Across the Aisle: Farm sector on the boil

The governments cannot be blamed for the occurrence of drought, but governments are solely responsible for the mismanagement of the consequences of drought.

Written by P Chidambaram | Updated: June 18, 2017 2:10 am
Farmers agitations, mandsaur, mandsaur Farmers agitations, mandsaur Farmers, Agriculture, farm sector, india news, indian express columns Apart from the natural calamity of drought, there were man-made calamities, and this column is about how the two have brought about the explosive situation in the country.

Farmers’ agitations are spreading across many states. It is the culmination of the acute distress in the farm sector that many observers have written and spoken about in the last two years. Two years of drought in many states was the main cause. The governments cannot be blamed for the occurrence of drought, but governments are solely responsible for the mismanagement of the consequences of drought. Apart from the natural calamity of drought, there were man-made calamities, and this column is about how the two have brought about the explosive situation in the country.

The bulk of farmers in India have no choice but to do farming. Land is the only asset they have, farming is the only skill they possess, and unless they grow food many of them will face starvation. Agriculture, despite its declining share in total output (GDP), is also the largest employer. In India’s economy, the agriculture sector has primacy.

The Price of Neglect

Unfortunately, the NDA government lost sight of this basic truth. The agriculture portfolio is the Cinderella of this government. The Minister of Agriculture, unchanged since May 2014, is a political lightweight with little clout within the government. (How many of you can name Mr Sharad Pawar’s successor?). The minister has been neither seen nor heard by most people. The only memorable statement on agriculture that I can recall was when he repeated the Prime Minister’s promise to “double farmers’ income in 6 years” and when asked if they had meant ‘real’ income or ‘nominal’ income, there was deafening silence.

On the other hand, the government erred grievously on the issue of minimum support prices (MSP). In its manifesto and in the election campaign, the BJP had unequivocally promised that it would implement the M S Swaminathan Committee’s recommendation that MSP should be cost plus 50 per cent. In government, the BJP not only reneged on its promise, it dealt a body blow to farmers by denying them even a reasonable increase in MSP in its first three years. The numbers speak for themselves:

The ostensible reason for denying a fair MSP was that higher MSP fueled inflation, which is partly true, but to lean in favour of inflation control against the interest of India’s farmer-producers was the height of folly. Some inflation is inevitable, and the government and the RBI must use other instruments to moderate inflation rather than reduce the farming community to penury.

Errors galore

The second grave error was demonetisation. Mr Harish Damodaran has convincingly demonstrated how demonetisation has crippled the post-harvest agricultural economy (see The Crops of Wrath, Indian Express, June 12, 2017). Agricultural products are bought and sold largely in cash. Demonetisation dried up liquidity and prices have crashed. According to Mr Damodaran, never before have prices of tomato, potato and onion crashed at the same time. Same is the situation with soyabean, arhar, garlic, methi (fenugreek) and grapes. Saying that farmers have resorted to ‘fire sales’, Mr Damodaran’s conclusion is, “We have entered deflation territory in farm produce, whose proximate trigger clearly has been demonetisation.”

The third error was when the Prime Minister announced, on behalf of the yet-to-be-elected Uttar Pradesh government, that all farm loans in UP will be waived if the BJP formed the government. More likely, it was just an election promise in a state that the BJP perhaps did not expect to win, but it was an unequivocal promise that has returned to haunt the BJP in several states. Farm loan waivers are neither intrinsically ‘good’ nor ‘bad’. As Dr M S Swaminathan said a few days ago, “Loan waivers, though temporarily necessary, do not provide for a secure long term credit system” (emphasis supplied). When farmers do not get a fair and reasonable price and are unable to repay their loans, they demand a loan waiver. The holder of the highest political office promised a total loan waiver, why blame the farmers for demanding that the promise be implemented?

In February 2008, the fiscal situation was excellent, growth had found a new momentum, and a one-time loan forgiveness to small and medium farmers was justified. The central government was confident it could fund the waiver and so it went ahead and announced it. In 2017, however, every prudent norm was turned on its head. The Prime Minister promised a loan waiver on behalf of an yet-to-be-elected state government, no one seems to have examined the capacity of UP to bear the burden, and no one seems to have factored the fallout in other states. Having mounted a tiger, the BJP does not know how to dismount it. Meanwhile, the tiger is galloping through Madhya Pradesh, Chhattisgarh, Punjab, Haryana, Maharashtra and Gujarat.

Jobless youth angry

The last straw was jobless growth. Young men can find no work on farms or off farms. Micro, small and medium businesses are not offering new jobs. Tier 2, 3 and 4 towns are full of jobless youth and their anger has turned against the central government. The BJP will not admit its mistakes. Nor will any BJP leader tell the Prime Minister that mistakes were made. Will the Prime Minister pull a rabbit out of the hat? Wait and see.

Website: pchidambaram.in @Pchidambaram_IN

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  1. C
    C
    Jun 19, 2017 at 6:12 pm
    arre,congenital hypocrite of a thug. yesterday kashmir on the boil, today farmers on the boil. only your bun is boiling due to jealousy. Modi does /achieves in a day what your mendacious govt could do in a year, literally.
    Reply
    1. H
      Harsimrat
      Jun 19, 2017 at 4:20 pm
      If you visit the official of ministry of Agriculture, you will not be able to download any eBook on present government's achievements'. The email id of the Union Agriculture Minister is wrongly spelt with two "dots" and no " " in it. I complained this sorry state of affairs at the alternate mail address (am.krishi nic ) given on ministry's . But received back following message: the recipient e-mail Address has been deactivated. Further, if you go to recent initiatives, the number 1 is "Orders relating to the National Anthem of India." Also a full one page is dedicated to the personal profile and biodata of Union Agriculture Minister highlighting his political career. What more can you expect from this govt, when India's farmer is dieing of starvation for lack of government's responsiveness, miscalculated priorities and flawed policies.
      Reply
      1. K
        Kamal Pasha
        Jun 19, 2017 at 12:21 pm
        India is on the boil under BJP government
        Reply
        1. K
          Kisan News
          Jun 19, 2017 at 8:20 am
          Mr Chidambaram, your Congress party was very confused in selecting the economic model for India - socialism or capitalism for India. Now, the economic model is very chaotic in India. Your party had more than 60 years to steer the Indian economic model to one of those but, again for political reasons, the confusion got perpetuated by your party.
          Reply
          1. A
            anil
            Jun 19, 2017 at 9:30 am
            Yeah blame it on "RIO".... We elected a govt to perform and expect positive results. Yes post independence we did tread the socialist path but subsequently we did move on , our country did prosper with GDP growth. The point is do you have an answer to the points raised by Mr Chidambaram, or do we continue bashing the past and give a free ride for what's happening currently...
            Reply
          2. R
            rishi
            Jun 18, 2017 at 10:25 pm
            cancerous traces of an almost fatally-wounded ancient colonial corrupt congress boiling in frustration at BJP-Led-NDA's ever-increasing strength, populairty and admiration for a remarkably good governance , particulalrly considering the fact that NDA also has to deal with the nuisance that shamelesssly exposed corrupt desperadoes like chidambaram are behaving as .....worse than the sadak ka goondas on the rampage using all their might to sabotage NDA Governmen's efforts and concerns towars the welfare of farmers and the regularisation of agricultural practices which were lying unattended by earlier regimes.
            Reply
            1. A
              anil
              Jun 19, 2017 at 9:33 am
              Stick our heads in the sand, shall we!?
              Reply
              1. H
                Harsimrat
                Jun 19, 2017 at 4:57 pm
                Instead of boiling our own blood on critics' reviews, we should peacefully acknowledge our faults. And endeavor to take out every step for course correction. Neither BJP is always right nor Congress has been always wrong. Political parties try to squeeze out dividends by polarising people like us, so that we may continue bickering each other. It's high time we became conscious to their hidden agenda and talk true socio-economic development focussing on quantifiable metrics and sustainable policy initiatives, that strengthen our diverse democracy and lead the whole world.
                Reply
              2. I
                Indian Abroad
                Jun 18, 2017 at 9:18 pm
                Congress, its policy and its politics have completely failed. Now they are trying to demoralize and bring down the new India that is emerging. Congress and other Pseudo-secularists are the biggest enemies of India, bigger than Pa-ki-stan and China.
                Reply
                1. H
                  Harsimrat
                  Jun 19, 2017 at 4:39 pm
                  Instead of submitting to emotions, Kindly substantiate your views with actual facts and figures with one to one comparison of both regimes.
                  Reply
                2. K
                  Kisan News
                  Jun 18, 2017 at 8:49 pm
                  Mr Chidambaram, when Congress government implemented MGNREGA, it should have setup local rural employment exchange as the long term solution to identify the real unemployment situation. Farmers and other industries could have registered with rural employment exchange and it would have identified the supply and demand of workforce and unemployment. Instead of that, congress government simply took short sighted, brute force decision. All the work done by MGNREGA did not have real deadline and even if workers were diverted to farm work or industry work, it would not have been a problem.
                  Reply
                  1. A
                    anil
                    Jun 19, 2017 at 9:37 am
                    Sirji, do we realise that 3years since, we still hang on to MGNREGA, probably have increased the budget for it. It was criticised then and still is but then why hang on to it...?
                    Reply
                  2. E
                    Employ Ment
                    Jun 18, 2017 at 8:45 pm
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