Agrarian crisis: A wake up call

• The Modi government needs to move beyond empty rhetoric and gimmicks to clear policy formulation and implementation to solve the agrarian crisis, which has been brewing for years now. 
• The timing of the current, almost nationwide, farmer agitation that is strikingly unique. It has erupted in a year when the farm sector seems to have achieved all the cherished objectives: an above 5% growth rate and record production not only in food grains but also in fruits, vegetables and dairy products. The Union government has claimed successful implementation of various schemes for the agriculture sector.
• The fact of the matter is that beyond all these seemingly positive factors, there is grave economic distress in the rural areas in general and in the farming community in particular. It is a crisis that marked the advent of economic policies of liberalisation in the farm sector and has persisted right from the early 1990s.
• The two principal demands of the agitating farmers, loan waiver and implementation of the Swaminathan Commission recommendations, which provide for a 50% profit margin on input cost—not only summarise this grave economic distress in rural areas but also point to the probable solution of the problems.
• The BJP’s election manifesto in 2014 said that once in power, the party “will take steps to enhance the profitability in agriculture, by ensuring a minimum of 50% profits over the cost of production, cheaper agriculture inputs and credit; introducing latest technologies for farming and high yielding seeds and linking MGNREGA to agriculture”. 
• The loan waiver concept was addressed by Modi himself at various meetings during the election campaign in Uttar Pradesh. Evidently, both the issues that form the root cause of the current farmer agitation were in the radar of the BJP for a considerable period of time.
• The schemes devised on the basis of one’s understanding need to generate a sense of benefit in the targeted sections of the population. Various schemes announced, sought to be implemented, and celebrated as great success by the Modi government as part of its third anniversary celebrations will highlight this mismatch. 

1. Crop insurance: At its core, it has nothing to do with increasing farmers’ income but is just a risk coverage for which farmers are paying a premium. The real beneficiary is the government since the risk of paying compensation has now shifted from the treasury to the insurance companies. The loser is the farmer since he or she has to first cough up a premium in order to be eligible for insurance. Pradhan Mantri Fasal Bima Yojana (PMFBY): crop insurance is compulsory for farmers availing themselves of loans and voluntary for non-loanee farmers. A farmer has to pay 2-5% of the premium fixed by the insurance company. The remaining amount of the premium is subsidised by both the Centre and the States under a 50:50 plan. There is no cap on the maximum amount that insurance companies can quote as premium. If any State is unable to mobilise resources as dictated by the insurance companies, the scheme will come to a standstill.
2. Statistics jugglery: The government has also been trying to mislead people with statistics jugglery. It claimed that the total number of farmers covered under the scheme for the kharif season alone between 2014 and 2017 was 56.52% more than the number covered between 2011 and 2014. Whereas the scheme was implemented only from 2016. The efficacy of the much-advertised insurance scheme can be inferred from the reply in the Rajya Sabha on April 7 that out of payable claims of Rs.3,47,413 lakh, only Rs.69,802 lakh had been paid under the PMFBY and under the Restructured Weather Based Crop Insurance Scheme (RWBCIS), out of payable claims of Rs.79,599 lakh, only Rs.1,570 lakh had been paid since kharif 2016.
3. National Agricultural Market (eNAM): The government claims that more than 400 mandis (markets) have been linked to the portal. The target is to connect 585 mandis with eNAM by March 31, 2018. The objective is to allow farmers the freedom to sell their crops. The government claims that as of May 15, 83.57 lakh tonnes of agricultural produce worth Rs.19,802.98 crore had been transacted through eNAM. While the figures look impressive the reality is that farmers are yet to be allowed to sell at a different mandi, not even in a neighbouring one, through eNAM. The reason is resistance by commission agents as well as lack of proper infrastructure. Who will guarantee that the produce sold by farmers adhere to basic standards if the trader who wants to buy is located 100 kilometres away? What is happening now is that the data of business transacted in a mandi are just being uploaded on the eNAM site, showing it as having taken place through the portal. The government mooted an idea of not allowing sale of produce priced below the minimum support price (MSP) in eNAM was dropped in the wake of opposition which cited it as interference in free market economy. Like MP Govt, Centre could have announced trading below MSP a crime, but administrative backup was missing.
4. Soil Health Card: This has found prominence in terms of the Modi government’s agriculture initiatives. This scheme, launched in a hurry is akin to employing quacks in every village to attend to the medical and health needs of the people without any arrangement for medicines. This long-term project will start producing results after 20 years if implemented seriously and effectively. The government did not have the equipment to test soil conditions on such a huge scale. Nor were trained technicians available. Moreover, farmers do not know what to do after getting the soil health card. Where do they buy the “medicines” to treat the soil? Who will spend the money? Is there a guarantee from the government that their produce will increase? Unless and until these basic questions are addressed, the soil health card scheme will be an utter failure. Gujarat had apparently achieved 100% coverage under the scheme when Modi was the Chief Minister, but did it make any positive impact on the farm economy? The scheme is hardly a novel idea but a continuation of the “apni mitti pahchano” (identify your soil) scheme set in motion by the United Progressive Alliance (UPA) government.
5. Neem-coated urea: Another much-advertised scheme is the use of neem-coated urea, which is, again, a continuation of a UPA scheme, and it has nothing to do with productivity at the farm level. It only checks the industrial use and smuggling of urea. 
6. Price stabilisation fund: The government initiated the Price stabilisation fund in the 2014-15. Budget to protect farmers from market volatility, but the allocation of just Rs.500 crore showed a lack of seriousness and understanding of the problem.

• The contradictions in agriculture policy formulation are stark and visible. On the one hand, the government has been talking about “doubling farm income by 2022” through integrated farming. It has also identified allied activities to be covered under integrated farming, which include poultry, animal husbandry, fisheries and beekeeping, etc. India has been the world’s largest exporter of buffalo meat over the past four years. The ban on slaughterhouses in Uttar Pradesh, the largest exporter-State and then the ban on selling cattle at cattle markets for the purpose of slaughter, and cow vigilantes have made inter-State movement of cows and buffalos literally impossible. On the same basis, the government also discontinued the successful “Kamdhenu scheme” of the previous Samajwadi Party government that had made Uttar Pradesh the top milk producer in the country. Selling unproductive cattle for slaughter is an integral part of dairy farming, which makes it commercially viable. These stringent rules will render dairy farming uneconomical and unsustainable. How can a farmer survive if he or she is asked to rear unproductive cattle and is not allowed to sell them? The impact is visible now in Haryana and Uttar Pradesh where unproductive animals are destroying crops, and the farmer feels helpless. Poultry farming and dairy have not been considered agricultural activities and have been brought under the ambit of the Goods and Services Tax.
• The export-import policies in agriculture trade are working against the interest of farmers. The imposition of a minimum export price to protect the interests of consumers has resulted in a skewed policy paralysis against farmers’ interests. Thankfully, there has been no export ban on any agricultural commodity during the three years of the NDA government. But, at the same time, there have been no concerted efforts to boost it further and this has resulted in negative growth in export of farm commodities.
• The problems in the farm sector are complex, but the solution is simple, and that is bringing about parity of agriculture produce with industrial products and services, the farmer with the economic worker, and farming with other enterprises. 
• The Commission for Agricultural Costs and Prices (CACP) had rightly identified the problem as follows: “Price shocks have become frequent. The pressure to meet family expenditure, to meet the necessities of modern life, has been forcing farmers to embrace risky ventures by using borrowed funds. Risks unleashed by market forces and price crash in many cases are leading to agrarian distress and sad situations like farmers’ suicides.” The panel had presented recommendations as well, and like other reports on agriculture, failed to attract the current government’s attention.
• The current nationwide farmers’ agitation after a year of record production and 5.2% growth is a wake-up call for politicians and policymakers to initiate a structural reform so as to provide a “minimum income guarantee” to farmers, like the MGNREGA does with labourers. 
• A loan waiver is only be a temporary measure but necessary to correct past imbalances. But the future needs remunerative and deficiency pricing. Modi government needs to move in on the agricultural sector, as in other areas of governance, beyond empty rhetoric towards clear policy formulations and implementation. Cosmetic rechristening and restructuring of programmes of old governments will not help in this suggested policy course correction. The current situation and its political ramifications also ring a warning bell for the BJP as far as the 2019 general elections are concerned. Among landowners and farmers in agricultural areas, more than 50% had voted for the NDA in the 2014 Lok Sabha election. 

A country can't prosper at the expense its farmers.

My View:

Modi never has any intention of walking the talking. His policy is to promise and forget. He thinks fudging of data, high decibel publicity and rhetoric will work always. Sadly "One can fool some of the people all of the time, and all of the people some of the time, but one can not fool all of the people all of the times". His doing nothing during three years for farmers is not an accident but intentional. He has no idea about agriculture, problems and aspirations. With opposition in total disarray and ineffective it is only farmers who can bring high flying Modi on to ground.