Jul 17, 2016

Nobel laureates need to look beyond GM crops, focus on food wastage to fight hunger.



Nobel laureates are a respected lot. So when more than 100 Nobel laureates presented a signed letter defending genetically-modified (GM) crops, blaming Greenpeace in particular for blocking ‘golden rice’ which it claimed has the potential to reduce or eliminate much of the death and disease caused by Vitamin A deficiency, the world would certainly sit back and take notice.

After reading the letter, addressed to “the Leaders of Greenpeace, the United Nations and Governments around the world”, I must say I was greatly disappointed. I have had the privilege of meeting, knowing and talking to many a Nobel laureate over the years, and I must acknowledge that while this was a great privilege I did realize from my meetings that a majority of them had rarely moved outside of their laboratories and conference halls, but this letter simply knocks me out. These distinguished scientists, and we salute them for their scholarship, have little idea how the world outside their lab looks like. But I never knew they were so ignorant. 

Coming at a time when the New York Times (July 14, 2016) reports that the demand for organic food in United States is far outstripping the supply, forcing food companies to make payments in advance even taking care of the transition costs, it seems the Nobel laureates are completely out of sync with realities. But let’s get back to the letter.

‘How many poor people in the world must die before we consider this a “crime against humanity”?’ the letter ends on this impassioned note. The question in particular is related to the acceptance of ‘golden rice’ which the GM industry has always been pushing as the answer to childhood blindness globally affecting 250,000 to 500,000 children every year. According to UNICEF, half of them die within 12 months of losing their sight. But perhaps what the Nobel laureates were not informed by the biotech industry before they signed on the letter is the fact that Greenpeace has nothing to do with the denial of approval for ‘golden rice’. Prof Glenn Davis of the University of Washington has in an exhaustive study shown that ‘golden rice’ has still not crossed regulatory hurdles.

We will come to that later. But first let’s look at the usual scientific rhetoric that I find is repeated worldwide ad nauseam: “Opposition based on emotion and dogma contradicted by data must be stopped.” Whose data? The data produced by GM companies or the data produced based on the research funded by biotech giants? After all, why should scientific bodies, including the Royal Society, always overlook the scientific studies and references challenging these ‘scientific’ claims? I draw their attention to a compilation of more than 400 scientific studies done by the Coalition for GM Free India. This study has a foreword by the well-known scientist-administrator Dr M S Swaminathan. Closer home, the Nobel laureates must see the work of the European Network of Scientists for Social and Environmental Responsibility, which too has questioned the so-called ‘scientific’ claims.

To say that scientific and regulatory agencies around the world, which find GM crops as safe as, if not safer than those derived from any other method of production, is a clever ploy to hoodwink public opinion and thereby push harmful and risky crop production technologies. The way the Food and Drug Administration (FDA) in the United States and for that matter the Genetic Engineering Appraisal Committee (GEAC) in India have been very conveniently turned into a rubber stamp for the GM industry clearly shows how futile and frustrating the search for scientific truth can be. If you want to see the ‘criminal destruction’ of scientific facts you must do a careful perusal of the FDA (or the GEAC) recommendations.

But why should I blame the regulatory bodies if the public opinion of even the Nobel laureates can be so easily swayed? 

If ever any of the Nobel laureates feels like moving out of his/her laboratory to see the ground realities, I would like to invite them to Punjab, the food bowl, situated in northwest India. Last year, nearly 300 farmers committed suicide after a deadly attack of white-fly insect on Bt cotton ravaged the fields. Bt cotton is the only GM crop approved for cultivation India. This year, drawing a lesson, as much as 40 per cent area under cotton dropped while cotton farmers in more than 72,000 hectares in the northwest States of Punjab, Haryana and Rajasthan, have already shifted to non-Bt native varieties and hybrids. Although I am aware that white-fly is not the insect against which Bt cotton has inbuilt resistance, but the fact remains that the virulent insect attack is primarily confined to Bt cotton. The question I therefore want to ask is why shouldn’t the GM seed companies be held accountable for the death of nearly 300 Punjab farmers?

More gory consequences of GM soya cultivation have been documented from Argentina, Brazil and Paraguay. I thought the Nobel laureates would at least Google to know how damaging GM crops have been to the environment, animal and human health in some of Latin American countries. This is the least I had expected from them before they signed the letter. If they had done so, I am sure they would instead have written a letter to the GM companies, the United Nations and Governments around the world warning them to be wary of GM crops and at least learn from the Argentina debacle.

If this is a collateral damage for addressing the bigger issue of global hunger, I am afraid the Nobel laureates have never cared to go beyond the newspaper headlines. According to the US Department of Agriculture, the world produced food good enough to meet the requirement of 13.5 billion people. In other words, the world produces food for double the existing population. In US alone, latest studies show that nearly half of all US food produced is thrown away. If only US food wastage was to be minimized, the food requirement of the entire Sub-Saharan Africa can be met. In Europe too, nearly 52 per cent of the food is wasted. The food wasted in Italy, for instance, if saved can feed the hungry in Ethiopia.

Globally, the world wastes 1.6 billion tons of food every year.

I wonder whether the Nobel laureates are aware that US faces its worst hunger, breaking all previous records, with more than 40 million people sleeping hungry at a time when the US is cultivating a number of GM crops. The US is also the Mecca of GM foods. I thought the question Nobel laureates would first ask is how come US has so much of hunger (and malnutrition) if GM crops were the savior? If GM foods could not reduce hunger in America, how do you think it is the solution for hunger in Global South? Isn’t it time therefore that the Nobel laureates focus on the immediate crisis of growing hunger first in their own neighbourhood?

What has to be accepted is that the food crisis the world witness is not because of any shortfall in production. The problem is because of the absence of food justice, which in other words means access and distribution. If the world was to eliminate food wastage there would be enough food available even at the end of the 21st century given the present rate of production. It is therefore high time the Nobel laureates begin to focus where the need is urgent. Come, join the global efforts being spearheaded by the United Nations on reducing food wastage. Isn’t food wastage at a time when millions of people are living in hunger, with some 20,000 succumbing to it daily, a mankind’s crime? 

I am asking the same question that you asked before: How many poor people in the world must die before we consider this a “crime against humanity”? #

Source: GM Crops are not the solution to global hunger. ABPLive.in July 16, 2016.

Jul 14, 2016

Pulses import -- abandoning food self-sufficiency.



There is something going wrong. A government-to-government contract to import pulses from Mozambique, at a time when farmers in India are increasingly forced to commit suicide, bears testimony to a flawed economic policy that will eventually uproot Indian farmers. I don’t know whether this is being done deliberately or whether Prime Minister Narendra Modi is being kept in dark of the grave consequences of taking contract farming to other countries.

I remember, some decades back, when Balram Jakhar was the Agriculture Minister he too had proposed cultivating pulses in some African countries and importing it. During the UPA regime, the then Agriculture Minister Sharad Pawar too had wanted India to undertake pulses cultivation in Burma and Uruguay, which could then be imported. But all these years, the fanciful idea, a brainchild of some ignorant bureaucrats in the Ministry of Agriculture, had remained only confined to media statements. This time I am told the bureaucrats in the Prime Minister’s Office (PMO) had sternly managed to prevail.

As per the news reports, India will identify a network of farmers with the help of local agents in Mozambique and provide them with appropriate technology, including seeds and improved equipments. These farmers will be assured before they take up cultivation that whatever they produce will be purchased by the Indian government at a rate not less than the minimum support price (MSP) that is given in India. The basic idea, says an official of the Ministry of External affairs, is to grow a network of farmers.

If India can build a network of farmers in Mozambique to grow pulses on a regular basis I wonder why a similar network of farmers can’t be built in India. Why is India not making a similar commitment to pay a higher price and make assured procurement that could have easily raised domestic production and thereby increase its availability. While in India, the government leaves farmers to face the volatility of markets, in Mozambique it agrees to provide an assured market by buying whatever is produced. This is grossly unfair.

The key to increasing domestic production of pulses lies in assured purchase. Although the government has raised the MSP for some of the important kharif pulses, by providing for example a bonus of Rs 425 per quintal to make it Rs 5,050 per quintal for arhar dal, but price alone may not be enough to raise production in the long run. I have always maintained that unless the government launches procurement for pulses, on the lines of wheat and rice procurement, there is little possibility of enhancing domestic production. If the government can assure farmers in Mozambique of buying whatever they produce I see no reason why the same cannot be done within the country.

From Mozambique, India expects to import 100,000 tonnes of pulses, which will increase to 200,000 tonnes in a matter of few years. Additionally, India is also exploring the possibility of taking cultivation of pulses to some other African countries, including Tanzania, Kenya and Malawi. The increasing reliance on pulses production in Africa to meet the ever-growing domestic demand will however leave behind a trail of destruction on the farm front which has perhaps not been properly visualized.

Food security is the primary responsibility of any government. Yes, I agree. But in India, unlike countries like Singapore, food security should not be met from imports. Considering that India has a massive army of 600 million farmers, faced with a terrible agrarian distress over the past few decades, what the country needs is production by the masses and not production for the masses. Instead of helping farmers in Africa, it makes political and economic sense to help farmers within the country. This is exactly what was achieved when India launched Green Revolution in 1966. The nation must admire the political sagacity of the then Prime Minister Indira Gandhi to have assiduously built up a public procurement system to pull the country out from a perpetual hunger trap. Grow more food was then the slogan.

There can be nothing more disastrous for any country to abandon the principles of food self-sufficiency as a pre-requisite to ensuring food security. Ensuring food self-sufficiency is the hallmark of ascertaining national sovereignty. Let’s not forget, India escaped food riots in 2007-08 when the world was faced with an unprecedented food crisis. At least 37 countries had faced food riots at that time, and all of these were countries which relied on food imports. India had ample food reserves at that time, an outcome of a continuing policy of maintain food reserves. Any tinkering that allows for dismantling the public procurement system is therefore fraught with dangers.

Secondly, there are lessons to be learnt from the way India badly messed up with edible oils. At present, country imports nearly 74 per cent of its edible oil needs exceeding Rs 70,000-crores despite having the ability to produce it within the country. Although the consumption of edible oils has doubled in the decade ending 2015, the fact remains that India was almost self-sufficient in meeting its edible oil needs in 1993-94. Following the Oilseeds Technology Mission that ex-Prime Minister Rajiv Gandhi had launched in 1985-86 India was producing 97 per cent of its edible oil requirement ten years later.

What went wrong were the faulty trade policy whereby import tariffs were reduced drastically thereby bringing in a flood of edible oil imports. If only India had continued to block cheaper imports by maintaining higher import duties, the Rs 70,000-crore that is spent on imports would have gone to the benefit of Indian farmers. Since oilseed is mainly a crop of primarily rainfed central India, imagine the economic benefits that would have accrued to farmers. But the tragedy is that while Indian farmers suffer, the benefit is being passed to farmers growing oilseeds in Malaysia, Indonesia, Brazil and United States from where the imports pour in.

After oilseeds, it is now the turn of pulses, which carries a zero import duty. With India getting into Free Trade Agreement (FTA) with European Union, Australia, New Zealand, South Korea, among other countries, there is a growing fear that import tariffs on milk and milk products, vegetables, fruits, poultry, and even wheat are on the chopping block. I shudder to think of the socio-economic and political consequences of relying on food imports to meet the food security needs. While on the one hand such a policy will push farmers out of agriculture, it will take the country back into the days of ‘ship-to-mouth’ existence when food used to come directly from the ship to feed the hungry mouths. #  

Jun 30, 2016

7th Pay Commission is welcome, but is the government's largesse only limited to employees?

The implementation of the Seventh Pay commission will turn out to be the real game changer for the Indian economy. Forget about rate cuts, policy paralysis and opening the floodgates to the 2nd phase of FDI wave, it is the much awaited salary hike for government employees that in reality is expected to act as a stimulus for the slogging economy.

No wonder, the Union Cabinet has hinted of a substantial pay hike, more than the recommendations of the 7th Pay Commission. Against the recommended minimum basic salary of Rs 18,000 and a maximum of Rs 2,50,000 as per the Pay Commission, the Empowered Committee of Secretaries is expected to ask for a 24 per cent jump, which translates into a minimum basic pay of Rs 23,500 and a maximum of Rs 3,25,000.

The bonanza for the government employees, coming at a time when the economy is showing no signs of tiding over the continuing crisis, hides the real intentions – it is an indirect rescue plan to bail out the industry.

It is like hitting two birds with one stone.

A report in LiveMint (Oct 29, 2015) says: “A historical analysis of auto sales shows that arrears and pay hikes of government employees have led to immediate spike in the purchase of two-wheelers and passenger vehicles in the country”. Although the wait has been long but the automobile sector is not the only exception. Take the case of the realty sector. Says a report in Indian Express (Dec 5, 2015) based on an analysis by Credit Suisse: “While the Centre’s easing of FDI norms last month was a positive development on the supply front, a new report says that the pay panel’s recommendations will provide a much-needed boost to the demand side.” 

In another report in Forbes India (Jan 18, 2016) all hopes for the revival of FMCG prospects hinged on the expected pay hikes: “Very recently, the Seventh Pay Commission has recommended an average 23.55 per cent hike in salaries and pensions, which could see an additional $15 billion in the hands of consumers, starting 2016. This could give a very good fillip to consumer spending across sectors such as automobiles, consumer durables and non-durables.”

That day has now arrived. As the Financial Express (June 29, 2016) rightly states: “Stocks of FMCG and auto companies will be in focus as the cabinet is likely to approve on Wednesday higher increases in basic pay for over 1-crore government employees and pensioners.” You will see the Chamber of Commerce welcoming it with a glee, and the markets giving a big Thums Up.

It is not only the 45-lakh central government employees and about 50-lakh pensioners who will be the only recipient of the government’s largesse, but as a Credit Suisse report tells us the recommendations will be followed by State governments and Central PSU besides colleges and universities. This means a total of 3.4-crore employees and pensioners will in reality see surplus cash flowing into their pockets. The annual additional burden on account of pay hike alone, for both the Central and the State governments put together, will therefore grow to Rs 4.5 to 4.8 lakh crore every year.

Although the PMO is believed to have directed the Empowered Committee of Secretaries to ensure that the pay hike is ‘sufficient to provide for the life and health of central government employees’, I fail to wonder why the concern is only limited to employees. I have nothing against the government employees being bestowed with huge salary hikes plus allowances but I thought the mandate of the PMO runs beyond the Central and State employees. But it appears as if the country’s economy only revolves around India Inc and the government employees. The rest don’t matter.

Take a look. At the time of economic meltdown in 2008-09, Rs 3-lakh crore bailout package was given to the industry. In addition, since 20104-05, tax concessions to the tune of Rs 48-lakh crore have been doled out for the India Inc. Similarly, for the employees, the 7th pay Commission is going to translate into Rs 4.5 to 4.8 lakh crore bonanza despite the economy not showing signs of any recovery. Exports are down, industrial output refuses to pick up, and job creation remains subdued.

But when it comes to 60-crore farmers, reeling under a back-to-back drought for two years, the government has never been so forthcoming. If it were not for a Supreme Court drubbing, the government was not even willing to acknowledge that a severe drought prevailed in 13 States. I had expected an economic bailout package of at least Rs 3-lakh crore for the drought affected areas, in line with the stimulus package for the industry, but then agriculture continues to remain outside the economic radar screen of the country.

Government employees all across the country work for not more than 150-160 days in a year. Farmers have to work 24x7 bit still have been denied a legitimate income by successive governments. They are being deliberately kept impoverished, penalized for keeping food inflation in control. 

For several years now, the rise in the minimum support price of wheat and paddy has remained at a paltry Rs 50 per quintal. Economic Survey 2016 tells us that the average income of farming household in 17 States has been computed at Rs 20,000 a year. Add to it the farm incomes in the rest of the country; the average a farmer earns from agriculture comes to Rs 3,000 a month. But I never heard the PMO express the same concerns about the plight of farmers as it does for government employees, directing the Finance Ministry to ascertain whether it is sufficient for the life and survival of the farming community. #

Source: 7th Pay Commission is welcome, but is the government's largesse only limited to employees? ABPLive.in June 29, 2016. http://www.abplive.in/blog/7th-pay-commission-is-welcome-but-is-the-governments-largesse-only-limited-to-employees

Jun 29, 2016

Opening the floodgates of Indian economy to FDI is not desirable

The floodgates have been opened. In what is being termed as the second phase of sweeping reforms, India has opened up for aviation, defence, pharmaceutical, single brand retail and food processing besides opening up animal husbandry and apiculture. Prime Minister Narendra Modi says that a radical liberalized FDI regime will turn India as the most open economy in the world providing major impetus to employment and job creation.

Whether it is water or economy, opening the floodgates certain brings in a surge. But unlike the opening of the floodgates of a dam, wherein flood waters do not flow back, the unhindered flow of FDI does not only mean that it will bring in a deluge of foreign capital but eventually for every dollar invested in the country, two dollars are repatriated. Moreover at a time when the world is witnessing a jobless growth, I don’t know how the government is confident that the FDI inflow will end up creating more jobs.

The desperation for creating jobs is clearly visible. The Labour Bureau has estimated that only 1.35 lakh jobs were created in 2015, which is the lowest in the past six years. You will agree this is not even a drop in the ocean. In a country where roughly 1.25-crore people join the employment queue every year, only 1.35 lakh people finally getting through clearly shows that the economic system is failing to deliver. Well, one year’s job creation data is certainly not enough to pass a judgment but the employment graph for the past 12 years, beginning 2004 when Dr Manmohan Singh took over as Prime Minister, has remained equally bleak.

Only about 1.6-crore jobs have been created in the past 12 years whereas roughly 14.5-crore people were in search of a job. 

The pressure to create jobs therefore is evident. But that’s exactly what the Manmohan Singh government was trying to explore when it had tried to open up to more FDI. In a tweet on Dec 5, 2012, the then Chief Minister Of Gujarat, Narendra Modi had written: “Congress is giving nation to foreigners. Most parties opposed FDI but due to sword of CBI, some didn’t vote & Congress won through the back door”. While in Opposition, Arun Jaitley had in 2013, said: “FDI is not in favour of the consumer, farmer, trader, manufacturer and the country. That’s why we are opposing it and will continue to oppose till our last breath. We stand united with the traders and the people of this country.”

So what has transpired in the last four years that has made the NDA go in for a complete U-turn of its earlier stand? Former Finance Minister P Chidambaram calls it Opposition Syndrome. While I may dismiss Chidambaram’s criticism of the Narendra Modi government opening up to FDI in a big way, but one certainly fails to understand the reasons for the new found love towards FDI. Noting has transformed so dramatically in the past four years as far as the global experience with FDI is concerned that a 180 degree turnaround can be justified but then that is politics.

India had recorded its highest ever FDI inflow at $ 55.46 billion in 2015-16.

Although Commerce Minister Nirmala Sitaraman has made it clear that the policy has been tweaked to ensure that it does not hurt domestic jobs, but the sudden announcement of the opening up f Indian economy without any nationwide discussion raises more questions than provides answers. For instance, I don’t still understand what is the problem with bee-keeping that FDI has been allowed in apiculture. Bee-keeping is a supplementary income source for the farmers, already under a severe distress, and any effort to allow control over the market by big business interests from abroad will only push these small farmers out of business.

Relaxing the requirement of ‘controlled conditions’ in animal husbandry, pisciculture, aquaculture and apiculture has been welcomed by the industry. With the improved technology coming in from the western countries, the domestic industry feels it will bring in better breed of milch animals, and there will be increased investment by foreign research laboratories. In reality, this runs counter to the NDA government’s policy of promoting desi breeds. What is being overlooked is that India does not need new improved exotic breeds but needs to bring back its own domestic breeds which are doing exceptionally well in Brazil. Over the years, Brazil has become the biggest exporter of Indian breeds of cows. A purebred Gir cow in Brazil provides a milk yield as high as 73litres/day.

The conflict will become more pronounced when major dairy multinational corporations begin setting up big cattle farms to get into industrial dairy farming operations. Although the FDI rules are still not available, the fact remains that the Indian dairy cooperatives have been under assault from private ventures keen on setting up big industrial dairy farms, which have come under a lot of criticism in the west for the environmental damage it wrecks. On the other hand, the milk cooperatives in India have been economically helping 80 million milk producers, a dominant part of which comprises farm women. The livelihood of these small producers will come under threat.

Earlier, FDI was justified in the name of bringing in ‘state-of-the-art’ technology into the country. Although Defence and civil aviation has been opened to 100 per cent FDI route under the government approval, it is now clear that investors are not keen to bring in cutting-edge technology into the country. Similarly for the single-brand retail, the government has practically done away with the clause that ensured 30 per cent local sourcing. The primary objective of seeking FDI should be to provide new technology and enable the domestic manufacturing to gain from business integration with the foreign companies. Bypassing the domestic manufacturing sector will certainly not add to job creation.

The pharmaceutical sector is where it is also expected to be hit most. India has so far been hailed as the drug factor of the world providing cheap generic drugs. While this has been under attack at the World Trade Organisation which has relentlessly been pushing the commercial interests of the drug multinationals, forcing India to accept the patenting norms to make it compliant to the industry needs, allowing FDI in both greenfield and brownfield projects could spell doom for the domestic industry. While this would hit the average consumers with high prices impacting the health for all programme, it will also limit job creation.

Returning back to the promise of job creation, it has always been a forgotten promise. When Pepsico entered India in the 1980s, it promised to create 50,000 jobs. In a reply in Parliament, Ministry of Commerce had later acknowledged that less than 500 jobs were created. Pepsico is not the only exception. It will be interesting to know the facts and realities about the tall promises being made to create jobs whenever foreign companies try to enter the country or special economic zones are created.#

Jun 24, 2016

Kisan Ekta -- The Voice of the Voiceless Farmers. My interview



At the recently concluded 3rd National Convention of Farmer Organisations that was held at Shimla, June 18-20, I was interviewed, among other media, also by TV Down to Earth. In this interview I have tried to explain the reasons behind bringing all the major farmer unions of the country onto one platform. It wasn't an easy exercise considering that the farmer movement has remained divided for various reasons. Political parties have kept the house divided, keeping them at an arms length. As a result the voice of the farmers had diminished over the years. Farmers have disappeared from the economic radar screen of the country. 

The idea to bring all the major farming unions face-to-face around a table was initiated in August 2015 with the 1st National Convention at Chandigarh. This was the first time that farmer unions had come together cutting across party lines, egos and ideologies. In this Convention, some 40 major farmer unions were represented. They made a loud plea to stay together or perish. They all decided to stay under a banner -- Kisan Ekta (Farmers Unity). Consequently, the 2nd National Convention was held at Bangalore in November 2015, in which close to 60 farmer leaders participated. At the 3rd Convention at Shimla, two fishermen organisations too joined. This was for the first time that an effort was made to bring farmer and fisherfolk unions onto one platform. 

This interview gave me an opportunity to dwell at length on some of the complex issues that remains unexplained and also to focus on what the farmer organisations plan for the future. It details out how the farming organisations intend to address the serious issue of agrarian crisis, and also about the thinking to influence the 2019 Parliamentary elections. I hope you find it useful. 

Jun 22, 2016

'Punjab's drug problem is a symptom of a deeper malaise' -- An Interview



Abhishek Chaubey's crime thriller has had its share of pre-release controversy. Though much of the discussion on the film has been on the drug menace in Punjab and its possible impact on the electoral fortunes of the political parties in the coming assembly elections, the reality is that the problem is a symptom of a bigger malaise. 

In an interview with KumKum Dasgupta, Chandigarh-based food and trade policy analyst Devinder Sharma unpacks for our readers Punjab's real problems.   

Q: Udta Punjab is about drugs and Punjab. But is that the real problem or a symptom of a deeper malaise (agricultural distress/governance issues/unemployment)? 

The easy availability of drugs has certainly played a big role in the drug addiction of Punjab. But the point being missed is that the drug menace in Punjab is a symptom of a deeper malaise that has afflicted rural Punjab for several decades, the cumulative impact clearly visible now with alcohol and drug abuse becoming too pronounced. It all began with agriculture turning unremunerative. Over the past few decades, worsening agrarian distress coupled with growing unemployment had led to frustration among the rural youth. Once the seat of Green Revolution, Punjab's agriculture was deteriorating. Fragmentation of land holdings, and the breakdown of joint family structures that acted as a social cushion had added to the decline in farm incomes turning agriculture into a loss making proposition. With employment opportunities outside agriculture very limited, this prompted many a farmers to sell off a major chunk of their meagre land holdings to ensure that their children are sent abroad, legally or illegally, in search of jobs. The trade in illegal migration activities has proliferated in the bargain. With many a popular Punjabi singers glorifying alcohol and drug use, in lot many ways alcohol and drug abuse became the easy means to overcome frustration. You just have to see the long queues before the liquor shops in the early morning hours to get an idea of the extent of alcoholism that prevails.         

Q: What are the reasons behind agrarian distress in the state and how has it been impacting Punjab’s society? 

That the frontline agricultural state should now turn into a hotbed of farmer suicides gives a loud message. While policy makers have been emphasisng on the need to increase crop productivity as the means to increase farm income, Punjab has demonstrated that the prescription is faulty. With 98 per cent assured irrigation, and with crop productivity higher than that in America, Japan, France and Germany the kind of agrarian crisis that prevails in Punjab defies every scientific logic. And this is where policy makers and agricultural economists have failed the farmers. It is basically the denial of a right and legitimate income to farmers, through the mechanism of Minimum Support Price (MSP), that has acerbated the farm crisis. As a result 98 per cent of the rural households are in debt. With not much scope for alternate means of employment or income generation, rural youth took to drugs and alcohol as the means to seek solace.    

According to the Commission for Agricultural Cost and Prices (CACP), the net returns from wheat and rice in Punjab averages Rs 36,000 per hectare. In other words, the average monthly return from cultivating wheat-rice is a paltry Rs 3,000 per hectare. This is less than what a housemaid on an average earns. With cost of production multiplying and with output price remaining almost stagnant, the indebtedness grew manifold. The total debt Punjab farmers carry is almost 50 per cent higher than the State's GDP from agriculture. According to another study by Centre for Research in Rural and Industrial Development (CRRID), farm debt has multiplied 22 times in Punjab in the past decade. The average debt is 96 per cent of the income a household receives. Such high levels of rural indebtedness has led to an increasing number of farmers to commit suicide. 72 farmers suicides were reported in a 43-day period between April 1 and May 13 this year. Last year, in 2015, 449 farmers had officially committed suicide.  

Q: Across India, agrarian societies are facing tough times. Young people want to leave farm work but there is no employment. Is the situation in Punjab a timely reminder of the effects of economic distress on farming communities?

Yes, unless of course the government wants to ignore the warning signals. What is happening in Punjab, a progressive society, should serve as a lesson before the agrarian distress worsens in the rest of the country. Already the crisis on the farm is too severe. The two years of back-to-back drought in 13 States has pushed farmers further to the margins. Several years back, a NSSO study had shown that 42 per cent farmers wanted to quit agriculture if given a choice. This was primarily because farming had been deliberately turned into a losing proposition. But in the past 12 years, after 2004-05, the economy has been able to add only 1.6 crore jobs despite a high GDP growth. The jobless growth the country is witnessing is happening at a time when an estimated 1.25 crore people join the employment queue every year. Last year, in 2015, Labour Bureau tells us that only 1.35 lakh jobs were created, not even a drop in the ocean. In such a depressing scenario, agriculture alone has the potential to reboot the economy. If only the government was to create gainful employment in agriculture, by providing a higher income into the hands of the farmers, more demand could be created thereby leading a revival of the industrial and manufacturing sectors. On the contrary, we have heard Confederation of India Industry (CII) say that 300 million jobs will be created by 2025. What has not been told is that 300 million jobs were not created since Independence. A senior minister has often said that more road network being built creates more job opportunities, which means the focus is on creating dehari mazdoors. I don't think dehari mazdoor is what the rural youth have in mind when they look for jobs in urban areas. 

Q: Successive governments have been aware of Punjab’s internal crisis but looked the other way. Your comments 

Punjab's depressing farm scenario is actually the worst in the areas which are represented by the leadership of both the SAD and the Congress governments. The Badals hail from the Bathinda region, the cotton belt of Punjab, and Capt Amarinder Singh comes from Patiala, another region faced with agrarian distress. Patiala is adjoining to Sangrur which is a hotbed of farmer suicides. The Badal's will find it difficult to explain how in their tenure the region they represent turned into an area of high farm suicides, worsening water crisis, increasing cancer belt, and also has the dubious distinction of highest number of farmers quitting agriculture. The phenomenon of putting village for sale also began from Bathinda district. Both the SAD as well as the Congress certainly knew of the internal crisis but focused more on real estate and industry. Even the growing drug menace was widely known, but was kept under wraps. While it was known all these years, it has only flared up as a major issue in the run up for elections.      

Q: How much will this drug issue and the agrarian problems impact the coming polls?

It is too early to say whether the drug issue will impact the forthcoming elections. Although the prevailing agrarian distress is on the radar for each of the major political parties, but none of the parties have been able to spell out a corrective course of action so far. The effort certainly is to woo the rural electorate with promises of putting agriculture on track but only time will tell how sincere the promises turn out to be.  

Source: 'Punjab's drug problem is a symptom of a deeper malaise'. Hindustan Times, June 17, 2016

Jun 6, 2016

Going by the income parity norms, paddy MSP should be Rs 5,100 per quintal.


The Minimum Support Price (MSP) for paddy for the 2016-17 cropping season should have been Rs 5,100 per quintal (100kg). Now don’t get startled. This is what their legitimate due is. It is however a different matter that after all the hard work they put in, despite two years of back-to-back drought, all that farmers have been promised by way of paddy price is a paltry Rs 1,470 per quintal for the common grade paddy they cultivate.
Indian farmers have been short-changed all these years.
At Rs 1,470 per quintal, the increase in paddy price is merely Rs 60 over the previous year’s price. The nominal increase in paddy price, which equals to a raise of 4.25 per cent, is less than the rate of food inflation. This is certainly a gross discrimination. At a time when the government employees get a steady increase in DA allowances every 6 months, even when wholesale prices have remained stagnant, and on top of it the DA they get is merged with the basic salary, I don’t understand the economic rationale of keeping farmers deliberately impoverished.
Denial of a legitimate income to farmers is the single most important reason behind the terrible agrarian crisis that continues to prevail. While the farmers seek a higher price, the fact remains that successive governments have ensured that the farmers alone carry the economic burden of keeping food inflation low. Forget about profit, farmers are actually being penalized to grow food.
This is a classic example of how Peter is being robbed to pay Paul.
Let me explain. In 1970, the MSP for paddy was Rs 51 per quintal. Forty-six years later, in 2016, the MSP for paddy has been fixed at Rs 1,470 per quintal. This is an increase of 28.82 times or let us says 29 times in roundabout figures. In the same period, the monthly salary government employees has gone up by 120 to 150 times; that of college teachers/professors by 150 to 170 times; of school teachers by 280 to 320 times; and that of middle level corporate employees by 300 times. I am counting only the basic salary plus the DA that was prevalent in 1970 and have analysed the corresponding increase in the next 25 years.
Although the jump in monthly salary of various organized sections of the society ranges between 120 to 300 times in the 25 year period, for the sake of an easy assessment let us take 100 times increase in the basic salary structure to be the benchmark. If the income of a farmer had increased in the same proportion, and farmer’s income is measured through the MSP he receives, the paddy MSP should have been Rs 5,100 per quintal. Yes, you heard it right: Rs 5,100 per quintal. Farmers therefore are being short-changed to the tune of at least Rs 3,630 per quintal.
Denying income parity with other sections of the society is what has made farming a losing proposition. In the absence of a living income, farmers have been pushed into a mounting spiral of indebtedness. The serial death dance being witnessed for the past 20 years, taking a heavy toll of more than 3.2-lakh farmers, is a reflection of the economic hardship that farmers are being made to undergo for no fault of theirs.
In the 7th Pay Commission report, the basic salary of a chaprasi has been increased from Rs 7,000 to Rs 18,000 per month, an increase of roughly 260 per cent. In addition, the 7th Pay Commission has pruned the list of allowances that the employees get, from the existing 196 to 108. In other words, employees get 108 allowances, while I agree not all of them get all allowances. But the MSP for farmers does not include even a single allowance. This is where the farmers are overtly discriminated against. If the MSP calculations were to include just four allowances – housing, DA, health and education – the face of Indian agriculture would have changed for the better. Indian agriculture would have turned into a pivot of development, with farming turning predominantly prosperous.
But the moment you talk of a higher MSP, economists rise in chorus warning of a higher food inflation, which in turn feed into the consumer price index (CPI). Since the guaranteed rural wages are linked to CPI it will also trigger a wage-spiral. While this is true, the question that needs to be asked is why should farmers be penalized for keeping food inflation under control for people who in any case get DA allowance linked to inflation? Why can’t the average consumer also share the burden of keeping food prices low? What economists have failed to realize is that farmer is the only community in the country which is being deprived of its legitimate income.
Producing food has turned out to be a punishment.
A 0.5 per cent service tax in the name of kisan kalyan is not what farmers need. What they need is a higher MSP in resonance with other organized sections of the society. If not, then let the Finance Ministry reject the report of 7th Pay Commission. Instead have another 0.5 per cent cess for the welfare of government employees. And, why not? Let there be parity when it comes to income distribution. One small section cannot be pampered at the cost of another, a gigantic one. Having a cess for the sake of farmers and implement the 7th Pay Commission report for government employees smacks of disparity. It’s time also to set up a Farmers Income Commission.
So what’s the way out. Well, my suggestion is that the government should procure paddy at the MSP it has announced — Rs 1,470 per quintal. The remaining difference between the legitimate price that is due to a farmer and the MSP announced, which comes to Rs 3,630 per quintal, should be deposited directly in the bank accounts of paddy growers. Since every farmer has a bank account underJan Dhan Yoyna, it shouldn’t be difficult any more. Such an approach will keep food inflation under check and at the same time address the bigger issue of income insecurity for farmers.
I see no reason why it can’t be done. If the government is willing to incur an additional Rs 1.02-lakh crore every year for about 45 lakh central government employees and approximately 50 lakh pensioners by way of  implementation cost of 7th Pay Commission report, please tell me why a similar amount cannot be provided to millions of paddy growers to begin with. The more the money in the hands of farmers, the more will be the generation of demand. This is the pre-requisite for industrial and manufacturing growth, which is lagging behind now in the absence of adequate domestic demand. In my understanding such a policy imperative in true sense will deliver what Prime Minister Narendra Modi has envisioned: Sabka Saath Sabka Vikas.