Issues

NO CRISIS COMES WITH AN INVITATION

By  Anwarul Hoda

“The post-reform period has been characterised by deceleration in the growth rate of crop yields as well as in total agricultural output in most states. By ending discrimination against tradable agriculture, economic reforms were expected to improve the terms of trade in favour of agriculture and promote its growth,” writes Professor G.S. Bhalla, in an essay to Economic and Political Weekly with the title of Economic Liberalisation and India Agriculture: A Statewise Analysis. (epw.in/journal/2009/52/review-agriculture-review-issues-specials/economic-liberalisation-and-indian)     

No crisis comes with an invitation. Since India liberalised and exposed its domestic economy to the world, more than  three lakh farmers have ended their lives, either by ingesting pesticides or by hanging themselves.

The three most common reasons causing such misery are debt, drought and declining productivity. Statesmen and policy makers failed to recognise the after-effects of Liberalisation, Privatisation and globalisation (LPG). They might have thought that opening up the farm sector will lead to more prosperous farmers who will be able to get maximum prices for their produce. Unfortunately, that did not happen. In fact, the prevailing distress turned into a crisis. Agrarian crisis in India is the result of adaptation of the policies of the WTO and its after-effect on the world economy, said Vijay Jaiwandhia, founder of Shetkheri Sangathana, a farmers’ union in Maharashtra in a documentary, commissioned by the 2014 food safety and sustainable agriculture forum, YIELD. (www.youtu.be/QvJmcoTjH6s).

A perception still seems to exist that the agriculture sector is growing with the increase in productivity. Yes, productivity of the land  increases, but unfortunately neither income nor condition of farmers is getting better. We need to understand that for more productivity, farmers are investing huge amounts in fertilisers and in pesticides and other chemicals. The invested amounts then increases the total  cost of production, which most of the time is greater than what they are earning. They are unable to match their income with the money they invested even after an increase in the production. Growth of agriculture should be measured in terms of real income of farmers than productivity to have more realistic information about the economic status of farmers.

Excessive use of fertilisers also made agricultural production stagnant and vastly affected the ecology. Excessive use of chemical fertilisers and pesticides made the soil and water contaminated.

 Increasing dependence on the market for every agricultural input is another problem. Farmers are facing exploitation in the name of healthy yield. Day by day, the cost of agricultural inputs is rising. The biggest challenge farmers face is not having their own seeds for production. The traditional way of hoarding seeds is no more in practice due to the introduction of various hybrids and modified seeds in the market, which promises high yield, but after sowing require a proper care as they are sensitive to the climatic conditions and are also having minimum ability to fight seasonal diseases. This extra cost adds to the farmers’ burden. But the traditional seeds are better adapted to Indian’s climatic conditions and ultimately reduce the cost of production.

Monopoly of private companies over sale of seeds has made farmers more dependent as they are bound to buy at a heavy cost. There is a need to make farmers empowered in every way possible. Their dependence on the market should be minimum and this can be done by reviving some old techniques and  modifying them to suit the present needs. Organic farming, for example, could  promote sustained and healthy ways of agricultural production.

There are possibly two ways to support farmers through price policy. One is by increasing the price of the crops grown by farmers and another is by reducing input cost. Cost-efficient techniques and methods have to be introduced at large scale so that input cost may be reduced. With this the government should also enhance the role of  Food Corporation of India to buy crops other than wheat and rice at a price which supports farmers.

Loopholes in fixing the minimum selling price (MSP) is another big problem. Catch news wrote that “the MSP was meant to protect farmers from being fleeced by wholesalers. But it becomes the maximum price that the farmers get in the mandi”. (catchnews.com/india-news/at-a-glance-10-absurd-things-you-should-know-about-farming-in-india-1432718350.html).  

Floor price, which is a price level defined by the government to support farmers through price mechanism, now actually becomes the maximum price a farmer gets in the market. There is a need to review the MSP policy and to restructure the market for the produce of farmers.  

During the post-reform period, India witnessed rapid economic growth. Per capita income increased along with  the production of different industrial goods all over India, but agricultural sector remained an exception. It’s a matter of concern for policymakers that the sector which constitutes 58% of the total workforce is facing deceleration in productivity as well as in income level during the same post-reform period.  

This article appeared in The Milli Gazette print issue of 16-30 June 2016 on page no. 2

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