Bibtex
Endnote
RIS
On March 6, more than 10,000 farmers set off on a silent march from Nashik to Mumbai. This march was called by the Akhil Bharatiya Kisan Sabha, the farmers’ organisation of the Communist Party of India (Marxist). Their main demand was transfer of land to farmers as promised under the Forest Rights Act (FRA) of 2006, better prices for their crops, and granting of loan waivers. The FRA aims to give forest land to adivasis for agriculture. The rules under the Act were framed in 2008, but implementation remains uneven. The adivasi farmers are simply seeking to enforce their rights.
The recent election outcome in Gujarat state also put the spotlight on issues of farmers and rural areas. The Union government’s own record shows that farm incomes have nearly stagnated for the past four years. How then to double these incomes in the next four years?
As the march progressed, numbers swelled, and by the time the protestors reached Mumbai, the numbers were over 50,000. Other farmers from the rest of Maharashtra joined in, and the march also received support from political parties. The march may be for specific issues related to forest land or crop prices, but clearly it has touched a chord across the entire farming community. Political implications of the protest apart, the march echoed the recurring stories of farm distress heard in recent years across different parts of India. The recent election outcome in Gujarat state also put the spotlight on issues of farmers and rural areas. The Union government’s own record shows that farm incomes have nearly stagnated for the past four years. How then to double these incomes in the next four years? The Union budget has promised that the minimum support price (MSP) would be 50 per cent higher than the cost of cultivation. This measure alone may not help, but will go some way in addressing the income challenge.
Around the same time as the march, as if to validate the concern of the farmers, the Economic Survey of Maharashtra revealed agriculture woes in stark numbers. Food grain production during 2017-18 is down by 14 percent. Pulses production is down 27 per cent. Cotton production, which was affected by the attack of the pink bollworm pest, is down 44 per cent. Oilseeds and vegetable production is down by 18 and 14 percent, respectively. Overall, the agriculture sector, which makes up about 12 per cent of the State GDP, and includes activities like livestock and animal husbandry and fisheries, is down by 8.3 per cent. Because of negative growth in agriculture, the overall state GDP growth slowed down from 10 to 7 per cent.
How do we reduce the workforce in agriculture, how to get them to higher income jobs, and how to get more income to flow to farmers as well? For a long time, right from the early days of our Republic, we followed a policy of development which resulted in completely shackling agriculture.
The State has limited irrigation potential, owing to being mostly on the Deccan plateau and hence is largely drought prone. There was a 16 per cent rainfall deficit in the State during last year. However, the steeply negative performance shows that we have been largely unsuccessful in drought proofing agriculture. And to top it all, sugarcane production, which is a water guzzler, is up by 25 per cent. Even if some of this was achieved by techniques like drip irrigation, it points to skewed priorities. Sugar factories in the State are run as cooperatives which have deep political linkages and patronage. Despite cane consuming almost 60 per cent of irrigation water, it is not a surprise that even in a rainfall deficit year, when crop production is down 14 per cent, sugarcane is up by 25 per cent.
The fact is more than 50 per cent of the workforce in India depends on agriculture directly or indirectly for livelihood. This workforce is today stuck in low productivity, low income activity. Moreover, half of this workforce consists of workers who are either landless (25 per cent) or farmers with very small parcels of land. So these workers are not particularly “tied to the land”. They would happily leave farming activity if only they had decent options outside of farming. Those employment options have to come from industry or services, and may need inputs like training and skilling. This is a huge untapped and underemployed resource.
The march of farmers is forcing us, yet again, to confront the main developmental challenge. How do we reduce the workforce in agriculture, how to get them to higher income jobs, and how to get more income to flow to farmers as well? For a long time, right from the early days of our Republic, we followed a policy of development which resulted in completely shackling agriculture. Output prices were kept low so as to keep food inflation low (to support industrialisation). And hence to compensate for low output prices, input costs were subsidised, be they water, fertiliser, electricity or seeds. In terms of trade, agriculture was “dis-protected” as compared to industry. And then to achieve food security for the nation, and income security for farmers, we had compulsory procurement and PDS. This tended to benefit larger farmers with marketable surplus, or traders. Anyway, with a combination of input subsidies, output price ceilings, compulsory intermediation through APMC, large scale stocking of food via the Food Corporation of India, we ended up creating a large, complex and ultimately unwieldy behemoth. And mind you, after all this, we still have farm distress and farmer suicides. Farming remains extremely shackled and permanently dependent on aid, dole, subsidies and rescue packages.
Farming has to be treated as a business activity, which has to be viable and profitable on its own, without subsidies, doles and rescue. We also need a comprehensive crop and price insurance market to mitigate the various risks associated with farming. The MSP regime is a step in that direction, but must be made to work for the benefit of the farmer with minimal fiscal burden and leakage.
Over the years, there have been several expert committees, commissions, and studies which have looked at different perspectives and proposed solutions. One of the most comprehensive and recent reports is that of the The National Commission on Farmers, chaired by Dr. M. S. Swaminathan. In fact, the farmers protesting in the present march want the Swaminathan report to be implemented in toto. The larger point is that agriculture needs to be completely unshackled of various burdensome controls, whether on input and output prices, on distribution and selling rights or on exports and imports. Export restrictions on various crops must be removed. The policies of monopoly procurement must go. Restrictions caused by the Essential Commodities Act must be removed. Compulsory sale through APMCs must go. APMC reform so far is highly incomplete. Prohibition on money lending to farmers, on tenancy farming, on leasing of farm land, land transfer (all with reasonable safeguards) must all go. Farming has to be treated as a business activity, which has to be viable and profitable on its own, without subsidies, doles and rescue. We also need a comprehensive crop and price insurance market to mitigate the various risks associated with farming. The MSP regime is a step in that direction, but must be made to work for the benefit of the farmer with minimal fiscal burden and leakage. The farmer simply needs more economic freedom.
(The writer is an economist and Senior Fellow, Takshashila Institution)