Sep 22, 2015

'Farm Incomes Deliberately Kept Low' -- My Interview in Business World

1: This will be the second consecutive year of deficient monsoon. Last year output declined by 4.66%. What do you think will happen this year?

Ans: This is in reality the fourth consecutive year of deficient rainfall. This year, as of date, there is a 12 per cent shortfall in monsoon and in a few days rains are expected to withdraw. The early withdrawal along with the deficit already experienced will certainly impact food production. Like the previous year, we can look forward to a drop in food production but that should not worry us since the country has ample stocks of wheat and rice stocked. But what is more worrying is the impact a drought-like situation causes to millions of farmers across the country. It hits the livelihood security of the small farmers the most. Already Marathwada in Maharashtra has turned into a farmer suicide capital with more than 660 suicides recorded in this year till Sept 1. Karnataka and Telengana too are reeling under a terrible agrarian distress with an unprecedented spurt in suicides having taken a huge toll.

The tragedy is that the harsh reality of the hinterland remains hidden. A recent report tells us that 100 districts in India continue to be faced with drought or deficient monsoon for 15 years now. Most of these districts have experienced drought for at least 9 of the 15 years. This means roughly 1/6th of the country has remained severely affected by drought all these years. I wonder if anyone can even imagine how people living in these areas must be surviving.     


2: Do you think we are witnessing a long term change in monsoon patterns or it is too early to speculate.

A lot of studies point to the changing monsoon pattern. At the same time, the meteorological data does not show much variation if you examine the past 100 years pattern. Nevertheless, considering that climate change is a distinct possibility, we need to be adequately prepared. Although the Govt of India has launched some mission programmes in preparation, much of the focus is on mitigation and adaption. There is hardly any thrust on hitting at the root cause that leads to climate change in the first instance. In case of agriculture, I find the emphasis is on how to make farmers’ ward-of the climate change impact. Considering that agriculture contributes to 41 per cent of the greenhouse gas emissions, I think the main priority should be on how to change the agriculture cropping pattern to reduce its contribution to climate change. In China, for instance, a study by the Stanford University and Chinese Academy of Agricultural Sciences shows that adopting an integrated method of crop cultivation would reduce the greenhouse gas emissions by 25 per cent without affecting the production levels. Similarly, in Andhra Pradesh/Telengana, more than 36 lakh acres is under no pesticides farming. This in my understanding is a perfect model to reduce greenhouse gas emissions, and thereby reduce the impact of climate change. But we still haven’t worked out as to how much greenhouses gas emissions are reduced in AP/Telengana.


3: The new farmer suicide zones in Marathawada and parts of Karnataka have seen the most deficiency. What will happen there?

This is worrisome, As I said earlier, Marathwada is turning into a suicide capital of India. In fact, like the infamous Bermuda Triangle, Marathwada—Telengana—Karnataka is the new Suicide Triangle. Karnataka has witnessed 431 suicides till Sept 5, and Telengana has recorded 1,391 in the same period. While deficient rainfall is one reason, the real cause is not the mounting indebtedness but the deliberate attempt to keep farmers impoverished. Over the past few decades, farmers are being deliberately paid less so as to keep food inflation in check and also to ensure that agribusiness industry gets cheaper raw material. In one of my analysis I have shown that while the income of government employees has risen by 120 times in the past 45 years – between 1970 and 2015, college/university professors by 150-170 times; school teachers by 280-320 times, the minimum support price for wheat has risen by only 19 times. Look at the huge gap. If only the farmers income had progressed in the same ratio as other sections of the society, agriculture would have seen reverse migration to villages.   

4: There is enough buffer stock of food grains. So prices may not be affected?

Yes, there is enough buffer stock of wheat and rice. There is nothing to overtly worry about food prices provided the Govt is able to maintain a check on hoarding and speculation that normally hits fruits and vegetables. In 2007, when the world was hit a food crisis leading to food riots in 37 countries, India had escape any such crisis situation because Indian agriculture was not integrated globally.India had enough food stocks even at that time. India therefore must ensure that its agriculture remains protected from the vagaries of the international markets. With such a huge population, India cannot afford to be at the mercy of global commodity traders. There is a pressure from some mainline economists who would like India to open up for cheaper imports from European Union and Australia but let’s not forget that importing food is like importing unemployment. The more the cheap and highly subsidized food India imports, the more the small farmers are pushed out of agriculture. This also increases the current account deficit for no apparent reason, just faulty policies.  


5: The real crisis seems to be in pulses and oilseeds with hardly any growth in yield or output and massive increases in imports. What has led to this?

It is the faulty import-export policies that have led to this piquant situation in oilseeds and pulses. I remember way back in 1985, the then Prime Minister Rajiv Gandhi, had launched the Oilseeds Technology Mission to boost domestic production of oilseeds. His worry was that India was importing Rs 15,000-crore worth of edible oils, then the third biggest import bill of the country, for no apparent reason. If Indian farmers were to increase oilseeds production, the imports could be drastically cut which means the current account deficit bill would also fall. He was right.

In just ten years, by 1993-94, India became almost self-sufficient in edible oils. The country produced  97% of its requirement domestically, with only 3 per cent imports. But then, India started reducing the import tariffs. From a bound rate of 300 per cent, India brought down the import duties to almost zero over a period. The result is that India is now importing more than 50% of its edible oil worth Rs 60,000-crores every year.  In all fairness, if India was to re-impose import tariffs and give farmers an incentive to produce oilseeds, it will not only help millions of farmers but also re-start the processing industry which lies shut. Similarly for pulses, India has always relied on imports to meet the deficit in domestic production. Giving farmers an assured price and also ensuring that whatever pulses farmers produce is procured by the government, imports can be easily stopped. But this would only be possible if the import tariffs are raised from the existing zero per cent to at least 15 per cent to protect any negative fallout on domestic production.


6: Five things wrong that Sharad Pawar did wrong as Agriculture Minister that this government can rectify if it has honest intentions.

I wouldn’t like blame anyone in particular. Instead let us look at the five mistakes successive government have made that is in a way responsible for the terrible agrarian crisis the country is faced with.

a) Successive Govts have followed the World Bank directive of 1996 to move 400 million people out of the rural areas into the cities by 2015. Conditions have been deliberately created that forces farmers to quit agriculture and migrate into the cities. This is evident from the way agriculture has been kept starved of public funding. In the 5 years of the 11th Plan, only Rs 1 lakh-crore was made available for agriculture. In the 12th Plan, this investment was raised to Rs 1.5 lakh-crore. In fact, such is the neglect, that the MNREGA budget is higher than that for agriculture. This urban bias in planning needs to be immediately corrected. India should be looking for a reverse migration – from the urban centres back to the villages.  

      b) Farm incomes have been deliberately kept low to ensure food inflation remains within check and also to ensure that industry gets cheaper raw material. This means that the burden of keeping the prices low falls on the shoulders of the farming community. In other words, farmers are being penalized for producing food for the country. According to the NSSO 2014, the average income for a farming family from agricultural operations is only Rs 3,000. Compare this with the average basic income of roughly Rs 15,000 per month for a chaprasi. Under the 7th Pay Commission, the minimum salary for a chaprasi is expected to be Rs 29,000. The Minimum Support Price (MSP) therefore needs to substantially jacked up, with food supplies subsidized for the consumers. India needs to learn from Japan, which has paid farmers an economic price and subsidises food for its consumers. Farmers cannot be penalized for producing food. Instead there should a guaranteed monthly assured income for the farmers. They too produce economic wealth for the country.

c) Although the industry wants cheap labour and therefore we see a clamour for shifting population out of agriculture, the fact remains there are no jobs available in the urban areas. To say that 300 million jobs will be created by 2022 is simply to stress on the need of dehari mazdoors that the industry would be requiring in the next 7 years. What is now being witnessed is jobless growth. And as Dr M S Swaminathan rightly said it is only agriculture that has the potential to provide job-led growth. It is therefore time to discard this flawed economic hypothesis and shift the focus to making farming a sustainable and profitable enterprise. Such a focus will lead to massive gainful employment, raise the GDP phenomenally, and reduce socio-economic disparities. Couple with small and medium industries, building rural enterprise, an economic transformation of rural India will turn the country into a true economic super power.   

d) Green revolution has led to 2nd Generation environmental impacts. Excessive use and abuse of chemical fertilizers has led to soil health being devastated, water table has gone down drastically, chemical pesticides have not only disturbed the insect equilibrium but also created environmental contamination, and in essence the natural resource base has been under tremendous stress. Such a massive deterioration of the agricultural landscape is also responsible for acerbating the existing agrarian crisis. In addition, the contamination of food has led to the emergence of lifestyle diseases. The need therefore is to move to low external input agriculture as suggested by the International Agriculture Assessment for Science and Technology Development (IAASTD) to which India is a signatory. More so at a time when climate change is inevitable, business as usual is not the way forward. Time to overhaul farming systems to make it sustainable and healthy.  

e) Create a network of mandis across the country. So far foodgrain procurement is only restricted to Punjab, Haryana, parts of Andhra Pradesh, Madhya Pradesh and Maharashtra. Foodgrain procurement can only take place if an adequate regulated mandi infrastructure exists. This also helps in ensuring that farmers don’t sell their produce at a distress price. At present, the country has only about 7,000 regulated mandies. If regulated markets have to provided within a radius of 5 kms from a village, India will need 42,000 mandis. This is the rural infrastructure that needs to be the focus of rural investment. Along with mandis, there is also a need to set up a network of rural godowns. Local production, local procurement and local distribution is wherein lies the answer for ensuring household food security. 


7: What is in your opinion a durable long term solution to the crisis in Indian agriculture?

In addition to what has been spelt above, I think a durable solution to Indian agriculture is only possible if farming is taken as the pivot of economic growth. Industrial development is very important but it cannot be at the cost of agriculture. Industry should be supportive of agriculture. Since agriculture is the only sector which has the potential to provide job-led growth, and national sovereignty depends on a country’s ability to feed its population, rejuvenating Indian agriculture provides the only long-term solution for country’s economic security, which is also sustainable and meets the challenges of climate change. #

Source: 'Farm Incomes Deliberately Kept Low.' Business World. Oct 5, 2015
http://www.businessworld.in/economy-agriculture/%E2%80%98farm-incomes-deliberately-kept-low%E2%80%99#sthash.6JVHEb9e.0ocpddEy.dpbs

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