Friday, 7 July 2017

Make by Modi: Agrarian distress

Agriculture which was profitable until the start of liberalization i.e. mid 1990's gradually slipped into distress due to neglect by government and anti-farmer policies in pursuit of globalization. While the slide was gradual, Modi's mindless demonetization adventure dealt deadly blow and is now in deep crisis.
  • On Nov 8, 2017, the Prime Minister Modi embarked on his demonetization adventure and the collapse of agricultural commodity prices has been unprecedented in the annals of independent India. Never before have prices of all commodities collapsed simultaneously in such a spectacular fashion. And, while all this has been happening, the emperors in New Delhi watched the tragedy unfold.
  • Demonetisation happened just before the rabi sowing season, giving a serious jolt to farmers, for whom cash is the only mode of transaction. Peasants were losing incomes on a massive scale because of the price crash and loss of perishable crops, especially fruits and vegetables. Agricultural workers lost employment and wages owing to reduced agricultural activity and non-payment of wages for work done. The collapse in demand resulted in the destruction of vegetables, fruits and perishables. Farmers were unable to buy essential commodities and agricultural inputs. The rural economy was thrown into disarray and normal trade relations were irreparably damaged.
  • The manner in which protests by drought-hit farmers from Tamil Nadu were treated in Delhi was a pointer to what farmers could expect from this government. In Aug 2016, Karnataka refused to release Cauvery river water to Tamil Nadu affecting delta farmers. The failure of monsoon was the next big blow to the farmers of Tamil Nadu. Hit by the drought, many farmers committed suicide as they were unable to repay their crop loans. Since then, farmers took to the streets everyday demanding drought relief fund. The Tamil Nadu government officially declared a drought in the state. The central government released Rs 1,740 crore in drought relief fund against the Rs 40,000 crore sought by the state government. Since mid-March 2017, a group of farmers has been staging a protest in New Delhi, demanding that the central government release Rs 40,000 crore. The protesting TN farmers in New Delhi stripped outside South Block on April 10, 2017 after they were denied permission to meet Prime Minister Narendra Modi.
  • Even after demonetization and after a semblance of “normalcy” returned, prices continued to be in free fall, resulting in more misery on the hapless peasantry. Never before have prices of all commodities fallen so drastically and without any signs of recovery in the near future. The RBI acknowledged this in its Monetary Policy Statement by conceding that the prices of vegetables fell markedly and bottomed out with “fire sales” during the demonetization period. The November misadventure of Modi, clearly, provides the backdrop for the present wave of protests, even if it is not the exclusive reason.
  • Rainfall has been better this year. But rains alone do not make or break agriculture. More acreage was devoted to pulses, but the import of pulses from Mozambique killed the farmers’ hope of getting a better price. 
  • The reduction of import duty on wheat, ostensibly to check inflation, has hurt the peasantry. Prices of most agricultural commodities are now at levels far below the government-announced minimum support price (MSP), even as production and input costs have soared.
  • The MSP as a support mechanism has been rendered a farce because it is not backed by physical intervention by the government and its agencies. Betrayal of farmers’ interests may have taken many forms in recent times, but this is the most direct and brutal let-down of the peasantry.
  • India has entered into a memorandum of understanding (MoU) with Mozambique to import one lakh tonnes of pulses in 2016-17 and double it to two lakh tonnes by 2020-21; it is obvious that Indian buccaneers stand to take a fairly large slice of this opportunity. The government assured farmers there for provision of quality seeds, equipment and technology and procurement at an MSP level of Rs.5,050 a quintal. The entire cost of carriage, transportation and storage would also be borne by India. Contrast this largesse with the utter neglect of procurement from Indian farmers at a committed price.
  • The import duty on wheat, which was 25% until September 2016, was initially reduced to 10% and exactly a month after demonetisation, on Dec 8, 2016, totally done away with. The wheat contracted from Ukraine is priced at Rs.1,329-1,431 a quintal, far below the Indian MSP of Rs.1,625 a quintal. The policy-induced dumping from other countries, even as India experiences a good harvest, has brought down prices even further. 
  • In case of paddy while the MSP announced is Rs.1,470 a quintal, the absence of procurement centres forces farmers to sell at Rs.800-1,100 a quintal in large parts of north and eastern India. The cost of production of both wheat and paddy is also much higher than the official MSP. The fact that Kerala procures paddy at Rs.2,200 a quintal makes farmers elsewhere ask why their States do not come forward to do so too.
  • The BJP government has done little to stabilize prices and assure farmers remunerative prices. Farmers in Mandsaur (MP) categorically said that they did not need loan waivers if they were paid remunerative prices for their produce. This sentiment was echoed by farmers across the country. In reality, reducing the cost of production by providing production-enhancing technologies and quality inputs at subsidised rates, and assuring procurement at remunerative price will go a long way in addressing farm distress. 
  • Loan waivers are, at best, a palliative that can provide temporary relief to a small section of farmers. Tenant farmers, small and marginal farmers, agricultural workers and the landless rarely benefit from it. Unless basic and structural issues are addressed and comprehensive state intervention is made at the levels of production, procurement, processing and marketing, with adequate emphasis on cooperatives, loan waivers will be the easy way out for the political establishment.
  • The BJP had come to power riding a wave of popular discontent against the Congress-led United Progressive Alliance (UPA) government, promising that it would usher in “achhe din” for farmers and put an end to farm suicides. Increased public investment in agriculture and rural development, a minimum of 50 per cent profit over the cost of production, cheaper agricultural inputs and credit, latest technologies for farming and high-yielding seeds, linking of the MGNREGA to agriculture, a national land use policy to protect farmers’ interests and food security, farm insurance scheme to take care of crop and income losses, expansion of rural credit facilities, irrigation facilities, a price stabilisation fund, welfare measures and more were promised. What more could a farmer ask for? The fact that the BJP had made tall promises in the States, including loan waivers, had also raised expectations. Three years down the line, each of the promises made to the farmers and the rural poor stands betrayed.
  • Suicides by farmers rose 42% between 2014 and 2015, despite under-reporting. BJP-ruled Maharashtra, Madhya Pradesh and Chhattisgarh accounted for more than half of all farm suicides in India.
  • Farmers’ hope for prices recommended by the Swaminathan Commission, an expectation utilised to the hilt by Modi, was the first promise to be put in cold storage. The government also filed an affidavit in the Supreme Court stating that it was impossible to fix MSPs recommended by the commission, that is, at least 50 per cent above the cost of production. The blatant manner in which the most popular promise was shelved and trivialized as a mere election jingle has not gone down well with the peasantry. It was followed by an undisguised attempt at facilitating a corporate takeover of land through a draconian Land Acquisition Ordinance. Two consecutive years of drought had led to massive losses and the government response was seen as insensitive. Allocations to MGNREGA were also drastically cut, leading to mounting arrears of wages and the average days of work generated getting as low as only 34 days, instead of 100 days a year. 
  • The spate of peasant movements and the broader issue-based unity that is successfully being built towards coordinated action against BJP governments at the Centre and in the States is a pointer to changing times. The protests are providing a basis to build a broader consensus for the fight against policies responsible for the agrarian distress and the loot of forests, land and resources. This, clearly, is a warning bell for the BJP regime and the Prime Minister. 
  • Solidarity action against attacks on workers’ rights, women, Dalits and Adivasis and the barbaric attacks by vigilante gau rakshaks and restrictions on cattle trade are also increasing.
  • But the fact of the matter is that in the states which were the BJP’s core support base, are in revolt. Many kisan leaders are openly recanting and rueing their association with the Sangh today. Raju Shetti of the Swabhimani Shetkari Sanghatana, who was elected as a Member of Parliament from Maharashtra with NDA support went on a yatra to repent for having enlisted farmers’ support to make the BJP victorious.
  • Peasantry organised massive mobilisations against the decision of the Vasundhare Raje-led BJP government in Rajasthan to hike electricity prices by 40%. The unprecedented mobilisation forced the government to withdraw the decision. 
Whether these rounds of protests snowball into a wider resistance against the policies that have undermined livelihoods in agriculture remains to be seen. But it is undeniable that the Indian peasant has clearly signalled that they have joined the fight against the ruinous policies that have taken farm livelihoods in India to the very brink.

In India, none can prosper while farmers are bleeding.
My View:
Who ever knew Modi well, knew very well that he has no love last for agriculture and is dictator and a demagogue, who doesn't like criticism of any kind. He doesn't have mannerisms even to answer parliament. Ill educated and lacking administrative skills, he makes decisions without knowing consequences. In a large and diverse nation like India any decision has to be taken after due examination, deliberation and refinement in appropriate forum. In Modi's India, all decisions originate from PMO only. He will do anything to win elections. His audacity has no bounds and publicizes failures as great achievements. Today, even his senior colleagues, once taller than him, are scared of telling him what he doesn't like. In his 3 year monstrous rule, he achieved nothing, but destroyed agriculture, destroyed informal economy, loss of millions of jobs, fudged economy's statistics which none will buy and lakhs of industries (small & medium) closed down. Fall in electricity demand is proof of that. The nation is experiencing 'jobless growth' & 'growth less jobs', a strange phenomenon. Almost all segments of economy are struggling. Kashmir deterioration is so bad even women and school girls participate in stone pelting. Foreign relations with neighbors has never deteriorated so badly. His endless foreign jaunts hasn't done any good so far. Almost all his projects like swachch bharat, make in india, demonetization, etc are utter flop bleeding exchequer. None of these are likely to hit their intended goals and nation will be saddled with unintended consequences. Hurried GST roll out while seemingly good might not deliver much good due to its mangling beyond recognition. Insane he is, he is accelerating in wrong direction. He will meet his Waterloo in 2019, and till then India has to suffer.

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