Monday, October 09, 2006

The macabre saga continued-sharad patil


Crossing 1000 mark farm suicides

The macabre saga continued-sharad patil

(The following article was released by PTI as a national feature on 7th Oct. ’06)


There is a saying that the test of the pudding lies in the eating. Did the PM’s Rs. 3750 crore package to the six districts of Vidarbha bring any relief to the distressed farmers? A resounding answer to this question is provided by the farmers themselves. Close on the heels of the PM’s visit, 99 farmers committed suicide in July 2006. The macabre saga continued in August with 111 farmers following suit. September was even worse, with an all-time high of 132 suicides. Nobody knows what horrors lie in wait for the farmers in the months to come.

It is irrelevant to ask what went wrong, because there was not much right with the package anyway. It went nowhere near the root cause of the problem. Regardless of the nonchalant attitude of the state government and the tall claims of the central government, the fact remains that the Vidarbha farmer is as distressed as ever. No amount of packages will give him lasting relief, because the malady lies elsewhere.

What is it that really ails the farmer, not only in Vidarbha but in the country as a whole? The answer is simple. One, agricultural market mechanism being what it is, he does not receive a remunerative price for his produce. And two, there is no availability of timely and adequate credit at reasonable rates of interest.

For those who contest the claim that the prices of farm produce are non-remunerative, one simple example should suffice. In 1970, the salary of a Class II officer was around Rs. 450. With gold priced at Rs. 180 per ‘tola’ (slightly more than 10 g.), the salary was equivalent to about 25 g. of gold. Even today, thanks to D.A. hikes and the periodical revision of wages, the salary of a class II officer is equivalent to the same amount of gold. If at all, the equation has changed in favor of the entire salaried class.

What about the farmer? Let us take the example of cotton, the main cash crop of Vidarbha. In 1970, cotton fetched about Rs. 180/- per quintal, the then price of 10 g. of gold. (Even then it did not cover the cost of production, but that is besides the point.) Today gold is priced at nearly 9300/-, while one quintal of cotton is worth Rs. 1700/- only. You do not need high power committees and pompous study groups to find out why the farmers are killing themselves. Apply this formula to any farm produce, and even a half-wit will understand the reason behind the distress of farmers.

The package could still have given a measure of temporary relief to a section of farmers, had it been promptly and effectively implemented. The PM had announced waiver of loan interest to the tune of Rs. 712 crores, fresh loans of 2000 crores, with new loans at 6 per cent rate of interest. With the sowing season looming ahead and the farmer in dire need, these provisions could have acted as life-savers for many. It is shameful that after three full months, hardly 75 per cent of this relief has reached the farmers. As on Oct. 4, out of the targeted loan of 2000 crores, only 1550 crores have been disbursed. Similarly, out of 712 crores of loan interest, only 544 crores have been waived.

Administrative difficulties are cited as the reason for this lethargic speed. It will be interesting to draw a parallel in this respect. On Oct. 3, the State Government announced a five per cent D.A. hike for its employees. You can bet your life that within a fortnight the necessary GR will be issued, adequate financial provision will be made, and the treasuries will burn midnight oil not only to include the extra five percent in the salary, but also to actually deposit it in the accounts of individual employees before Diwali. It is merely a question of political and bureaucratic will, which is never exercised in favor of the farmer.

As for reducing the rate of interest to six per cent, there is no such move in the offing, as the government has not yet dared to issue a GR to that effect. The ruling combine is afraid that such a low rate of interest might cause serious damage to the co-operative empire in the state. Its fears are fully justified, as the co-operative barons and their cronies have long been fattening themselves at the expense of the farmers. Barring a very few honorable exceptions, the co operatives in the state are widely known as hotbeds of corruption and nepotism. If the entire edifice collapses, the farmer will probably benefit in the long run. But since it serves as the base of political power, how can any government afford to destroy it?

Instead of tackling the core issues of remunerative prices and smooth flow of adequate credit, successive governments have only taken peripheral fire-fighting measures. A classic example is the provision of Rs. 2200 crores for irrigation in the PM’s package. Irrigation involves extra expenditure in the form of labor, seeds, insecticides, fertilizers etc. With scarcity of credit, the farmer cannot raise these extra resources. Even if he does, the price he gets never covers even the cost of production. In fact if he floods the market with his produce, the prices come crashing down. So the more he produces, the less he earns.

Today most farmers have shifted to subsistence farming not because they are ignorant of modern techniques of farming, but because they are paying the price for using these techniques to produce more. If the two measures of remunerative prices and credit flow are in place, rest of the development activities like irrigation, improved farm practices and value addition will follow as a matter of routine. In the absence of these two basic components, all other measures are like putting the cart before the horse.

Yet the PM has done just that once again, by announcing a similar package of Rs. 17000 crores for farmers of 31 districts across four states. In the opinion of Kishor Tiwari, founder of Vidarbha Jan Andolan Samiti and one of the foremost farm activists in Vidarbha region, the fresh package amounts to nothing more than ‘an eye wash’. Strong words these, but it is difficult to disagree with him, especially on the background of the fallout of the Vidarbha package.

The condition of farmers has deteriorated to such an extent that it is impossible to improve it by fire fighting. The most urgently needed measure is to waive off all farm loans across the country, amounting to Rs. 35000 crores, less than the cost of a single wage revision for government employees. The second and equally important measure is to make adequate short and long term credit available within a week of applying for loan.

This must be followed by a thorough systemic overhaul, with great emphasis on the market mechanism. The government should refrain from manipulating farm prices through exim policies, movement restrictions, levy and such other draconian measures. The role of individual and institutional middlemen should be ruthlessly curbed. These measures may hurt the well-entrenched interests of powerful lobbies in trade and industry, even in bureaucracy and politics. But only this kind of major surgery can save the terminally ill farmer.

One final question remains. Why bother to save the wretched farmer at all? We are close to achieving a double digit growth rate. Our coffers are flush with dollars. We are set to become a super power. What will happen if we allow the farmer to die his own death? This question is best answered by Dr. M.S.Swaminathan, Chairman of the National Commission on Farmers, in his Draft National Policy for Farmers submitted to the government on 13th April 2006. Dr. Swaminathan points out the dangers of neglecting farmers in these words-

· Expansion of threats to internal peace and security (e.g. spread of Naxalite Movement)

· Reverting to a ship to mouth existence, thereby diluting national sovereignty and enlarging the rural-urban divide in economic growth

· Jobless or even job-loss economic growth resulting in joyless growth for nearly half of our population

· If agriculture goes wrong, nothing else will have a chance to go right. If conversely agriculture goes right, the vision of a hunger and poverty free India can become a reality sooner than the time frame set under the UN Millennium Development Goals.

Looks like it is in our interest as a nation to rescue the farmer. It will not be an act of charity, but a sound and sensible step of self preservation for us. It remains to be seen whether we take prompt and decisive action to correct the horrible imbalance, or choose to go down the drain along with the farmer.

- Sharad Patil, Nagpur

1 comment:

No Hassle Loans said...

Whats up!! Anybody know where I can get a Quick Cash Loan