The agriculture crisis emanates from a discordant link between the produce and the prices. Whenever farmers have a bounty crop, prices plummet leaving them crestfallen. Basic minimum returns to farmers must be ensured, the way it happens for the other sections of society
A young and educated couple, P Mohana Chary, 45, and his wife Sarita, 42, of Rangapur village, close to Hyderabad in Telengana, committed suicide. They were found hanging with nylon ropes from the roof of their house. In the suicide note Chary left behind he detailed how they wanted to make a decent living through farming but eventually failed.
In Madhya Pradesh, Ramesh Basnei, a 42-year-old debt-ridden farmer committed suicide last week. He carried a debt of Rs 25,000, reports a newspaper.
A few weeks back, a 21-year-old young girl, Sheetal Yankat, daughter of a Maharashtra farmer, committed suicide. Unable to bear the terrible stress her father was undergoing to get her married, she ended her life by jumping into a well. In the suicide note she left behind, she wrote: “The economic condition of my family has worsened over five years because of the failure of crops. I am committing suicide because I don’t want my parents to come under a debt burden because of my marriage.”
In Punjab, the food bowl of the country, the spate of farmer suicide has left everyone baffled. A few months back, a young farmer committed suicide. But before doing so, he tied his 5-year-old son to his waist, and then jumped into the canal. In the suicide note he left behind, he explained why he killed his son also along with him. He carried an outstanding loan of Rs 10-lakh and knowing that his son would not been able to repay the loan throughout his life he was taking his son along to the watery grave.
The tragedy that struck these four families symbolises the tragedy of the entire farming community. Despite the economists and agricultural scientists blaming low crop productivity for the agrarian crisis, farmers know where the show pinches. As debt continued to mount, the spate of farmer suicides grew. In the past 21 years, over 3.18 lakh farmers have committed suicide; one farmer ending his life every 41 minutes. The tragic serial death dance was considered to be a sign of weakness, but in reality was a farmer’s unique way of making a statement. Every death on the farm infuriated other farmers and their families. The simmering discontent has turned into outright anger. But political leaders have always failed to ignore the warning. Not realizing that the day farmers wake up, Indian politics will change forever.
The violent farmers’ agitation that swept the Malwa belt of Madhya Pradesh, resulting in the killing of five farmers, once again brought agriculture into focus. Over the last few weeks farmers’ protests have now spread to Punjab, Haryana, Rajasthan, Gujarat and Chhattisgarh demanding better crop prices and loan waiver. While a number of reasons can be attributed to the sudden flare up of farmer’s anger, the fact remains the prevailing agrarian distress is the outcome of an economic deprivation that prevails. For 70 per cent farmers, the annual expenditure is more than their earning. Real farm income has further declined in the past five years thereby aggravating the crisis. Farmers have been increasingly sinking into a cycle of deprivation. Two years after a back-to-back drought, demonetisation had further reduced the farmers income, with estimates suggesting 40 per cent drop in farm incomes especially that of vegetable growers.
There is no denying that farmers’ suicides are a symptom of a deeper malaise that afflicts agriculture. Over the decades, agriculture had faced the brunt of deliberate neglect, apathy and official indifference. The spate of farm suicides too was seen as nothing more than a psychological disorder, and was never taken as a warning that all is not well in agriculture. After all, how long could the farming community continue to be driven against the wall?
Take the case of Punjab, the frontline agricultural state. In a study commissioned by the Punjab government, economist Dr R S Ghuman, who chaired the three-member committee, concluded that Punjab farmers had lost Rs 62,000-crore between 1970 and 2007, a period of 37 years, on account of a low Minimum Support Price (MSP) for wheat and rice. The Ghuman committee had studied the loss arising from farmers not being paid a price equal to the wholesale price. That the MSP had been kept low ,was known but no corrective steps were taken to provide farmers prices that covered the high cost of cultivation arising from intensive farming practices. Similar studies conducted by agricultural universities in Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu simply glossed over this fact.
More recently, at a time when income levels in urban India are on an upswing, the Economic Survey 2016 tells us that the average income of a farming family in 17 states of India, which means roughly half the country, is a mere Rs 20,000 a year, I shudder to think how these farming families must be surviving. After all, it is not even possible to rear a cow in less than Rs 1,700 per month.
With the markets crashing after every harvest, and with the government reluctant to save farmers by ensuring that they get at least the Minimum Support Price (MSP) that has been announced, farmers are pushed deeper and deeper into a never ending cycle of debt. Even the MSP being given is often less than the cost of production. In Maharashtra, for instance, the production cost of tur dal has been worked out at Rs 6,240 per quintal. The MSP announced was Rs 5,050 per quintal, and in reality what the farmers were able to sell tur, and that too after waiting for a week or so in the mandis, was between Rs 3,500 to Rs 4,200 per quintal. Imagine the plight of farmers who grew 74 per cent more pulses, raising the domestic production to a record 221 lakh tonnes, from 163 lakh tonnes a year earlier, only to find the prices crashing.
The slump in prices was not only confined to Maharashtra. In Mahowa mandi of Uttar Pradesh, on an average farmers realised a price of Rs 3,400 for tur thereby incuring a loss of Rs 1,600 per quintal. For moong, the loss was Rs 2,225 per quintal; For urd the loss was around Rs 1,100 per quintal; Rs 700 per quintal for Mustard; and even in case of wheat the loss was Rs 325 per quintal. The loss in wheat was essentially because UP has over the years failed to provide a strong network of APMC regulated mandis. When prices crash after a bumper harvest, and with no support system in the offing, there is enough reason for farmers’ anger to spill over.
Take another case. A farmer in Haryana toils hard for three months, putting all his labour to reap a bountiful harvest of potato, only to find the prices crashing thereby forcing him to sell 40 quintals of potato for just 9 paise a kg. In Chhattisgarh, images of farmers throwing tomato on to the streets are quite common. Farmers in Madhya Pradesh, Maharashtra and Rajasthan had to even dump onions on the streets as the insensitive government continued to look the other way. An agitated farmer even dumped 20 quintals of garlic on the streets in Kota in Rajasthan. The shock a farmer gets when prices crash often turns fatal. Compare this with the fall in stock markets, and the Finance Minister promises to monitor the crisis on an hourly basis, holding a press conference to assuage the investors. Have we ever seen the Finance Minister or the Agriculture Minister monitoring the deplorable condition when farm prices crash?
To keep food inflation under check, farmers are being denied the rightful price. In fact, farmers are actually being penalized to grow food. Let me explain. Between 1970 and 2015, wheat procurement price had increased only by 19 times whereas the basic income of government employees in the same 45-year period was raised by 120 to 150 times; of college teachers/professors by 150 to 170 times; and of school teachers by 280 to 320 times. In addition, the employees get in all 108 allowances put together. Farmers don’t even get a single allowance. The match therefore is fixed against farmers. What the farmer doesn’t realise is that he doesn’t just cultivate a crop, he actually cultivates losses.
An estimated 58 per cent of farmers go to bed hungry every night. I have always been saying that in reality, it is farmers who have been subsidising the nation all these years.
After Yogi Adityanath announced a farm loan waiver of Rs 36,359-crore, which will benefit 92 lakh small and marginal farmers when implemented, Maharashtra has announced a loan waiver of Rs 32,000-crore. Punjab is expected to take over at least Rs 9,500-crore of the farm bad loans. And farmer protests are now spreading to Haryana, Rajasthan, Chhattisgarh and Madhya Pradesh demanding loan waivers. In Maharashtra too, farmer groups have rejected the loan waiver demanding lifting of the upper limit cap.
Ever since UP announced the farm loan waiver I find many TV channels are devoting time to misguide the people by claiming that the farm loan waiver will hit the national economy, raise inflation, raise home loan EMIs etc. Farmers are being deliberately painted as culprits whereas these points are never highlighted when corporates get the bail out. In fact, the corporate bailout is projected as essential for economic growth whereas farm loan waiver is blamed for fiscal slippage.
But before we see how the loan waiver policy discriminates farmers, it is time to know what quantum of corporate loans are struck. The Public Accounts Committee of Parliament has estimated that the total bad debt of public sector banks, known as Non-Performing Assets (NPAs), stands at Rs 6.7 lakh crores. Out of this 70 per cent belongs to the corporate whereas only 1 per cent default is of farmers. As per the credit agency, India Ratings, more than Rs 4-lakh crore of stressed corporate loans is likely to be waived. Chief Economic Advisor Arvind Subramaniam has already gone on record saying that writing-off of bad loans of the corporate sector makes economic sense. “This is how capitalism works,” he said. If this is true, I don’t know why capitalism doesn’t work the same way for farmers.
If rich corporate can make mistakes and get a massive bail out, why do not farmers, who actually don’t make mistakes but are victims of economic policies that keep them deliberately impoverished, get a loan waiver ? Are farmers not part of the same capitalist system? Unless, of course, farmers are considered to be children of a lesser god. This is not the first time that corporate loans are likely to be written-off. Between 2012 and 2015, Rs 1.14 lakh crore of corporate NPAs has been written-off. Surprisingly, no state government was asked to bear the burden from its own resources. Neither did the State Bank of India chief Arundhati Bhattacharya ever remark that the routine waiver of corporate loans leads to a disruption of credit discipline.
According to a Bank of America Merrill Lynch report, roughly Rs 2.57 lakh crore of farmers’ loans, or 2 per cent of India’s GDP, is expected to be waived-off in the run-up to the 2019 general elections. But again, Merrill Lynch never told us how the humongous write-off of corporate loans affects the economy. I agree Rs 2.57 lakh crore of farm loan waiver in the next two years is a big bailout package for farmers but why doesn’t Merrill Lynch ever talk about the proposed Rs 4-lakh crore bailout just to the telecom industry?
In fact,the loan waiver must be followed by comprehensive set of policies that ensure loans don’t pile up again. But what worries me is the kind of suggestions being made to address the agrarian crisis. I find what is now being prescribed as the way forward is the same that I have been hearing over the past 20 years, if not more. The Niti Ayog is leading the debate with the same faulty prescriptions – raise crop productivity, reduce cost of cultivation, expand irrigation and provide a national agricultural market. The National Bank for Agriculture and Rural Development (NABARD) is putting resources in the same seven areas which have earlier failed to prop up agriculture. Agricultural Universities are only digging out the forgotten package of practices that they had recommended and repackaging it as the pathway ahead.
What the Niti Ayog is proposing is primarily the need to make more public investments in agriculture. This is certainly welcome. More so at a time when the annual outlay for MNREGA is much higher than that for agriculture. But it is completely wrong to package it as the mechanism to double farmer’s income. After all, building swanky eight-lane highways, flyovers, super markets etc in the cities do not mean that the new urban infrastructure in any way compensates for employees’ salaries. Similarly, it is wrong to assume that providing more irrigation, technology and markets compensates for farmers income.
The objective behind what the Niti Ayog/NABARD and agricultural universities proposes as the roadmap for increasing farmer’s income hinges on the dire need to raise crop productivity. Increasing crop productivity is being seen as the way to increase farm incomes. It is believed that the higher the crop productivity, higher will be the farm incomes. To my understanding this is a flawed hypothesis.
Take the case of Punjab, the country’s food bowl. Punjab has 98 per cent assured irrigation, the highest anywhere in the world. Even the United States is able to provide only 12 per cent assured irrigation to its farmers. Now let’s look at the crop productivity. At 4,500 Kgs per hectare, Punjab’s productivity of wheat is among the highest in the world. In case of paddy, Punjab’s productivity is 6,000 Kgs/hectare which matches the highest productivity of 6,700 Kgs per hectare recorded in China. With such high crop productivity of wheat and rice, and with 98 per cent of the cultivable lands being provided with assured irrigation, Punjab farmers should in the process be very prosperous.
The sad part is that despite the highest crop productivity and with the highest acreage under irrigation in the world, Punjab has turned into a hot sport for farmer suicides. Also, let’s not forget that Madhya Pradesh, despite the high growth rate in agriculture, has been the epicenter of the recent farmers protests.
Yet, there is hardly a day when one misses reports of farmer suicides happening in Punjab. Does it not ,therefore, mean that what is being proposed by the policy makers as the roadmap for doubling farmer’s income is terribly flawed? This is primarily because every disaster becomes a business opportunity. The prevailing agrarian crisis too has become a business opportunity for input providers – fertilizer, pesticides, seeds, and implement manufacturers – to make more money. Nothing wrong, but I expect policy makers to see beyond the economic interests of the companies dealing with agriculture inputs/implements and take steps which ensure economic security to farmers:
1) The Commission for Agricultural Costs and Prices, which works out the MSP for crops, should be directed to factor in 4 allowances in the MSP being paid to farmers – House allowance, Medical allowance, Educational allowance and Travel allowance. So far, the MSP only covers the cost of production.
2) Since MSP benefits only 6 per cent farmers, it needs to be understood that the demand for providing 50 per cent profit over MSP will benefit only these 6 per cent farmers. For the remaining 94 per cent farmers, who are dependent on the exploitative markets, the need is to setup a National Farmers’ Income Commission, with the mandate to provide a minimum assured monthly income package of Rs 18,000 to a farmer’s family.
(The writer is a renowned agriculture expert)
Ensure Fair Price for Farm Produce: BKS
The Bharatiya Kisan Sangh (BKS) has been rigorously working for the cause of farmers since 1979. At a time when farmers are amidst serious crisis BKS general secretary Chaudhary Badrinarayan has mooted following suggestions;
* Since the farm land of most farmers has been divided into small holdings, immediate initiative should be taken all over the country for chakbandi at free of cost.
* Farmers should be educated to use renewable source of energy like the solar power for economy reasons.
* Farmers should be motivated to use cattle-basedfarming instead of mechanized farming. This will reduce production cost and also will help the farmers to opt for organic farming.
* Today farmers’ involvement in policy making is almost zero. Those who basically represent the farmers in policy formulation process know nothing about farming and farmers problems. Proper steps shuld be taken to ensure farmers’ participation in policy making.
* Cooperative societies are highly beneficial for small and marginal farmers. But these societies are being politically misused.
* The Kisan Bhavan built in various Mandis and also the Mandi guest house are being misused by politicians.
* Farmers do not need any loan or subsidy, they only want fair price of their products.
* Madhya Pradesh has done a very good work on enhancing irrigation facilities by reviving traditional methods of water conservation. Such steps should be taken all over the country.