Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
In news: Hundreds of farmers in Rajasthan had decided to go on strike. Farmers under the banners of Kisan Sangharsh Samiti had given ultimatum to state government to meet their demand of better crop prices, agricultural pensions and loan waivers. Local farm leaders under the banner Bharatiya Kisan Sangh said that protests were spillover of similar demonstrations in MP.
The snowballing of farm protests are a challenge for present government as it has made the agricultural sector a focus and promised to double the agricultural incomes by 2022.
Angry farmers say that they can’t afford sell their produce below par prices and want the administration to create a safety net.
There has been element of agrarian crisis for 20 years between 1997-2017. One big indicator is farmer suicides. If broken up in period with agriculture doing well and not doing well, there has been persistence of agrarian distress and suicides through both the periods. This means that farmer doesn’t do well even when agriculture does well.
Last three seasons there has been debate on drought. Even though consumers were paying high prices, value realisation for farmers were poor. Rabi and kharif were good crops, yet value realisation was poor.
Reasons for crisis
On one hand, agriculture is becoming a costly enterprise- farmers have to incur debts and on both kind of seasons- good and bad, the farmers are not getting adequate prices for their products. This is resulting in continuing distress.
The second is no proper market to sell their produce. Relying on madis has made them prone to middlemen interference which has reduced their fair share of prices. Farmers are not getting proper price of their produce neither cost of production value.
After implementation of LPG policies, farmers were the worst sufferers. There is no market for fruits and vegetables in the country as there are no cold storage in rural areas, no agro processing units in rural areas. Discussion about food parks and large industries is for big corporates and not general farming community which has led to farmers suffering post harvest losses. North east India had been identified as a horticulture promoting states. However, even after undertaking such farming, adequate infrastructure nor market was provided for the harvest. They have now shifted to their traditional crops.
The cost of production is increasing day by day by corporate agricultural model. It is main cause for debt in agricultural sector. Seed cost, input cost, irrigation cost, fertilisation cost has increased but the productivity has not increased nor has their supply price. Backward states like Bihar, Jharkhand, Chhatisgarh don’t see such farm unrest because subsistence farming is still practices over there. Hence, they don’t have huge corporate debts accrued over time.
The average family income of farmers is low which cannot help them sustain their consumption needs. Hence there is no possibility of investment in agricultural technology. In most cases in agriculture, most farmers in low level equilibrium trap cannot come out because of rising cost of production, fluctuations in price market.
Non-crop agriculture and livestock agriculture constitutes about 30% of agricultural. National dairy development board study shows that nearly 50% profit in the dairy sector is by selling of cattle. If that is restrictions on that, then the sector will suffer a lot.
In Maharashtra- vidarbh and Marathawada are suffering from drought. But the agitation has started from economically sound area. The farmers have to sell their produce of onions and tomatoes at 2-4/kg but when it reaches consumers, it is 20/kg.
Thus questions such as who decides this margins, who are the forces who are getting the huge benefit on agricultural produce need answers.
Possible steps to address the unrest
Revamping the mandi system- Famers put their produce in the mandi from where it goes free hand from farmers’ side and depends on traders- small, large and corporate traders. The government should change this system. It has to directly link farmers to consumers. Else the middlemen will artificially raise the prices of all food items for their own benefit and farmers and consumers will have to lastly suffer.
True picture of agriculture- MP had impressive agricultural growth in past few years yet it saw widespread agitation and farmer protests. This proves that growth does not reflect reality which shows problems with data.
There are policies like PM Krishi Sinchayi Yojaana, Fasal Bima Yojana which aim to help the famers. However, many state governments have not adopted the crop insurance scheme. Thus there is a need for sensitivity on part of central and state governments.
Need of a fundamental shift for agriculture. Different parties have to come to power but there is no change in fundamental situation of farmers. Still the agricultural structure continues to be middlemen driven. The agriculture and corporate relationship across the world, in developing countries it is seen that when there is a greater emphasis in promoting corporate structure in economy, there is a tendency to keep food and agricultural prices low. Unless and until there is a certain effort, concerted move and a structured plan to get over this situation, there is not many chances that situation will improve.
Farm loan waiver
This concept has been studies well in the context of Vidarbh prices, Andhra and Kerala debt crisis. In all these context, the loans from banks cover only a fraction of the farmer- 30-50% of farmers. Most of the loans are extended to small, medium and medium large farmers and not to marginal farmers. Thus the root of crisis is farmers have to rely on informal channels of loans at high interest loans. Thus, the banking loans waiver is not going to solve the crux of the problem.
There has been rhetoric in last 10 years in favour of agricultural but very few concrete steps have been taken. There is need to look at farming policies, the role of bovine and livestock economy and how it is linked to wider processes of marketing and sale. It is true that many policies are undertaken which have the capability to show the dividends, but it cannot be possible suddenly. Overnight, it is not possible to create 15 million tons capacity of cold storage facility. Also, farm loan waivers is not a temporary solution as it has more drawbacks than gains.
The political class, the academicians and agricultural theorists need to sit together and look at concrete comprehensive plans to address the agrarian crisis.
Connecting the dots:
Agrarian crisis have always been critical in affecting India’s economy. Identify the key areas and evaluate which need to be addressed to bring a long term solution for bringing farmers at peace.
What is agricultural corporate model? Analyse its impact on Indian economy and society.