AGRARIAN ECONOMY – IS IN DOLDRUMS? BY ASHOK NATH EX GOA CHIEF SECRETARY
Future of India’s agrarian economy– in the doldrums?
Caveat: I am neither an agriculture expert nor an economist. These are only perceptions of an observant layman.
Our agriculture has, unfortunately, been neglected since Independence. Even Nehru, the architect of modern India, didn’t give adequate attention to it. As a result we came to such a desperate position that we were literally living from ship to mouth, that is , the wheat being imported from the US under PL 480. In the sixties, thanks to the import of Mexican dwarf variety of wheat gene and the IR 8 variety of rice developed in the Philippines the ‘ green revolution ‘ happened only after which we became almost self sufficient. But basic flaws in perception and planning remained. Later Governments too gave agriculture a step motherly treatment. Even the famous reforms of the 90s which opened up the economy and led to enormous growth all around did not give the kind of attention to agriculture it deserved. The position continues to remain the same at present notwithstanding the hoopla and publicity blitz about crop insurance, Jan dhan yojna etc.
There are various distortions in the agrarian economy. There is still no free trade in food across India. The poor farmer is getting screwed between the village money lender on the one hand and the ‘arhatyas’ or brokers at the mandis on the other. The APMC act has not been amended by the states . This pernicious act mandates the farmer to sell all his produce only at the mandis where brokers exploit him to the hilt. They serve no useful purpose in society. Only parasites, sucking out the blood of the farmers. Since they form the vote bank of the politicians, especially the BJP, Nobody dare touch them. In fact the Government of Maharashtra tried to exclude fruits and vegetables from the APMC act so that the farmers could sell them anywhere at the best price available but these parasites forced the Govt. to back down.
Then you have the huge monolith of a white elephant in the form of the Food Corporation of India, which procures, stores and supplies to the ration shops all over the country. Everybody knows that it is a den of corruption. It has been reported that the loaders are earning as much as Rs one lakh if not more by manipulating registers, overtime etc in collusion with the clerical staff. It costs the Govt. Rs 5 per kg for the entire operations for which the returns are only Rs one! There is not much warehousing space and food grains are often stored in the open, CAP, or cap and plinth. Or sometimes completely exposed to nature. The colossal amount of money being wasted on rotting food grains and other forms of spoilage is mind boggling but nobody dares to do anything believing in the maxim, ‘ let sleeping dogs lie ‘ .
India is still primarily an agrarian economy, in the sense that about 55% of our people live off the land. It might surprise our readers that in advanced countries only 2 to 3% are employed in agriculture and they feed not only the entire country but export huge amounts to rest of the world. Even in the BRICS countries people employed in agriculture varies from 4 to 15% . This simply means that too many people are employed in the rural areas where their output per capita is abysmally low as compared to what they would be able to earn with new skills elsewhere. The reason for low productivity is because the proportion of marginal( upto one hec. ) and small farmers ( 1-2 hec ) is around 80% of the total number of farmers in the country.
These poor farmers do not have access to credit, subsidised fertilisers or other facilities offered by the Govt. to the farmers. These are all hijacked by the bigger farmers. This is one of the areas where all Govts have failed miserably. The skewed fertiliser policy ensures that at least urea is diverted for industrial purposes or smuggled into Nepal or Bangladesh at huge profit margins. The same is the case with sugar policy. The farmers don’t get paid for their sugarcane, the sugar mills are going bankrupt, sometimes we have to import sugar in huge quantities when there is a crisis. If there is a glut we start exporting without a reduction in the domestic prices.
The scene is similar in the case of onions. When there is a glut and the prices crash the Govt wakes up too late and starts to export onions three months after the damage is done and a few farmers have committed suicide. In the reverse, if the production is hit for various reasons the bureaucratic machinery starts to grind slowly into action and by the time imported onions land on our shores the consumers have got a huge hole in their pockets and probably the next crop has started arriving in the market. These scenes are repeated with sickening regularity year after year. Isn’t it possible to assess the status of a crop through satellite imagery or other high tech aids? In this 21st century there is just no excuse for the Govt. to be caught with its pants down. Why can’t we leave the decision making to the market forces, select a few reliable operators and let them export or import under strictly controlled conditions? These chaps can feel the pulse of the available situation and can accordingly take immediate decisions. Won’t this be a better idea than a ponderous leviathan of a govt machinery taking ages to come to a decision?
The story can be repeated for potatoes, tomatoes and other produce. There is always a cyclical period of glut and shortage and this has been going on for the last seventy years with various Govts too busy with other matters. There is not enough cold storage space, no cold chain transport, no food processing industries worth the name. The UPA had tried to bring in 100% FDI in retail but the BJP so vigorously opposed it that it died a natural death. Had it been implemented then we could by now have been able to save thousands of crores of rupees in processing, storing and transporting perishable fruits and vegetables which now go to waste at a tremendous cost to the economy. It is estimated that 20 to 30 per cent of fruits and vegetables are spoilt in this country. A quantity which no other country would have tolerated. Also, the rural area would have been transformed into a hive of activity, created lakhs of jobs, raised the income of rural people, especially farmers and contributed enormously to the exchequer.
The net sown area in this country is 141 million hectares out of which only 65 million hectares are irrigated, rather shameful, being 70 years into independence. Then our planning of crops region wise is so pathetic and skewed up that we grow rice in Haryana and Punjab. Rice is a water guzzling crop and the water table in these states is at precarious levels. Besides the high dosage of fertiliser required for the high yielding varieties is affecting the fertility of the soil. It is estimated that a kg of rice consumes 5000 litres of water. In 2015 we exported 10 million tons of rice. This means that we exported about 40 billion cubic metres of water! What a criminal waste. The farmers in these states could, instead , be encouraged and incentivised to grow pulses, legumes and fruits. The legumes can nourish the soil because of its nitrogen fixing properties instead of depleting the soil like wheat and rice. Pulses are normally cultivated in rain fed areas as they don’t require much water. But unfortunately due to two successive droughts the production of pulses got a severe hit and now the Govt is running around trying to import millions of tons of pulses at 4 to 5 billion dollars. Had various Govts encouraged cultivation of pulses in assured irrigated areas we would not have been in this sorry position.
Another water guzzling crop is the sugarcane. Here again we have made the same mistake. Its cultivation has been recklessly encouraged in areas which are water scarce, like areas of Maharashtra where people are struggling for drinking water while sugarcane is soaking up the available water to fill the pockets of the sugar barons, politicians of all hues, who have a vulture like stranglehold on the sugar industry in the state. I am sure no Govt can do anything about it. The only result of this warped policy is that farmers and common people suffer. But who is bothered?
One of the biggest mistakes the present govt is making is its idiotic Hinduvta laced decision regarding cows and beef ban. Even the Directive Principles in the constitution mention protection of milch cattle, not all cattle. Being more loyal than the King, the BJP Govts in states have blindly gone rushing into banning right and left like a ‘ bull in a china shop’ ( pun intended ), without thinking, without reasoning without contemplation as to the damage it will be doing to the agrarian economy in general and the harm to the farmers specifically, not to speak of the thousands of people employed in the cattle, trade; butchers, transporters, tanneries and the leather industry. Most farmers who own a reasonable sized land keep a couple of cows/ Buffaloes if not more. The milk is used to feed the family and the surplus sold nearby thus earning a little side income. What happens when the cow becomes too old to produce milk? Earlier, he used to sell it and with the money buy a new cow or other essentials needed in the family. And now? He does not dare sell. Nobody dares to buy for fear of being killed. So the poor farmer is forced to look after the cow, feed it,water it till it dies of old age. All this costs money which he can ii afford. He’d rather feed his family. Even now he cannot sell the carcass for nobody dares to buy . So perforce, he has to bury it and this too, costs money because he can’t do it alone.
This is the position regarding one farmer. Multiply by the number of cattle owning families and you realise the predicament they have been thrown in. At one stroke of the pen the jobs of lakhs of people are at stake. The chain reaction up the line will be catastrophic and cause a tremendous loss to the people involved, the agrarian economy and ultimately the exchequer. There is another aspect to this problem. The cow is a valuable asset not only when it is producing milk but also when it is dead. Each and every part of the cow has economic value; the hide, bones, blood, offal, horns and even the hooves from which gelatine is extracted. If one adds the value of these products and multiply by the number of useless cattle on which the govt is spending thousands of crores in keeping them alive the irony manifests itself. Dead cattle will add much more money in the govt coffers than the amount that is being drained needlessly in keeping them alive. Work out the maths. Thousands of crores saved by stopping this brainless activity added to the thousands of crores earned from products of useless cows. ( By the way, I am a Hindu and I don’t eat beef. )
What better way can there be in improving the agrarian economy and the lot of the rural people. You must see through the hypocrisy of the govt. On the one hand it is claiming that it is going to create so many lakh jobs. On the other it is destroying the jobs of lakhs of people and that too, from the lowest strata of society, probably much faster than creating them. I strongly suspect that all this beef banning business has nothing to with sentiments, love for the holy cow etc but to deliberately
target a certain community who happen to eat beef. They forget that a sizeable population of this country too eats beef– the whole of north east, Bengal, Kerala, the tribals and the schedule castes for whom it is the cheapest meat( protein ) available. But since when was the BJP and the parivar ever been inclusive?
Another important decision which is pending for a pretty long time ( even under The UPA ) and on which the Govt. is dithering, rather unusual, for they have taken other vital decisions quite promptly, is the matter regarding GM ( genetically modified ) crops. This is probably due to the vehement opposition from the Swadeshi Manch, an affiliate of the RSS. Again this will be a very big mistake if a decision is not taken quickly. In this country land available for agriculture is already limited. The only way to increase production of food grains, oilseeds and fruit and vegetables is to increase the productivity of crops. As it is our output, whether wheat or rice or any other crop is the lowest in the world. We have to find ways to feed our burgeoning population which is supposed to overtake China’s in another 20 to 25 years.
The only way to achieve this, apart from other measures like increased irrigation, crop insurance , subsidised inputs, extension work etc, is to go in for GM crops. Many crops like corn, rice, soya bean, tomatoes brinjals mustard etc have been modified to increase their yield one and a half to two times, making them resistant to pests ( means less pesticide usage ) and requiring lesser quantity of water. In fact they are the new wonder crop. What more could one want. All over the world they are being cultivated giving very good results. South and south east Asia has taken to them. Even Bangladesh has gone in for GM brinjals. But we, here in India , haven’t even allowed trial cultivation of such crops under strictly controlled conditions. This is primarily due to opposition from vested interests, NGOs whose only aim is to cause obstruction,at the behest of foreign interests, in this country’s road to progress and of course, from within the party itself.
You may have heard of the miraculous performance of Bt cotton, a GM crop. Before it was introduced in India a few years ago, we used to import cotton in large quantities for our textile industries. Now, I believe, we have become not only the biggest producer of cotton but also the biggest exporter of cotton in the world. It is worth repeating, therefore, that we must start cultivating GM crops as early as possible. It will help in not only raising the farmer’s income, improving the agrarian economy, adding a notch or two to the GDP but hopefully help us meeting our food requirements in the 2030s. If we don’t , that is if we miss the bus again, then we will be spending our hard earned foreign exchange only on importing oil and food and PM’ dream of doubling the farmer’s income in five years will go up in smoke!