By Rajendra Prabhu
The new political masters in New Delhi have a present from Hyderabad. It is the addresses of some 100 farmers in Andhra Pradesh who have committed suicide within a fortnight of Congress riding to power in that state on the back of a promise to redeem the debt-ridden farmers.
The Chief Minister Dr Y.S. Rajashekhar Reddy is baffled: he has waived their pending electricity bills (Rs 1200 crores), he has ordered free power to farmers (Rs 400 crores), he has sanctioned Rs 1.5 lakhs for all farmer families that faced suicide of their bread-earner earlier. Then why do they continue to kill themselves?
That question should be haunting the Common Minimum Programme (CMP) architects in Delhi. After all, Andhra set the tone for the CMP to take shape by handing out a huge setback for the most conspicuously dynamic Chief Minister in the country, Nara Chandrababu Naidu of Telugu Desam. The Congress breeze began from Hyderabad and moved to Delhi like a political storm. ?The Left wants and I want,? says the Central Finance Minister ?a greater emphasis on agriculture.? Is that something only the Left and you know, Mr Finance Minister?
Finance Minister thinks that previous (non-Congress) governments were not friends of farmers; they were deaf to the pleas of credit; they were unconcerned with farmers getting on with their jobs. How come then the farmers in Mandya in Karnataka also died?
Let'stake Andhra itself. In the first year of this century, crop loans by banks alone in the state amounted to Rs 4,184 crores (according to Financial Express, dated May 31, 2004). In 2003-04, this figure was Rs 7,903 crores?an increase by nearly 89 per cent in four years. This does not include the money pumped in by the state government of Chandrababu Naidu. There is already an outstanding crop loan of Rs 10,359 crores due to banks. Even before the Congress government announced free power to farmers with a flourish at YSR'sswearing in, they were only paying one-sixth of the charge that other power consumers were forking out.
Asked what his prescription for agriculture is, Chidambaram said: ? The first signal that will go out is, here is a government which is a friend of the farmer, we will give you credit…get you out of the money-lender'sclutches. We will give you credit on time…. Please… get on with the job.? How wonderful!
The only fly in the ointment is that Finance Minister thinks that previous (non-Congress) governments were not friends of farmers; they were deaf to the pleas of credit; they were unconcerned with farmers getting on with their jobs. How come then the farmers in Mandya in Karnataka also died, consuming pesticides or hanged themselves despite a ?benign? Congress rule there?
Neither Chidambaram nor his new comrade-in-arms, Sitaram Yechuri of the CPM, is the first to discover that farmers need credit; nor is the UPA'sCMP (Common Minimum Progra-mme) the first to pump credit to farmers. When Chidambaram would be presenting the budget next month, probably he would turn to page 18 in the annual official document he is so familiar with as Finance Minister in previous governments, namely, The Economic Survey. The 2002-03 edition of it says:
?The flow of institutional credit to agriculture has witnessed a sharp increase of 21 per cent in 2001-02 compared with 14 per cent in 2000-01. This seems to have had a positive impact on capital formation in agriculture in 2001-02. Under the Kisan Credit Card scheme, more than Rs 64,000 crore has been sanctioned till September 2002. The scheme intends to cover all eligible farmers by March 31, 2004, and is also extending personal insurance cover to its beneficiaries. The National Agricultural Insurance Scheme, which extends to all food crops, had covered more than 20 million farmers till rabi 2001-02.? Further on, it also reveals that the Agriculture Insurance Company of India Ltd., with a capital of Rs 1,500 crore set up that year, would take over the covering of all other rural and agricultural risks in addition to crop failure.
So it isn'tthat only Chidam-baram and Yechuri are crying over the shoulders of farmers. Others immediately before them have also done certain remarkable things for farmers across the country?Kisan Credit Cards, for instance; or crop insurance. If the case is that all this is not enough, no one can agree more with our new Finance Minister. But more of the same is not the real solution.
The real solution is in building the infrastructure that would bring the right advice to the farmer, create self-help groups that would look out to help him or dissuade him from going to the wrong seed-seller, not be influenced by pesticide salesman, and so on. Most important, there has to be a strong link between the farmer and the market; not just local market but national and international markets. One of the Andhra farmers who committed suicide lost out because his chilli crop prices went down by one-fourth between sowing time and harvest time. He would not have had to sell the crop at the time if the infrastructural support was there. If he had proper information on chilli market, not just in his local mandi but across the nation, he would not have sold out at below cost price. For keeping in touch with the market, he needs regular connectivity, the Internet link.
Just see what change the ITC's?e-chaupal? has brought about to several lakhs of soyabean farmers in central India and contract farming in collaboration with some food processing companies for tomato farmers in Punjab? If the chilli farmer of Andhra had such a linkage, even in a falling market he would have the protection of the processing corporation. Then there are good roads and lower transaction costs, etc. to strengthen that linkage. This is what is needed; more than mere money and this infrastructure of institutions and knowledge was what was envisaged in the last five years based on the experience of several hundred separate experiments by NGOs and govern-ments. Crop diversi-fication, market information linkages, knowledge centres that could get access to right source of information on farm practices, link up with food processing corpora-tions or co-operatives, sharp reduction in transaction costs and intermediaries, and beyond the farm, excellent roads that would reduce time to the market, ports that could handle ships in hours rather than days, etc. are what is needed. Along with this, community action to promote integrated farm economy with poultry and animal farming, biofertilisers and pesticides, environmental improvement, all that and more regenerate the rural economy.
The same Economic Survey also said: ? The reform measures adopted in the current year are likely to create new avenues for private investment in agriculture and lay the foundation for value addition besides improving quality of agro-products for global markets.?
India has the largest variety of mangoes and a huge mango crop, but it is the Brazilian mango that sells in America. India has the best climatic condition for oranges, but it is Israel that is selling its oranges in Europe. India'sdomestic market itself is huge and growing, but the crop from farm to the consumption centre goes through a convoluted route and several intermediaries, each of whom raise prices but not quality. This is where the farmer loses out.
The election results that somehow have been considered anti-technology, anti-reform and being propagated so by the Left, have broken the progress that has been building up in creating the right linkages between agriculture, technology, markets, right commercial practices and stake for the corporate sector in the primary base of the economy. This linkage was what the Economic Survey referred to as the ?the virtuous interaction among technology and competition in India while benchmarking to the best international practices, will need an enabling environment.? This was to be facilitated by three fundamentals: appropriate social and physical infrastructure, a suitable regulatory framework and an efficient tax system and macro-economic stability.
The ruling UPA has been handed over by its predecessor, as Chidambaram himself admitted, a stable price level, a mounting foodgrains stock and a foreign exchange reserve far beyond the best dreams at 118 billion dollars. The Finance Minister even acknowledged the previous government'scontribution in this. Let us see how the UPA builds the right environment instead of boasting of big bucks on the way that might turn out to be rotten eggs incubated in an obsolete Marxist basket.