Punjab's procurement muddle

A Punjab farmer takes nap lying over the heaps of wheat bags he has brought to a mandi 

Everything seems to be going wrong for Punjab farmers. After unseasonal rains, hailstorm and strong winds in the past two months had left farmers battered, they didn’t realize that the worst was still to come. Unable to sell the rain-soaked wheat, and waiting endlessly for buyers in the mandis, their patience now seem to be running out.

First they protested in the mandis. Then they moved out to block trains and squat on the highways.  On Monday, seven trains were reportedly cancelled and at least four were terminated at Beas in Amritsar. The blockade affected super fast trains like Amritsar-New Delhi Shatabadi and Shane-e-Punjab trains. At several places, farmers blocked the highways to express their anger against the slow pace of procurement.

While the Chief Minister Prakash Singh Badal once again promised to lift every grain of wheat that farmers bring to the mandis, Congress leaders Amarinder Singh and Pratap Singh Bajwa did the round of mandisto assuage farmers’ anger. Politics apart, what I find intriguing is how could Punjab falter on wheat procurement when it knew what was coming. The fault lines run deeper than the despair that I see on the faces of farmers.

Punjab has been procuring wheat and rice for several years now, and one would expect a well-oiled machinery to be in place. It was in the fag end of March that the State Food and Civil Supplies Minister Adaish Pratap Singh Kairon had announced that despite the rain damage Punjab expected to procure 140 lakh tones of wheat, against 129.35 lakh tones procured last year. Five State agencies – Pungrain, Markfed, Punsup, Punjab State Warehousing Corporation and Punjab Agro Industries – along with Food Corporation of India (FCI) were to start procurement operations beginning April 1 from 1,770 purchase centres.

Although the Centre had imposed quality cuts, considering that the rain-soaked wheat was damaged, shriveled and had lost its luster, the State government had assured to lift the entire stock that farmers would bring to the mandis. In reality, this did not happen because the procurement agencies were reluctant to buy wheat that did not conform to the specifications. Official claims notwithstanding, the fact remains no agency is keen to procure wheat stocks that they would find it difficult to store and dispose off at a later stage. The Centre had made it clear that the inferior quality wheat procured by the State government would have to be consumed in the public distribution system within the State. The State procurement agencies are therefore in a fix.  

At the same time I don’t understand why the State government failed to stock the gunny bags much in advance. While the grain markets were overflowing with wheat, at least 300 rail wagons carrying jute bags were stranded because of labour problems. To compound the problem, transport unions too are reportedly dilly-dallying on moving the wheat bags out of the mandis. As a result, while huge quantity of wheat is flowing into the mandisevery day, the grain markets are already choked. According to reports, 7.7 lakh bags of wheat lie in Khanna mandi alone, Asia’s biggest mandi.

Finding no space, farmers are dumping their stocks outside the mandis at many a places and waiting for their turn to sell. Even the small mandis are overflowing with grain.

I recall that during the time Surjit Singh Barnala was the Union Agriculture Minister in Morarji Desai’s government in 1977-78, a similar situation had developed in case of paddy. While Barnala had then relaxed the moisture norms from the existing 14 per cent to 18 per cent, no problems were encountered in procuring the moisture-laden paddy stocks. Since wheat is a lot hardier crop than paddy, I fail to understand why the State procurement agencies are not able to lift the wheat stocks.

Talking to farmers and senior officials, I am told the blame would rest primarily with the State Food and Civil Supplies department as well as the Punjab Mandi board. Food Minister Kairon has to explain why timely availability of jute bags was not ensured, and also his inability to tackle the transport union’s failure to life the stocks. At the same time, there are numerous reports of corrupt dealings with farmers being given kacchi parchi (receipts) and paid a distress price. I have been shown receipts which are blank. Rampant exploitation of farmers can only be witnessed if you visit any of the mandis.  

Despite such a vast network of purchase centres, I don’t find covered sheds erected in most mandis.There can be no excuse given the fact that the Punjab Mandi Board collects a lot of revenue from taxes. The mandiinfrastructure is awfully inadequate. Blaming the Centre and the Centre in turn blaming the State government is not the answer. If after five decades of Green Revolution, Punjab is faltering on procurement, the fault lines run deeper than what is visible. #  

Nehru was wrong. Why only poor, why can't the rich be also asked to sacrifice for the sake of country's development?

Political leaders only expect the poor tribals to make a sacrifice for the sake of country's development. The rich are allowed to enjoy the fruits of development. They should not make any sacrifice !

In the midst of a highly polarized and surcharged political debate on the controversial land bill, the NDA government is reportedly planning to use quotes from Jawaharlal Nehru and Indira Gandhi speeches to justify the need to displace farmers, tribals and poor for the sake of development. That underlying argument is: the poor must sacrifice for the sake of the country’s progress.

Soon after India attained Independence, Nehru had laid the foundation stone for the Hirakud dam over the Mahanadi river in 1948. Speaking on the occasion, Nehru had said: “If you have to suffer, you should do so in the interest of the country.”

I don’t agree. After all, why should it be always the poor who have to make a sacrifice for the sake of development? When was the last time you heard of any sacrifice being made by the middle class or for that matter the rich for the sake of country’s economic development? Does it not mean that the burden of development is solely borne by the poor while the rich eat the fruits and that without any remorse or guilt about the destruction wrought on the livelihood security of millions of underprivileged? Many generations have been lost in the continuing struggle by the displaced for getting their legitimate dues.

What probably Nehru did not visualize was that many of those who were displaced in 1948 by the Hirakud dam have still not been rehabilitated 68 years later. According to a study, some of those displaced were uprooted twice again to make way for some other development activities. Even a large number of those ousted from Bhakra dam, Tehri dam and Pong dam – the ‘modern temples’ as Nehru would call them -- have not been rehabilitated so far. I am not against the big dams or similar industrial projects, but how can the State and the society remain a mute spectator to the plight and suffering of those who were forcibly displaced? Why should they not be compensated and rehabilitated on a priority?

A 2011 study by the Indian Institute of Technology, Roorkee, had pegged the number of displaced by dams, mines, industrial projects, wildlife sanctuaries/national parks at 50 million over the past 50 years. Several other estimates show that only a third of those displaced have been adequately rehabilitated so far.

Not only big dams and industrial corridors, land for railway tracks, roads, highways and electricity lines too have displaced farmers. Such is the callous attitude that the District Session Judge in Una in Himachal Pradesh recently had to order attachment of the Jan Shatabadi train to force Indian Railway to cough up the compensation amount to farmers whose land was acquired way back in 1998. All across the country, there are umpteen such examples where an indifferent State continues to harangue and harass the poor for their legitimate dues.

While the popular narrative conveniently blames farmers for coming in the way of country’s economic growth process, the government will never dare to acquire even a portion of the vast stretches of a golf course. You will see how the rich will force the government to retreat. Ask the government employees to forgo even one single installment of the Dearness Allowance in a year to help the government in balancing its fiscal act and you will see the employees resort to mass protest. At a time when the country needs investments, and is scouting for FDI, will it ever be possible to appeal to the government employees to forgo the 7^th Pay Commission Award? And why not? 

Corporate India has been given a mammoth subsidy – categorized as tax concessions – to the tune of Rs 42-lakh crore since 2004-05. I sometimes wonder why can’t India Inc be asked to pay taxes (and not seek exemptions) to help the government in putting that money into the hands of farmers, and for rural development activities. Isn’t it the duty of the rich and the well-to-do to also make a sacrifice for the sake of country’s development? At least, India Inc can be asked to pay Rs 5.9-lakh crore in exempted taxes this financial year so as to wipe out the country’s worrying fiscal deficit of Rs 5.25 lakh crore. This money can be then used for country’s development. 

Nehru was wrong. It’s not only farmers and tribals who must sacrifice for the sake of development.
ABPLive.in http://goo.gl/tGk6cR April 25, 2015

How farmers have been deliberately kept impoverished. They carry the burden of providing cheaper food to you and me.

New Delhi is in a state of shock. A 41-year-old farmer Gajendra Singh from Dausa in Rajasthan has brought farmer suicides right to its doorsteps. What was earlier a distant problem, far away from the seat of political power, is now staring at them in a discomforting close-up. So much so that even Prime Minister Narendra Modi was forced to acknowledge that he is shattered and disappointed, and in a subsequent tweet wrote: “At no point must the hardworking farmer think he is alone. We are all together in creating a better tomorrow for the farmers of India.”

In the past 6 weeks, in the aftermath of unseasonal rains, a little over 150 farmers have taken to gallows in Uttar Pradesh, Haryana, Rajasthan, Punjab, Madhya Pradesh and in Maharashtra. While all these suicides were tragic and should have shaken up the administration, but I didn’t see the kind of shock and awe that we see now for any of those farmer suicides that happened outside New Delhi. In fact, all out efforts by State Governments are to deny that these farmers had even committed suicide because of a lingering crisis on the farming front.

While the politicians are battling it out in and outside parliament, blaming the other party for ignoring the farmers, the fact remains that both the major political parties have blood on their hands. Farmer suicides are not a recent phenomenon. In the past 20 years, almost 3 lakh farmers have committed suicide. On an average about 14 to 15,000 farmers are taking their own lives in a year, with two farmers dying every hour. Those who were committing suicide, and it does require tremendous courage to take your own life, were actually trying to make a political statement with their death. They failed to shake up the callous and insensitive system even by their death.

Soon after Gajendra Singh hanged himself at Jantar Mantar I find the TV channels have swung into action re-enacting scenes from the film Peepli Live. They are in Gajendra Singh’s village in Rajasthan, talking to each and sundry and telling us why he preferred to wear a particular kind of colourful pagri and so on. Every channel is now holding panel discussions calling spokespersons from different political parties who simply are using the media platform to say how white his shirt is by listing the number of steps taken to help farmers. There is hardly an effort to make a serious attempt to track down the fundamental reasons behind this serial death dance.  I am getting calls from newspapers who are asking me which areas their reporters should go to. A new face, a new name but the story will remain the same.

If I were to point to the primary and the most significant reason behind the continuing farmer suicides over the past two decades, I would narrow it down to the declining farm incomes. The 2014 report of the National Sample Survey Organisation (NSSO) tells us that the average monthly income that a farm family derives from farming activities is a paltry Rs 3,078. To make the ends meet, a farm family has to work in some other non-agricultural activities, including MNREGA. That makes for an average of Rs 6,000 per family per month. No wonder, 58 per cent farmers go to bed hungry, and 76 per cent want to quit agriculture if given a choice.

To look deeper, a colleague has meticulously done a comparative analysis. In 1970, the minimum support price for wheat was Rs 76 per quintal. Forty five years later, in 2015, wheat procurement price is Rs 1450 per quintal. In other words, in 45 years, wheat price has been raised by approximately 19 times. Let’s compare this increase in wheat prices for farmers with the increase in salaries for different sections. The average salary of central government employees has risen by 110 to 120 times; of school teachers by 280 to 320 times; of college/university teachers by 150 to 170 times; and of mid to high class corporate sector employees by 350 to 1000 times. In the same period, school fees have increased by 200 to 300 times; medical treatment cost has gone up again by 200 to 300 per cent; and average house rent in cities has risen by 350 times.

Farmer therefore is being made to pay the penalty for keeping food prices low. This year also, the wheat price has been raised by Rs 50 per quintal only so as to keep food inflation under control. Similarly, rice price for farmer has been raised also by Rs 50 per quintal. This increase comes to a paltry 3.2 per cent. Meanwhile the government employees have got a second installment of DA, a jump of 6 per cent. The employees will soon get the 7^thPay Commission where the salary of the lowest employee – a chaprasi – is being demanded at Rs 26,000 per month.

If I were to go by the lowest rate of salary increase seen in the past 45 years, the wheat price for a farmer should have been raised by 100 times. This means, against Rs 1450 per quintal now, what farmers should have legitimately been paid should be 100 times of Rs 76 per quintal that he was given in 1970. This comes to Rs 7,600 per quintal. That is his due whether we like it or not. Now don’t get panicky. I do not want food inflation to go through the roof. All I am suggesting is that instead of putting the entire burden on the poor farmer, the way out should be to pay farmer a higher price and then subsidise the produce for the consumers. It is done in Japan, and it’s also done in other rich countries.

Unless the farm incomes are raised significantly, I don’t see anything working in favour of a farmer. To say that farmers need to raise crop productivity and utilize every drop of water is simply a way to sell newer technologies. Neither will loading farmers with more credit help them to be out of the debt trap. A farmer does not need credit, he needs income. We have deliberately deprived him of a reasonably good income over the years. Successive governments have deliberately kept him poor. #

How long will we continue to have a primitive form of crop insurance?

My daughter, studying in the US, recently shifted to a new flat in the suburbs of Los Angeles.  I went to Google maps on the internet, and after a few minutes of tracking, was able to locate her house on the map. The picture of the building where the flat was located was in front of me. Looking at the locality, the surroundings and the landscape around, I became confident that she’s living in a decent and safe locality.

Why I am narrating this is to explain how technology has made it possible for us to even spot a house thousands of miles away and also counts the number of trees. Forest cover is being determined by satellite images. Crop estimates are being prepared using remote sensing data. But when it comes to assessing crop losses that farmers suffer from weather anomalies, the insurance companies backtrack. If a farmer’s crop is completely destroyed, the crop damage that the insurance companies offer to compensate him is the average loss in 70 per cent of the block.

This primitive insurance system prevails at a time when unseasonal rains, hailstorm and strong winds have caused extensive damage to the standing crops. With crop damage extending to over 11 million hectares in 14 States, crop losses have already dealt a severe blow to farmers. With rains continuing to dampen farmer hopes, and with nearly 200 farmers committing suicide, many of them dying from shock, an effective crop insurance scheme could have minimized the blow.

If your car gets a hit, you can claim the damage. If your house is burnt down the insurance company will pay compensation irrespective of whether other houses in the colonies suffered or not. Why then an average in a block is taken as a measure for crop losses suffered by a farmer in a village is something I have never been able to understand. It is simply the failure of the government to make it obligatory for the insurance companies to provide per unit coverage to farmers that has left the farming community hapless. Insurance companies will obviously resist, but the government must ensure that they are made to deliver. Crop loss assessment must shift per unit basis, insuring each and every farmer.

But for nearly three decades, I have watched with dismay the reluctance on the part of successive governments to provide for any meaningful crop insurance plan for farmers. The comprehensive crop insurance scheme that the Ministry of Agriculture has now prepared – called, the National Crop Income Insurance Scheme (NCIIS) – and expected to be soon piloted in 50 districts across the country, is unlikely to provide any succor to the beleaguered farming community facing crop losses. What shocks me is that even after three decades, all that the government has managed to come up with is a shoddy proposal, a rehash of an earlier failed Farm Income Insurance Scheme introduced in 2003, and withdrawn in 2004.

As the name suggests, the scheme is designed to provide insurance against fall in prices as well as drop in crop yields. In case of yield losses from natural calamities, a disease attack or otherwise, it still follows the primitive methodology of basing the compensation on 70 per cent of the average loss in a district. This only shows that the planners haven’t learnt anything from the technological improvements.  The NCIIS draft does illustrate 4 probable scenarios and the compensation that a farmer will get in each of these. For instance, if a farmer’s yield is 4 tonnes/hect and indemnity being 70 per cent, the compensation would be worked out based on 2.8 tonnes only.

The guaranteed income that the farmers will get under the new insurance scheme would be to a maximum of 20 per cent of the price fall (against the Minimum Support Price) that a farmer suffers. It is based on a threshold yield, the average yield for past 7 years in a district. In other words, if the wheat MSP is Rs 1450 per quintal, and the farmer gets only Rs 900 by selling it openly in the market, the assured price that the farmer will get is Rs 900 plus 20 per cent of the gap between market price and MSP. Against Rs 1450, a farmer under the new insurance scheme can expect a maximum of Rs 1110 per quintal. This is distress price. If a distress price is all that the government assures it will provide to farmers, I think the message is clearly on the wall. Farmers must quit agriculture. 

The only good news on this front that I can share is Madhya Pradesh chief minister’s promise of setting up a State Crop Insurance scheme wherein farmers will be insured on per unit basis, and not on block averages. I hope more and more chief ministers understand the need for a crop insurance that is effective and meaningful. 

Govt lets down farmers yet again. Hindustan Times, Chandigarh.

April 20, 2015.