Dear Tim Worstall, the US Size Does Not Fit the Indian Farmer
NEW DELHI: A controversial opinion piece in Forbes magazine on the ongoing farmer protests in several Indian states, maintaining "But India's farmers should go bust, that's how economic development works" has kicked off a heated debate.
Writing in the noted American business magazine which focusses on finance, industry, investing, marketing, technology and related topics, contributor Tim Worstall maintained that farmers in a highly unviable profession should go bust is "one important point we've got to get across to people (protestors, political activists)" so that "people stop doing low productivity things like rain -fed labour-intensive agriculture and do more productive things like working in factories or producing services."
While the transition should be made "as painless as possible," fundamental, if harsh, change in the primary sector should not be prevented because "that just keeps everyone poorer than they need to be," Worstall said. "We are all, the people doing the labour most of all, made richer by people moving from low productivity activities to higher,” he added.
The position on farm sector development in India taken in the business magazine flies in the face of what agriculture sector experts have been arguing throughout the farmer unrest in Tamil Nadu, Maharashtra, Madhya Pradesh and now, even in relatively much better off Punjab and Haryana: that loan waivers are an essential pre condition to resolving the troubles of farmers but the real issue is a steady basic income and a statutory, fair produce support price backed by penalties for violation. While some experts maintain that this, in fact, is the "painless change" that Worstall may be arguing for, the big questions remains unanswered.
Feeding a billion plus people in a country as big as ours and ensuring equitable distribution of food essentials is a massive job and leaving the farmer to his own resources, as has by and large been done ever since economic liberalisation in the 90s has untold consequences beyond the travails of the farming community itself. Especially as, whenever a buyer with the size of India's food needs enters the global market for purchases, international prices tend to shoot up exponentially, driving up import prices for wheat, pulses (India is the biggest consumer in the world), oilseeds and edible oil in particular.
If the past is any indication, even the slightest intention of the Indian government to import, leaked to the global markets, has engendered a big hike in global prices for food crops and food essentials.
Relying long term on huge imports would mean a sustained budget for food imports, impacting the overall economy in a big way, especially in years of poor monsoons. Quite aside from that, the political consequences of overtly adopting a policy that would force people off the land into an already unstable, erratic job market in overcrowded urban areas, is not something that can be brushed aside by any political party, least of all a ruling party that came to power promising to be farmer-friendly and brandished the Jai Jawan, Jai Kisan slogans to it's optimum electoral advantage..
India's farmers have remained entrepreneurs in the primary sector despite all the travails they faced since economic liberaliastion in the 90s, displacing thousands and forcing them into perennial migration until the MGNREGP which, unfortunately, the Modi government is seeking to dilute and gradually perhaps weed out. PM Narendra Modi famously asserted several months ago in Parliament that the job guarantee programme was a big blunder of the Congress but, despite increasing reports of prolonged absence of payment to beneficiaries in some states, teh government has been forced to keep the exercise going, more apparently for political gains and lack of a sound long term vision of growth in the farm sector, than anything else.
The irony is, Worstall's piece which appears to somewhat echo the couched and unstated farm policy of the government to force hidden and over employment out of the farm sector, comes at a time when the farmer produce is ample in parts of the country and purchase prices in the market have plunged way beyond input prices, forcing farmer suicides to amplify further. Worstall's use of the US as the reference point for stable and sound agri growth, at this time, hardly a solution for the never ending travails and tragedies of the Indian farm sector.
Recent GDP and employment figures have confirmed that not only has demonetisation impacted adversely on the farm sector, but that forcing farm labour to migrate to urban and semi urban areas for other forms of employment and access to growth benefits is a problem in itself and certainly not a solution. Although PM Modi himself asserted post November 2016 that the noteban surgery was "timely" since the "economy was healthy," Finance Minister Arun Jaitley was forced to admit a slowdown in growth.
More than 50 per cent of the population of this country remains invested, even today, in the primary sector and a substantial percentage of this are small and marginal farmers and landless labour. That’s roughly 60 crore people dependent on the primary sector. Compare that with the meagre number of jobs (1.5 lakh crore) created in the last three years. The problem is unfathomably enormous.
As Devinder Sharma pointed out “Imagine the enormity of despair of the farmer from Balaghat who committed suicide because he could not repay a paltry Rs 1.5 lakh loan.” Agriculture may contribute to only 15 % of the GDP but that it is crucial beyond just those figures and will continue to remain so is clear from the size of the population dependent on it for work and livelihood security, hidden or not.
Policy makers can ill afford to ignore these crucial issues and merely ape the US to coin a One Size Fits All policy for Indian agriculture, as Worstall seems to suggest.
For a government that was chaffing at the bits to seize power at the Centre from the Congress and self avowedly radically change the old order of things to craft a New India, the Modi government has proved to be abysmally lacking in any long term vision for the growth and health of the primary sector. Even cash crops like soya bean have seen crashing market prices and relatively mollycoddled states such as Punjab and Haryana are boiling over with farm unrest, or threatening to, in the face of looming disasters in the primary sector.
FM Jaitley recently dismissed, with relative ease, suggestions that the Centre cannot foot the bill for state governments waiving farm loans. and that state's should make their own arrangements for this using the additional share of central taxes given to them since 2015.
Farm sector analyst Sharma pointed out that the interest subvention on short term loans announced by the Centre was in place for the last few years and should have been extended in early April by another year against the backdrop of farm unrest, but wasn't. Mainly because the Modi government and farm minister Radha Mohan Singh had clean forgotten about the extension, and scrambled to extend by another year while stressing the political value of that act.
As if that weren't enough, a number of mob lynchings by enthusiastic anti socials in the name of cow protection has only made matters much worse for those relying on the farm and livestock sector for a livelihood. Livestock, chicken, cattle and vegetables have for long remained the fallback incomes for farmers. By not checking those attacking the farmers in the name of cow slaughter, and by actually encouraging their violence, the crisis facing the Indian farmer has only been deepened.
Far from showing bona fide intent to improve the primary sector, the Modi government and its affiliate BJP state governments may have, infact, indicated terrifying mala fide intent.
Make In India cannot remain an exotic corporate hothouse show piece. Can the Modi government transpose that to the farm sector and put its money (and our food) where its mouth has been since May 2014?
(Prabha Jagannathan is a freelance journalist with over three decades of work experience. She mainly focusses on political and socio-economic issues and has written widely on agriculture and the rural economy, the impact of NREGP and other key issues involving the vulnerable, the marginalised and the economically weaker sections of society for a range of publications).