Why "Grow in India" too is important ...

For three years in a row, wheat farmers have received a paltry increase of Rs 50 per quintal per year in the form of minimum support price (MSP), which translates to 50 paise per kg every year. This corresponds to an insignificant 3.6 per cent increase in the price being paid to wheat farmers.

Compare it with the 7 per cent additional installment of Dearness Allowance (DA) to Central government employees in September over the existing rate of 100 per cent of the basic pay/pension to compensate for price rise, you realize the step-motherly treatment being meted to the majority farming population in the unorganized sector. Employees are getting 107 per cent DA allowance today.

In addition, as per a Centre government notification, whenever the DA crosses 50 per cent, there will be an automatic increase by 25 per cent in allowance such as Children Education Allowance, Travelling Allowance, Conveyance Allowance, Cash Handling Allowance, Risk Allowance, Bad Climate Allowance, Hill Area Allowance, Remote Locality Allowance and Tribal Area Allowance, among others. Agreed, not all employees get all these allowances but they do get some of these. In other words, the Central and State government employees are completely insured against any and all kinds of price rise.

The private sector employees too get a guaranteed income which incorporates all these allowances plus they receive hefty bonuses and shares.

But when was the last time you heard of a Children Education Allowance, a Bad Climate Allowance or a leave travel allowance or for that matter any of the above mentioned allowances being given to farmers? They are expected to meet all their expenses, including children education, daughter’s marriage, bad weather etc from the MSP they get. And the MSP is being kept nearly frozen for all practical purposes by successive governments to keep food prices in check. In other words, the entire burden of rising prices is being very conveniently passed onto to the farmers. The farmers must live in poverty and hunger to keep the middle class happy. 

No wonder, several studies show that more than 58 per cent of the 600 million farmers sleep empty stomach. Ironically, the people who produce food for the country themselves go hungry.

Several times in the past, Parliament has been informed that the average monthly income of a farming family (comprising 5 people plus) in the country stands at a paltry Rs 2,115. This includes about Rs 900 per month from non-farm activities like MNREGA. In many States, including the frontline agricultural States of Punjab and Haryana, the minimum wages for workers are higher than the daily farm income. Interestingly, while the Central Government Employees Federation is demanding a minimum monthly wage of Rs 15,000 for contract workers/other unorganized sector employees; and a minimum monthly salary of Rs 26,000 to the lowest aid employees of the Central Government, there is no talk at all of providing an enhanced minimum monthly package to the farmers.

In other words, it is the country farming population – comprising 600 million people -- that forms the neo-untouchable class.

An interesting analysis has been provided by the former Punjab Chief Minister Capt Amarinder Singh. When it comes to farmers, there is hardly a difference between the UPA and NDA. Accordingly, while the average cumulative increase in the paddy and wheat MSP during the Congress-led UPA, between 2004 and2014, was Rs 70 per year. During the previous NDA regime 1998-2004, it was only Rs 11. What he says is a stark pointer to the continuous apathy and neglect of the farming sector under successive governments.

As of this is not enough, there is more worrisome news that awaits farmers. Ministry of Food has already directed State Governments to refrain from providing any additional bonus over the MSP announced the Centre. Madhya Pradesh, Chhatisgarh and Rajasthan governments, which provided a bonus of Rs 100-200 per quintal for the past few years, have been warned not to do so in future. In case they don’t stop the practice, the Centre will not undertake food procurement operations in those States.

What is however not being told is that the MSP benefits only 30 per cent of the farmers. Even in the case of wheat and rice, where the Food Corporation of India makes procurement from the mandis at the support price, the network of mandis is only available in 30 per cent farmers. In the remaining 70 per cent of the cultivable areas, there are no mandis as a result of which farmers have to resort to distress sale year after year. Farmers in Punjab and Haryana are in the privilege category considering the he network of mandisand procurement centres as a result of which they at least get the assured price for their produce.

Even in western Uttar Pradesh, the lack of mandis and procurement centres forces farmers to transport wheat and paddy to the nearest mandis across the border in Haryana. Like the previous Congress regime, the new BJP government in Haryana has also banned the entry of paddy flowing in from Uttar Pradesh. The plight of the UP farmers who now face the prospects of distress can well be ascertained.

Let us not forget that while MSP is announced for some 24 crops, in effect it benefits only wheat and rice farmers for it is only in these two crops that procurement is made every year. In a case filed in the Punjab and Haryana High Court, Gurnam Singh of Bhartiya Kisan Union (Haryana) has petitioned how lack of procurement hits farmers. Last year, while the MSP for sunflower was fixed at Rs 3,700 per quintal, but it was purchased for Rs 2,600-2,900 per quintal. It was added that while 48,000 quintals of sunflower arrived at the Shahbad mandi for sale, and considering the average loss of Rs 500 per quintal, it resulted in Rs 4 crores loss to farmers.

The same holds true for all crops, including sugarcane for which the State governments fix a fair price. The industry has been demanding market prices for sugarcane, which means lower prices in effect, to sustain the industry. Similarly, a strong lobby of economists is demanding the withdrawal of procurement operations in wheat and rice which effectively means doing away with MSP. The argument is that it is because of MSP that the government is forced to buy and stock huge quantities of food grains. These economists are telling that the farmers would benefit if the markets are allowed to make purchases. But what is not being told is that already 70 per cent of India’s farmers are dependent on private markets, and it is in these areas that bulk of the farm suicides take place. 

Withdrawing the MSP would only force farmers to abandon agriculture in big numbers and migrate to the cities looking for menial jobs. Modi government therefore must take a realistic view of agriculture sector and makes efforts to bring prosperity in the countryside. Grow in India is no less important than Make in India. #

Source: 

Why "Grow in India" too is important... Deccan Herald, Nov 11, 2014.

http://www.deccanherald.com/content/440805/why-quotgrow-indiaquot-too-important.html

An 11-point agenda for resurrecting Indian agriculture and restoring the pride in farming

 Time to usher in "Acche din..." for the Indian farmers.

Indian agriculture is faced with a terrible agrarian crisis. It is a crisis primarily of sustainability and economic viability. The severity of the crisis can be gauged from the spate of farm suicides. In the past 17 years, close to 3 lakh farmers reeling under mounting have preferred to commit suicide. Another 42 per cent want to quit agriculture if given a choice.  The spate of farmer suicide and the willingness of farmers to quit agriculture is a stark reminder of the grim crisis.

Even at a time when the country was in the midst of elections, there was a spurt in farm suicides. In the past few weeks, on an average five farmers ended their lives in Vidharbha every day, another five in Telengana, three in Bundelkhand. In Marathawada in Maharashtra, news report say 101 farmers have taken their own lives in March-April. In progressive Punjab, 14 farmers have ended their lives in past two months.

 

When Prime Minister Narendra Modi blames UPA for the plight of jawanand kisan during the past 10 years, he raises a lot of hope for the beleaguered farming community. During election campaigning, he had specifically talked of farmer suicides, farm prices, crisis in agricultural marketing and also touched on local agricultural issues in different parts of the country. After all, kisano ke bhi to aache din aane chahiye …

What should therefore be the agriculture agenda for the new government? What should be the strategies and approaches that Narendra Modi has to follow to pull farmers out of the deep morass? Knowing very well that India cannot compromise with its food self-sufficiency, there has to be a number of short-term as well as long-term measures. I am being asked this question time and again. Here is my 11-point agenda:

 

1) Providing a guaranteed assured monthly income to farmers. According to the Arjun Sengupta Committee report the average monthly income of a farm family is Rs 2,115. This includes Rs 900 from non-farm activities. About 60 per cent farmers are dependent on MNREGA activities to survive, and an estimated 55 per cent farmers go to bed hungry. But these farmers produce economic wealth for the country in the form of agricultural, horticultural and dairy produce. It is high time they are adequately compensated for generating that massive economic wealth in the form of food. My suggestion is that the new government should set up a National Farmers Income Commission which should have the mandate to compute the monthly income of a farm family depending upon his production and the geographical location of the farm.

2) The time for price policy is now over. Every time the Minimum Support Price (MSP) is raised questions are asked about its impact on food inflation. Moreover, the Bali Ministeral of WTO has questioned India's subsidies that it provides to farmers by way of MSP. It is therefore an appropriate time to move from Price policy to Income policy. The income that a farmer earn should be de-linked from the price that his crops fetch in the market. That is why I have been asking for a guaranteed monthly income for for farmers. Let us not forget, if inflation is rising it is also rising for the farmers. While the Govt employees get DA instalments every 6 months to compensate for inflation, and get a pay commission every few year, farmers get only MSP and that too is un-remunerative. In an interesting study from Kerala, it was computed that if paddy price rise was to match the salary rise of govt officials, paddy price in 2005 should have been Rs 2669/qntl. It's Rs 1,310 today. In other words what paddy farmers are getting in 2014 as paddy price is 50 per cent of what they should have earned 9 years ago.

The burden of providing cheap food therefore to 1.25 billion people should not be only on the shoulders of farmers. The society too must share the burden.

3) There is an immediate need to strengthen the network of mandis (market yards) across the country whisch provides farmers with a platform to sell their produce. Leaving it to markets will result in distress sale. To illustrate, let me take the example of rice farmers in Punjab and Bihar. In Punjab, which has a huge network of mandis linked with roads, farmers bring the produce to these mandis. Last harvest, Punjab farmers got an MSP of Rs 1,310 per quintal for paddy. In Bihar, where APMC Act does not operate, farmers resorted to distress sale with prices not exceeding Rs 900 per quintal. The Commission for Costs and Prices (CACP) is now pressurising Punjab Govt to dismantle the mandis and let markets operate. Which means, Punjab farmers will soon go the Bihar way.

4) For a country which was able to build up an excellent marketing network for one of the most perishable commodities -- milk -- I see no reason why a similar approach cannot be adopted in providing a viable marketing network for fruits and vegetables. If the National Dairy Development Programme could ensure that milk is procured from each and every village, and then through a cooperative chain it is finally delivered to the consumers in the cities, I see no reason why India cannot carve out a marketing chain for fruits, vegetables and other farm commodities.

5) Cooperate farming need to be encouraged. Appropriate laws must be framed to make cooperatives more independent and effective. Drawing from the experience of the Amul cooperative in dairy farming, a similar system needs to be adopted for vegetables/fruit farming. I know of small cooperatives of organic farmers which have done wonders. Why can't it be replicated to rest of the crops?

6) Aim at making villages self-reliant in agriculture and food security. Feeding the population has to be linked with farming. Chhatisgarh has given an excellent model of self-reliance in agriculture and food security. It has shifted the focus to local production, local procurement and local distribution. This is exactly what needs to be done throughout the country for which the National Food Security Act needs an amendment. Instead of providing 5 kg of wheat/rice/millets every month, the focus should be on making the villages take care of their own food security needs. This will help reduce the huge subsidy bill on food security that is required every year and thereby reduce fiscal deficit. Such a programme will also help in removing hunger in the long term.

7) Green Revolution areas of the country are facing a crisis in sustainability. With soil fertility devastated, water table plummeting and environment contaminated with chemical pesticides and fertiliser, the resulting impact on the entire food chain and human health is being increasingly felt. The new Government should launch a nation-wide campaign to shift farming to non-pesticides management techniques. In Andhra Pradesh, no chemical pesticides are used in 35 lakh acres. Farmers have even stopped using chemical fertiliser in some 20 lakh hectares. Production has gone up, pesticides pollution has come down, insects attack has also come down, and more importantly farm incomes have gone up by 45 per cent because of reduced health expenses. There has been no farm suicides in these areas. The same system now needs to be extrapolated to the entire country with local modifiations/adaptation.

8) Agriculture, dairy and forestry should be integrated. Agricultural growth should not only be measured in terms of increase in foodgrain production but should be seen in the context of the village eco-system as a whole. This will also shift the focus to low external input sustainable agriculture (LEISA) practices. At the same time such an approach will limit the ecological footprint.

9) Importing food is importing unemployment. Recently, apple growers in Himachal Pradesh have been protesting against the low import tariffs for imported apples as a result of which the local produce goes abegging. There are no buyers for Himachal apples, and the prices have plummeted . Similarly for other crops. The Govt must raise the import duties on agriculture, horticulture and dairy products and refuse to buckle under the pressures being exerted through the Free Trade Agreements. It should not accept the European Union's demand for opening up for dairy products and fruits/vegetables by reducing the import duties. Studies have now shown that indiscriminate signing of FTAs and bilateral agreements has been disadvantageous to the country. Time to revisit the trade treaties and protect domestic agriculture thereby millions of livelihoods.

10) Climate change is certainly going to affect agriculture. But instead of looking at strategies only aimed at  lessening the impact on agriculture and making farmers cope with the changing weather patterns, the focus should also be to limit greenhouse gas emissions from agriculture. Considering that agriculture share in greenhouse gas emissions is about 25 per cent, the thrust must shift to reducing the application of chemical fertiliser/pesticides in farming. Following the AP model of non-pesticides management being the right approach, the cropping pattern too needs a revision. In the dryland regions of the country, for instance, at present hybrid crops which required almost twice the amount of water than normal crop varieties, are grown. Common sense tells us that in rainfed regions, which occupy 65 per cent of the cultivable area, crops requiring less water should be grown. But it is just the opposite in reality thereby accentuating the water crisis at times of rainfall delay.

I see no reason why Rajasthan, a semi-arid region, should be cultivating water guzzling sugarcane, cotton and rice crops. Similarly I see no reason why Bundelkhand should be cultivating mentha crops, which requires 1.25 lakh litres of water to produce 1 kg of mentha oil. Why can't the cropping pattern in Rajasthan and Madhya Pradesh shift to pulses, oilseeds (like mustard) and millets? Why can't the Goovt provide special incentives by way of a higher price for these crops so that farmers can willingly shift to more sustainable cropping patterns?

11) Lack of storage for foodgrains is appalling. It was in 1979 that under the Save Food Campaign, the Govt had promised to set up grain silos at 50 places in the country. This should be the top agenda for the new government. Not even a single grain should be allowed to go waste. #

Elections 2014: Spare a thought for farmers.

Elections 2014 is around the corner. And when elections draw nearer, the Government suddenly wakes up and thinks of its duties towards the people. This year is no exception. Whether it is the one-rank-one-pension for the retired defence personnel or the legal monthly entitlement of 5 kg of wheat/rice/millets for the poor households under the national food security act or the announcement of a 7^th pay commission along with a DA installment for the central government employees or reservation for jats, the list is endless.

It is an election bonanza time. The more organized you are, and the bigger the vote base, the bigger is the largess. 

But for some strange reasons I find the farmers, comprising the largest chunk of the population, have remained largely ignored. With a 54 per cent share in the total population, and forming the biggest vote bank considering there are 60-crore farmers and landless farm workers, the farming community has not received anything more than lip sympathy. Not only the ruling UPA Government, even the major political parties have refrained from spelling out any economic measure to mitigate the terrible agrarian crisis that the country is faced with.

Although the election manifestos of political parties have still to be made public, the fact remains that farmers are not on the electoral radar of any political party. I have seen Narendra Modi talking about a higher sugarcane price when he addressed a political rally in Meerut; and at times talk of a Rs 5,000-crore Market Stabilisation fund that he believes will ensure that farmers get adequate market price for their crops. He has also been talking of cash crops, and replicating the Gujarat model of agriculture.

Congress leader Rahul Gandhi has not even acknowledged the presence of farmers in his speeches. He talks of the youth and the women but I have rarely seen him devote a major part of his speech on agriculture and farmers. In Punjab, Prakash Singh Badal has refused to tone down the agricultural subsidies. Knowing well that farmers constitute nearly half of the 1.92 crore voters, he has released 7,200 tubewell connections pending for over a decade. In addition, he has also agreed to pay pending compensation to the families of farmers who had committed suicide. This too happened after the farmers staged a massive sit-in for a week or so.

In Madhya Pradesh, Chief Minister Shivraj Singh Chauhan sat on a dharna demanding Rs 5,000-crore relief from the Centre for the crop losses suffered by farmers due to hailstorm and incessant rains. Similarly, some other State governments have been announcing timely relief measures to keep the farming flock satisfied with the amount of compensation. But for a long-term sustainability and overcoming the income inequality in agriculture, nothing is on the cards.

Although forming nearly half of the country’s roughly 82-crore voters, farmers have failed to make a difference. It is because as a community they remain divided, and prefer voting on political grounds rather than as a unified farming force, no political party takes them seriously. Much of the fault also lies with the current leadership of farmer unions and organizations. Most of them are themselves aspirant for tickets for the Lok Sabha and have been queuing up before the political leaders. In other words, it’s the farmer’s leaders who have failed the farming communities. They must accept responsibility for the failure of the farming population to emerge as a major political force.

At a time when the average monthly income of a farming family has been computed at a paltry Rs 2,115, and at a time when close to 2,500 farmers are quitting agriculture every day, all political parties should have seen the urgent need to revitalize agriculture. All the talk of making the country a super power in the next few years sounds hollow if two-third of the population lives in poverty and hunger. According to some recent studies, about 60 per cent of farmers in India go to bed hungry. A farmer sleeping hungry is a reflection of the terrible crisis that afflicts agriculture.

All is not lost yet. It is high time the farmers unions across the country come together and chart out a unified plan before the elections. They should make it abundantly clear that the farmers will only vote for those political parties which promise to support, endorse and put into action the major demands if voted to power. They should refrain from coming out with a 20-point charter of demand and instead narrow down their priorities that need immediate focus. Let me point to some of the priority areas they need to draw attention on.

1.Farmers need a guaranteed monthly income. It's therefore important to constitute a National Farmers Income Commission: At a time when WTO is challenging minimum support price being paid to farmers, also considering the fact that MSP benefits only 30 per cent of India’s farmers, the time has come when farmers need to be given a monthly assured take home income package. If Mayawati can provide a minimum monthly salary of Rs 18,500 for the safai karamcharis in UP, there is no reason why farmers should not get an assured income, DA, health and medical allowances and benefits of pension. 

2. Drawing from the experience of Punjab which has a wide network of mandis and link roads, and thereby is able to provide farmers with the procurement prices, a similar programme needs to be launched across the country for building mandis/markets where farmers can sell their produce at a remunerative price. In Bihar for instance, in the absence of mandis, farmers are duped and fleeced by trade year after year.

3. Excessive use and abuse of chemical pesticides and fertilizers have not only ruined the soil fertility, destroyed the natural resource base, polluted the groundwater, the industrial farming systems have also contaminated the food supply thereby creating health problems and lifestyle diseases. It is therefore time to launch a nationwide mission for sustainable farming based on what has been achieved in Andhra Pradesh. Over 35 lakh acres in AP is now under non-pesticides management, and farmers do not apply chemical fertilizers in 20 lakh hectares. Production is going up. And there are no farmer suicides in the areas where chemical pesticides are not been applied. 

4. No agricultural land should be allowed to be diverted for non-agricultural purposes. In India, massive land acquisition is underway in the false premise of growth through urbanization. Even foreign companies are being asked to acquire farmland. Some 31 such ventures/deals are underway. Given the requirement of a growing population, this will be catastrophic in the years to come. Even China is now rectifying the mistake it made in acquiring the farm lands. Agriculture should be made economically viable and sustainable in the long-term to ensure that farming remains the biggest employer. Killing jobs in agriculture and creating menial jobs in cities is not economic growth. #

How to kill farmers

At the AICC meeting in New Delhi, Rahul Gandhi made a mention of how he had asked his Congress chief ministers to exempt fruits and vegetables from the Agriculture Produce Market Committee (APMC) Act.  As per his directive, most Cong chief ministers had already removed fruits and vegetables, which have contributed much to raging food inflation, from the APMC Act by January 15. But has it helped reduce food inflation?

The prices had already come down in December much before Rahul Gandhi’s directive could make a difference. But what is more important is to understand whether the APMC Act is the villain of the story or whether the fault lies somewhere else. Let’s take a deeper look.

A day after Parliament approved FDI in multi-brand retail in Dec 2012, a newspaper report highlighted how the big retail was exploiting both the farmers as well as the consumers. The wholesale cash-n-carry Bharti-Walmart enterprise was buying baby corn from contract growers in Punjab at Rs 8 per kg, selling it in wholesale at Rs 100/kg and finally the consumers were paying Rs 200/kg. In other words, a farmer got only 4 per cent of the end price the consumer paid.

Take the case of paddy in Bihar, which is the only State to have repealed the Agriculture Produce Marketing Committee (APMC) Act way back in 2006. It had freed farmers from what many pro-reform economists call as an ‘archaic provisions of a socialist era’ thereby allowing farmers the freedom to sell their produce to whomsoever they like. Against the procurement price of Rs 1,310 per quintal that Punjab farmers got this year, Bihar farmers have somehow managed to sell paddy at something around Rs 800-900 per quintal. This is nothing but a distress price, a classic example of ruthless exploitation by the private trade.

Ironically, the Commission for Agricultural Costs and Prices (CACP) which is supposed to ensure remunerative prices to farmers lists Bihar as the top ‘market-friendly’ State as far as agriculture is concerned. Punjab, which has a network of mandis and provides an assured price to farmers year after year, is at the bottom of the chart. At a time when being market-friendly is the new mantra, CACP is asking the Punjab government to disband the APMC Act and allow markets to operate freely. In other words, it wants Punjab farmers to go the Bihar way.

What probably Rahul Gandhi has never been told is that only about 30 per cent of India’s farmers get the benefit of procurement prices. Rest 70 per cent farmers are in any case dependent upon the markets. If the markets were so helpful for these 70 per cent farmers, encouraging entrepreneurship and thereby improving livelihoods, I am sure by now the farmers in the food bowl of the country – Punjab and Haryana – would have demanded repeal of the APMC Act.

But it didn’t happen. The reason is obvious. APMC Act, despite all its flaws, provides an assured price and market to farmers. It is primarily for this reason that Punjab farmers are refusing to diversify from wheat and rice cultivation in the absence of an assured price mechanism for other crops. Madhya Pradesh this year is expected to take over Punjab in wheat production, not because of leaving farmers to the tyranny of the markets but providing them with a bonus above the procurement price.

I am amused when some economists blame APMC for the monopolistic market structure that restricts the entry of free trade and competition thereby denying farmers an economic price for his produce. This is completely wrong an assumption. Under the APMC Act, farmers bring produce to the designated mandis where the private trade is first allowed to make purchases. It’s only when there are no private buyers left that the Food Corporation of India (FCI) or the State procurement agencies step in to lift whatever is available at the minimum support price.

This is what irks the private trade. It doesn’t want to pay the minimum support price to farmers. If it can get paddy at Rs 800-900 per quintal in Bihar for instance why should it shell out Rs 1,310 per quintal to Punjab farmers? While I say this, the Gurgaon Chambers of Commerce and Industry have already asked the Haryana government to remove the APMC Act completely which will allow them to procure cheaper raw materials for the industry.

To say that market structures do not permit the entry of new players who want to set up cold chains and invest in other infrastructures is all bunkum. In seven years after repealing the APMC Act Bihar has seen any revolution in agricultural marketing. Farmers have been left in the lurch. Nor is the private trade interested to make investments. In fact, the industry wants to exploit the already existing supply networks in the frontline agricultural states like Punjab and Haryana.

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. An assured price and an assured market formed the very foundations of the Green Revolution. Procurement prices help farmers realise a fair and better price for their produce. This system needs to be improved and strengthened, not dismantled. 

There is no denying that over time some aberrations have cropped up in the way the mandis (as the public grain markets in India are known) operate. The APMC laws have the provisions to effectively regulate these mandis. But rarely has the government ever stepped in, and in fact it is because of the political cover to the powerful middlemen coterie that the entire mess has generated. For instance, why do the State Governments make a political appointee as the chairman of the APMC committee? 

But to take away horticultural produce from the purview of the mandis, and that too after the 2005 amendment in the APMC Act had allowed the private buyers to bypass the mandis and purchase wheat and rice directly from the farmers, is primarily aimed at killing the procurement system. This is the first step. More will soon follow. In other words, knowingly or unknowingly Rahul Gandhi is very cleverly suggesting destruction of the very foundations of food self-sufficiency built so assiduously over the past four decades. #

An abridged version appeared in The Hindustan Times, Jan 20, 2014.

Leaving farmers to reap the bitter harvest bit.ly/1bcyvWW 

Read also: Cartels cause runaway inflation. DNA Mumbai, Dec 30, 2013.

dnai.in/bXsg