Politicians Trap India’s Farmers Between Scarcity and Surplus

There are 90 million agricultural households — with an average monthly income was Rs 6,426, and 52 per cent reeled under debt with average burden being Rs 47,000.

By Shankkar Aiyar | Published: 11th June 2017 04:00 AM |

Irony is caught in the seeming cross fire of reason and rhetoric.

India was informed on May 31 this year that agriculture did well in 2016–17 — gross value addition, the measure of value of goods was estimated at 9 per cent at current prices in 2016–17. Thanks to a record output of 273 million tonne. India has also been told repeatedly that agricultural growth in Madhya Pradesh has been in double digits for five years. Yet, farmers are unhappy.

Madhya Pradesh is the epicentre of anger, but the angst is a nation-wide phenomenon. The cause of the grief and grievances of farmers are visible in the data on the landscape. The story about the rural economy is known. The 2011 Socio Economic Caste Census says 179 million households live in rural India — of these, 54 per cent are casual labourers, only one in 10 has a salaried job, and households live on Rs 5,000 per month.

The National Sample Survey in its 70th report released in 2014, informed that there were 90 million agricultural households — 69 per cent with less than a hectare of land.

The average household (of five persons) monthly income was Rs 6,426, and 52 per cent reeled under debt with average burden being Rs 47,000.

Agriculture is the largest constituency for all parties — after all seven of 10 persons live in rural India. The farmer is the constituency of opportunity for the Opposition and victim of neglect by successive governments and systemic apathy.

There is much talk about the M S Swaminathan Report — five volumes of recommendations delivered between 2004 and 2006 by the National Commission on Farmers. In 1976, the National Commission on Agriculture submitted 15 reports in 69 chapters. The issues were virtually the same and the outcome is no different.

The Congress, which has waded into the agitation, must answer what it did between 2004 and 2014 to alleviate agrarian distress. Equally, the BJP is faced with questions about its promise — ‘ensuring a minimum of 50 per cent profits over the cost of production’. The demand for loan waivers, from farmers in Madhya Pradesh, Tamil Nadu, Maharashtra, Punjab, Haryana and Karnataka, which by some estimates could tote up to over `3 lakh crore, is simply a symptom of the larger malaise. Loan waivers serve the same function that saline drip does for patients in critical care — it is one of the steps for mitigation, not a cure in itself (Loan Waivers and Band Aid Politics http://bit.ly/aiyar4545).

Technically, agriculture is India’s largest private sector. It is also the largest employer — accounting for 49 per cent of the 450 million-plus workforce. It is also the riskiest sector — given that 55 per cent of farmers depend on the benevolence of divine forces. Theoretically, Licence Raj is dead — remember it was dismantled in 1991. Yet, a quarter of a century later the farmer must circumscribe ambition to fit the landscape and aspiration to suit the policies of the day.

Fact is the business model of farming is crumbling. The issues and solutions are known (Why Agriculture Cannot Wait? http://bit.ly/24uW8bm). Agriculture is simply like any other enterprise. To appreciate, contrast the farmer enterprise with any small enterprise, in manufacturing, for example. The entrepreneur can enter into a contract with a buyer, access credit on the basis of the order, buy insurance, source suppliers’ credit for inputs, and plan his operations to maximise revenues and profit.

Agriculture lacks the flexibility and benefits of such an ecosystem. Take land as the base asset. The farmer brings in knowledge and labour. Like any business, farming needs capital. The farmer struggles to get credit — a third and more depend on private lenders and pay usurious rates of interest. Then there is the need for reliable real-time access to supply of inputs — seeds, fertilisers, water for irrigation and power.

Over 55 per cent of net sown area of 130 million hectares is rain-fed — area under irrigation has crawled from 50 million hectares in 1981 to 65 million hectares. Access of seeds and fertilisers is troubled by availability and affordability, and supplier credit is scarce. Bankrupt State Electricity Boards (SEBs) script the power story. Once ready with his produce he faces the issue of access to markets for a fair return for his troubles.

The government has been at pains to list out the schemes and programmes for farmers, including soil health cards, the Pradhan Mantri schemes for minor and major irrigation for crop insurance and the electronic National Agriculture Market (e-NAM). There is no denying the attempt, neither is any disputing the infirmities in implementation. Take the issue of the glut in output of pulses. Inspired by Prime Minister Narendra Modi’s call to grow pulses, farmers delivered a record output. The states failed to ensure procurement, causing acute distress. It begs the question why e-NAM could not be deployed or could not deliver.

Ideally, the farmer must be able to choose when to sell, who to sell to, whoever s/he wants to and at a price of his/her choice. This calls for infrastructure — road, rail, port connectivity. There is also the need for enabling market factors — access to a market for pledging produce, storage to be able to postpone sales. In 2012, India needed 61 million tonne cold chain storage capacity. In 2017, the gap is 29 million tonne. There is also inadequacy of food processing capacity — this, when the value of annual wastage is `92,000 crore. Change is hostage to the confusion between what the Centre can do and what the states must do.

To paraphrase a line from Pulp Fiction the path of the farmer is beset on all sides by the inequities of the selfish and the tyranny of evil men. India’s farmer is trapped by extractive economics and band aid politics that leave him stranded between surplus of political rhetoric and scarcity of action. The current episode of this simmering crisis is a signal for the states and the Centre to do whatever it takes to recast the business model for farming — from fixing linkages to remapping cropping pattern.

Agriculture matters because food security will be at risk. Agriculture matters for social equity — democracy demands it. Agriculture matters to sustain economic growth — the India Story will be stranded if half the populace continues to live on 17 per cent of national income. Agriculture matters for national security.

Shankkar Aiyar is the author of Accidental India: A History of the Nation’s Passage through Crisis and Change

You can email him at shankkar.aiyar@gmail.com or follow him on Twitter. His previous columns can be found here. This column was first published here



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Shankkar Aiyar

Journalist-Analyst. Author of ‘Accidental India, ‘Áadhaar: A Biometric History’ and ‘The Gated Republic’. Studying how politics rules the economics of people!