Farm distress is at a tipping point

By K R Sudhaman. Dated: 12/4/2017 1:36:59 PM

Prime Minister Narendra Modi government is gung ho about the latest GDP quarterly figures saying for the first time in five quarters, the economic growth is on the increase at 6.3 percent in July-September 2017 as compared to the a new low of 5.7 percent in the previous April-June Quarter. It is true that the economic growth has been from 7.9 percent in April-June 2016 in every quarter until the latest quarter for which figures are now available. This recovery is partly because of recovery in manufacturing and it is too early to say if it is real and sustainable.
Nonetheless, what has been missed out in such interpretation is the farm distress and its serious implication to the economy. The crux of the problem in the Indian economy is agriculture, whose growth has slipped further to 1.7 percent in July-September quarter this year as against 2.3 percent in the previous quarter.
Father of India's green revolution M S Swaminathan is right in saying India cannot eradicate poverty in the country without tackling the woes of farmers, who formed 50 percent of the population. The growth of 2.3 percent in agriculture is pretty bad in April-June quarter considering the country had a bountiful monsoon this year after two years of severe drought. The growth should have been much higher this year considering a low base because of poor production in the previous two years.
So none can dispute the fact that demonetisation has had, therefore, a crippling effect on the farming community, which largely depended on cash economy. Also, demonetisation came at a time when things were looking up for them because of good monsoon. The timing was so bad that demonetisation was done when farmers needed cash flow the most as November is the time when Kharif harvest takes place and Rabi sowing begins. The hasty rollout of GST has added to the farmers' woes as it had jacked up some of their inputs costs. It is, therefore, not surprising that agriculture, which should have grown by at least 5-6 percent, managed to clock only 2.3 percent growth in the first quarter and 1.7 percent in the second quarter this year. This is not an encouraging sign. The poor farm growth is one of the reasons for rising food inflation when WPI and CPI or falling or stable.
Farmers' suicide is somewhat alarming in India. In 2004 when NDA government led by Atal Bihari Vajpeyee government demited office, the farmers suicide was highest at over 18,500, highest in a year. Of course there were two severe drought years during the Vajpayee regime. In 2014 for which the figures are available, there were around 5,600 farmers' suicides. That year too was a drought year. Farmers' suicides rate in India has ranged between 1.4 to 1.8 per 100,000 in the last ten years, which is alarming considering nearly 70 percent of the population depended on agriculture directly or indirectly.
It is, therefore, bound to be an election issue in the forthcoming assembly elections first in Gujarat followed by other states in cowbelt like Rajasthan, Madhya Pradesh and Chhattisgarh.
Along with big ticket public investment on roads announced by the government recently, it should have come out with big ticket investment on irrigation projects and linking of rivers, which had remained virtually non-starter so far. It is sad that though India had one of the largest areas under irrigation in the world, yet more than half of the over two lakh crore hectares of land were still rain dependent. Take the case of Bihar and Jharkhand. While Bihar has floods every year, Jharkhand has drought most of the years. All one had to do is to connect all the Himalayan rivers in Bihar to the rivers in drought stricken Jharkhand. This has not happened in 70 years of independence. Take the case of Kerala and Tamil Nadu. There are more than a dozen west flowing rivers in Kerala. All that is needed to be done is divers some of them through canal to water starved Tamil Nadu and this has not happened in 70 years of independence.
So Solutions are available and now technology too is there but the political will appears to be missing despite the fact that a large chunk of the country's members of parliament are farmers. Doles like no farm income tax or periodical farm loan waiver do not address the issue, which is deep rooted and needed concerted and comprehensive solution. Unfortunately the Indian political class look at only short-term political gains and not the long term and permanent solution to the problems of agriculture as it does not help them win elections every five years.
Swaminathan had nicely summed up in his report, the government has to do two things basically that is to ensure farmers get remunerative income that is cost plus 50 percent should be price for farm produce and secondly creation of proper marketing system for farm produce, which has not happened so far in the country. Minimum Support Price, a price stabilisation mechanism, though a good tool, has so far largely benefited only the rich farmers as only they have marketable surplus in the country.
Swaminathan is right in saying that Agriculture ministry needed to be made Agriculture and Farmers Welfare Ministry. Mere change in name as has happened lately will not suffice. What he actually meant was that the ministry should undertake large scale measures to improve farmers welfare and that has not happened so far.
Animal husbandry and livestock are equally important as they go hand-in-hand with farming. Livestock is a sort of insurance to farmers. Cows which ceases to be milch cows, used to be sold and he used to get some money for it. Now because of the activism of the Gou Rakshaks, they are no longer able to sell their aged animals. He has not only lost the money that he used to get as a sort of insurance, but also spend more money in the upkeep of the useless animals, which had to be fed till it dies on its own. This eats into already poor finances. This is one of the reasons for pushing down farmers' income further adding to his misery. This has also hit leather and meat industries as well.
Another issue that government needed to address is stable import-export policy for farm produce. One does not understand why government allows import of rubber, apparently succumbing to the pressures of tyre industry, when there is surplus rubber production in Kerala and North East. This further depressed local rubber prices putting rubber growers into difficulty. Export policy too is funny. When there is surplus production of Onions, it cannot be exported as government takes time to announce lifting of ban on onion exports. This again results in glut leading to crash in prices. This calls for a stable policy that ensures that global markets are created for Indian farm products. Whenever there is domestic shortage, India should import rather than banning exports so that tenders for country's farm products secured abroad are not hit.
In sum, it is time that Government came out with a big ticket farm policy to ease the farm distress, it is serious about development of the country. If independent India does not have starvation deaths as in the past, it is because of our farmers' hardwork. If they stop working the entire nation will starve. So it is in our interest to uplift them. They are the most hardworking with least return and yet the nation has not improved their income, which does not increase adequately even to take care of the rise in inflation. There is need for yet another green revolution, which should include all crops and until that is done, the country cannot become a developed nation. Modi has promised to double per capita farm income, which is as low as Rs 20,000 per year at present in most states. This promise has remained a piped dream so far.
(K R Sudhaman, who has been a journalist for over 40 years, has been Editor in Press Trust of India and Economics Editor in TickerNews and Financial Chronicle)



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