The Hindu Business Line : Give farmers a real way out

On the eve of the Budget, the Finance Minister, Mr P. Chidambaram, had indicated that this year's exercise would be pro-farmer. That was taken as a hint by the friendly press, which promptly reported on March 1 that the Budget has gone the extra mile for the farmer.

The mainstream press, however, found nothing in the proposals that would arrest the farmer suicides. During the debate on the Budget in Parliament, the Finance Minister faced strong criticism for what was termed his lack of sensitivity to the farmer's plight.

The Finance Minister seems to have seen the writing on the wall. Speaking at a public meeting at Baramati, in Maharashtra, the backyard of the Minister for Agriculture, he stressed the need to transform agriculture into agribusiness and remove the mindset that the farmer is destined to a life of poverty.

He outlined a roadmap by which farming can be made profitable. The Government, he said, is taking steps to improve the supply of water and credit and market facilities.

While reiterating several of the Budget provisions, he avoided talking about the retail sector, clearly unwilling to rake up any controversy on the subject with the Left. Loftily he called for the end of the politics of poverty.

Politics of poverty

If over 14,000 farmers have committed suicide during the last three years in different States, there is something far more amiss than than the politics of poverty. It was hardly necessary for the Finance Minister and the Agriculture Minister to come together on one platform to tell the world that agriculture needs water and technology.

Since Independence, various governments have tried their hand at providing inputs and technology to the farm sector. All of them systematically overlooked the need for infrastructure and assured and profitable markets.

This was not oversight. Rather, it seemed to stem from an adherence to a philosophy in the erstwhile Soviet Union that held that cheap raw materials and wage goods for industry had to be provided by agriculture.

Experience shows that farmers, like all other entrepreneurs, are discerning people and make their business decisions after weighing the pros and cons and the economics.

In an environment in which the government used a whole armoury of instruments, such as banning export of agricultural produce and dumping of foreign agricultural produce in India, as also restricting the movement, storage, processing and marketing of farm produce within the domestic market, the farmer has lost hope of agriculture ever becoming profitable.

This, indeed, is the rampant politics of poverty. It has been played out over the last six decades by the party that raised slogans of eradicating poverty.

Mr Sharad Pawar was evidently not too pleased that his guest should score a march over him in his citadel. On his return to New Delhi, he declared that the Centre would announce, in May, a special package including institutional credit, insurance and financial aid for farmers in four States where thousands of them have committed suicide in the last few years. The package is supposed to benefit 30 districts in Andhra Pradesh, Kerala, Karnataka and Maharashtra. The package is to be finalised in the coming month and a multidisciplinary team is to be constituted to ensure effective implementation.

On the wrong track

The announcements of the Agriculture Minister are, again, on the wrong track. Provision of credit without ensuring that agriculture becomes a profitable vocation is a recipe for further indebtedness and more suicides. The Minister intends reforming the crop insurance scheme by making the `village panchayat', rather than the `revenue block', the unit for insurance. That could be a step forward. But the basic difficulty about any crop insurance scheme still remains un-addressed.

Even within a single village, the crop mortality experience is widely divergent. The level of management and inputs used are the prime factors governing the loss of crops, even in a situation where the weather conditions are more or less the same.

Has any serious study been undertaken to prepare a crop mortality database?

If the premiums charged are less than those indicated by the crop mortality table, any organisation responsible for the insurance of crops will be required to pay out, year after year, more by way of compensation than what it receives as premiums; such an insurance scheme would just not work.

Neither the Finance Minister nor the Agriculture Minister appears to be aware of the stark reality in the field today. Everyday, farmers are being forced to take poison, to hang or immolate themselves. This is a crisis situation. The experiment of providing a help-line to farmers on the brink of suicide only results in the kind of Kafkaesque experience that has been brought out so poignantly in the case of Boya Madhiletti of Mahbubnagar by P. Sainath (The Hindu, March 16, 2006).

Offer them an alternative

Poverty in agriculture is a chronic disease and is unlikely to be cured by such prescriptions. Whether other solutions offer a way out or not, it is essential that the affected farmers are given an opportunity to quit the vocation that was forced on them by the simple accident of birth and to choose another profession. And they should be helped by being provided with a good amount of capital, to start with.

This is possible if the farmers are allowed to benefit from the booming real-estate market.

Rather than provide a nominal help-line, the Government should offer to take over their land on cash payment of a sum equal to the stamp value of the land, with the provision that, in the 12 months following, the government will make up the difference between the market value and the stamp value of the farmers' transferred holdings.

This would permit the exit of those who lack the training and the mindset to face the challenges of the Second Green Revolution and would permit the entry of those who have the necessary technology, managerial and financial background to make agriculture a prosperous agribusiness.

The Chidambaram-Pawar prescription will only be valid once this transfusion operation is carried out. Otherwise, it is difficult to envisage an early end to the spate of suicides.

(The author is Founder, Shetkari Sanghatana and Member of the Rajya Sabha. He can be reached at sharad.mah@nic.in)

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