Laxminarayan yadav is a wealthy farmer. He lives in Ghumanhera village located on the Delhi-Haryana border. He grows wheat and mustard on five-and-a-half acres of irrigated land. Unseasonal rain destroyed 40 per cent of his winter (rabi) crop in March. The grain that remained edible got coloured; its price is down. He is not exactly happy, but far from despondent. Reason: the Delhi government will be paying him Rs 13,999 as compensation. “I will break even this rabi season,” says he. “I won’t earn any profit but at least my costs will be covered.”
Yadav is fortunate. Millions of farmers across the length and breadth of India are not. Many more landless peasants who work on other people’s land for a livelihood are in a state of acute distress wondering how they will survive the long, hot summer. They are unsure whether they will have food for their children in the coming weeks. Among them are the families of at least 300,000 widows of male farmers who have committed suicide over the last few years.
Even the prospect of earning the statutory minimum daily wage after toiling eight hours under the blazing sun digging earth, seems uncertain. Payments under the Mahatma Gandhi National Rural Employment Guarantee Act have been delayed in many states. The alternative for them is to travel to an urban area to lift bricks and carry pans of concrete on their heads.
Jaideep Hardikar, special correspondent of The Telegraph who has reported extensively on farmers’ suicides in Maharashtra, talks about Ram Rao, a farmer from Hiwra village in Yavatmal district. In February, Rao tried to kill himself by swallowing two bottles of pesticide. It is not known if the liquid he ingested was adulterated. But he survived. He now laments: “Death would have been cheaper; life has become more expensive.”
Farmers are not the only ones who are worried. Far from the dusty killing fields of Vidarbha, inside plush air-conditioned chambers in Mumbai, executives of multinational corporations selling fast-moving consumer goods are far from comfortable for different reasons. Their sales targets won’t be met.
For manufacturers of tractors, the writing on the wall is clear. Escorts recorded a 31 per cent fall in sales in March. Tractors sold by Mahindra & Mahindra fell 13 per cent in April and by around a fifth the following month. It’s not just tractors or toothpaste, there are indications that even power consumption in rural India is stagnating and even falling in particular drought-prone areas.
“It is not as if those living in villages are not buying tractors or motorcycles because they are expecting an unfavourable monsoon,” says Ajay Jakhar, chairman of Bharat Krishak Samaj, the oldest farmers’ organisation of its kind in India. “The situation that is currently prevailing is a consequence of many years of farmers not getting a remunerative price for their produce.”
He points out that over the last 12-18 months, the prices of a wide range of agricultural commodities have come down by proportions varying between 25 per cent and 75 per cent. These include cotton, sugarcane, paddy, wheat, potato and rubber.
The MSP Mirage
The minimum support prices (MSP) announced by the government on Thursday (17 June) should have been higher given the prevailing rural distress, Jakhar contends, adding that less than a fifth of the country’s farmers benefit from the MSP because they have surplus crops to sell. Besides, while the government announces MSP for some two dozen crops, it purchases barely six of these. “Over the last year, maize or corn prices are below the MSP, but the government is not buying maize,” he points out.
The India Meteorological Department has forecast that the monsoon will be 88 per cent of the long-term average. These percentages will probably change in the weeks ahead. In many areas, rainfall has picked up. Much depends on the timing and spread of precipitation across the country’s different agro-climatic zones that the average numbers do not adequately reveal. Floods in Assam and drought in Bihar can happen simultaneously.
If inclement weather reduces crop output and widens the gap between demand and supply, why then have prices of many crops been falling instead of rising? The answer to this conundrum can be found in the fall in world prices of commodities that has exerted downward pressures on domestic prices. Farmers and even traders are wary of hiking prices excessively for fear that they will get priced out of the market by cheap imports.
In today’s highly-integrated world markets for agricultural commodities, India’s government agencies seem to have still not been able to master the skills of trading in markets where speculation is rampant. Whenever babus in Krishi Bhavan and Udyog Bhavan announce a decision to import, world prices of that particular commodity shoot up.
This familiar story has been repeated. Prices of a number of pulses (tuar, urad, moong and chana dal) shot up by 50-64 per cent over the last year, largely on account of a fall in production by nearly two million tonnes from 19.25 million tonnes between July 2013 and June 2014 (the crop year) to an expected 17.38 million tonnes in 2014-15. The rise in prices does not match the fall in output.
On 10 June, the Cabinet approved the import of lentils in “whatever quantity is required”. In the days before and after the decision, world prices of pulses shot up by 30-40 per cent.
This indeed has been the perennial complaint of India’s farmers. When they produce more, prices fall and they don’t gain. But when output falls, the government intervenes to protect the consumer (often by subsidising imports) and the farmer loses once again — a classic heads-I-win-tails-you-lose situation.
The last time a drought was declared by the government was in 2009-10, but in that year as well, total agricultural output went up by 1 per cent. This financial year, however, there are expectations of an actual fall in total farm output after a gap of a decade brought about largely by deficient rainfall in two successive years.
“Farmers are already reeling under heavy losses ... and now they don’t have money to irrigate their fields or use an optimum level of inputs like fertiliser,” Ashok Gulati, former chairman of the Commission on Agricultural Costs and Prices, told Reuters.
Impact Of Slowdown
Gulati pointed out that slow or no agricultural growth would severely impede the government’s efforts to create jobs and reduce poverty even if industry and services grow in a robust manner. He added that each percentage point growth in agriculture is two to three times more effective in reducing poverty than a similar rise in non-farm sectors.
Government officials claim they are gearing up to provide relief to those in drought-hit areas. Plans have been drawn up to distribute high-yielding varieties of seeds that can be sown late. Other forms of assistance include disbursement of interest-free loans and subsidised diesel for use in agricultural
pump-sets.
The same day the Cabinet announced its decision to import pulses, it approved a proposal to provide soft loans to the extent of Rs 6,000 crore to the sugar industry with a one-year moratorium on repayment and agreed to bear the interest subvention cost to the extent of Rs 600 crore for this period.
To ensure that farmers are paid their dues expeditiously, the government mandated that banks would obtain from sugar mills, lists of farmers with bank account details for payment of dues for purchase of cane so that the funds are paid directly into the accounts of cane farmers on behalf of the sugar mills. Subsequent balances, if any, would then be credited into the mill account.
Not all are convinced that this scheme would benefit sugarcane farmers. “Similar schemes were announced by the Manmohan Singh government in 2013-14, but only mills gained not farmers,” says V.M. Singh, convenor, Rashtriya Kisan Mazdoor Sangathan.
He points out that while sugar mill-owners in Uttar Pradesh are claiming that they are in dire straits, the fact is that the number of mills in the state has gone up from 35 to 95 over the past decade. “Such bail-out schemes don’t help cane cultivators but rich industrialists,” he alleges.
Land Acquisition
Agriculture and land have always been extremely emotional issues. It is hardly surprising that the Narendra Modi government’s decision to amend the land acquisition law raised such a huge political storm. For the government, the timing of the proposed amendments to the law could not have been worse.
The world’s second-most populous country with 1.25 billion people (roughly 17 per cent of the planet’s population) has barely 2.5 per cent of the world’s land area. At least half — or more than half — the people of India depend on farming for their livelihood. The average size of a farm is around 1.3 hectares (due to fragmentation of holdings) and roughly half the total cropped area in India does not have irrigation facilities.
From the farmer in the field to the finance minister, everyone in India prays to Indra, the god of rain.
Satellites data analysed by the National Aeronautical and Space Administration of the US found that nowhere on the planet has the groundwater declined as much as it has in northern India where the country’s “grain bowl” is located. It was found that large-scale irrigation had caused 108 cubic km of groundwater loss in Haryana, Punjab, Rajasthan and Delhi between 2002 and 2008. The situation has worsened since then.
In July 2012, when there was a massive grid collapse and around half the country’s population had no access to electricity for several hours, many argued that this was contributed by low supplies of power from hydro-electric projects. These hydel projects did not generate enough electricity because of drought and farmers also increasingly used diesel-powered generating sets to draw water from under the ground to irrigate fields.
The problems faced by Indian agriculture are structural in nature. Short-term solutions will not help. Whereas agriculture currently accounts for 16-17 per cent of India’s gross domestic product and this proportion has shrunk consistently over the years, the share of the country’s population dependent on agriculture has not come down commensurately.
As economist Jean Drèze pointed out to this writer in an interview in Farmers’ Forum (June-July 2014): “What is unusual in India is the large share of services in total employment, and the small share of the manufacturing sector. No doubt the share of employment in agriculture would be smaller today had there been faster growth of the manufacturing sector and especially of labour-intensive industries. But the share of agriculture in total employment today would look abnormally high only to someone who thinks of India as some sort of middle-income country. That illusion is quite common, but the fact is that India is still a poor country, despite robust economic growth in the recent past.”
Desertion From Farms
Despite the growth of India’s population, there has been an absolute decline in the number of people engaged in agriculture: by around 23 million between 2005 and 2010 and another 13 million between 2010 and 2012, or a total of 36 million. Why are people leaving agriculture? First, farming has been and remains one of the most (if not, the most) risky professions. Secondly, when people move out of farming and migrate to urban or semi-urban areas, they earn higher wages, even if they are engaged in uncertain, short-term and risky work such as construction.
“Government policies over the years have made agriculture unviable,” says Biswajit Dhar, professor of economics at Jawaharlal Nehru University. “There are some people in the government who want the share of the population dependent on agriculture to come down very quickly in the belief that this will make India a developed country. I believe this is a bit like trying to cure a headache by chopping off your head.”
Dhar believes: “We have to change our mindset. The reason why we have surplus foodgrain in the country is because there are large numbers of people in the country with inadequate purchasing power. If we were a developed country, we would be having food shortages and would not be exporting food.”
India lives in its villages. So said the ‘father of the nation’ Mohandas Karmachand Gandhi. In the 1960s, former Prime Minister Lal Bahadur Shastri coined the memorable slogan to honour the soldier and the peasant: Jai Jawan Jai Kisan.
But successive generations of political leaders paid only lip service to the toiling Indian farmer engaged in arguably one of the most risky professions anywhere. Even after they started committing suicide in large numbers, the attention of the elite towards the crisis in agriculture has been perfunctory at best and callous at its worst.
