Union Budget (2008-09) once again has taken the UPA hype on Indian agriculture, nay the Indian farmer this time, via the loan waiver, to a high pitch. As usual, it has evoked a multitude of reactions and analyses. Most of these have been along expected conventional lines, loan waiver occupying the centre stage. The immediate over all impact, however, was awe inspiring.
Even the arch political opponents seemed to be at loss to offer a full blooded comprehensive criticism. Most of them stopped at dubbing the measure as ?purely political and populist?, ?delivered quite belatedly?, ?too short of requirement?, ?not supported by budgetary provision?, ?to be of no help to majority of farmers?, ?announced essentially with an eye on the forth coming election? etc. etc. The debate by now seems to be reduced to quite a low pitch, if not completely died.
The moot question, whether the waiver would help the farmers overcome their misery, however, does remain. The only reasonable and fair answer to this could be ?yes, it will, but in a very limited manner.? As per the Budget Speech of the Finance Minister, the full waiver is to be available only to the marginal and small farmers and that too in case of short term crop loans, which were overdue as on 31st March, 2007. Firstly, it implies that all the medium and long term loans for developmental and non-crop purposes e.g., land development, machinery, source of irrigation, horticulture, live stock, dairying, poultry, fishery etc. stand excluded. It is common knowledge that loans of these categories are more important, involve much larger amounts and, generally more sticky. Secondly, the condition of the farmers living in rain-fed areas that have no assured means of irrigation and constitute 60 per cent of the total cultivated land of India, is more appalling mainly because of very low productivity and high incidence and frequency of crop failure. Ironically, the majority of farmers in such areas like the Vidarbha and Marathwada regions of Maharashtra, Bundelkhand of Uttar Pradesh, almost whole of the states of Rajasthan, Madhya Pradesh, Chhattisgarh, Orissa and Jharkhand etc. own more than two hectares of land, are excluded from the definition of small and marginal. Even in the states of Punjab and Haryana, the number of marginal and small cultivators is very small. Several recent studies have found that the incidence and extent of indebtedness amongst all the categories of farmers of above mentioned areas are no less high. They are all bypassed. The farmers who have repaid honestly would feel cheated. This cultural and moral dilemma too is not easy to ignore.
So, unless the parameters of the scheme are amended, as has been widely demanded, even by some ruling group members including the Prince incumbent of Congress ?Rahulji?, the likely numbers to be covered would turn out to be too small. More importantly, even the amount that is held out as Rs.60,000 crore, is sure to be much less, maybe not even Rs.15,000 crore. Thus, the charge that the announcement was made in a huff without adequate preparation and budgetary provision seems not misplaced. Post-Budget statements of no less than the Finance Minister and Agriculture Minister on these issues and dimensions provide ample proof thereof. The Finance Minister has since announced some, probably Rs.10,000 crore, provision while responding to the Budget debate in the Lok Sabha. For the remaining amount and modalities thereof, he has promised that they would be worked out soon, and latest by the end of June this year. Let there be hope. All these, however, are corroboration of the confusion, which persists at least for the time being. Making an announcement of such financial magnitude without concomitant budgetary provision also raises the question of budgetary and parliamentary propriety/impropriety. Equally questionable is the practice of including the Rural Infrastructure Development Fund (RIDF) and whole of Accelerated Irrigation Benefit Programme (AIBP) in the budget speech. RIDF by no standard can be part of the budget, as it is the money transferred by banks to NABARD for being lent to the states. Similarly, only 25 per cent of the AIBP i.e. the Central Government grant of Rs.5,500 crore, and not Rs.20,000 crore as claimed by the FM, is part of the Budget. Surprisingly, nobody, neither the media nor any parliamentarian, has questioned the misleading statement.
The question, why the waiver has been offered in the last year of the UPA tenure, is not difficult to answer. The whole history of Congress rule is marked by eloquent lip service to the agriculture sector. During its present tenure too right from the Common Minimum Programme to all the Budget speeches, the words and time devoted to agriculture have never been matched by the budgetary allocations and tangible programmes. Even the reforms pertaining to the sector have not only been put on the back burner, but also in reverse gear like banning certain forms of trading and exports. All the gains of the Green Revolution, including adequate production and availability of food grains, have been allowed to slip away. Minimum support Prices (MSPs) of commodities have neither been adequate nor announced in time. The consequence is regular imports of wheat, which has been in surplus for several years preceding the UPA rule. More intriguing is that the prices paid to the farmers of rich countries have been much higher than what the Indian farmers have got. Sanitary and phyto-sanitary norms too have been relaxed for facilitating import of sub-standard wheat mixed with more than 30 exotic weeds, some of which are known to be very highly hazardous. The case of Parthenium weed, commonly called as the Gajar Ghas and also Congress Ghas, that came mixed with imported wheat during 1950s causing mass allergies and aggressively infesting our fields and forests is public knowledge. Only time will tell how the newly imported ones would behave and affect the health and environment of the country. This messing up of agricultural policy makes one apprehend whether this is by default or part of a deliberate design to make India a deficit and perennially importing country, pave the way for lowering the binding tariffs available under WTO, and opening the flood gates for highly subsidised agricultural produce of rich countries. Judging by these, one can legitimately conclude that the Congress has an incorrigible tendency and culture of serving the rich and the elite i.e., India, which I call as the ?Note Economy? during the major part of its rule; and showing concern for the poor including farmers i.e., Bharat – the ?Vote Economy? in the final year just before the elections. Interestingly, many of the Congressmen too allude to this perception.
There could be differences of opinion on some of the issues enumerated above. But on one there is almost complete unanimity that the waiver is not a lasting solution to the problems of farmers. The problem is more fundamental. The most important dimensions of it are: low public investment especially in irrigation, prices not being remunerative, uneconomic size of holdings, weak market infrastructure, adhocism in matters of export and import and non-availability of quality inputs and farmer friendly technology and extension services. The numbers engaged in agriculture are too large, which calls for development of rural areas in terms of road and power connectivity, educational and health facilities to create favourable conditions for generation of non-farm jobs. Equally important is a mass skill development effort to enhance the employability and productivity of rural people, if they have to move to jobs other than agriculture. There hardly seems any resolve or measure to address these. It also needs to be emphasised that the opposition parties too, BJP included, are expected to reflect on these issues more intimately and comprehensively to develop a clear understanding and articulate their response now, when the season of manifesto making has arrived.
(The writer is a former Union Minister and expert on Agriculture. He can be contacted at sompal@nic.in)
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