The Rashtriya Swayamsevak Sangh Sarkaryavah Shri Mohan Bhagwat addressing the Akhil Bharatiya Pratinidhi Sabha at Vrindavan on March 16 was candid in his concern over the deepening economic crisis that has come to envelop the lower middle class and weaker sections as a result of globalisation. It is not routine that the Sangh Sarkaryavah talks on the subject. That he chose this occasion to warn the nation about the side effects of 17 years of liberalisation is significant in itself. In fact, he was highlighting the widely felt angst over the growing consumerism and westernisation, undermining the country'seconomic sovereignty.
He said, ?We are increasingly witnessing incidents which are dangerous to our economic security…Our food security is also gradually threatened due to this lopsided development policy. There is no stopping in rising unemployment, rising inflation and suicides by farmers. Villages are being uprooted and concrete jungles in the name of towns and industrial areas are coming up on their vast agricultural land. Retail traders are increasingly facing threats ?Big business houses are depriving the livelihood of even vegetable venders. People are increasingly becoming victims of all those evils that accrue from a blind imitation of the economic development model that is in vogue in the West including concentration of economic power in the hands of a few. We should develop our own independent economic policy that suits our country'snature, aspirations, resources and requirements?we are witnessing incidents like Nandigram and Singur where the policy adopted has been to brutally suppress the voices that are being raised against this injustice and encourage activities like SEZs that would benefit only a selected few. Sadly the governments of day are shamelessly supporting such activities in their arrogance of power and political self-interest.?
It is these thoughts that have inspired the present volume, our Varsha Pratipada Special, to concentrate on an area that is fast becoming the biggest casualty of mindless globalisation. Before 1990s we had not heard of farmers committing suicide. And that too all over the country in thousands. Official data shows that from 1997 to 2005 nearly 1.5 lakh farmers committed suicide. After the Finance Minister announced the loan waiver nearly two dozen cases of farm suicides were reported. At double the price we pay to our farmer, India imported last year 1.79 million metric tonnes of foodgrains. The Rs. 60,000 crore loan waiver is being projected by the UPA as the panacea for farm crisis. But on SEZ, the official estimate is that the notional revenue loss on account of tax sops would be Rs.1 lakh crore in 2008-09. The government policies guided by the World Bank are geared to encourage alternative land use, easy access for foreign investments in agricultural land for non-agricultural and commercial purposes resulting in a forced migration of farmers in search of livelihood to the cities. There are economic theoreticians who rationalise farm suicides. They say that it is natural in a society where over 60 per cent of the population is engaged in agriculture, that the suicide rates in this community is higher. It is natural, they say, in a milieu where the National Crime Records Bureau has shown a remarkable increase in suicides as a whole from 1997 to 2005. The fact they conceal is that the rate of suicides of farmers due to indebtedness is three times higher than the rate of suicides for other reasons.
The idea here is not to condemn liberalisation, which has brought unprecedented growth at all levels, or to ignore the better living standards that globalisation has ushered in. The process is irreversible and there is consensus that growth cannot happen without private investment and initiative. That does not mean that India should blindly adopt the WTO regulations, which the developed world is using as a weapon of market colonialism.
The US has always used its surplus food production as a tool of diplomatic domination. It is so today; it was so in the days of Cold War. Gunnar Myrdal wrote in the early seventies, ?It (Food Aid) should not be operated under the hazard of the United States having a food surplus that it wants to get rid of and then finds suitable to integrate into its foreign policy as ?Food for Peace? later renamed ?Food for Freedom? (p 137, The Challenge of World Poverty).
As Myrdal analysed, agriculture in developed countries is of two distinct types: extensive land use over large, sparsely-populated areas as in North America, Australia, and Russia etc. with often a low output per unit of land and intensive land utilisation with high yield per unit of land as in Europe and Japan. India like other developing countries fall in a third category and has extensive land use combined with a high man-land ratio. Naturally, this correlation results in disastrously low real income.
India'sagricultural yield per acre is low compared to world average. But a very large portion of the total labour force is tied up in producing that low out put. It is under these circumstances that many farmers took to cash crops, but the disaster there has been phenomenal. The suicides triggered by farm failure and high indebtedness have been concentrated in these cash crop areas because of high cost of input and low returns.
Nobel laureate Joseph Stiglitz narrates a story in his book Globalization and Its Discontents. It is pertinent in the Indian context. He writes: ?I visited some poor villages in Morocco to see the impact that projects undertaken by the World Bank and Nongovernmental Organizations (NGOs) were having on the lives of the people there. I saw, how community based irrigation projects were increasing farm productivity enormously. One project, however, had failed. An NGO had painstakingly instructed local villagers on raising chickens, an enterprise that the village women could perform as they continued more traditional services. Originally the women obtained their seven-day-old chicks from a government enterprise. But when I visited the village this new enterprise had collapsed. I discussed with villagers and government officials what had gone wrong. The answer was simple. The government had been told by the IMF that it should not be in the business of distributing chicks, so it ceased selling them. It was simply assumed that the private sector would immediately fill the gap. Indeed a new private supplier arrived to provide the villagers with newborn chicks. The death rate of chicks in the first two weeks is high, however, and the private firm was unwilling to provide a guarantee. The villagers simply could not bear the risk of buying chicks that might die in large numbers. Thus, a nascent industry, poised to make a difference in the lives of these poor peasants, was shut down. The assumption underlying this failure is one that I saw made repeatedly; the IMF simply assumed that markets arise quickly to meet every need, when in fact many government activities arise because markets have failed to provide essential services.? (p 55) How true this is, in the case of India, where millions of village and cottage units have been closed down leading to unmitigated poverty in villages because of blind implementation of alien concepts.
A few weeks ago a new book written by Cambridge economist Ha Joon Chang created a flutter. His latest book, Bad Samaritans gives an insight on the disastrous trade policies of the developed world which he says have been responsible for poverty in the developing countries. Chang, who won the Gunnar Myrdal prize for his essays on developmental issues, wrote that rich countries preach free markets to the poor countries to capture larger share of the latter'smarket and preempt the emergence of possible competitors. Many of Chang'sexamples are taken from his own experience as a South Korean. In his conception, there are two kinds of Bad Samaritans, ?first working in the unholy trinity of the IMF, the World Bank and the WTO? and the second is their ideologues in the form of neo-liberalism preaching privatisation, balancing national budget, shrinking the size of state bureaucracy, liberalising trade, maintaining low inflation and making the currency freely convertible. Is it not interesting that we see this variety in large numbers in the Indian economic discourse scene? The most striking aspect of Chang'sstudy is his conclusion that ?history of today'srich countries contradict the (liberalisation) doctrine mostly as a result rather than a cause of economic growth.?
There is no point in blaming others for our mistake. But we cannot be oblivious to the realities of neo-liberalism. In the name of market they make money selling both poison and the antidote. It is a game like the computer, they sell, then they inject the virus and sell the anti-virus. We spend on all the three and they make profit from all the three.
It is said that there is a declining trend in per capita consumption of foodgrains, because people are changing their food habits going for fruits, vegetables, eggs, milk and other nutrients. People are getting health conscious and are on diet. Why eat rice when alternative pills will do. But we are not talking about that class though in economic discussions we often hear the talk about foodgrains becoming less important. But the demand for foodgrain is projected to increase by two per cent annually because of population growth. This means that the growth rate in domestic foodgrain production has to be fast forward three to four times. In the world market foodgrain price is rising and is projected to increase every year. We are face to face with a growing threat of food scarcity.
We have a food minister who is more interested in cricket than food security. The Ministry of Agriculture and Food has never been so uncared for as under the UPA.
It is not only the failed crops at home but the structural changes in global markets also that threaten India'sfood security. The search for alternative energy sources following the sharp increase in oil price has induced the US and EU to develop bio-fuel by giving support and subsidies to their farmers to grow bio-fuel crops. This is a violation of the WTO. Reports say that in the US one-fifth of its corn output is now used for bio-fuel production. This trend will accelerate in future and the global food reserve will go on depleting. India has no option but to achieve food self-reliance. After remaining a net exporter of foodgrains for several years during the NDA period India has now become a net importer of foodgrains. Last year, alarmed by the rising food price in the global market and domestic decline in food production, the government launched the National Food Security Mission. The target is to increase food production by 20 million tonnes. This implies a two per cent growth in food production annually. The problem however is, there has been no investment on irrigation to make more land cultivable. Equally despairing is the power situation.
A bigger tragedy is diversion of land under foodgrain cultivation to non-agricultural activities and diversification into more paying high value crops. Growth will come a cropper if farm and farmer fail. Even industry is sustained by agricultural growth. Not vice versa. A prosperous India has to have wealthy farmer backbone. That is our focus in this issue.