Sunday , 21 April 2019

Rural Distress And Farmers’ Agitations

Dr D M Deshpande

There can be no two opinions about the fact that the farmers across the country are unhappy. They are venting out their anger by various means; agitations have spilled over to streets. They have stopped supply of vegetables, fruits and milk to urban areas. Although a painful act, they have resorted to dumping their produce on roads making clear their frustrations with regard to farm gate prices which are ruling very low for quite some time. Unfortunately some leaders from the ruling political dispensation have made insensitive remarks about the farmers protests and the methods they have adopted to agitate. Look at the sheer increase in the numbers of protests by farmers in India; from 628 in 2014 to 2,683  in 2015 and 4,837 in 2016 according to National Crime Records Bureau! Qualitatively, too, these protests are intense and cover most parts of India.

First and foremost, it has to be accepted fully and without any reservations that farmers’ problems are real. Let us take a look at performance of agriculture in the last 48 months of Prime Minister Modi’s regime. During this period, while the overall GDP grew by an average rate of 7.2% per annum, growth of agriculture was no more than 2.5% as per CSO estimates. In contrast, during the last four years of UPA II Government, that is, 2010-11 to 2013-14, the nation’s GDP increased by an average rate of 7.1%, agriculture registered a growth of 5.2% per annum.

In 2013-14, agricultural trade surplus was $26 billion; it fell almost by half to $14 billion 2017-18. Why did this happen; because while imports galloped, exports fell even in absolute figures from $42.4 billion in 2013-14 to $ 32 billion in 205-16 before recovering somewhat to $38 billion in 2017-18.  During the same period, agricultural imports increased from $16 billion to $24 billion. Also between 2013-14 and 2017-18, profitability of most of the major crops is down by at least one third percentage. Real income growth rate in farm sector, instead of rising, has fallen by over one percent to just 2.5% per annum in the last four years. Under such circumstances, doubling the farmers’ incomes by 2022, as the Government professes to do, will remain just a pipe dream.

Farmers are only asking for delivering what was promised ahead of elections in 2014- 50% profitability over costs and complete loan waver. 50% over costs was based on the Swaminathan’s  Committee report of 2006. While making his presentation, M S Swaminathan had made it amply clear that he meant C2 costs meaning including all the input costs or paid out costs, imputed cost/values of family labour, rental cost of land cultivated and interest on owned capital. This is a comprehensive-all inclusive-cost. The sum of paid out costs and the imputed cost of family labour is called A2+FL which is about 38% lower than the F2 Cost. After four years of present Government, there is a mention of giving farmers 50% above A2+FL and not C2 costs. Un-kept promises and lower profitability of a number of crops such as cotton, maize, ground nut, soya bean, bajra and even sugar cane have resulted in huge fall in farmers’ incomes.

Now even if Minimum Support Price is increased by a huge margin, it will only benefit a fewer farmers in selected areas, as the procurement arm of the Government is not comprehensive in coverage. What is more likely to happen,  with crucial state elections and general elections to come thereafter, is more loan waivers which will cause huge fiscal damage without bringing lasting solution to the woes of agriculturists. If all loans are to be waived in agro-sector, it would cost a bomb-Rs 3 lakh crore to the exchequer. As a large majority of farmers and land less labourers are not covered by institutional credit, loan waver will only benefit a small percentage of mostly rich farmers.

The Government, for sustainable growth and lasting solution in agriculture, has to get the ‘markets right’. Major reforms are pending for a long time. Infrastructure and related laws will have to be set right. APMC has only succeeded in creating a cartel of traders and in keeping the gate prices of agricultural produce low. Agriculture needs huge investment in building roads, cold storage facilities, research; governments do not have the money and private investors do not see return on their funds. Agriculture is a state subject. It is sad to see squandering a golden opportunity when for the first time in 22 out of the 29 states in India, BJP is in power. It can push through major reforms and changes but we are not seeing a champion who is up to this task. It looks like farmers miseries will only continue.

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