The Farmer and I

The destinies of the farmer from the 140 million-strong bullock cart economy and of the proverbial people-like-us are interconnected in more ways than we care to imagine. Except that, like the government, we have relegated him to the farthest corner of our minds. For the urbanite, milk comes from Mother Dairy, fruits and vegetables from a supermarket. The farmer could belong to another planet!

But with just a week to go for the 2004-05 budget, it8217;s more clear than ever before that benefits of any modernisation and technological upgrades for the 140 million will percolate down to us as well.

If the budget actually announces substantial policy changes for farmers, it will be a springboard for the economy and the GDP as much as for what we eat, how much we spend on food and even urban safety. Here8217;s how, complete with wishlist:

YOUR FOOD BILL
OUT: Antiquated controls on storage of food
IN: Logical, cheaper prices

EVER wondered why Ratnagiri Alphonsos cost a packet in Delhi despite the 13-hour distance between the two points? Or why Himachal almonds are out of reach for most people anywhere? Or even why it8217;s cheaper to export Punjab foodgrain to Thailand instead of sending it to Andhra Pradesh?

The answer is a government order 8212; in place since Independence 8212; restricting storage, movement and sale of food and agriculture products. Though the Finance Bill of 2002-03 did remove some limitations, full implementation is still a while away.

Once the bars go, the first impact will be on your monthly food bill. According to the Central Statistical Organisation, the urban Indian8217;s food bill has fallen by 15 per cent in the past 15 years. Once products grown and processed in the country are free to move around, logic dictates that prices 8212; especially for fruits and vegetables 8212; will fall further south.

Remember Singh8217;s first mentions of a 8216;8216;unified market8217;8217;? This is exactly what he had in mind. With IT at his disposal, the farmer can choose his mandi, erasing current scenarios such as distress sales of onions in Rajasthan concurrent with sky-high prices in Delhi.

Other possibilities: More competitive mandis, maybe even private mandis. Fewer middlemen. All of which spells cheaper prices for the consumer.

From onions to sugar. Though technically decontrolled, a state government restricts sale of sugar to limit factory access to the market. So even as prices remain at an artificial high, sugar piles up in godowns instead of coming into the market and lowering prices.

Processed food comprises only one per cent of the total food in the country, and is perceived to be expensive. However, the processing cost is offset by increased shelf life, lower post-harvest losses and supply chain efficiency. The reason why a carton of tomato puree could be more cost-effective than actual tomatoes.

YOUR HEALTH
OUT: Non-existent guidelines on hygiene
IN: A seven-ministry integrated food law

ACCORDING to the Economic Survey 2001-2002:

8226; There are 70 million dairy farmers. Only 2,000 have milking machines and only 2,000 8212; not the same 2,000 8212; are connected to bulk coolers. Only 15 per cent of the milk is processed.

8226; Only one per cent of fruits and vegetables produced are processed. Fifty per cent of the production 8212; valued at Rs 200 crore 8212; goes waste because of packaging or processing shortcomings.

8226; Pesticide consumption through water has fallen significantly ever since CODEX guidelines were applied.

While it is established that processed food is less susceptible to spoilage through biochemical processes, microbial attacks and infestation, the challenge is to retain nutritional value, flavour and texture. That is where government policies come in, by way of physio-chemical and phytosanitary parameters and strict health standards.

Though basic standards have eradicated food-and-water diseases like cholera and dysentery 8212; aflatoxin, a poisonous effect of groundnuts, is possibly next 8212; the absence of an integrated food law is a major hindrance. A prospective food processor has to deal with at least seven ministries, with conflicting rules and laws. Despite pressure, no real progress has been made on integration.

On the other hand, with markets opening up, desi meat shops and vegetable markets will soon be competing with Australian and New Zealand produce. To cope, a clean-up act 8212; assisted hopefully by stringent domestic food quality regulations 8212; will have to be in place.

Then there8217;s organic food, opportunity in capital letters for India. In the US, an average supermarket today devotes 10 times more space to organic produce than it did five years ago. Abiding by some certification and production norms, states like Rajasthan are already trying to cash in.

Noticed that the hygiene, storage and transport strictures all add up to cleaner, healthier food for us?

YOUR CITY
OUT: Traditional employment ideas
IN: Job ops that travel to the people

CHANCES are that the face peering into your car at the traffic light, begging or hawking, belongs to a farmer 8212; a farmer who found farming less viable than migrating to the city.

According to the Economic Survey 2001-02, of the 100 million people who will join the work force over the next 10 years, 50 million will be rural youth. Consider, also, the fact that industry created only two million jobs in the 1990s. So, where will the surplus go?

Agriculture, once the major employment generating sector, has not expanded its labour-absorption capacities. So, for a farmer8217;s son, upward mobility could lie in a modern farm or an agro-processing unit.

According to a report of the International Centre for Peace Initiative, employment ops need to travel to people, instead of the other way round. Right now, says the report, 8216;8216;We are in a vicious cycle: these islands that are growing vertical, you are shifting the population from rural areas to live in slums8217;8217;.

Income and esteem-generating employment are directly linked to societal stability. 8216;8216;Productive employment with social esteem can mitigate the attraction to violent causes. Once they lose their sense of belonging, they want to destroy societal structures,8217;8217; says the report.

Pressure on urban infrastructure, water and electricity is fairly well documented. The only way out is 8216;8216;growth centres8217;8217; in the rural hub, as Singh proposed this week. Or as M.S. Swaminathan, chairman, Commission on Farmers, said, 8216;8216;There has to on-farm and non-farm employment to bring about a change in the rural sector.8217;8217;

The fallout: Healthier, sustainable cities for everybody else.

THE CORPORATES
OUT: Ancient rural economy policies
IN: Progressive farming laws

ALONGWITH farmers, companies like HLL, ITC, Mahindra and Mahindra, too, gaze skywards when the monsoon is due. Unlike farmers, though, they also frequent Krishi Bhawan in Delhi and lobby for a change in agriculture polices. They know a happy farmer paves their way to the bank.

So much so, they replaced government apathy with their own initiatives: Internet kiosks, tech-help centres, training centres, even produce-purchase schemes. Eight ITC e-chaupals are being added to the rural landscape every day.

Their biggest obstacle is the Agriculture Produce Committee APMC Act. It bars private parties from buying produce directly from farmers and offering it at competitive prices in government mandis. So, farmers have had to settle for lower prices and pay hefty mandi taxes even if the corporates seek their produce at their doorstep.

Their initiatives are not about the salvation of their souls, but of their balance sheets. According to Hindustan Lever, the rural market absorbs 50 per cent of soaps, detergents and beverages, 37 per cent of personal products and 12 per cent of culinary products. It also accounts for 50 per cent of all-India sales of B038;W television sets, pressure cookers, table fans and sewing machines.

And it8217;s just the tip of the iceberg, since only three of 10 consumers use shampoo and only one of four uses soap.

The hurdle here: Only 45 per cent of the rural population has roads, only 31 per cent has electricity and only nine per cent has toilet facilities. India Inc wants them to switch from spending 70 per cent of their income on essentials to luxuries.

And they want: 8216;8216;Precision farming, incentive for food processing and amendments in the legal framework,8217;8217; says an HLL spokesperson.

THE ECONOMY
OUT: Dependence on monsoon
IN: Technology to supplement rains

This is a no-brainer: Any growth in agriculture has a multiplier effect on the economy. Although it constitutes 25 per cent of the GDP, its impact is much larger, borne out by the fact that each time the GDP has crossed 8 per cent, the key driver was a farm sector recovering from drought-induced declines: 14.9 per cent in 1967-68, 12.9 per cent in 1975-76 and 15.5 per cent in 1988-89.

The latest GDP figures, released last week, show agricultural growth at 9.07 per cent, following a contraction by 5.20 last year after the drought.

The converse is also true: In the last four decades, especially the period before the 1990s, every bad monsoon was accompanied by a drop in GDP growth.

The impact crossed into the next year, slowing down growth for the first few months. The annual GDP growth was negative in these periods, at least four in the last five decades. Even in 2002, GDP growth took a large hit when the monsoons failed.

The reason is that linkages arise from both the demand and the supply side. A rise in rural incomes means more demand for industrial, consumer durables and fast-moving consumer goods.

On the supply side, it increases the supply of food and raw materials. Plentiful supply and lower prices reduce the cost of living.

So far we know the story only linked to the monsoon. It will be different if technical intervention makes agriculture less dependant on the monsoon. GDP growth is sure to be increase above eight per cent if good rain is supplemented by technology.