #

Source: Agriculture in 'terrible crisis.' http://www.bpb.de/internationales/asien/indien/190207/agriculture-in-terrible-crisis

In German: http://www.bpb.de/internationales/asien/indien/189174/landwirtschaft-in-der-krise

Industry-sponsored study tours are a malpractice.

In the mid-1980s I was working with the Indian Express. As the Agriculture Correspondent for the newspaper I had followed keenly the claims Pepsico was making to re-enter India. In the garb of bringing a 2nd Horticultural Revolution in the trouble-torn Punjab, Pepsi had its eyes set on the vast Indian market for its beverages. The studies and reports Pepsico had presented were not so convincing. In my columns I had repeatedly questioned the claims.

Pepsico was certainly not happy with my reports. I was contacted by a senior Punjab bureaucrat who wanted me to sit across with the Country Director of Pepsico to know the other side. As a journalist this is what I am supposed to do. So I readily agreed. The three of us met for a cup of tea and after a lot of discussions, Pepsico invited me and my wife for a fortnight visit to the US to see for myself the remarkable research that was being conducted on agriculture. I was also told that Pepsico would be keen to take me to Venezuela to show me the success they have achieved in potato cultivation. When I just smiled and said "thank you" (and perhaps sensing that I may not take it as an unethical practice), I was told they were also taking a senior bureaucrat (who incidentally was responsible for the development sector, and was not very enthused with Pepsico's proposals) to the US.

Well, the bureaucrat did visit Pepsico's headquarters (he had sought permission from the Punjab Govt to attend a family marriage in the US) and once he returned he became a die hard champion for Pepsico.

Pepsico did subsequently make an entry into Punjab in the late 1980's. But all I know is that after some 30 years, in 2014, when I look back there is no trace of the 2nd Horticultural Revolution the soft drink giant had promised.

This incident came to my mind the moment I read the news report After GM trials ban, BJP, Sena MPs heading for Monsanto-funded study tour (Business Standard. Aug 22, 2014. http://bit.ly/1q095qc). The news report said: "A group of members of Parliament from BJP and Shiv Sena are heading to the US on a week long study tour sponsored by global seed giant, Monsanto. The group departs on Saturday."  It also quoted a Monsanto spokesperson who admitted that this is in line with industry practice. The visit would cost approximately $ 6,000 per head for food, accommodation and travel which would be entirely borne by Monsanto. Considering there are no free lunches, you can just imagine the kind of indirect return the company was expecting for this visit.

Within hours of the news report appearing the social media went berserk. The BJP responded by saying that none of its members would be part of the junket.

Nevertheless, the fact remains this is not the first time industry has sponsored such study junkets. And also Monsanto is not the only company to have done so. This is a usual lobbying practice adopted by Big Business and somehow the media is game with it. Monsanto itself has taken in the past scores of journalists, farmer leaders, scientists, and officials of the Department of Biotechnology on study tours. It will be interesting to know how many such junkets have been organised by Monsanto in the past, and to know who all went and what did they write when they came back. No wonder you see a very spirited defense of the controversial genetically modified (GM) crops that are under consideration for commercial approval.

This also reminds me of a news report that has appeared in the national daily The Hindu some years back. A group of visiting scientists (for an International Science Congress in New Delhi) had gone and met the then Chief Justice of India inviting him and some senor judges on an 'educational tour' of the US to understand the virtues of GM technology. I later found out that judges from some 20 countries including India, South Africa, Brazil, and Egypt had traveled to an institute named after Albert Einstein. The basic objective of such education trips for the judges was to expose them to 'the great potential of GM crops' so that they don't easily admit legal cases that would be filed in due course of time.

This malpractice must stop. Already enough damage has been done by manipulating the public discourse by such sponsored visits. Just like the Prime Minister Narendra Modi has put an end to the malpractice of carrying an entourage of journalists on his visits abroad, and has also directed ruling party MPs to take his permission before travelling abroad on sch junkets/study tours, it is high time the Indian media too on its own announced putting an end to this malpractice. Media can't be standing on the high moral ground without first setting up an example.

Why only MP's it is time the government also stops agricultural scientists, economists, sociologists, and also bar officials of the Department of Biotechnology, Ministry of Agriculture, Ministry of Science & Technology as well as the Ministry of Environment & Forests from such sponsored studies. This is a corrupt practice and it must be put to an end. #

Is Big Business in India thriving on Crony Capitalism?

Wikipedia defines Crony Capitalism as a "term describing an economy in which success in business depends on close relationship between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks and so forth. Crony capitalism is believed to arise when political cronyism spills in to the business world; self-servicing friendship and family ties between businessmen and the government influence the economy and society to the extent that it corrupts public-serving economic and political ideals." Why I thought of bringing this up is because I find a number of articles appearing in newspapers which actually are (if you read between the lines) trying to defend crony capitalism.

I was taken by surprise when Economic Times in an editorial What is wrong with Crony Capitalism ( Aug 13, 2014) concluded: "As India evolves and acquires institutional maturity, it is imperative to shed cronyism from the process of selecting those to accord State support. But it is too early to rid the system of State support altogether." A few days later Swaminathan Aiyar writing in the Times of India (Aug 17, 2014) under the caption: Corruption? protection rackets more than crony capitalism (http://bit.ly/1t9WuzZ) lists 30 riches families and gives them a certificate of not being a beneficiary of State monopolies. Accordingly, these richest barons are a product of competitive business practices.

These 30 richest families listed are: Mukesh Ambani (Reliance Industries Ltd); Azim Premji (Wipro); Sunil Mittal (Bharti Airtel); Dilip Shanghvi (Sun Pharma); Anil Aggarwal (Sterlite); Shiv Nadar (HCL); Anil Ambani (Reliance Power and Communications); Kumar Birla (Grasim); Uday Kotak (Kotak Bank); Choksi-Dani-Vakil (Asian Paints); Gautam Adani (Adani Enterprises); KP Singh (DLF); VC Burman (Dabur); Keshub Mahindra (Mahindra & Mahindra): Adi Godrej (Godrej Industries); DB Gupta (Lupin); Rahul Bajaj (Bajaj Auto); Brijmohan Munjal (Hero): Subhash Chandra (ZEE): Naveen Jindal (Jindal Steel and Power); Vijay Mallya (United Spirits); Sajjan Jindal (JSW Steel); YK Hamied (Cipla); Pankaj Patel (Cadila); Kalanithi Maran (SUN TV); VC Sehgal (Motherson Sumi); Reddy family (Dr Reddy’s Labs); BK Parekh (Pidilite): BM Bangur (Shree Cement); and Sudhir Mehta (Torrent).

Read through the list and I am sure you will be able to immediately find out how many of them have been and still remain a beneficiary of State largesse. In fact, some of them have been the beneficiary of 'crony socialism' accumulating wealth during that period, and subsequently strengthening business after the economy was thrown open in 1991. It doesn't therefore matter whether we live in a socialist era or a capitalist, big business knows how to thrive.

But what pains me is the dexterity with which some loud speakers for the free market economy (includes some big names from the economic fraternity) have gone to defend 'crony capitalism' against protectionism or 'crony socialism'. It's more or less like the advertisements we often see on TV: "Meri kameez teri kameez se zaida safed" (my shirt is whiter than yours). Just because economic liberalisation is generally accused to be leading to massive corruption by a handful of big businesses does not mean that you have to stoop so low to defend it by saying that it's better for the economy than protectionism. A crime is a crime, and it doesn't matter during whose regime it was committed. Similarly, a crook is a crook whether he was active during socialist era or is pro-actively exploiting the resources (both natural as well as financial) during the times of market economy.

This is contrary to what the Reserve Bank of India Governor Raghuram Rajan warned the other day. Delivering a lecture in Mumbai, Rajan said: "One of the greatest dangers to the developing countries is the middle income trap, where crony capitalism creates oligarchies that slows down growth. If the debate during elections is any pointer, this is a very real concern of the public in India today." (Crony capitalism is a big threat to countries like India, RBI chief Raghuram Rajan says. http://bit.ly/1rhPDIi). 

Whatever one might say, the fact remains big business thrives on State largesse. Whether it is in the form of natural resources like land, water, forests, minerals being made available to them at a throwaway price or tax concessions in one form or the other. The moment State withdraws the unwanted support, you'll hear the same bunch of economists who defend crony capitalism, raise the chorus of policy paralysis. The moment you hear the war cry policy paralysis just be sure big business is not getting a free ride. So when Tata's don't get land at a price that only seeks 0.1 per cent interest (for his Nano factory), or when Laxmi N Mittal doesn't get Rs 1250-crore loan from Punjab Government to invest in Bathinda refinery and that too at an interest of 0.1 per cent, which in other words means practically at zero interest, they cry hoarse. But tell me, isn't this a classic example of crony capitalism? Does this government grant and tax breaks not fall in the definition of crony capitalism?

The line between what is called incentive and what falls in the broader category of crony capitalism is very thin indeed. As the Times of India further writes: "The governor's warning against crony capitalism and oligarchies is a reiteration of his statements four days before the Lehman Brothers collapse in 2008. In a speech at the Bombay Chamber, Rajan had highlighted that India had the highest number of billionaires per trillion dollars of GDP after Russia. While excluding NR Narayana Murthy, Azim Premji, and Ratan Tata as 'deservedly respected', Rajan had said "three factors — land, natural resources, and government contracts or licenses — are the predominant sources of the wealth of our billionaires. And all of these factors come from the government."

Even the three that he had exempted -- NR Narayana Murthy, Azim Premji and Ratan Tata -- have been beneficiary of massive doles from the government. I have already talked of Ratan Tata's Nano car project to give you an idea, but the IT czars are no exception. The other day I read a news report wherein Punjab Govt had welcomes Infosys to set up a unit in Mohali. Very right, nothing wrong with it. But offering Infosys campus in Mohali 50 acres of land is nothing but crony capitalism. Why does Infosys need 50 acres?

Mohali campus is not the only example. A report in Live Mint tells us that Infosys has the largest number of hospitality rooms in the country. With roughly 15,000 rooms constructed, it beats Taj and Sheraton. (Infosys: India's biggest hospitality firm? http://bit.ly/1t9EasS). On top of it, IT sector does not pay any I-T tax. A sector which is slush with money is not paying taxes. That's the reason while the IT sector thrives merrily on tax payers money, the rising stocks has accumulated private wealth into the hands of a few of top honchos who manage the IT sector. Basically it is public money that creates more wealth for a few. This is a classic example of privatising the profits, and socialising the costs. Remove the tax exemptions, and make IT sector pay for the land resources and you'll see the stock value coming down.

Since 2004-05 the government has started clubbing the tax concessions that it provides every year under the head Revenue Foregone. These exemptions were given to boost industrial production, enhance exports, and to create employment. In the past 9 years, Rs 36.5 lakh crore has been given as tax exemptions. In 2014-15 Revenue Foregone is Rs 5.73 lakh crore which is more than the fiscal deficit. P Sainath has very lucidly brought out what could have been accomplished from the kind of tax sops given knowingly to India Inc (P Sainath on Corporate bail out. http://bit.ly/1nv4w6k). Accordingly, every day for the past 9 years, India inc has received tax concessions to the tune of Rs 1,100-crores.

Yes, State support is very important for any industry. But when it continues indefinitely, it crosses into the category of crony capitalism. Raghuram Rajan is very right when he says "three factors — land, natural resources, and government contracts or licenses — are the predominant sources of the wealth of our billionaires. And all of these factors come from the government." 

No wonder, the economic wealth of 56 families in India is equal to that of 600 million. 

No one wants to be a farmer anymore. It's only a matter of time before farmer as a species goes extinct

Farming is wilting everywhere. It's only a matter of time before farmer as a species goes extinct -- AP pic

Some years back, the celebrated Indian President Abdul Kalam was addressing students at an annual event organised by K Govindacharya's Bhartiya Swabhiman Andolan at Gulbarga in Karnataka. He exhorted students to work hard, educated themselves to become doctors, engineers, civil servants, scientists, economists and entrepreneurs. After he had ended his talk, a young student got up and asked why he didn't say that they should also become farmers.

Abdul Kalam was floored. Whatever be his long winding answer, the young student had actually punctured his argument, and at the same time brought out the great bias towards farming.

This incident came to my mind when I was reading this moving essay by a farmer from the United States. Bren Smith, a shellfish and seaweed farmer writes in the New York Times (Aug 9, 2014) Don't Let Your Children Grow up to be Farmers (http://nyti.ms/VeffqD): "The dirty secret of the food movement is that the much-celebrated small -scale farmer isn't making a living. After the tools are put away, we head out to second and third jobs to keep our farms afloat." Accordingly, 91 per cent of all farm households in the US rely on multiple sources of income. This is happening in a country where the Farm Bill 2014 makes a provision for $ 962 billion of federal subsidy support for agriculture for the next 10 years.

Ironically, the stark reality remains hidden in the Year of Family Farms.

Farmers are a dying breed. Writing in the Newsweek magazine (April 10, 2014), Max Kutner says: "For decades, farmers across the country have been dying by suicide at higher rates than the general population. The exact numbers are hard to determine, mainly because suicide by farmers are under-reported (they may get mislabeled as hunting or tractor accidents, advocates for prevention say) and because the exact definition of a farmer is elusive." (Death on the Farm http://www.newsweek.com/death-farm-248127).

Well, what is happening in America is not an isolated development, farmers are dying across the globe.

When some weeks back I said on a prominent TV channel that on an average 2,80,000 people living in rural areas every year have been committing suicide for the past decade in China, the nation was shocked. A lot of concerned viewers called me up and wrote to me wanting to know more about the death on the Chinese farm. According to news report, nearly 80 per cent of the rural people who take their own lives in China are victims of farm land grab. In India, almost 300,000 farmers have ended their live since 1995. Again, like in the US, farm suicides are also under-reported in India with some States now trying to hide them by shifting these deaths to some other categories. Even in Europe, which provides massive subsidy support under the Common Agricultural Policy (CAP), the serial death dance continues unabated. In France, 500 suicides have been reported in a year. In Ireland, in UK, in Russia, and in Australia farmers are a dying breed.

In India, although we keep on saying that agriculture is the mainstay on the economy, in reality it isn't. Employing some 52 per cent of the population, the share of agriculture in country's GDP has been progressively on the decline. It is less than 14 per cent now. I have been saying for long that small farmers have to get into multiple of jobs to keep their chulas burning. Some studies point out to roughly 58 per cent farmers relying on the rural employment guarantee programme (MNREGA), which provides for 100 days guaranteed employment. Still worse, the people who feed the country actually sleep hungry. More than 60 per cent go to bed hungry every night. Nothing can be a worse illustration of the great tragedy on the farm.

It's not because of any unexplained natural calamity or a virus that the farms across the globe are first being hit by recession, and then depression. It is part of global economic design to move farmers out of agriculture, and by doing so to shift food production into the hands of heavily subsidised and environmentally-destructive agribusiness companies. It is generally believed that for any country to grow economically, the share of agriculture in the GDP must be brought down. In US, agriculture is only 4 per cent of its GDP. In India, it is less than 14 per cent now. By the end of 2020, I am sure it would be somewhere in the range of 10 per cent. Small scale agriculture is therefore being deliberately stifled.

In my understanding, the unwritten economic prescription is to make farming non-viable so that farmers are left with no other choice but to quit. In a quest to keep food prices low, the economic paradigm support large agribusiness conglomerates. The demise of the farmer therefore is predetermined. It's only a matter of time before the farmer as a species goes extinct.

Further reading:

1. Displacing Farmers: India will have 400 million Agricultural Refugees
http://www.globalresearch.ca/displacing-farmers-india-will-have-400-million-agricultural-refugees/6127

2. France and India: The Beautiful farms are all but dying.
http://devinder-sharma.blogspot.in/2010/07/france-and-india-beautiful-farms-are.html
   

WTO: Livelihood security of 600 million farmers is more important than creating jobs in the rich and developed countries

Prime Minister Narendra Modi is absolutely right. What India had signed at the Bali WTO Ministerial in Dec 2013 would have surely compromised the future of India’s 600 million farmers.

The then Commerce Minister Anand Sharma definitely knew what was at stake. Despite calling the Prime Minister’s statement as ‘incorrect and false’ the fact remains that he deliberately mortgaged poor farmers’ interest.* He had agreed to an interim protection of four years for the Minimum Support Price (MSP) that farmers get. The reason was simple. India wanted to ensure that the Bali Ministerial succeeds even if it means destroying the livelihood of farmers. I don't know how could UPA think of destroying a majority of 600 million farm livelihoods just to keep the Bali WTO Ministerial afloat? How does India gain by help creating jobs in the rich countries at the cost of its poor millions?  

Anand Sharma knew that numerous US farm groups had written to the US Trade Representative Michael Froman as well as the US Agricultural Secretary Thomas Vilsack objecting to linking food aid with price support programs. Not finding anything wrong in legitimate domestic food aid programs, 30 farm commodity export groups had however expressed concern at the “price support programs, which have more to do with boosting farm incomes and increasing production than feeding the poor.”

These US farm commodity export groups, which ironically receive monumental federal support every year, had questioned the need to provide any relaxation in current discipline even on a temporary basis. Accordingly, such an exemption will result in more subsidy outgo and result in further damage to US trade interests. Against this, it's very clear that the Bali Ministerial had failed to find a permanent solution to India’s price support for farmers. If a the tough stand was taken by India at the Bali Ministerial, the present crisis would not have erupted.

By refusing to ratify the protocol for amendments of the Trade Facilitation Agreement (TFA) by July 31 unless linked to a permanent guarantee for stockholding of foodgrains and an assured income for farmers, India has demonstrated a shift in power equation since the days of the Uruguay Round of the World Trade Organisation. Not only protecting its food security concerns, and the livelihood security of 600 million farmers, India’s decisive position will hopefully herald a new era in trade diplomacy.

The way Prime Minister Narendra Modi remained defiant despite the last minute efforts of the visiting US Secretary of State John Kerry gives me hope. This is the first time an Indian Prime Minister has stood like a solid rock behind his team of negotiators. Quite a departure from what we have witnessed in the past 20 years of trade negotiations. We have seen India’s successive trade minister make the right noises, dominate the global media space, but in the final hours sign on the dotted line. India had always behaved like a mouse that roared.

If only at the Bali WTO Ministerial in December, the then Commerce Minister Anand Sharma had refused to accept the ‘Peace Clause’ – that gives India a four-year reprieve from being dragged into the dispute panel for violation of the WTO farm subsidy obligations – the entire trade dimensions would have changed for better. India needed a permanent solution that allows for its sovereign and gigantic role to feed the hungry millions. Not realizing that food security for any developed country, and that includes the United States, has always taken precedence over the trade benefits, India had failed to stand up.

The US has never been worried about torpedoing the trade negotiations. It has stalled decision making in some 30 instances, always keeping its national interests supreme. It has refused, for instance, to do away with cotton subsidies all these years. 

Capitulating voices within the country had added on to the fears that a tough stand will isolate India. These economists had more or less blamed India for making a mountain out of a mole-hill. As if sacrificing the livelihood security of 600 million farmers, almost double the population of US is a mole-hill, wrong statistics were flaunted. Some even went to the extent of saying that Indian farmers were the highest paid in the world by wrongly comparing fob prices with procurement prices and thereby ignoring the massive subsidies US/EU farmers get. Unlike in America, Indian agriculture has become economically non-viable with close to 300,000 farmers committing suicide in the past 15 years. 

What the WTO had wanted was the minimum support price that farmers are paid be either dismantled or capped at 10 per cent of the total value of the produce. As per the WTO pricing calculations, worked out in 1986-88, the present rice procurement price of Rs 1,360 per quintal would need to be reduced to about Rs 600 a quintal. All that India wanted was revision of the outdated pricing formula to a more realistic base period of 2010-12. This wasn’t however acceptable to the US, EU, Australia and Japan.

Reducing the MSP by roughly 50 per cent to meet WTO obligations or by agreeing to dismantle the procurement prices would have brought the farmers onto the streets. The political ramification for any present government would have been disastrous. 

While India has rightly slammed the door, it has kept a window open for negotiations. When WTO meets again in September after the recess, the real test for India’s trade diplomacy will come into focus. This will be the time to asset on the need for a ‘food security box’ for developing and least developing countries. On the lines of the green box, amber box and blue box, which provide protection to agricultural subsidies in the developed countries, the ‘food security box’ should provide protection to each country to feed its hungry population and at the same time ensure that small farmers are adequately protected against the tyranny of the markets. There can be no compromise on the state’s sovereign role in feeding its poor. India cannot afford to forgo the policy space to maintain food self-sufficiency. # 

*Did the UPA mislead the country on Bali pact? in Mint Aug 11, 2014. http://www.livemint.com/Politics/V580QjRAitbDuqD1tl4TlM/Did-the-UPA-mislead-the-country-on-Bali-pact.html 

67 Years after Independence, Indian farmers have disappeared from the economic radar screen -- My interview

Indian farmers continue to toll against all odds. 

(pic from web) 

On the occasion of the 67th Independence, Aug 15, 2014, the Hindi magazine Yathawat interviewed me on the state of Indian agriculture. In this short and crisp interview, I was asked to track the historical backdrop and to look at the present and future agricultural policies and approaches.  

Q: When India got its Independence in 1947, how did its agriculture look like? 

India got its Independence in 1947 in the backdrop of Bengal Famine. The famine happened in 1943 taking a massive human toll. Some estimates point to 3 million people perishing in the famine. But Nobel laureate Amartya Sen’s work tells us that there was no shortfall in food production in 1943. It was only because the private trade had diverted the food that millions of people were left starving. In 1947, when India got Independence, agriculture was in a pathetic state, a fallout of the neglect and wanton destruction of agriculture during the days of the British Raj. With more than 80 per cent population engaged in subsistence farming, Independent India was a hungry nation.

Q: What prompted Prime Minister Lal Bahadur Shashtri to give the slogan of "Jai Jawan, Jai Kisan" in 1965? Was it a reflection of the grave crisis afflicting farmers and farming, and of course the threat India faced from across the borders. 

When Lal Bahadur Shashtri took over a Prime Minister in 1964 India was a food importing country. It depended on food imports from North America under the PL-480 scheme. Not many people know that 1965, the year when India went to war with Pakistan, was also a drought year. In 1965 India had imported 10 million tonnes of wheat under PL-480. Knowing how precarious the food situation was, and knowing the extent of prevailing hunger, Lal Bahadur Shashtri had urged the nation to fast for a day. I know many people who have continued to fast on Monday’s since then. It was primarily because Lal Bahadur Shashtri understood the role that soldiers and farmers play in maintaining national security thereby preserving national sovereignty that he gave the slogan ‘Jai Jawan Jai Kisan’

Q: Green Revolution came in the late 1970s. What led to that ..

For almost 20 years after Independence in 1947 India had remained a food importing country. In fact, after the 10 million tonnes food import in 1965, the next year 1966 also turned to be a drought year in which India imported 11 million tonnes of foodgrains. That was the biggest food import at that time in history. before that, it was not that the first Prime Minister Jawaharlal Nehru did not make any serious efforts to improve food production. He launched various community development programmes but could not achieve the desired results. On Aug 15, 1955 he had shared his frustration with the nation when he said from the rampart of Red Fort: “It is very humiliating for any country to import food. So everything else can wait but not agriculture.’

After the premature death of Prime Minister Lal Bahadur Shashtri in Jan 1966, Mrs Indira Gandhi took over. But before Shashtri died he had annoyed the then American President Lyndon Johnson when he had told an American journalist, in reply to a question, that the war in Vietnam “was an act of aggression’. This sentence had annoyed Johnson who had stopped food exports to India under what is known as ‘stop-go policy’. India was then in such a precarious situation that even the Food & Agriculture Organisation of the United Nations had to make an appeal to US to allow food exports to India. Food would come directly from the ship to the hungry mouths. India was then called as a country living in a ‘ship-to-mouth’ existence.

Mrs Indira Gandhi sowed the foundation of ‘Green Revolution’ in 1966 when she allowed the seeds of dwarf and high-yielding varieties of wheat from CIMMYT in Mexico. India imported 18,000 tonnes of wheat seed from Mexico, adapted them to Indian conditions, and as per an earlier demarcated programme, distributed these seed to farmers in Punjab and western Uttar Pradesh where irrigation was available. The first wheat harvest after cultivating high-yielding seeds in 1967 was five tonnes more than the previous. This was a record increase at that time and was termed ‘wheat revolution’ by Mrs Gandhi.

Q: Green Revolution increased production in wheat and rice. Besides high-yielding varieties, there must be something else too?

The quantum jump in the wheat production was followed by rice two years later. India received high-yielding varieties of rice from the International Rice Research Institute in Manila, in 1968. These rice varieties were adapted to the Indian conditions and distributed to farmers in Punjab, western Uttar Pradesh and also in Andhra Pradesh and Tamil Nadu. Rice also recorded an increase in productivity and production. The term ‘Green Revolution’ was later coined by an American scientist, William Gaud.

Green Revolution turned the country self-sufficient in wheat and rice, and by early 1970s India stopped importing food under PL-480.

Since the days of Green Revolution, Indian agriculture has grown manifold. There has been an all around development in crop production not only in wheat and rice but also in coarse cereals, maize, cotton, sugarcane etc. Improved technology was packaged well with right policy decisions. The setting up of Food Corporation of India and Agricultural Prices Commission in 1965-66 were the two major planks of what Dr M S Swaminathan calls as the ‘famine-avoidance’ strategy.

Q: How come after Green Revolution turned the corners, farmers are committing suicide on a large scale?

By the mid-1980s, the environmental impact of intensive farming systems that used chemical fertilizers, chemical pesticides and groundwater had begun to emerge. These are called the 2^nd Generation Environmental Impacts. But instead of encouraging farmers to adopt sustainable practices to thwart the negative impact of intensive agriculture, farm scientists tried to address this by encouraging more Green Revolution. In other words they asked farmers to apply more chemicals. This deteriorated the natural resource base. At the same time, the policy support for agriculture declined. Reduction in public sector investment in agriculture, failure to encourage sustainable farming practices, and unremunerative prices for agricultural produce were among the factors that turned agriculture into a losing proposition. The damage was more pronounced in cash crops like cotton. Farm suicides began as a trickle around 1987 or so and since then have taken a toll of nearly 3 lakh farmers in the past 17 years.

Q: What is behind the terrible agrarian crisis that India faces? 

Farm suicides are the outcome of the continued neglect and apathy of the farm sector. Besides the policy makers, a significant role is also played by agriculture scientists and economists. They cannot simply absolve themselves from the terrible agrarian crisis that have prevailed for almost two decades now.

Q: Is it because India does not have a clear cut understanding and focus on how to prop up agriculture? Is it because of a wrong direction coming from international institutions? 

About 20 years after the Green Revolution began, and somewhere in the early 1990s, the global economic thinking shifted to shrinking agriculture and boosting industry. World Bank/IMF and the international financial institutions began to propose that economic growth can only take place when fewer people are left in agriculture. In 1996, the World Development Report of the World Bank suggested moving 400 million people, equally to twice the combined population of UK, France and Germany, from the rural to the urban areas in India in the next 20 years, by the year 2015.

Meanwhile, the emergence of World Trade Organisation in 1995, also shifted the focus to trade. The mainline economic thinking shifted to reducing support for agriculture and importing highly subsidized cheaper food from the developed countries. Subsequently, the World Bank and Multinational Corporations have been pushing for land acquisitions, contract farming, creation of super markets or in other words paving the way for corporate agriculture. In other words, the neglect of small scale agriculture is part of a design. It is part of a pre-planned economic strategy that is being imposed. 

In a country where 52 per cent of the 1.27 billion people are directly or indirectly engaged in agriculture, the thrust of the economic growth paradigm is to push farmers out of agriculture. Since the younger lot among farmer’s don’t know anything except farming, the World Bank had suggested a network of training schools across the country to train them to become industrial workers. That is being done. In other words, farmers have now become a burden on the country. The common thinking is the sooner the country is able to offload farmers,  the better it will be.

Q: Every year the government announces support for agriculture in its annual budgets. You think that is enough? 

In 2013-14, farmers produced a record harvest of 264.4 million tonnes of foodgrains. Production of oilseeds reached a record high of 34.5 million tonnes, a jump of 4.8 per cent. Maize production increased by 8.52 per cent to reach a level of 24.2 million tones. Pulses production reached an all-time high of 19.6 million tones, an increase of 7.10 per cent over the previous year. Cotton production too touched a record high.

With such record production, the nation should remain indebted to the virile and hardworking farmers. But last year, in 2013-14, when farm production recorded a quantum jump, agriculture received Rs 19,307-crore from the annual budget kitty, which is less than 1 per cent of the total budget outlay. This year, only Rs 22,652-crore has been provided for agriculture and cooperation departments. Again the outlay for agriculture remains less than 1 per cent of the total budget. In all fairness, the apathy towards agriculture continues.

Q: Is the neglect continuing? 

The neglect of agriculture has become more pronounced since economic liberalization was introduced in 1991. I recall the then Finance Minister Manmohan Singh famous budget speech when he showered all the bounties on industry and in the next paragraph said that agriculture remains the mainstay of the economy. But since agriculture is a State subject, he left it to the State Governments to provide the much need impetus to farming. But what he forgot to say was that industry too is a State subject and should have been left to the State governments. The bias therefore was clearly visible.

Although agriculture grew at an impressive rate of 4.1 per cent in the Eleventh Plan period (2007-8 and 2011-12) it received a dismal financial support of Rs 1 lakh crore. For a sector which directly and indirectly employs 60-crore people, Rs 1 lakh crore outlay for five years is simply peanuts. In the 12 Plan period (2012-13 to 2017-18) agriculture is projected to receive Rs 1.5 lakh crore. Compare this with the Rs 5.73 lakh crore tax exemptions showered on the industry in 2014-15 alone. Since 2004-05, Industry has received tax concessions (computed under ‘revenue foregone’ in the budget documents) to the tune of Rs 36.5-lakh crores or Rs 1,100 crore per day for the past 9 years. It’s therefore a matter of priorities. In fact, as I have been saying for long, farmers have disappeared from the economic radar screen.

Despite the neglect, the fact remains whatever India has been able to achieve in economic and military terms is primarily because of food self-sufficiency built so assiduously over the past five decades. But the tragedy is that the country is deliberately destroying the agricultural foundations, and pushing it back to the days of 'ship-to-mouth’ existence. Over the past few years, India is busy adopted the same economic policies that were existing at the time of Bengal Famine. #