How Much Is The Farmer’s Life Worth?
“…तुम ज़हर खा के यही मर जाओ, हम सब किसान मिलके तुम्हारे परिवार को २ करोड़ देंगे!” (Eat poison and die right here and all of us farmers would give your family 2 crores.)
This was an in-your-face reply to Madhya Pradesh Chief Minister, Shivraj Singh Chauhan’s announcement to offer a crore of rupees to the families of the farmers killed in Mandsaur. The farmer protests in various parts of the country recently were a rude, albeit necessary wake-up call for many people, providing enough evidence that farmer distress is a real and pressing problem in our country. Many believe that numbers never lie. Here are a few for all those wondering, “These farmers get so much subsidy. They don’t even have to pay taxes.” The Consumer Price Inflation during May was reduced to 2.18%, (basically meaning we paid less for products that we consumed on a daily basis) pushing the Food Price Inflation to negative. At the index level, the prices of vegetables dropped by 13.44% and 19.45% for pulses.
For those of us who paid a little attention in school, would remember that dependence on the erratic monsoon is one of the major problems of Indian agriculture. For two consecutive years, we have had less than average rainfall. Last year, due to adequate rainfall, production sky-rocketed, causing a sharp decline in prices. (To put things in context, for example, the production of tur daal increased by almost 80% in the financial year of 2016–17.) Prices of vegetables crashed at the wholesale market due to greater supply. Not to forget demonetisation, which also affected the prices.
The ultimate silver bullet for this grave issue is extremely simple (at least for our government.) Farm Loan Waivers. Of course it does nothing to solve the actual problem(s). However, it is the easy way out and the politicians know no better. As for the farmers, well, they have no options. In the first week of June, the Maharashtra government, lead by Devendra Fadavnis, declared a complete farm loan waiver, initially meant only for marginal farmers. The amount then was around INR 30,500 crores. Same demands are now getting louder from other states. Punjab even asked the Central Government to help. Arun Jaitley, our Union Finance Minister has cautioned these states more than once that the resources for executing the loan waivers would have to be raised by them and them alone. Although, it is probably too late now, the damage is already done.
Yes, loan waivers are good to bring back peace and sanity when the situation becomes ugly -momentarily, for the short term. Yet, in the long run, we may or may not be dead, our farmers surely would be; they already are. These good-intentioned magical waivers, unfortunately do not change anything on the ground. Studies show that loan waivers do not end in greater investment or better labour market outcomes. They also do nothing to improve agricultural productivity. In fact it may do more harm than good. Loan waivers upset credit flow since bank lending decreases to sectors receiving these schemes. The reason being continuous waivers incentivise default. Also, it is crucial to remember that they have fiscal costs with additional deficit and interest burden. Since money is spent here, we have lesser money to spend on capital expenditure which in turn affects the long-term prospects of the agricultural sector.
The problem does not end here. Agriculture contributes to merely 15% of our GDP and yet manages to employ 50% of our population, directly or indirectly. The numbers are enough for even a student to understand that this is highly unsustainable. There are many other issues that the sector is today plagued with and it requires serious policy intervention. For example, in response to the changing demand patters, many farmers have shifted to growing more fruits and vegetables. Interestingly, the horticulture production has surpassed that of food grains from the last 5 years. Yet, we do not have in place the required infrastructure for either storage or marketing. This has intensified the price volatility.
Sometime back, Norway’s Svalbard seed vault — a global food bank (aptly) nicknamed “Doomsday” designed in a way so as ensure agriculture survives any catastrophe was flooded after just 10 years after it was built. I am aware that it is wholly discomforting to consider a problem that is very difficult to solve, if not impossible given the altogether incomprehensible scale of that problem. However, aversion, even if it stems from fear is a form of denial too.
NITI Aayog, recently in December 2015, published a paper with several propositions worth investing our time to consider. We’ve been working on increasing yields from years now, along with it we could also work on strengthening land leasing. This would doubly benefit, with both land consolidation and providing an opportunity to unwilling farmers to exit. Another idea is of price deficiency payment, where if the crop price falls below a earlier decided level, farmers would be reimbursed with cash transfers. We could also work with cooperatives and not just for political motives but to reduce risk and transaction costs. The plans are solid and promising, the question is anybody listening?
Our Central and State governments, even those with ruled with different political party, would need to work together for the sake of making agriculture viable again. More than anything, we need investment in all aspects of the farm economy — irrigation, agricultural research, storage and marketing. We also need to make some big policy decisions for foreign direct investment in multi-brand retail as it would bring with it the base for the much-needed cold chain storage infrastructure.
It’s high time we pay some attention to our farms. If not for the sake of food, for Gau Mata and grains to feed her. After all, for how long can just money silence cries of millions?
About the author: Aishwarya Chordiya is a 2016 India Fellow. As a part of her fellowship, she worked with Jan Sahas in Dewas, Madhya Pradesh, to strengthen a social enterprise. Aishwarya now leads Research & Documentation with Indicus Foundation.
Originally published at http://www.indiafellow.org on July 28, 2017.
