Agriculture needs much more!

It is difficult to believe that no Tamil poet or saint gave our Finance Minister the wisdom to realize that it is not just simple interest that sends farmers to despair. It is the bleakness of future, the hopelessness of the effort that drives farmers to suicide. Little attention has been paid at giving incentives to farmers to work harder in their farms though a weak palliative in the form of loan waiver to small farmers has been given.

by HARBANS SINGH

There is that episode in Mahabharata during the battle when resorting to stratagem to over come Drona, Lord Krishna resorted to spreading the word that his son Ashwathama had been killed. Not believing the word of the wily Lord, Guru Drona demanded of Yudhisthara to confirm the news. Realising that his uneasiness in confirming the falsehood would land the Pandavas in trouble, Lord Krishna orchestrated the drowning of his words in the din of blowing conches and trumpets.

The thanks giving by the farmers, orchestrated by the Congress leaders soon after the Finance Minister P.Chadamabaram announced Rs. 60,0000 crore loan waiver for farmers has similarly buried the truth about the waiver. The subsequent accusation by the opposition and budget analyst that it was a move made with an eye on the ballot box has only buried the problem of agriculture in the country deeper.

Now that the din has subsided, it is time to dispassionately look into the whole affair. The accusation that the Finance Minister has presented the budget with an eye on the polls needs to be rejected as this has to be a part and parcel of parliamentary democracy. Political parties need to be voted to power if they are to make any meaningful difference to the lives of the people. The criticism that the Finance Minister has made an announcement without making any provision for the amount of money that the banks need to waive the loans is more of a technical nature and even though Finance Minister asks his critics to be patient with him and credit him with some intelligence, it can be debated. But the real issue is the sluggish growth rate in agriculture and the increasingly deteriorating plight of the farmers.

The Indian farmer has been under the yoke of the money lenders for a long time now and Chotu Ram and the Green Revolution notwithstanding a farmer family finds itself confronted by the need to have alternate sources of income in the family. Thus, but for a brief period following the Green Revolution, the farmers have battled diminishing land holdings, increasing costs of inputs and un-remunerative prices of farm products. Not surprisingly Indian literature has the ‘Do bigha zameen’ theme repeated again and again. However, their plight came to be highlighted only in the nineties when the ‘rich’ Punjab began reporting farmer suicides due to debts. Debts in rural areas, till then were considered to be either a problem of the decaying land lords or the small and marginal farmers whose land depended upon rain Gods and who were too ill-equipped to improve either themselves or their land.

The truth was that by then many States, notably Andhra Pradesh and Maharashtara, especially the Vidharbha region, had begun to record the increasing number of such deaths. One felt that with the spread of the competing media the deaths had also spread like and epidemic. The clamour for a solution had begun from many sides. Confoundingly, instead of heeding to the call, first the NDA and then the UPA chose to focus on the industrial growth that brought media attention. It was not till the food production began to suffer because of various reasons that attention was paid to it. It was in these conditions that National Commission on Farmers was constituted. It duly submitted its report and recommendations in October, 2006 but the Government woke only now to implement only one of the many important recommendations. The loan waiver being the sole exception.

Today many critics of the scheme are debating over the number of beneficiaries. It is being pointed out that according to the available data Indian farmers were under a debt of Rs. 1.12 lakh crores in the year 2003. Now since the Government plans to write off Rs. 60,000 crore, it also admits that approximately Rs 48,000 crore of loan has been taken by the farmers from non-banking, non-institutional sector and this is what the Government should be worried about if it really wants to see the spate of farmer suicide stop. Farmers do not commit suicide because they have defaulted on a bank or a cooperative loan. A farmer or for that matter any one else commits suicide in the wake of high and compound interest that does not give him respite and he increasingly finds himself in a situation where there is no solution to his problems. Even urban people are aware of this situation as it is not any different from what some people face at the hands of private financers when they avail a loan to tide over a crisis.

The Finance Minister has failed to address this problem. His articulation could have been warm and genuine if only he had remembered that of the Rs. 48,000 crores that the farmers take from the private sector, Rs. 18,000 crore is usually taken at an interest rate of 30% or more. This is enough to drive any person to despair leading to either selling of the land and penury or suicide and stigma for the rest of the family. Today there are 89.33 million farm households and of them 48.6 % house holds are under debt. In Punjab and Haryana, from where the bulk of the contribution comes to the centre’s food pool, 36% and 24% households respectively are in debt of private money lenders. In Bihar this figure is 33% whereas in Andhra Pradesh it rises to 54%.

The Finance Minister has not only failed to address this situation but has also demonstrated lack of understanding by limiting the waiver to those having only 2 hectares of land. It is common knowledge that in Vidharbha region where in the last few years more than 25,000 farmers have committed suicide, a large number comes from families that own more than 3 hectares but since their land is rain fed therefore a failing monsoon rings the death knell for them. His scheme only adds to their despair.

For quite some time now the Government has been lamenting the sluggish growth rate in agriculture. There is nothing in the budget to suggest that this is being seriously addressed. What was needed was to make the Minimum Statutory Price of farm products practical and just. Path breaking and innovative steps and leadership needed to be created to deal with the challenge of making agriculture viable even in small land holdings. It needs the kind of innovation, spirit and leadership that countries like Holland demonstrated soon after the First World War to emerge as modern societies even when agriculture continued to contribute in national economy.

Perhaps, the country today is void of leaders who can instill confidence in the farmers and inspire them break new frontiers in cooperation and imbibing of technology; perhaps, the present leadership honestly believes that agriculture can wait; but, with the possibility of half of the population continuing to live in rural areas even by the year 2050 there is greater need to invest in agriculture and villages if the growth and development of the other half is to be protected. By waiving the loan of small and marginal farmers the Finance Minister has addressed only one of the symptoms of the ailment that afflicts agriculture. More simultaneous steps need to be taken before it can be said that our farmers are as progressive and competitive globally as the industry and IT is becoming. The din that the politicians have created in the wake of the budget might blur the truth but there is no mistaking the face of false bravado even in supposedly rich Punjab and misery in the farm houses dependent upon nature and consequently private lenders. The bitter truth even for Dronacharya is that Ashwatthama may or may not be dead but he is badly wounded and gasping for breath.