Many have paid tribute to Atal Bihari Vajpayee by calling him ajatashatru and describing him as an orator par excellence. Some have lauded him for his wit and humour; others have praised his poetry. His seminal contribution to policymaking — from laying the foundation of India’s road infrastructure (highways and rural roads) to telecom policy and privatisation of PSUs — has rightly been highlighted. Surprisingly, however, not much has been written about his contribution to the agriculture sector. I want to highlight some such contributions.
But before doing that, I must confess that as a student in Delhi University’s Shri Ram College of Commerce (SRCC) in the 1970s, I was a fan of Atalji. I would listen with rapt attention to his speeches, especially the ones he gave during elections. They were a lesson in using the pause to telling effect. I recall how Arun Jaitley and Shri Ram Khanna — both from SRCC, who went on to become ABVP presidents — held the crowd’s attention before Atalji would arrive on the scene. Little did I know then that in 1998, I would have the privilege of working with Atalji as the youngest member of his Economic Advisory Council.
Atalji introduced Kisan Credit Cards (KCC) that gave farmers easy access to credit. The idea was originally mooted by Sompal Shastri and supported by Yashwant Sinha. But Atalji’s much bolder decisions in the agri-food space pertained to de-licensing the sugar (1998) and dairy industries (2002) and allowing the cultivation of Bt cotton (2002) — India’s only GM crop so far — despite opposition from NGOs and other influential quarters. He initiated reforms in agri-marketing through the Model Act of 2003 and tried to transform the Public Distribution System (PDS). In February 2004, he set up the Farmers’ Commission with Sompal Shastri as its chairman. After the NDA lost office in 2004, the Commission was headed by M S Swaminathan during the UPA government. Here, I pick a few of these policy changes to highlight their impact and understand if they hold any lesson for NDA-II under Prime Minister Narendra Modi.
The decision to allow the cultivation of Bt cotton has made India the largest producer and second-largest exporter of cotton globally. Today, more than 95 per cent of the country’s cotton growing area is under Bt cotton. In “From Green to Gene Revolution,” Kavery Ganguly and I have worked out that between 2003-04 to 2016-17, the country gained $67 billion by exporting raw cotton and yarn and saving on imports. This is in addition to the increased incomes of cotton farmers.
Farmers in Gujarat gained most from this decision. The state’s cotton revolution was the biggest driver of the unprecedented 8 per cent per annum growth in its agriculture between 2002-03 to 2013-14. This growth was higher than that achieved by Punjab during the Green Revolution. Farmers being the largest political constituency, the decision had a significant political effect in Gujarat. Modi was elected as the state’s chief minister thrice, as farmers supported him all through. Of course, CM Modi’s initiatives to ensure good irrigation — through check dams and power sector sector reforms — played a significant role as well.
Atalji wanted to make India a superpower in technology, including bio-technology. He would often say, “IT (information technology) is for India today, and BT (biotechnology) is for Bharat tomorrow”. Can PM Modi fulfill his dream by enlarging the scope of BT in the country? This would mean approving the cultivation of Bt brinjal and GM mustard. That would be a fitting tribute to Atalji.
Next, I highlight the delicensing impact of the dairy sector. Operation Flood under the cooperative structure, as envisaged by Verghese Kurien, had given good results. But even after two decades of the programme, less than 10 per cent of the total milk production was being processed through cooperatives. The dairy sector was de-licensed after the economic reforms of 1991. But soon after, at Kurien’s insistence, controls were resurrected through partial licensing. This constrained the sector’s overall growth. In 2002, the Vajpayee government fully de-licensed the dairy sector. In the years to follow, the private sector expanded its processing capacity at double the pace of cooperatives (see graph), making India the world’s largest milk producer — 176.4 MMT in 2017-18, leaving the US (98 MMT) and China (45 MMT) behind.
The de-licensing of the sugar industry in 1998 had a similar effect. In 1997-98, at 5.7 lakh tonnes/day, the private mills matched the cooperative sector in cane crushing capacity. But by 2017-18, the private sector’s crushing capacity had exceeded16 lakh tonnes/day, while that of the cooperatives stood at 8.4 lakh tonnes/day.
Atalji also undertook reforms to transform the PDS. His government launched the Antyodaya scheme that would give more ration (35 kg per household) at much higher subsidy (rice at Rs 3/kg and wheat at Rs 2/kg) to the poorest of the poor households. The remaining Below Poverty Line (BPL) families were charged 50 per cent of the procurement price. And households above the poverty line (APL) had to pay 90 per cent of the procurement price. The idea was to align the issue prices for the APL families with market prices in order to reduce the fiscal burden on the PDS.
But in 2013, the UPA passed the National Food Security Act (NFSA) that gave rice and wheat to 67 per cent of the population at Rs 3/kg and Rs 2/kg. I was part of the government (as chairman of the CACP) and expressed strong reservations about some of NFSA’s provisions, including its high fiscal implications and adverse impact on markets. The UPA thought the move would bring it back to office. It was, though, voted out and the NFSA left a massive burden on the exchequer. The food subsidy bill touched Rs 1,69,000 crore (budget 2018-19), with extra pending bills of the FCI at Rs 1,34,000 crore. Can PM Modi fix this in line with Vajpayee’s vision?