Financial Daily from THE HINDU group of publications
Wednesday, May 22, 2002
Agri-Biz & Commodities - Agricultural Policy
Columns - Down to Earth
New crop of farm champions
A NUMBER of self-appointed spokesmen are pontificating on agricultural issues and advocating their own brands of programmes. Since Independence, India has witnessed two types of farm leaders. One, the Chaudhari-Deshmukh type and, two, those who demanded only freedom of vocation and technology. Now a new type of NGO elite is coming on the scene. It shares its mind-set with the Chaudhari-Deshmukh type but not the latter's parochialism.
At least since the great depression of 1969, the terms of trade have been moving against Indian agriculture. The deterioration of the terms of trade was the hallmark of the colonial rule. Even after 1947, when acute food security prevailed, the prices of agricultural commodities moved unfavourably compared with those of agricultural inputs and articles.
The Green Revolution ended the era of food scarcity. Both farm production and productivity went up. The income terms of trade of the farmers continued, nevertheless, to deteriorate. A species of farmers' champions cropped up who put the blame for the peasants' penury on the machination of the landlords and the moneylenders. The landlords took away the cream of the agricultural output and the moneylenders squeezed the farmers through fraudulent accounting, cruel rates of interest and feudal methods of loan recovery. This was the theme of the farm leaders of the epoch, generally caste leaders who were interested in capitalising on farmers' woes to their political benefit.
Even these leaders of Chaudhari-Deshmukh brand could not deny that agriculture was unremunerative. That only added venom to the cruelty of the landlords and the moneylenders. But the unremunerativeness of agriculture came from the uncertainties of monsoons and weather, and the ignorance of the farmers who stuck to old methods of cultivation.
This brand of advocacy of farmers' causes was the predominant voice in the farmers' movements till the 1980s. It advocated government subsidies for agricultural inputs and massive assistance to agricultural research in governmental institutions and to the development of cooperative bodies in processing, marketing and financing. The Zamindari and sahukari were abolished soon after Independence. Even the tenancy contracts were snuffed out. Land ceilings were imposed in three waves of increasing stridency.
Curiously enough, the beneficiaries of the abolition of the two structures were the Zamindars and the sahukars themselves. The first obtained sizeable sums as compensation though the rates of compensation were fairly modest. This class of ex-Zamindars, with the help of the lump sums of compensation paid by the government, became the forerunners in the industry and commerce. This was also the class that produced Chaudhari-Deshmukh brand of farm leaders. More important, they dominated the political scene in the socialist era and were the most vociferous critics of the kulaks and the big farmers. The sahukars shifted their business to urban areas, prospered and gained political influence. The moneylender was replaced by a whole structure of government-supported and -regulated cooperative bodies. In theory, the cooperative movement should have eradicated corruption and brought down the extent of rural indebtedness. Nothing of the kind happened. The rural indebtedness continued to mount. Paradoxically, the level of indebtedness was higher in regions where farm productivity had increased and the cooperative bodies had come up for processing and marketing. Everybody who left agriculture prospered thereafter, while those who remained in agriculture sunk into poverty and indebtedness.
The immiseration of farmers continued relentlessly in spite of increased production and productivity, the flourishing of the cooperative movement and a long list of so-called agricultural subsidies. This represented the big paradox in the economy. It should have set the alarm bells ringing that something was more seriously wrong in Indian agriculture than just vicissitudes of monsoons and tyranny of the landlords and the moneylenders.
The fact that the state tyranny was the prime cause of the rural poverty was brought out by the leaders of the new movement of farmers in the 1980s. They presented a cogent economic argument. The distortion of agricultural terms of trade, the penchant for the so-called `low-cost economy' and the advocacy of industrial and urban interests were the predominant features of the socialist era. They were not fortuitous accidents but a part of well-thought-out policy to prevent the agricultural surplus kick-starting development of secondary and tertiary industries in the countryside itself. The motive was to promote development of primary capital required for the newly burgeoning licence-permit industry in the urban areas.
Stalin did it with tanks to help Soviet industry; Indian socialists used less bloody methods to the same purpose. The new movement of the farmers of the 1980s mobilised unprecedentedly large crowds of all layers of farmers in their rallies and agitations. They, however, failed to make an impact in the political arena and in the cooperative sector. Farm leaders with the socialist mindset armed by the Dalda school of economics (`Dalda economics', Business Line, February 28, 2001) continued to hold the reins of power.
A quirk of destiny came with the Uruguay round of WTO negotiations on Agreement on Agriculture (AoA). The documentation of the negotiations proved beyond doubt that the Indian farmer suffered from crass negative subsidies while his counterpart elsewhere benefited from massive positive subsidies. Not the leaders of the `freedom' movement of farmers but a group of politicians who had a vested interest in continuing India's neo-colonial hold on Bharat presided over the ushering in of economic reforms in India.
The era of farmers' freedom appeared on the horizon when in a brief spell of one month, the Finance Minister announced an "era of farmers' freedom", the government of Maharashtra committed itself to abolition of the Maharashtra State Cotton Monopoly Procurement Scheme, the GEAC permitted commercial use of Bt cotton and the Union Commerce Minister lifted the quasi-totality of bans on agricultural exports. The farm leaders with socialist mindset the Chaudhari-Deshmukh brand of politicians and the Dalda economists are attempting to resurrect themselves. A large number of farmer-haters have started raising their heads in a clever advocacy of State control on agriculture.
These new champions of farmers have little standing in the agrarian community but they perorate from the pulpits of NGOs and five-star seminars. Their experience of agriculture is limited to tending kitchen gardens and amateur organic farming. They have been active surreptitiously for years. There are those who oppose dams, lest they usher in an era of modernity in the countryside. There are others who oppose farmers having a free access to such frontier technologies as Information Technology and Biotechnology. Last but not the least, there are those who feel threatened by a market-oriented free economy based on competition.
If the mainstream farmers' movement of the 1980s made freedom the main theme, the new leaders are talking of the food security and the need to ensure right of livelihood for the most modest citizens. `Market can never be just' is the burden of their song. `Market needs to be carefully and closely monitored', they add. When India is opening up its cloistered closed economy, some are bound to feel the compulsions of competition an unpalatable prospects. The new NGO leaders are capitalising on these fears and advocating an anti-WTO and Swadeshi programme. The anti-WTO NGO farms spokesmen are arguably the most influential in this crowd. They have contacts with NGOs in the Western world that have reason to be disgruntled about the advent of freedom.
March 2002 was the red-letter month for the farmers seeking freedom. The NGO protectionists retaliated concertedly and in quick succession. They got the GEAC to impose conditions on the exploitation of Bt cotton seed. That makes one wonder why the permission could not have been given with all these conditions on the date of the application itself. They have plagiarised `refuge' conditions from the American document. It would appear that the GEAC is unhappy about genocide of bollworms and would like to give them a chance to survive and multiply. Thankfully, those in authority of campaigns against small pox, cholera and polio did not think like the GEAC babus. To the extent possible the GEAC has underscored the point that the farmers cannot be allowed untrammeled access to technology.
The sugar barons of Maharashtra held an extraordinary meeting in Mumbai and declared that the WTO was responsible for the dire straits in which the sugar industry finds itself. The WTO did not impose licensing for sugar factories for political purposes. The WTO did not require India to import sugar from Pakistan. So, what have the sugar barons got against the WTO? Most of them know little about Marrakech agreements. They simply dislike freedom and openness.
Abolition of the zonebandi, the draconian system of Sharad Pawar's invention that was designed to preclude all possibility of competition amongst factories and ordained that a cane producer must deliver his produce to an assigned factory no matter the price it was offering. NGOs from 13 Asian nations gathered in Kathmandu to demand that the WTO abdicate its agricultural mandate, since the Marrakech regime will harm the poor countries. The Asian chief of the Food and Agriculture Organisation (FAO) was present in Kathmandu. This must have been music to his ears. Since the 1980s, the FAO has been unhappy about the increasing domination by the WTO of the agrarian scene and would like to reassert the FAO's authority.
GEAC in Delhi, Sugar barons in Mumbai and NGOs in Kathmandu represent the new NGO school in farm movement. The NGOs are telling the farmers that freedom can be dangerous and it is better to be guarded by benevolent, knowledgeable and paternal government. Unfortunately, benevolence, knowledge and honesty rarely go together.
(The author is founder, Shetkari Sanghatana. Feedback may be sent to email@example.com)
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