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Journalism of Courage
This newspaper has been looking at the serious issues of land and water scarcity. Apart from my commentaries on these pages, I have dealt with these issues in lectures and academic contributions. A shift in the debate has happened after the Congress president8217;s observations at the party conclave in Nainital. Sonia Gandhi8217;s statement on SEZs and the land issue need to be seen in three contexts. What are the facts, what is the nature of the problem, and what are the solutions she hinted at and asked for?
At one level we have a serious problem; at another level there are opportunities and we must not turn those into problems.
What about the pace of urbanisation, which has a direct bearing on availability of agricultural land? It is unwise to say India is urbanising slowly, for it is extremely likely that urbanisation is proceeding faster than was thought earlier. The rate of growth in the number of towns is perhaps double that officially declared, because Census procedures take time to declare big villages as towns. And towns chew up land.
Now, let8217;s look at irrigation. Land reserve in India was maintained for some time because irrigation led to double cropping. In a study on forestry we have shown that since the eighties India managed a big increase in agricultural production, but kept forest area constant. This was in contrast to big declines in forest areas in countries like Brazil, Indonesia. One piece of data is instructive: even in 2001-02, just before the drought year of 2002-03, irrigated area and irrigation intensity were in decline.
So the basic causes of unsustainable land and water use have to be addressed. One root problem is often forgotten: instead of ceilings on small plots, our city planners should have planned land use by betting on transport solutions killing the distance problem. Towns could have been built on non-arable land. But rectifying all that will take time.
The situation in the short run is that those who have land titles are at an advantage right now. A lot of land is owned or tilled by poor people, some very poor. They could and should benefit from a land shortage as India grows. The pressure on land won8217;t abate 8212; India is the most competitive of the BRIC countries and its consumers are the most optimistic about the future.
I hope to show in a forthcoming book that only land, water and energy can hold us back. So we have to find the land for growth. The stakes are too high. Why not use the price mechanism? Because some of us won8217;t let that happen.
Decontrol doesn8217;t sit easily with the official Indian mindset. When we were decontrolling industry in the eighties, I was in the government. I would try to calculate dual prices or tariffs with a net-of-tax profit rate of 16 per cent on net worth. A famous industrialist who sympathised with my failures told me 8220;Yoginder, no one will live with 16 per cent.8221;
No one will live with government calculations on land value either. If we want land for large township projects, we shouldn8217;t depend on the efforts of the collector. But lectures on market mechanisms are still only for seminars. Not much has changed. I failed in enforcing efficient fertiliser pricing in 1986 and again in 2006. The babus saw to it that we import fertiliser rather than reward efficiency at home.
I became an admirer of Jean Dreze when he looked at a good study on Narmada cost-benefits some of my colleagues had done and said, don8217;t pick holes, their numbers and economics are good, but if the water is so valuable, why not use the market to rehabilitate the oustees. Let them share the benefits. I pressed this great idea with the Standing Committee of Parliament on Environment.
But, of course, markets can work both ways. The problem of some free market reformists is that they want to source growth only by cutting down the share of the poor. If you say this, the foreign consultant crowd will tell you, what about China Three Gorges?
In Shanghai a senior official told me that the advantages of Party rule was that hundreds of thousands of families could be relocated quickly. I told him wryly that we haven8217;t been able to relocate twenty thousand families for over a decade. But we have one advantage 8212; even the Harvard Business Review sees enterprise and planning as big pluses for India.
So we have to build up the capabilities of the farmer to negotiate a price for his land. I suggest producer companies or cooperatives. This of course would be slower than packing them off with the police after them, but it would be surer. The corporate sector would come to terms with India8217;s greatest competitive free market strength: the labour advantages of its agriculture. The results would be enduring. Partnerships with stakeholders would be genuinely started. The great advantage of India8217;s corporate sector in finding markets and accessing technologies would be married with one of the most enduring forms of enterprise the world has known in its recorded history: the Indian peasant.
There is nothing wrong with market-based reform. You have only to adapt it to a country called India and integrate it with its peasants and artisans.
Another way would be to build up the competitive strength of the farmer by empowering him. I believe the job guarantee scheme does that for small farmers and landless labourers. Empowerment can be ensured by providing a fall-back income for peasants.
If we are willing we can find a way. And since Sonia Gandhi has said it, maybe the government will be willing. As somebody said, we Indians know how to muddle through.
The writer, a former Union minster for power, planning andsciences, is chairman, IRMA
