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Ground Reality

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Understanding the politics of food, agriculture and hunger
Updated: 49 min 20 sec ago

A call for making Minimum Support Price (MSP) for procuring crops legally binding.

Fri, 03/09/2018 - 11:17

For the past two weeks, farmers in the Durg district in Chhattisgarh have been dumping tomatoes on to the streets. In just one village – Parsuli in Durg district -- an estimated 100 quintals has been either fed to cattle or left to rot in the crop fields. After a relatively better marketing season that lasted till the first week of January, retail prices have been continuously on the decline. 
Far away, farmers in Erode district in Tamil Nadu are a worried lot. The retail price of cabbage has crashed. Against a price of Rs 12/kg last year, farmers are getting on an average Re 1 per kg. In Chhattisgarh too, tomato prices have crashed leaving farmers in the lurch. Not fetching more than Rs 1 to 2 per kg, farmers have simply abandoned the tomato harvest. The deplorable price they are getting in the market is not even enough to meet the plucking and harvesting cost. 
This is primarily because of higher production. Whether it is cabbage, tomato, potato, onions or for that matter any other crop, the higher the production, less is the price. A higher production enables the middlemen to form cartels and manipulate the prices often to the extent of exploitation. Admitting that it is because of over production, T Rajaganesh, a farmer from Erode district asks: “Farmers spend at least 45,000 per acre a month to cultivate cabbage. Add to it the cost of labour, maintenance and fertiliser, and the cost shoots up to more than 50,000 a month. Since it takes almost three months to yield, we have to spend at least 1.5 lakh per acre before harvesting. How can we realise profit with a farmgate price of 1 per kg?”
In the case of tomato too, average cost of production comes to about Rs 90,000 to Rs 1 lakh per acre for small farmers. For the big farms, the production cost is a little higher, at Rs 1.25 lakh per acre. Till the first week of January, when I travelled to meet tomato farmers in Durg district, the prices were much better, about Rs 1000 per crate of 25 kg. But with the advent of tomato crop from Karnataka, the supplies swelled, and prices slumped.
Now, let’s take the case of chana. The fresh arrivals have begun to arrive in the markets. According to news reports, chanaprices are ruling at about Rs 3,600 per quintal against the Minimum Support price (MSP) of Rs 4,400 per quintal, a drop in 20 per cent in the retail price. With the production expected to increase to 10 million tonnes this (from 9.33 million tonnes last year) on account of an 8 per cent increase in the area sown, prices are further expected to dip with arrivals picking up. Even wheat price has remained below the MSP by 6 to 8 per cent in Gujarat and Madhya Pradesh where early crop harvest hit the mandis.
In February last week, market price for tur dal was ruling at Rs 4,500 per quintal against the procurement price of Rs 5,500 at Tandur market in Telengana. In the first week of March, prices of mustard and pulses in Gujarat and Madhya Pradesh were ruling much below the officially announced MSP. Meanwhile, reports of tomato being dumped on the streets in Chhattisgarh have again poured in. This is the third year in a row when tomato prices have crashed to Re 1 per kg. In fact, this is the third year in a row when prices of almost all the agricultural commodities have crashed across the country. After two years of back-to-back drought in 2014 and 2015, production had picked up after a favourable monsoon season in 2016, 2017 and now in 2018. While the increase in production has brought cheers to the government, the drop in prices has added to the misery of farmers.
It is here that I see the relevance of a very timely suggestion made by Dr T N Prakash, chairman of the Karnataka Agricultural Prices Commission. Delivering an endowment lecture at Mysuru, he called for making the Minimum Support Price (MSP) of crops to be legally binding. He said: “Consumers have legal protection if produce is sold above the Maximum Retail Price (MRP) and can approach the courts, but even after 70 years of independence, farmers don’t have similar protection.”
For the third year in a row, prices of almost all the commodities are ruling 20 to 45 per cent lower than the MSP in various parts of the country. At times of glut, traders have ruthlessly exploited farmers. Even the introduction of Unified Market Platform in Karnataka, which led to the expansion of 585 eNAM (National Agricultural Market) throughout the country, farmers have not gained. The concept of model price, which is based on the average of day’s trading, is in reality a distress price and needs to be dispensed with. eNAM in reality is a nationwide platform being created to make it profitable for spot trading.
In addition to 23 crops for which the MSP is announced every year, my suggestion is to direct the State Governments to work out the MSP for highly perishable commodities like tomato, potato, onion, and veggies. Many states already have State Farmers Commission, which has more or less become retiring rooms for political appointees. The immediate need therefore is to convert them into State Agricultural Prices Commission, with the mandate to provide higher income to farmers, similar to that in Karnataka. If Karnataka can ensure procurement of 14 crops at prices that are much higher than the MSP announced by the Centre, I see no reason why other states cannot rise above the Cong-BJP charade to follow the trend. #
Categories: Ecological News

It is important for farmers to understand the MSP arithmetic

Mon, 03/05/2018 - 12:17

Not getting the right price, dairy farmers spill milk on the street as a mark of protest.
Addressing the 5th National Convention of Farmer Leaders, which concluded at Chandigarh recently, I asked farmers whether they would be satisfied if the wheat price was to be raised by Rs 150 per quintal as per their demand of providing 50 per cent profit over the cost of production.
The answer was a resounding No.
A farmer got up and asked: “Sir, please clarify. You are saying that if wheat MSP is increased by Rs 150 per quintal it will meet our demand of implementing the Swaminathan Commission recommendation. But as per our calculations, raising the wheat price by one and a half time over the cost of production would bring the wheat price to over Rs 3,500 per quintal.” 
I was certainly taken by surprise at this new set of calculations that was presented. This only showed how misinformation was being spread around. Later, I learnt that some farmer leaders had been going around telling farmers that the demand of MSP plus 50 per cent would translate into a price of Rs 3,625 per quintal.
Since it is mired in technical details, I know it becomes rather difficult for majority farmers to understand the how the MSP is worked out. The three abbreviations –- A2, A2+FL and C2 – that are floating around are certainly not easy to comprehend. I therefore decided to simply it for them to easily grasp. I told them that whatever you spend on cultivating a crop, like fertiliser, pesticides, seed, and cost of hiring tractors etc is computed and is placed under the head of A2 cost. This also includes the labour a farmer employs. In simple words, it is the actual cost a farmer undertakes. In addition, a farmer’s family is also engaged in the crop operations and this is calculated separately under the head of family labour, called FL. When we add family labour of a farmer to the actual cost he has incurred in cultivation, it becomes A2+FL.
According to the Commission for Agricultural Costs and Prices (CACP), which works out the MSP for 23 crops every year, the A2 plus FL cost of wheat comes to Rs 817 per quintal. Since the MSP this year has been announced at Rs 1,735 per quintal, the government claims it is already paying farmers a profit of 112 per cent over the actual cost a farmer undertakes, including his family labour.  
Now there is something called as C2 cost. This is the comprehensive cost which in addition to A2+FL also includes the rental value of the land and the interest on farmers own assets. According to CACP, this has been computed at Rs 1,256 per quintal for wheat. But since the MSP has been announced at Rs 1,735 per quintal for this year, it means that over the C2 cost the government is already paying a profit of 38 per cent. On the other hand, farmer unions are demanding 50 per cent over the cost of production. In other words, farmers are demanding 50 per cent more over the C2 cost of Rs 1,265 per quintal, which comes to Rs 1,884 per quintal. If you deduct Rs 1,735 from Rs 1,884, it comes to Rs 149 to be exact. Rounding this figure, I had earlier said that all that the government needs to do is to raise the wheat price by another Rs 150 per quintal, and the farmers demand would be met.
But would that satisfy farmers, the answer is no.
While it is true that even the UPA government had been paying higher profit than this, I think the time has come when we should move away from price policy to income policy. Between 2009-10 and 2011-12, the wheat MSP was higher by 125 per cent, barley by 110 per cent and gram 105 per cent. So the question that needs to be asked is what the big deal when the government says it is providing a higher profit. That even the UPA government had been doing, but it never made that kind of a claim. Again, if I ask farmers I am sure they would reject this so called increase in procurement price that the government claims as anywhere near the actual cost of production they incur.
That the MSP is less than the actual cost of production for various crops, and in different regions, is well known. The cost of cultivation of wheat in Punjab and Madhya Pradesh is certainly higher than the cost in Bihar and Uttar Pradesh. Since the prices are averaged before being announced, invariably Punjab farmers have been at the receiving end. In Haryana, for instance, the cost of production as worked out by the Haryana Agricultural University was Rs 2,219 per quintal. The MSP that was announced by the Centre was Rs 1,625 per quintal, which means for every quintal sold, a farmer suffered a loss of Rs 594 a quintal. 

The ‘one size fits all’ approach has already inflicted heavy damage by way of reduced farm incomes to farmers in progressive states. It is here that I see the role of Karnataka Agricultural Prices Commission, which has forced the State government to procure 19 crops, at procurement prices it has fixed, to be a very significant development. Other states too need to follow the trend. 

Just to give you an idea, a study done by Prof R S Ghuman for the Punjab Government had worked out that between 1997 and 2007, Punjab farmers incurred a loss of Rs 62,000-crore by being denied their rightful income. Interestingly, if this is the economic loss farmers incur in a state where more than 90 per cent wheat is procured at the officially declared MSP, imagine the loss farmers are suffering in other states.
Another report submitted by the Punjabi University concludes that every third farmer in Punjab is below the poverty line. In other words, even in a progressive state where more than 90 per cent wheat is procured which means farmers get the benefit of MSP, a third of the farming community is somehow surviving below poverty levels. Most of the 16,000 farmers and farm workers who committed suicide in the past 17 years, between 2000 and 2017, fall in this category.
I think it is very important for farmers to understand the MSP arithmetic. Unless they know how they are being taken for a ride with very clever jumbling of figures, they will never be able to understand how they have been deliberately kept impoverished all these years. And unless they understand the economic jigsaw, they will never be able to stand up and ask the right questions. #
Categories: Ecological News

The entire banking system has been structured to serve only the rich and powerful

Wed, 02/21/2018 - 09:45

Courtesy -- IndiaTomorrow.net
For 96-year-old Ramdiya from Kaithal in Haryana, an old age pension of Rs 1,600 he receives every month is his only social security. But for several months now, he is being deprived of his only life line at this advance age. To recover a loan of Rs 50,000 he had taken way back in 2006, the bank has been mercilessly deducting the entire amount from his old age pension that is routed through his bank account.
Ramdiya is not the only beneficiary of the old age pension scheme whose only life line has been suddenly snapped. This is against the banking norms but then that’s the extent of cruelty that the poor and the marginalised sections of the society are subjected to by the banking system. Banks are known to paste the name and photo of the defaulting farmers on notice boards in the tehsil headquarters; recovery agents not only harass but also physically thrash the defaulters; inability to pay back the loans invariably results in seizure of movable and immovable property which is put to auction. I wonder why the same privileges are denied to the corporate defaulters, after all both the farmers as well as the industrialists draw loans from the nationalised banks. Why then different strokes for different class of defaulters.    
The relative ease, with which corporate defaulters have been able to defraud banks, adding on to the piling up of non-performing assets (NPAS) and still getting away without even an idea of remorse, clearly shows how the entire banking system has been structured to serve only the rich and powerful. After all, if Rs 11,400-crore has been fraudulently sucked out of Punjab National Bank (PNB) by Nirav Modi and his associates, and they have very conveniently escaped to safer havens to escape arrests it clearly shows that the fear of banking regulator is only for the aam aadmi. While all kinds of inhuman ways are applied to recover dues from farmers, some recovery tactics even surpassing barbaric norms, the same banks have always refrained from even making the names of corporate defaulter’s public. The Finance Ministry as well as the RBI have time and again pleaded before the Supreme Court not to disclose the names of wilful defaulters saying it will reduce investor’s confidence.
With tacit protection being accorded by the Finance Ministry, no wonder the banks are now saddled with NPAs amounting to a staggering Rs 9.5 lakh crores. On the other hand, the total outstanding farm loan as of Sept 2016 stood at Rs 12.6 lakh crore. But when the farmers demand the outstanding debt to be written-off the mainline economists and policy makers are quick to reach saying that it leads to a moral hazard and will upset the national balance sheet. On the other hand, writing-off corporate bad loans is viewed as economic growth, as the chief economic advisor had once remarked. Even the economic policies therefore provide a escape route for corporate defaulters. They know for sure that their bad debts will be easily written-off in the process to attain economic growth.    
Earlier, the Public Accounts Committee of the parliament had estimated that the total outstanding loans of public sector banks till mar 2017 stood at Rs 6.8-lakh crores.  Out of this, 70 per cent belongs to the corporate sector, whereas only 1 per cent of the defaulters are farmers.  Already, in the past 10 years, Rs 3.60 lakh crore of bad debts has been written off by banks. But what I fail to understand is why none of the corporate chiefs whose companies have defaulted on bank loans have been put through the same strenuous scrutiny and made to undergo the same level of inhuman recovery tactics that farmers are forced to.
In fact, while defaulting farmers are routinely put in jail and are made to pay upfront for jail expenses, company heads escape with huge ‘haircuts’. For instance, Sree Metalick co owed Rs 13,000-crore out of which only 7 per cent was recovered under insolvency resolution process. A Haryana farmer, who had borrowed Rs 6-lakh for laying irrigation pipeline in his crop fields on the other hand was sentenced to two years imprisonment by a district court a few weeks back and also ordered to deposit Rs 9.80 lakh.
If Rs 11,400-crore that Nirav Modi as duped the banks was to be used for farm loan waiver of up to Rs 1.5-lakh per farmer, my estimate is that it could benefit as many as 30-lakh farmers. My estimate is based on Maharashtra government’s claim that its proposed Rs 34,000-crore loan waiver will benefit 89 lakh farmers. A third of Rs 34,000 crore is what Nirav Modi has defrauded the banks with, and using Maharashtra’s calculations, Rs 11,400-crore could have wiped-off bad loans of 30-lakh farmers. Add to this Rs 3,695-crore ‘default’ by Rotomac chief, and another Rs 9,000-crore that Vijay Mallaya ran away with, another set of 30 lakh farmers could have emerged free from the burden of bad loans they carry. In simple words, the massive swindle of public exchequer inflicted by just three captains of Indian industry could have wiped away the tears of over 60 lakh farmers reeling under farm indebtedness. #

The Other side of the PNB fraud. DNA. Feb 21, 2018
Categories: Ecological News

Where is the MSP plus 50% profit that was promised in the budget?

Sun, 02/18/2018 - 11:31

Some years back I had compared the rise in procurement prices with the rise in incomes of employees in various sectors over a period of 45 years – between 1970 and 2015. The basic objective was to look at income parity between various sectors, to know how farmers had been deliberately denied their rightful income.
What I found was startling. In 1970, the wheat procurement price was Rs 76 per quintal. In 2015, wheat procurement price was is Rs 1450 per quintal, an increase of about 19 times. In the same period, the average basic salary plus DA of central government employees have risen by 110 to 120 times; of school teachers by 280 to 320 times; of college/university teachers by 150 to 170 times; and of mid to high class corporate sector employees by 350 to 1000 times. Interestingly, while the DA alone has risen by 137 per cent of the basic pay for a state government employee/college professor in the past 10 years, while the commitment to pay 50 per cent profit over the cost of production is being manipulated in such a way as to give an illusion of profit. 
When Finance Minister Arun Jaitley made another startling revelation in Parliament while presenting Budget 2018 saying that the government has already paid 50 per cent profit over cost for most rabi crops and would be following the trend in the ensuing kharif season I was shocked. Farmers demand for MSP plus 50 per cent profit is derived from Swaminathan Commission’s recommendation. What the Finance Minister announced was instead based on the actual operational cost farmers incur (A2) plus the family labour (FL) of the farming family. This is much lower than what the farmers had been demanding for. That makes me wonder why the policy makers think that inflation does not hit farmers. School fees in the past four decades for instance have risen by 300 times, medical expenses by about 400 to 500 times, and moreover let us not forget a farmer is the only person why sells at wholesale price and buys everything at retail price.
Let’s take the case of wheat. The procurement price for wheat this year stands at Rs 1,735 per quintal. Of which the A2 plus FL cost, which means the total operational costs a farmer undertakes including the cost of fertiliser, pesticides, machinery used, seed etc and then add to it the computed cost of family labour engaged in farming operations, it comes to Rs 817 per quintal. The government is very conveniently considering A2 plus FL as the basic cost over which it claims it is already paying a profit of 112 per cent in the final MSP that it has announced. This is no big deal. Even the UPA government had been paying higher than this. Between 2009-10 and 2011-12, the wheat MSP was 125 per cent higher; barley 110 per cent and gram 105 per cent. In other words, farmers are being very cleverly hoodwinked to believe that the government is has started to pay the farm prices according to the recommendations of the Swaminathan Commission.
Nevertheless, in case of wheat, the C2 cost comes to Rs 1,256. When compared to C2 cost, the final MSP of Rs 1735 per quintal is still short of the farmers’ demand of MSP+ 50 per cent profit by Rs 149 per quintal. Similarly, in case of gram, the A2+FL cost comes to Rs 2,461 and the C2 cost is Rs 3,526 per quintal whereas the MSP announced is Rs 4,400 per quintal. In case of gram, C2 cost plus 50 per cent profit would be Rs 5,289 per quintal and what the farmers are getting as MSP comes to Rs 4,400 per quintal, a deficit of Rs 889 per quintal. Farmers are therefore justified in asking where is the 50 per cent profit that was promised over the cost of cultivation. Even at present, gram prices are ruling around Rs 3,200 per quintal against the MSP of Rs 4,400 quintal in the market.
But this is not the way costs are worked out. According to international norms of cost calculations which are well-laid out, the total farm cost also includes the rental value of the land and the interest on farmers own assets. This falls under the category of C2 cost. This is exactly what the farmers had been demanding. In addition, there is a need to add the cost of marketing, warehousing, transportation etc to the C2 cost, which for some strange reasons is not being done. Add another 15 per cent as the managerial cost, the comprehensive cost is computed as C3. The MSP recommendation should be based on C3 calculations. In most cases, the MSP announced is less than the comprehensive cost of production. I therefore agree with former Finance Minister P Chidambaram when he said that cost accountants services should be utilised in working out the farm prices. In fact, I strongly feel the time has come when the Commission for Agricultural Costs and Prices (CACP) which fixes the MSP for farmers is headed by Cost Accountants.
Take the case of how cost accountants work out the prices of industrial goods. While farmers are dumping potato onto to streets and even cold store owners are finding it difficult to dispose-off stored potatoes, some popular brands, carrying not more than 52 grams of potato chips, are priced at Rs 20 per pack. In other words, a kilo of potato is processed into chips and sold at Rs 400. Senior Cost Accountants tell me that the actual cost of processing is only a fraction of the final retail price. Whether it is processed foods, medicines or industrial products like automobiles, the retail price offers huge profit margins averaging over 300 to 500 times.
The pricing structure therefore is so designed to keep the farmers deprived of their rightful income. Since any move to fix prices of industrial goods on the basis of A2 cost plus family labour, which is completely justifiable, my suggestion is to move away from the price policy to income policy. It is time to set up a Farmers Income Commission with the mandate to work out a minimum assured income that a farming family must receive. This has become necessary considering that only 6 per cent farmers receive MSP, and the remaining 94 per cent farmers who are dependent upon markets have been exploited ruthlessly. If markets were efficient I see no reason why agrarian crisis should have worsened over the years. #

Categories: Ecological News

If bounties are being showered for farmers, it surely is election time.

Fri, 02/16/2018 - 10:23

The only time farmers appear on the economic radar screen of the country is when elections are around the corner. I have seen this happening for nearly 30 years now, and all political parties irrespective of their colour and ideology have been following the same approach. But once the elections are over, farmers disappear from the focus and are easily left abandoned. For the first four years after the new government is sworn in, the entire effort is serve the corporate interests only to remember farmers in the year before elections.
At every election time, political parties seduce farmers with financial baits luring the farming community to vote for the ruling dispensation. Dangle a few carrots at the time of elections and we have seen the angry farming community forgetting the past. So when Rajasthan Chief Minister Vasundhara Raje presenting the last state budget before statet assembly elections, announced a one-time crop loan waiver for small and marginal farmers up to Rs 50,000 in the overdue and outstanding categories of short-term loans from cooperative banks, it was clear that elections are around the corner. The waiver is expected to cost the state exchequer Rs 8,000-crore.
Madhya Pradesh Chief Minister Shivraj Singh Chauhan on the other hand has promised that farmers will be paid Rs 200 bonus on every quintal sold to the government in the last rabi season. Addressing a Kisan Mahasammelan at Jamboree Maidan in Bhopal, Mr Chauhan said:  Kisan bheek nahi mangta, paseene ki kimat denge” and announced that against Rs 1,735 per quintal as the Minimum Support price for wheat, farmers will be given Rs 2,000 per quintal. As you guessed it, Madhya Pradesh goes to election this year and Shivraj Singh Chauhan faces a tough challenge to return to power for the 4th time in a row. In the days to come, I wouldn’t be surprised if Chhattisgarh too announces a similar bonus on the purchase of wheat and paddy.  
For four years, both Rajasthan and Madhya Pradesh were witness to large scale farmer protests, much of it emanating from farmers anger over the crash in farm prices for two years in a row. While faced with a glut and low prices farmers had dumped their harvest on the streets at various places, six farmers were killed in a police firing at Mandsaur last year. Not to be left behind, the Union government too has swung into action and the policy focus has now shifted to farmers. For four years, there was no talk of farmers except a few times when hollow promises were made but as the government enters the last year before 2019 elections, all eyes are now on farmers.
Interestingly, if the government had continued with the bonus on wheat and paddy it was providing before the NDA government was sworn in May 2014, perhaps the farmers anger on the streets would have been much less. Madhya Pradesh and Chhattisgarh were paying a bonus of Rs 150 and Rs 300 per quintal over the MSP for wheat and paddy. In June 2014, the Ministry of Food and Civil Supplies directed the two states to withdraw the bonus. The State governments were also told categorically that in case they don’t stop paying a bonus over the MSP they would not only have to bear the entire financial burden but would also have to undertake the procurement operation themselves.  
For four years, they wield the stick and in the final year before elections a few carrots are dangled. Even these promises remain unfulfilled. Yogi Adityanath had promised to waive all outstanding loans in Uttar Pradesh but in reality waived a maximum of Rs 1 lakh per small farmer. In Punjab, Capt Amarinder Singh had promised to take on farmers debt and also write-off all loans – including from private banks and the nationalised bank – but when in power he has been able to waive only Rs 170-crore bad loans so far. The total outstanding loans exceed Rs 86,000-crore.  
For the first four years after coming into power, all ruling parties simply ignore farmers often creating economic conditions that force them to abandon agriculture and migrate to the cities. Economic policies are designed deliberately to make farming economically unviable. That’s the stick the governments have always applied. Except for a little sop here and there like the introduction of bhavantar bhugtan scheme in Madhya Pradesh no structural changes have come up. On top of it land laws are being conveniently amended to make it easy for the industry to usurp farm land at will. Agriculture in reality is being sacrificed to keep economic reforms alive. As Raghuram Rajan used to say the biggest reform would be when farmers are moved out of rural areas into the cities where cheap labour is urgently required for infrastructure development. 
The slump in prices had certainly aggravated farmers’ anger. But it’s not only low prices that plague agriculture pushing farmers deeper and deeper into a livelihood crisis. The malaise runs much deeper and would require a complete overhaul of policies to bring cheers to the farming sector. But despite the fact that an unprecedented spurt in rural anger has been seen in the past few years with recorded incidents of farm protests multiplying by a staggering 670 per cent, up from 628 in 2014 to a record high of 4,837 in 2016, I don’t think the political parties are unduly perturbed. They know that a few months before the elections, a series of sops can be dangled before the farmers and their vote bank will remain intact.
Will the ensuing 2019 elections see a change? I am not sure. Unless of course the farmers realise that enough is enough. They have no one to blame but themselves. For 70 years, they have been taken for an easy ride by politicians of all colours, from all parties. They have been victims of the universal phenomenon of “elections and farmers”. A few carrots are invariably thrown at them as electoral bait. And they grab it just like the mice is unable to resist the cheese. They have never been seen as the mainstay of the economy in real terms. Farmers have only two roles – as a vote bank and as a land bank.
The day the farmers rise above caste, religion and political ideology and vote as farmers, the political landscape will change. The economic policies will also change the day farmers vote as farmers. Farmers will then be in the driving seat, becoming the pivot of economic growth and development. Till then, they must learn to live with the never ending agrarian distress. They must know that the survival battle they fight every day is actually their own doing. #
चुनावी सीजन चालू है आज किसान महज वोट बैंक हैं Gaon Connection. Feb 15, 2015https://www.gaonconnection.com/samvad/in-election-season-farmer-is-just-a-vote-bank
Categories: Ecological News

Budget 2018: Agriculture too deserves a Dream Budget

Mon, 01/29/2018 - 11:30

This cartoon is by Satish Acharya. 
After two consecutive years of back-to-back drought 2014 and 2015, followed by a bumper harvest in 2016 and 2017, prices for almost all the crops had crashed forcing farmers to dump their produce onto the streets at many a places. As if this is not enough, demonetisation had further hit rural wages. Farmers across the country are unable to realise even the production cost. As per the National Crime Record Bureau this had led to an unprecedented spurt in rural anger with recorded incidents of farm protests multiplying by a staggering 670 per cent, up from 628 in 2014 to a record high of 4,837 in 2016.The slump in prices had certainly aggravated farmers’ anger. But it’s not only low prices that plague agriculture pushing farmers deeper and deeper into a livelihood crisis, it is a whole plethora of structural changes that farming is crying for. In a country where 52 per cent of the population is directly or indirectly engaged in farming, the path to Sabka Saath Sabka Vikas passes through agriculture. 

This is possible only if agriculture too gets Dream Budget. 
Farm incomes had increased by a mere 3.6 per cent in the 2002-03 and 2012-13 period. Subsequently, Economic Survey 2016 had pointed to an average annual farm income of Rs 20,000 in 17 States or in roughly half the country. At this rate, doubling the farm income by 2022 seems more of a guffaw. Considering that only 6 per cent farmers receive Minimum Support Price (MSP) and even that is fixed below the cost of production for most crops, it is high time to shift the policy focus from the existing ‘price policy’ to ‘income policy’. The Commission for Costs and Prices (CACP) needs to be renamed as the Commission for Farmers Income & Welfare with the mandate to provide a minimum assured living income of Rs 18,000 per month to each farming family.
A vibrant agriculture will serve as a pivot for revival of rural economy thereby creating employment opportunities for rural youth.  In Punjab, over the past few decades, worsening agrarian distress coupled with growing unemployment had led to frustration among the rural youth. With not much scope for alternate means of employment or income generation, rural youth took to drugs and alcohol as the means to seek solace. In such a depressing scenario, agriculture alone has the potential to reboot the economy. If only the government was to create gainful employment in agriculture, by providing a higher income into the hands of the farmers, more demand could be created thereby leading a revival of the industrial and manufacturing sectors. But unfortunately, Indian planners follow the dictum given by the credit rating agencies, which in guise serve the interests of their corporate masters. I hope the Finance Minister is able to emerge out of the rating agencies web.  
To begin with, I have two suggestions: To realise a better price, investment priority should aim at creating more market infrastructure. At present, there are only 7,600 APMC regulated mandis against the requirement of 42,000 mandis within five km radius. Budget 2018 can easily make adequate financial allocation for setting up 20,000 mandis to begin with. The State should be under an obligation to purchase any farm commodity for which an MSP has been announced and that is brought to the mandis. This does not mean that the Centre should pass on the buck to the State governments by promising to meet 30% of the total cost of undertaking such a mammoth operation. Unless the entire cost is borne by the Centre, the promise of procuring all crops will remain an empty rhetoric.
Secondly, taking a cue from Telengana to make up for the crop losses in the past two years, there is a need to provide an economic stimulus package of Rs 4,000/acre per season for farmers. In Telengana, all farmers, irrespective of how much land they own, are eligible to receive an incentive of Rs 8,000 per year. This should not only be expanded to cover the entire country but a mechanism be evolved to include tenant farm workers as well. Further, like in Karnataka, dairy farmers too need to be given an incentive of Rs 5 per litre for milk. All trading in e-NAM (National Agricultural Market) platform or under bhavantar schemes should be linked to procurement price and not model price as is the practice. Model price is in reality a distress price, a smokescreen for exploiting farmers. #

Categories: Ecological News

Glitz apart, WEF won't end poverty

Sun, 01/28/2018 - 11:49

I fail to understand. If poverty reduction, elimination of global hunger and removing inequality remains the three most important challenges the world faces today, why do the world leaders need to show up at the lavish annual World Economic Forum (WEF) jamboree at the picturesque town of Davos in Switzerland? 
Isn’t it ironical that to reiterate their commitment towards a more equal world they need a platform which is basically looking to grab every possibility to multiply business and profits? For several years now, I thought the international charity Oxfam has very loudly conveyed how the worsening inequality was the outcome of a very neo-liberal economics that actually sucks wealth from the bottom into the pockets of the top 1%.
With each passing year, inequality has been only worsening. In its latest report, released a few days before the world’s who’s who among the richest assembled for the WEF 2018 at Davos once again, Oxfam told us that in 2017, the year that just passed by, 82 per cent of the wealth generated globally was cornered by the top 1%. In India, a Credit Suisse report had shown that 73 per cent of the wealth generated was gobbled by the top 1%. In a country where 290 million people officially live in poverty, this shocker of a data should have swayed the dominant narrative on how to reduce the growing inequality and ensure the fruits of economic growth are equally distributed. Instead, in the quest to race towards a higher GDP growth, more of the same remains the economic prescription.   
In 2013, Oxfam told us that world’s top 100 families in 2012 earned $ 240 billion more that particular year, which was good enough to wipe out global poverty four times over. In other words, removing global poverty and hunger, which was always on the top of WEF rhetoric, required only $60 billion. I thought this can be better achieved by launching a frontal attack on poverty eradication rather than pumping more money into the hands of rich corporations by way of tax cuts as well as by providing direct financial stimulus and then wait endlessly for the money to trickle down.
What to talk of $ 240 billion to remove poverty four times over, the world doesn’t even have $ 60 billion to eradicate poverty from the face of the planet we are repeatedly told. But over the years, especially after the economic meltdown in 2008-09, the United States and the European Union have been aggressively printing money through a very sophisticated process of Quantitative Easing (QE), a term that camouflages printing of surplus money to buy government debt. Knowing how a staggering amount of surplus money is being printed, I tweeted that year to the then US President Barack Obama to print an additional $ 120 billion and give it to a group of international organisations (with backing from G-20 countries) to launch a time bound programme to remove poverty two times over. As expected, I didn’t get any response but later I learnt that more than 65 economists had launched a campaign for ‘Quantitative Easing for People’ in 2015. That’s the way it should have been. Poverty and hunger could have become history by now.
Although there are different estimates of how much of surplus money has been printed since the economic meltdown, in Sept 2017 the US Federal Reserve began cutting down on its $ 4.5 trillion portfolio of bonds and other securities. In the EU, between Mar 2015 and Mar 2016, a total of Euro 700 billion was pumped in the economy at interest rates of 0.2 to 2 per cent. The European Central Bank will now resort to reducing the bond buying spree from Euro 60 billion to Euro 30 billion a month. Bank of England too has meanwhile pumped in 445 billion Pound Sterlings. Much of this easy money is invested in the stock markets in the developing economies. How easy it is can be gauged from a statement of the US Fed Chairperson who has been quoted as saying that as long as everyone is having a good time there is no plan to withdraw it.
Now let us look at global warming. The accumulation of wealth into the hands of a few is also the reason for the global climate going topsy-turvy. Author Amitabh Ghosh tells us that there is a direct correlation between wealth and emissions. “The West’s wealth is fundamentally built on greenhouse gas emissions.” He thinks the Paris Agreement is trying to do a few minor fixes while preserving status quo. He is so right. Greenhouse Gas Emissions emanating from an industrial model of economic growth that the world has been blindly following has led to forests disappearing at an alarming rate, oceans being exhausted of the fish stocks, crop fields turning barren and sick, water becoming scarce, and environment being polluted beyond redemption.
Several studies show that as much as 41% Greenhouse Gas Emissions come from intensive agriculture, livestock and forestry. Undeterred by the massive damage already inflicted by intensive farming practices, and to ensure that the world does not see a repeat of the 2007 food crisis, business leaders from 17 private companies had announced at the 2009 World Economic Forum the launch of a global initiative — New Vision for Agriculture — that sets ambitious targets for increasing food production by 20 percent, decreasing greenhouse gas emissions per ton by 20 percent, and reducing rural poverty by 20 percent every decade. Again, instead of reducing the emissions, the effort seems to be to aggravate the climate crisis.  

The 17 agribusiness giants include Archer Daniels Midland, BASF, Bunge Limited, Cargill, Coca-Cola, DuPont, General Mills, Kraft Foods, Metro AG, Monsanto Company, Nestlé, PepsiCo, SABMiller, Syngenta, Unilever, Wal-Mart, and Yara International. It is therefore quite apparent that at the global level both the political as well as the business leadership is looking at the business opportunities that the crisis offers. Corporate agriculture coupled with free trade, again designed to benefit the top 1%, and has already displaced millions of small scale farmers in developing countries forcing them to swarm into the cities looking for menial jobs.
UN General Secretary Ban Ki-moon had the courage to say at a panel in WEF 2011: “The world’s current economic model is an environmental suicide. Climate change is showing us that the old model is more than obsolete. We need a revolution on how best to make the global economy sustainable.” His clarion call went unheeded, and this wasn't unexpected. # 
Glitz apart, Davos and WEF won't end poverty. The Week, Jan 28, 2018
Categories: Ecological News

Celebrating the misery of small and marginal farmers.

Sat, 01/20/2018 - 10:09

Farmers displaying the cut-out of the cheque they received as farm loan waiver in Punjab -- Pic Hindustan Times 
Whenever the government waives crop loans or provides any subsidy to farmers, it makes a show of it. Minister are seen handing over certificates or cheques to farmers at ceremonies akin to post-match presentations at IPL. Such ceremonies are now being held at district level with state ministers, MPs and MLAs in attendance to show how farmer friendly the government is. 
But when it comes to industry, huge tax concessions, bank write-offs and doles are provided quietly. In fact, many a time massive subsidies in the name of incentives for growth are covered so much in secrecy that it takes quite an effort to dig out the figures from official records. I have never seen captains of the industry lining up to receive the write-off certificate from the Finance Minister or the Commerce Minister. In fact, the impression being given is that writing-off of corporate bad debt leads to economic growth. Waiving farmer’s outstanding loan is perceived as credit indiscipline leading to upsetting of the national balance sheet.
Launching the first phase of the much awaited farm debt waiver scheme in Punjab with a lot of fanfare, Chief Minister Capt Amarinder Singh handed over huge cut outs of cheque amounts to the beneficiary farmers. While popular singer Gurdas Mann regaled the audience with Punjabi songs, I don’t understand the logic behind such pomp and show. After all, the 47,000 marginal farmers who received cheques, totalling Rs 170-crore, will end up facing more humiliation in their villages where they will now be called karzai. Living with this unfortunate tag for the rest of their lives will not be as easy as we may think. Even the appeal made by the well-known economist Dr S S Johl requesting the government not to ask the beneficiary farmers to make a beeline for receiving the debt waiver cheques fell on deaf ears.
A few days after the loan waiver song and drama event Punjab quietly announced a power subsidy of Rs 748-crore to the industry. 

Some months back, it was Uttar Pradesh Chief Minister Yogi Adityanath who handed over certificates, depicting the amount of farm loan waived to farmers, at a glittering ceremony. Home Minister Rajnath Singh too was present in one of these ceremonies. This was followed by loan waiver events at the district level where the state ministers presided. A total of Rs 36,000-crore was waived off by Yogi Adityanath’s government benefitting farmers to a maximum of Rs 1 lakh. In Maharashtra, another Rs 30,000-crore of outstanding farm loan has been promised. In Karnatkaka too, Rs 6,000-crore of waiver was announced by the state government.
Put together, farm loan waivers given by various states add up to approximately Rs 75,000-crore.  Even Part II of the Economic Survey for 2016-2017 presented in August, raised concern over farm loan waivers stating that these waivers eat up as much as 0.7 per cent of the GDP. Let’s not forget that despite the concern expressed in the Economic Survey a lot of political mileage was extracted by the state governments which demonstrated their benevolence towards farmers by turning the waiver ceremonies successfully into public events. I wouldn’t be surprised if taking a cue from Punjab where singer Gurdas Mann took to the stage, in future loan waiver ceremonies are converted into mega events with Bollywood film stars invited for dance performances.
While the entire effort is to publicly express love for the farmers showing how much the government actually care for farmers, nationalised banks quietly wrote-off corporate bad debts of Rs 55,356-crore in the first six months of this financial year, 2017-18. As I said earlier, this write-off was hidden from public glare and it required a newspaper to use the Right to Information (RTI) to obtain the data from the Reserve Bank of India. I therefore don’t understand. Why does it require the political parties to make a pomp and show for farm loan waivers while keeping their extra love for companies under wraps? Why talk of only the political parties, even the media and mainline economists (read the Economic Surveys) only brand farm loan waivers as an economic disruption. The basic objective is to demonise farm loan waivers.
A year earlier, in the financial year 2016-17, banks had written off Rs 77,123-crore of the bad debts. In the past 10 years, banks have struck down a total of Rs 3,60,000-crore of corporate bad debts. What to talk of public events where corporate bigwigs are made to queue up to receive cheque cut outs of the write-off amount, even the name of the beneficiary companies are never disclosed. The Ministry of Finance as well as the Reserve Bank of India have repeatedly appealed to the Supreme Court not to disclose the names of the corporate bank defaulters as it would not be desirable for economic growth. In reality, the Finance Ministry does not want the chief executives of these defaulting companies to be known as karzai. Naming them would end up publicly shaming them.  Different strokes for different people.
A majority of the farmers who have ended their lives actually take the fatal route to escape the humiliation that comes along with indebtedness. What hits most is when they see their names and pictures plastered in tehsil headquarters. The defaulting farmers’ pictures on posters look as if they are militants wanted by the police. And then, when the banks come and take away their tractor and puts them on public auction or for that matter any other movable property, it becomes difficult for the defaulting farmer to even look into the eyes of fellow villagers. Their children are normally scoffed-off and taunted as belonging to a karzai family. The social ostracization that follows is what forces them to commit suicide. I therefore don’t know how the farm loan beneficiaries in Punjab would be able to stand up to the trauma inflicted by the large cut outs handed over to them.
Celebrating the misery of small and marginal farmers is not an expression of care. It only adds to the humiliation a farmer is being forced to live with. Let’s not forget, a farmer is born in debt and dies in debt. #     
Categories: Ecological News

A walk through one of the richest village in India.

Wed, 01/10/2018 - 17:43

A beautiful view of the snow-clad Kiari village in Shimla district, Himachal Pradesh, India. The imposing structure in the centre is the village temple. 
From a distance it looks like any other village in the hills. Perched on the mountain slopes, Kiari is a tiny village in the Jubbal-Kotkhai belt of Rohru tehsil of Shimla district in Himachal Pradesh. What makes it however a lot different from the image of a village that we normally carry is that it was once rated as the richest villages in Asia.

To see how the one time richest village in India (now some people rate it as the second richest, the richest also I am told is situated in the Shimla district), I drove to Kiari. About 45 kms from Shimla. The road winds its way through the mountains to reach the village. As my car enters the village market, the very first impression I get is that it is a well-to-do village. The village market is much cleaner then what I have so far seen in the hills and it opens into a relatively well kept parking lot.

Village market, Kiari

I am greeted by village elders. After exchanging pleasantries, we walk into the village to take a look. I am pleasantly surprised to see the tile-paved pathway that leads to the village temple. This was certainly beyond my expectations. I wasn't expecting a neat and well-kept pavement and that too in a village far away from the madding crowd. I asked Sunil Chauhan, an orchard owner, as to what actually brought prosperity in the village. I was expecting him to tell me how the introduction of apple cultivation changed the face of the village -- from subsistence to prosperity. Instead, what he told me was not what I could have ever imagined: "Almost 99 per cent of the males in this village had been in Government service. My father was a teacher in a Government school, and my grandfather too was in government service. So is the case with most people in the village." Being in Government service provided them an assured regular income or in other words ensured income security. Apple cultivation of course subsequently added to the village wealth.

Adds Devendra Singh Chauhan, an ex-President of the Gram Panchayat: "Because of income security, this village could take risks and exhibit entrepreneurship. Before apple cultivation came in, which of course brought in additional wealth, we had earlier taken to cash crops like potato. The average landholding size then was about 20 bighas, which is quite a handsome landholding in the upper hills. It has now come down drastically." Accordingly, most village elders were well-educated, with quite a few getting educated from Lahore at that time. Better education coupled with economic security helped them to take advantage of several government schemes.

"At that time it was a Union Territory (UT). Since 1962, Kiari had in a number of government surveys come up as a relatively prosperous community. It was primarily because money deposits from the village had swelled that a subpost office was opened in Kiari way back in 1967. It was in 1981-82 declared as "Bachat Gram" (a village with high post office deposits). I decided to visit the post office, again a very well kept office. Jagat Ram, the Gram Dak Sewak, had been in service for 39 years. He told me that the post office now serves some 29 villages in the near vicinity. "Not many letters come in now, and most of the dak is for the schools and banks." The village has two branches of banks -- the State Bank of India and a Cooperative bank. Even now the village post office carries more deposits than the two banks.

      Sub-Post Office in Kiari started in 1967. 
The imposing structure of the village temple speaks a lot about the prosperity in the region. It is now being renovated, a part of the lofty complex has already been decked up. Besides, the village has a primary, middle and a high school. It has a primary health center and a veterinary center plus a telephone exchange. In fact, much of the necessary infrastructure already exists in this village. "Most children in the government schools are of the Nepali labour. Our own children are mostly studying in Shimla," informs Mr Chauhan. I then decided to sit with some village elders for a discussion. We walked to the very well kept house of a prominent resident, Rajender Chauhan. From the discussions it emerged that despite the prosperity, most young people had moved out. They preferred to live in the city. Most residents who had stayed back were the elderly parents. When asked why is that the youngsters are attracted to the city life, Mr Rajender explained that one indication can be drawn from the fact that it has become difficult to find matches for their children. "You may be earning Rs 1-crore from apple cultivation but the girls no longer are interested. They want their prospective groom to be in a job in a city, even if it is earning them a fraction of what managing an apple orchard would give." How about the girls from the village? What about their matrimonial preferences? "They too prefer a groom from the cities."  

This certainly is a worrying trend. Most sociologists would ascribe the lack of opportunity in the villages to be the primary reason behind the push migration that we generally encounter. But what I witnessed in Kiari is a strange phenomenon wherein people are even moving out of prosperous villages. In fact, this trend is visible all across the apple belt of Himachal Pradesh. I can understand why hundreds of village in economically insecure Uttarakhand region lie abandoned. That's a typical case of push migration, where people move out in search of better prospects. But how does one define the relatively prosperous villages in upper region of Himachal Pradesh too turning into ghost villages? # 

Categories: Ecological News

Applying a tincture of iodine here and there will not address the agrarian crisis.

Fri, 01/05/2018 - 12:20

Pic: DNA
The below then expected performance by BJP in keenly-watched Gujarat elections has been largely attributed to farmers’ anger arising from the continuing agrarian crisis. While the effort by the BJP leadership is to play it down, the rebuff by rural Gujarat can fuel a nationwide electoral trend bringing out the stark India-Bharat divide.
In the run up to 2019 parliament elections, there are still 8 more assembly elections to go. Among these are States like Madhya Pradesh, Rajasthan, Karnataka and Chhattisgarh, where the rural vote share is very large. These are also the States where farmers’ protests have been quite regular and predominant, with farmers even resorting to stopping vegetable and milk supplies to the urban centres in Maharashtra and Madhya Pradesh leading to gunning down of five farmers in police firing.
What has been happening in Gujarat is happening across the country. In fact, the rural distress is more pronounced in other parts of the country reflected in soaring farmer suicides numbers. Maharashtra alone has recorded 1,497 farm suicides since the loan waiver was announced six months ago. Two years of back-to-back drought, followed by the demonetisation blow has taken a severe toll of farm incomes. While the cost of production has increased, farmers are unable to get a reasonable price often forcing them to throw their produce onto the streets.
Even in Gujarat, farmers were unable to realise the minimum support price of Rs 4,450 per quintal for groundnut, often selling at prices ranging between a minimum of Rs 2,675 per quintal to a high of Rs 2,750 per quintal. In Cotton, the prices had slumped from Rs 6,000 a quintal a couple of years ago to around Rs 4,400 per quintal. Although just before elections, the government declared a bonus of Rs 500 per quintal for cotton and another Rs 50 per quintal for groundnut, farmers do see through the intent which is primarily aimed as an election sop. This is an encouraging trend. If farmers across the country were to express their anger by exercising their franchise against the ruling dispensation then only the ruling elite will understand that something is terribly going wrong in the hinterland.
Let’s look at some other crops. For urad dal, against the MSP (including bonus) of Rs 5,400 per quintal, farmers across the country suffered a loss varying between Rs 1,000 to Rs 1,800 per quintal.  For Soyabean , the prices had prevailed at a low of Rs 2,660 and 2,800 against the MSP of Rs 3,050 per quintal. In case of Groundnut it becomes clear that farmers have in reality been forced to incur a net loss of Rs 1,740 per quintal. For moong, against the MSP of Rs 5,575 per quintal, farmers earning was in the negative, a loss of more than Rs 1,600 per quintal on an average. Wheat, paddy, bajra, sunflower, mustard, onion, potato and tomato did not fare any better.
The slump in prices had aggravated farmers’ anger. But it’s not only low prices that plague agriculture pushing farmers deeper and deeper into a livelihood crisis, it is a whole plethora of structural changes that farming is crying for. Applying a Tincture of Iodine here and there will not address the agrarian crisis; it requires a radical overhaul with the economic growth model shifting to rural India. But what I read in the newspapers as the bold measures Finance Minister Arun Jaitley is expected to announce in the forthcoming budget to fix rural distress does not give me hope. It only shows that the mandarins in the corridors of power have not come to grips with what ails agriculture.
The proposal to direct State governments to procure all crops from farmers for which MSP is announced so as to provide a ‘minimum assured price’ to farmers is in reality a meaningless initiative. It is simply an exercise to pass on the buck to the state governments, who will then be alone blamed for farm distress. Absolving itself of any responsibility, the Centre knows that the state governments are already under pressure to raise finances for the promised farm loan waivers, where is the money for undertaking procurement. 
There are 24 crops for which MSP is announced every year but in reality only two crops, wheat and rice are procured. To some extent, cotton and sugarcane growers also get assured prices. But considering that only 6 per cent farmers get the benefit of MSP, the challenge to extend the MSP regime to the remaining 94 farmers who are dependent on the exploitative markets, is certainly monumental. It cannot happen unless the government shifts its investment priorities to constructing APMC regulated mandis. At present, the country has only 7,600 mandisagainst the requirement of 42,000 mandisin five km radius. It requires shifting bulk of the Rs 6.9 lakh crore allocated budget for constructing more mandisinstead of more roads.
Increasing credit to farmers by another Rs 1 lakh crore or extending the eNAM (National Agriculture Market) platform too is aimed to help commodity trading and not farmers. More of the same is not the answer. #
Is the Centre paying attention to the lessons from Gujarat? DNA, Jan 2, 2018. http://www.dnaindia.com/analysis/column-is-the-centre-paying-attention-to-the-lessons-from-gujarat-2572198
Categories: Ecological News

The new Gujarat Model: When farmers express their anger through the electoral franchise

Wed, 12/27/2017 - 10:44

Not the right way, but this is how Gujarat farmers have been expressing their anger over low prices. This didn't work. Voting against the ruling party at the recently concluded State Assembly elections did work. All eyes are now on the Budget 2018 where the Government is expected to announce some 'bold decisions' to fix rural anger. -- Indian Express photo
"I hope the anger that Gujarat farmers have demonstrated is also reflected in other parts of the country in ensuing elections. Only then will the ruling parties accept that something is terribly going wrong in the hinterland."The Congress' revival in Gujarat stunned many even though it lost the assembly election to the Bharatiya Janata Party. The Congress made maximum gains in rural Gujarat. Of the 109 seats in rural Gujarat, the Congress won 62. In contrast, it only won 15 seats in the cities. Why did rural Gujarat oust the BJP after voting overwhelmingly for the party in the 2014 Lok Sabha election?Devinder Sharmabelow, distinguished food policy analyst, agricultural scientist, author and activist, tells Rediff.com's Syed Firdaus Ashraf why rural Gujarat voted against the BJP.Going by the election results there appears to be tremendous anger among farmers against the BJP. Is it so?One of the hidden pointers of the Gujarat election is the agrarian crisis that has been ignored for the last several years. This vote is primarily a reflection of that.In April, you told me 'Farmers are dying and the country is rejoicing'.
Do you think the pollsters and exit polls missed this issue when they conducted their surveys?
Let us for a moment keep the pollsters aside. The problem is the mainstream economists and the media. They have deliberately ignored agriculture, taking it as a downmarket subject all these years.The result is that when farmers were dying, we were rejoicing. Even now we talk of the revival of the economy without even mentioning the grave tragedy on the farm. The high growth rate does not reflect the kind of deep tragedy that we witness on the farms.We were applauding this model as if rural India does not exist. Ignored all these years, what do you expect the farmers to do?The only way to express their anger is through their right of franchise. They have to wait for five years to exercise their vote, and the Gujarat farmers have done it. I only hope the anger that Gujarat farmers have demonstrated is also reflected in other parts of the country in the ensuing elections.Only then will the ruling parties accept that something is terribly going wrong in the hinterland.What are the reasons for the anger? The Gujarat model of development was considered to be an ideal one.The Gujarat vote is simply a reflection of the agrarian crisis going on across the country. It is only because of elections that it has come into visibility (now). What is happening in Gujarat is happening across the country, and much worse in certain regions.Secondly, the Gujarat model of growth was banking on the growth of heavy industries which means giving them concessions like cheaper credit, land almost free of cost, giving electricity, water and so on and so forth. And this happened at the cost of rural areas.How long can you convince people that growth is happening when they know their household economy is drying up? How long can you tell people that we are trying to go for 8 to 9 percent growth when they know how difficult it is becoming for them to run their home? This rosy picture has been relentlessly created by the media and mainline economists. They are the real culprits as they painted a rosy picture when the realities were quite different. Even now, after the Gujarat verdict, mainline economists are not willing to accept that the shift in votes from the BJP in the Saurashtra region is a reflection of the direct link with rural anger. The other category you spoke about are pollsters. They would have reacted on this issue if the media had been talking about. I don't think it is fair to expect some kind of brilliance from the pollsters. After all, they too come from the same urban mindset.Since the media did not show rural distress, the pollsters too ignored it.Till the Saurasthra results came out, the media was not even willing to acknowledge that there was something terribly going wrong in rural Gujarat.One report said Gujarat's farming sector witnessed a remarkable 8.15 percent Compounded Annual Growth Rate between 2012-2013 and 2015-2016, and now that has fallen. Is it true?Gujarat had good rainfall for 9 years between 2002 and 2011. Once the rainfall became scanty, the crisis worsened. The crisis was there, but the mainline economists as well as the policy makers refused to see it. It's like the pigeon closing its eyes when a cat approaches.What made matters worse was the crash in prices. After two years of back to back drought, 2016-2017 has been awful for farmers. Prices of all commodities have crashed in the market and the government has no idea what to do about it.The government has belatedly launched procurement at MSP (minimum support price) for farmers for cotton and groundnut crops, but in reality several reports have shown that farmers are getting 20 to 25 percent less than the minimum support price.Why have the prices of commodities crashed?Prices of some crops are internationally linked. Let's say, cotton. Prices of cotton have crashed internationally too. Two years ago, cotton prices were around Rs 6,000 per quintal. Now it has come down to Rs 4,000 per quintal. During election time the government announces Rs 500 per quintal as bonus. Do you think farmers don't realise that it is an election sop? Look at the prices of groundnut, and pulses. This year the prices have crashed.Across the country, name any crop -- potato, onion, pulses etc -- and you'll find the prices are on a downward slide.Demonetisation had a role to play, but all put together farmers continue to get distress prices. So what do you expect farmers to do?For three years farmers suffered silently and the government looked the other side. If you remember, at the time of the 2014 elections, Prime Minister Narendra D Modi had himself promised that if elected his government would give 50 percent profit over the cost of production as recommended by the (M S) Swaminathan committee.     That is one reason why rural India voted conclusively for the BJP in 2014. Farmers are still waiting for the promise to be delivered.Are Indian farmers so well informed that they know about the Swaminathan report in detail?Yes, they know. The one whose shoe is pinching, only he knows how painful it is. Farmers have been living with the crisis all these years, and they know where the solution lies. They know that they are being denied their rightful income.Modi promised them that his government will give them 50 percent of profit. Farmers could see a ray of hope in what Modi promised. But eventually, the government went to the Supreme Court and filed an affidavit saying it cannot give what it promised. The farmers know this news too.The major farmers' union in Gujarat is the Bharatiya Kisan Sangh, which is an affiliate of the RSS (Rashtriya Swayamsevak Sangh). The vote in Saurashtra clearly shows that the farm distress is so acute that even the BKS did not go along with the BJP. Or perhaps their hold on the farmers has weakened.Surely, the farmers didn't go by the BJP's electoral promise. Let's accept: Farmers are not that foolish. They too can distinguish between a jumla and a commitment. The agrarian distress is pan-India.Take Madhya Pradesh, for example. Not a day passes when farmers are not on the streets protesting against the government. The problem is not only in Gujarat, but all across the country.The BJP has certainly pushed farmers' issues to the backburner all these years. This goes well with the dominant economic thinking that believes in pushing farmers out of agriculture.In fact, there is another school of thought that says it is cheaper to import food then to grow it within the country. Then RBI governor Raghuram Rajan, for instance, used to say that the biggest reforms would be when farmers are moved out from the villages into the cities, because cities are need of cheaper labour. Cheaper labour is required for infrastructure, real estate and highways. In other words, agriculture is being sacrificed to keep economic reforms alive.This flawed economic thinking is what has acerbated the agrarian crisis. Successive governments have therefore been creating economic hardship that forces farmers to quit farming.A Gujarati friend told me farmers are partly to be blamed as they switch between cotton, pulses and groundnut only in Gujarat, and therefore they are in distress. They do not go for other crops. Why?Please tell him to go and farm in a village. These are the fellows who have done equally more damage to farmers. This urban thought, which I find quite widespread, comes from a complete disconnect with the realities of rural India.If you think getting farmers out of distress is so simple, why don't you go and demonstrate it yourself? Tell your friend to stay in the village for some time at least. Sitting in the city and romanticising about crop diversification is easy. It's like Mungeri Lal ke Haseen Sapne.If it was so easy, you think the farmer wouldn't like to try it? But the reality is that whatever a farmer tries, what he doesn't know for sure is that the match is already fixed. He will continue to harvest losses.The Narmada waters have reached Gujarat. Why has this not benefited the farmers of Gujarat? Also, we have schemes like the Pradhan Mantri Fasal Bima Yojana. Are these schemes not working on the ground?I find this argument absurd. Educated people tell me that farmers are now getting crop insurance under the Pradhan Mantri Fasal Bima Yojna so they should not be in crisis anymore.What they don't realise is that the Bima Yojna only covers crop losses. It is not an insurance for profit. After all, doesn't a farmer need to rear his family, provide education to his children, take care of the health expenses of the family?Did you ever hear that the MSP a farmer gets includes house rent, education allowance for children, medical reimbursement? Why not? Isn't a farmer a citizen who needs to get the basic entitlements that everyone in the city gets?Bima Yojna is required, but it is like a social investment aimed at taking care of his crop losses. It is not an income for the farmer. Don't the salaried class insure their vehicles, houses and also have life insurance?Does it mean if their life and health is insured, they should not get monthly salaries?Why do they then need the 7th Pay Commission? Let's be fair in our arguments. My question, therefore, is, if you are giving farmers crop insurance that does not mean you are giving him his rightful income. What farmers need is income, a profit over his cost of production.To keep food inflation in control, successive government have denied farmers their rightful income. This is what I call as Farm Theft. Just like 'wage theft' in the case of workers, farmers in reality have been penalised to cultivate food.We must understand that what farmers need is income, and no amount of diversion into issues like mandir, masjid, Aurangzeb or Padmavati can address the terrible farm crisis. They had no other way to express their anger, but to vote.Are you saying that the Pradhan Mantri Fasal Bima Yojana is not working?While the intent may be correct, the implementation has been awful. The details that are available in the public domain clearly show that the Pradhan Mantri Fasal Bima Yojana has actually worked more as profit insurance for the insurance companies.Roughly of the Rs 22,000 crore (Rs 220 billion) premium amount they collected, only Rs 8,000 crore (Rs 80 billion) was the amount spent on compensating crop losses. The remaining Rs 14,000 crore (Rs 140 billion) plus was neatly pocketed by the companies.I think there is no lucrative business than crop insurance. It was a bonanza for the insurance companies, not for farmers. #Source: Why BJP lost rural Gujarat Rediff.com Dec 21, 2017http://www.rediff.com/news/interview/must-read-why-bjp-lost-rural-gujarat/20171221.htm

Categories: Ecological News

Absolute power comes from absolute control of food --- My interview

Thu, 12/21/2017 - 10:11

Is this what we have done to our planet? This painting has been done by the French artist Michel Granger. 
The industrial food production model, developed in the United States and Europe since WWII, and lately widely adopted in South America, is unsustainable and is destroying both the planet and its inhabitants...
Industrial food production has already struck a death-knell for the planet. The large high-input, high-yield monocultures, coming equipped with heavy farm machinery running on subsidised fossil-fuel, and laced with potent agro-chemicals have not only depleted soil health, but polluted oceans, rivers as well as ground water and has massively contaminated the environment. The decimation of plant and animal biodiversity, and the loss of accompanying ‘traditional knowledge’ has in turn impoverished communities that have lived in synergy with the bio-resources. With the natural resource base highly plundered over the past few decades, modern agriculture has left behind a trail of sorrow.
Whether it is Argentina and Mexico where a circle of poison escalated by the application of chemical pesticides, including the controversial Glyphosate pesticide, has caused extensive suffering among women and children; or in India where aerial spray of Endosulfan in cashew plantations in Kerala for some decades had inflicted innumerable diseases/disorders among the people, and lately a train carrying cancer patients from the food bowl of Punjab, engaged in high-intensive agriculture, toneighbouring Rajasthan has come to be known as ‘Cancer Train’, the devastation chemicals have left behind is enormous. With six companies controlling pesticides production, and the same companies also claiming intellectual propriety over ‘improved’ seeds, the control over agriculture becomes complete.
The emergence of commodity value chains and eventually the way the international trade regime have been designed, developing country farmers have been forced to de-skill, abandon agriculture and migrate to the cities in search of menial jobs. Still worse, the forceful opening of the developing country trade barriers, and consequently inundating with highly subsidised food supplies, has already turned 105 of the 149-odd Third World Countries into food importing countries. Thank heavens, US President Donald Trumps has dumped the trans-Pacific and trans-Atlantic trade treaties otherwise the damage would have been irretrievable. The North would have produced food, and the South would have been perpetually standing with a begging bowl.
What role/responsibility does it play/have on the hunger crisis in many regions, on climate change and on farmers crisis in many part of the globe?
The demise of the farmer has been the biggest casualty that a combination of industrial agriculture, emergence of factory farms and suitably-tailored trade policies has inflicted on the developing countries. After the US, followed by EU and now the developing countries, farmers are being pushed out of agriculture. Way back in 1996, the World Bank had directed India to move out 400 million people – double the combined population of UK, France and Germany – from the rural to the urban areas in the next 20 years, by 2015. International Financial Institutions and Credit rating agencies have been reminding time and again. Successive governments have been merely following the directive, creating policies that make agriculture non-economical in the bargain so that farmers have little choice but to quit agriculture. Farming is increasingly coming into the hands of Corporate.
Producing food and then carrying it all the way to different parts of the world has created ‘food miles’ which exacerbates global warming. But ever since the Global food crisis in 2007/8, the multinational companies are now in a race to grab farm land. Studies have shown that an area equivalent to the cultivable area in China and India has already been purchased or leased in Africa, South America and Asia. On the contrary, in my understanding the best way to address hunger for any developingcountry is to have production by the masses, and not production for the masses. Small farmers need to be gainfully employed, in the sense that farming is turned into a profitable enterprise. At a time when the world is in the midst of a jobless growth, only a sustainably vibrant agriculture can now provide livelihoods, save environment, reduce Greenhouse Gas emissions, and thereby boost the global economy.
With severe droughts for many months now, millions of people across the world are facing starvation and water shortages (Horn of Africa, North-east Nigeria, Yemen etc). How did we get to that point again?
In 1987, ten years after Pol Pot had ravaged through Cambodia, I landed in Phnom Penh, the capital of the country, then called Kampuchea (I was then a Visiting Fellow to the International Rice Research Institute (IRRI) in the Philippines). For some years, Kampuchea was reeling under a famine-like situation. I found the international media had flocked to Kampuchea expecting an official declaration of a famine. When an American journalist asked me whether I expected Kampuchea to undergo a famine I replied it is unlikely considering the country has been able to cultivate a lotof rice. The journalist was disappointed, and I recall vividly what he told me: “Then, there is no story for me.”
The fact is that Kampuchea had lost all its rice varieties during the time Pol Pot was on a rampage. Luckily, the country had deposited some 150 of traditional rice varieties with IRRI, before Pol Pot emerged on the scene. IRRI had returned the seed varieties back to Kampuchea, which had made it possible to undertake rice cultivation on a large area. Why am I narrating this incident is that although the United Nations has already declared that more than “20 million people, across four countries, face starvation and famine” and it requires an emergency aid of $ 4.4 billion to meet the extraordinary humanitarian challenge, what is needed after the emergency situation is taken care-off, is to address the “root cause of famine”. Political stability apart, the region also needs investment in livelihood options which means primarily focusing on restoring agriculture, livestock and the rural infrastructure.
Revival of traditional agriculture, depending on the water availability, and providing adequate farm prices and market infrastructure is what is immediately required. Like Kampuchea, the only way to providing a lasting solution is to bring back agriculture.
What are the responsibilities of governments and their public policies and choices? In the West?
It is clear that the international community hasn’t drawn any lessons. Let me give you one example. At the World Economic Forum 2011 at Davos, business leaders from 17 private companies announced the launch of a global initiative — New Vision for Agriculture — that sets ambitious targets for increasing food production by 20 percent, decreasing greenhouse gas emissions per ton by 20 percent, and reducing rural poverty by 20 percent every decade. While all the targets seem very attractive, the fact remains that world does not need to produce more. As per USDA, the worldalready produces food for 13.5 billion people, which means for double the existing population. Roughly 40 per cent of the food produced globally is wasted every year. The challenge should therefore be to drastically reduce food wastage rather than to raise production thereby causing more environment depletion.
The 17 agribusiness giants include Archer Daniels Midland, BASF, Bunge Limited, Cargill, Coca-Cola, DuPont, General Mills, Kraft Foods, Metro AG, Monsanto Company, Nestlé, PepsiCo, SABMiller, Syngenta, Unilever, Wal-Mart, and Yara International.
Well, this shouldn’t come as a surprise. Every global crisis provides an opportunity for business. Multinational giants are quick to grab it. In the years to come, the political leadership across the world had welcomed the initiative not realizing that it is the industrial farming model that has created the global food crisis in first instance — soil health devastated, excessive mining of groundwater has dried aquifers and chemical pesticides have contaminated the food chain. As if this is not enough, theG-20 countries are further trying to push in policies that provide marketing support for their industrial agriculture. For instance, the emphasis is on forcing the developing countries to open up for Foreign Direct Investment (FDI) in multi-brand retail. Basically, the governments in the West are only trying to prop up the commercial interests of its MNCs.
No lessons seem to have been drawn. While agriculture has turned into one of the biggest contributor of Green House Gas Emissions (GHG), a recently CGIAR (Consultative Group on International Agricultural Research) study indicating 41 per cent contribution coming from agriculture, livestock and forests, the world is literally heading towards a tripping point. But I don’t see any international effort being made to reverse this damaging trend. Even the Paris Accord is almost silent on this. Thereason is simple. The global agribusiness industry controls the global climate change narrative too. Business as usual is not the way forward. But the report of the IAASTD, jointly conducted by 400 scientists from across the globe, and supported by World Bank and UN, continues to gather dust.
Rich and industrialised countries should not use multilateral platforms to treat the developing countries as mere markets. Just like developed countries first created an appropriate environment for building self-sufficiency, they should also allow developed world to attain domestic food security.
In India? 
From an era of food self-sufficiency, India is gradually moving to be an economy of dependence. Successive governments have pushed in policies that promotes privatization of natural resources, takeover of farm land, integrating Indian agriculture with the global economy, and moving farmers out of agriculture – in essence the hallmark of the neo-liberal economic growth model. The result is clearly visible.
According to Down to Earth magazine, food import bill for 2015-16 stood at Indian Rs 1,402,680,000,000. This was three times more than the annual budget for agriculture. Successive government’s have actually been following a policy prescription that was laid out by the World Bank as early as in 1996.
A former vice-president of the World Bank and a former chairman of Consultative Group on International Agricultural Research (CGIAR), a body that governs the 16 international agricultural research centers, Dr Ismail Serageldin, had forewarned a number of years ago. At a conference organised by the M S Swaminathan Research Foundation in Chennai a few years back, he quoted the World Bank to say that the number of people estimated to migrate from rural to urban India by the year 2015 is expected to be equal to twice the combined population of UK, France and Germany.The combined population of UK, France and Germany is 200 million. The World Bank had therefore estimated that some 400 million people would be willingly or unwillingly moving from the rural to urban centres by 2015. Subsequent studies have shown that massive distress migration will result in the years to come. For instance, 70 per cent of Tamil Nadu, 65 per cent of Punjab, and nearly 55 per cent of Uttar Pradesh is expected to migrate to urban centres by the year 2020.
These 400 million displaced will constitute the new class of migrants – agricultural refugees. Twice the number of people that are expected to be displaced by global warming worldwide are alone be pushed out of agriculture in India.
Sacrificing agriculture is being seen as a pre-requisite to economic growth. Economic reforms need cheaper labour and it is believed that people displaced from agriculture will be able to meet the ever growing demand for daily wagers. This comes coupled with economic policies that aim at reducing fiscal deficit and the current account deficit. Just like the controversial austerity measures in theEuropean Union, the thrust of the economic policies is to cut down on social security, public investment in food, agriculture, health and education. International Financial institutions, credit rating agencies and the multilateral trading organisations have all been pushing for fiscal reforms. This is accompanied with increasing privatisation of natural resources, encouraging corporate agriculture and as well as pushing for public-private partnership projects. I don’t understand the blind acceptance of apolicy directive which actually reduces dependence on domestic strengths, including the massive labour force, and instead shift to displacing a large percentage of the population from the rural areas.
For a country like India, which has 600 million people directly or indirectly engaged in agriculture, I don’t see any merit in a demographic shift. With the world facing jobless growth, and India being no exception, sensible economics tells us that the effort instead should be to make farming more profitable, more economically viable thereby providing gainful employment in the rural areas. Agriculture alone has the potential to revitalise the Indian economy, be a pivot of inclusive growth. What India needs is a production system by the masses, not production for the masses. Whether it is the US or EU, the fact is that their trading interests lie in capturing the huge domestic market that India provides. Unfortunately, India refuses to capitalise on its unique available strength that its vast market provides, and is willingly adopting policies and approaches that actually ends up benefit the western economies. All that India is likely to be content with is the trickle down impact.
Why are farmers considered differently - often despised - while they feed the world? Where does it come from and since when?
Since the days of the Great Depression, the US has been pushing for policies that push farmers out of agriculture. Several writers have shown that the US actually pushed nearly 100 million people out of farming in the beginning of the previous century. The dominant economic thinking was to drastically cut down on the work force engaged in farming, and shift them to industries, as the only viable way to achieve economic growth.
After the 2nd World War, US agriculture turned increasingly towards intensive cultivation, depending on application of chemicals, mostly left from the war, which in turn increasingly brought the American agriculture in corporate hands. What was achieved in the US, was quickly followed in Europe after the war. Industrial production of food, heavily subsidised, required more access to markets and therefore agriculture was aggressively pushed to be part of the World TradeOrganisation (WTO), which came into existence in 1995. Studies have shown that in the past 30 years, more so after the Structural Adjustment was unleashed by the World Bank/IMF, 105 of the 149 countries classified as Third World Countries had turned into food importing countries.
Whatever remains by way of protection for agriculture in some developing countries now faces erosion at the altar of international treaties like Regional Comprehensive Economic Partnership (RCEP), being currently negotiated among 16 countries, including the 10-member ASEAN block and China, New Zealand and Australia. Zero per cent duty import for 92 per cent of traded goods is being negotiated, and this is likely to open up the flood gates for cheaper and highly subsidies imports, of both agricultural and industrial goods in countries like India. It will take away the right from India to protect and ensure the livelihood security of its 600 million farmers.
Over the past few decades, the economic thinking veers around the idea that farmers are no longer required. As you rightly said, they are simply despised. In India, farmers are considered to be a burden on the economy. Successive governments are looking for opportunities to offload this burden as quickly as possible. The economic thinking is that the monumental task of producing food canbe performed by the corporations. Trade policies, intellectual property rights, and investment treaties are enabling concentration of rights into the hands of powerful corporations. Not more than 6 to 7 multinational corporations engaged in agribusiness are actually formulating global policies that merely strengthen their control over food. The G-7, the G-20 and platforms like the World Economic Forum are merely facilitating the process of control of food. Academia, and policy makersthe world over are simply creating justification and logic for the entire food chain to be passed on into the hands of a handful of corporations.
Food is the most powerful weapon. He who controls food can easily manoeuvre the national sovereignty, including that of the emerging countries. Unfortunately, the world has failed to lean from what India’s first Prime Minister, Jawaharlal Nehru had once said: “It is very humiliating for any country to import food. So everything else can wait but not agriculture.” On the other hand, the world is being further divided. I have often feared that we are coming to a stage when the North will be the food provider. And the South will be standing with a begging bowl.
As I have often said: “Absolute power comes from absolute control of food” So far, the food chain is in the hands of three dominant players. The technology companies, like Monsanto and Bayer; the trading companies – Cargill and ADM; and finally, the Supermarkets – Wal-mart and Tescos. I see a convergence taking place in the years to come. Three players are swiftly merging into one – the future food factories. Many universities in US/EU have come up with designs for the future foodfactory, but the most worrying part is that the World Bank is considering how to subsidise it. It will be the end of farmers then. It will also be a curtain raiser for the romance of food that we have all been indulging in.
In your opinion, what is the consumer's power - in the rich countries, in India, in China - to change things for the better ? How ?
Ever since the notorious application of Agent Orange in World War II, the powerful pesticides industry has managed to hoodwink the regulations to pollute the ecosystems and leave behind a trail of destruction. The Poison papers, a compilation of 20,000 documents that expose decades of collusion between the pesticides industry and regulators has been prepared by the BioScience resource Project. A recent University of Sheffield points to the ‘ecological footprint’ left behind by ahugely unsustainable farming system that has shrunk the future of British agriculture. But still, the international community is unwilling to work towards a pesticide-free world.
It is here the consumers can make a difference. If the consumers demand pesticides-free food, there is no reason why the retail trade will not be able to provide. Once the demand for pesticides-free food picks up, I see no reason why farmers will not increasingly come under pressure to cultivate without the application of pesticides and chemical fertiliser. The sale of organic food in recent years haspicked up enormously in America, Europe and India. The sale of A2 milk too has picked up in recent years. I see this as a major development which can shape the future of agriculture, move towards sustainable farming systems.
Consumers rejecting genetically-modified food is primarily the reason why Europe has stood as a wall against the import of GM food from America. European governments are refusing to buckle under pressure to allow for GM foods. This is because of the public pressure. The challenge therefore lies in educating the consumers, creating wider awareness about their food habits. Once the consumers realise that they are responsible for the environmental damage the world is facedwith, they will change. They are willing to reduce their ‘ecological footprint’. #
This interview by French journalist Catherine Andre was done in Aug 2017
Categories: Ecological News

Punjab turns into a graveyard for farmers

Mon, 12/18/2017 - 12:16

Pic courtesy: Tribune
Punjab, the food bowl of the country, is faced with a paradox of productivity. Ever since the launch of the Green Revolution in 1966, Punjab has been producing a record grain surplus year after year, and yet it has over the years turned into a graveyard of farmer suicides. There is hardly a day when reports of farmers committing suicide do not appear in Punjab newspapers.
Take a look at the food procurement figures for 2017-18 marketing year. Of the total wheat procurement of 308.24 lakh tonnes, Punjab had contributed 117.06 lakh tonnes, thereby providing more than 37 per cent of the country’s wheat requirement. In case of rice, for which the procurement season is still in progress; Punjab has already contributed 174.35 lakh tonnes till Nov 28. This is 67 per cent of the total rice procurement of 258.18 lakh tonnes. In other words, Punjab continues to be the top contributor to the national food kitty. Whichever year, and the extent of climatic aberrations, Punjab has dutifully delivered food for the country.
Now hold your breath. A bumper grain production year after year belies the grave tragedy that has been worsening with each passing year. According to a survey conducted by the Punjab Agricultural University, as many as 16,000 farmers and farm labourers have committed suicide in the past 17 years, between the year 2000 and 2017. This comes to an average of 900 suicides per year. Of these, 83 per cent committed suicide buried under mountain of unpaid debt, and 76.1 per cent owned less than 2 acres of land. Every third farmer is below the poverty line. Still worse, nearly 66 per cent of these farmers and farm labourers who took their own lives were young. Surely, like all young, they too had a dream. But what made them to abruptly put an end to their lives?
Take the case of these two brothers -- Roop Singh, 40, and his younger brother Basant Singh, 32. Both jumped into the Bhakra canal a few weeks back. They were residents of Patiala district in Punjab. Both the brothers together owned 2.5 acres of land and were cultivating another 30 acres on contract. But unable to generate any profits, the outstanding debt continued to swell. While the two sons ended their lives in November 2017, their father too had committed suicide some 10 years earlier, in 2008. Two generations of the family were consumed by the scourge of mounting farm debt.The tragedy that struck the family in Punjab symbolises the agony that the entire farming community is living with. Those who have refrained from taking the extreme step are no better. They continue to somehow survive, living in acute stress, mental agony, depression and surviving hoping against hope. Still, the bigger question that remains unanswered is how can the food bowl turn into a hotbed of farmer suicides? How can Punjab be in the deadly grip of an unending agrarian crisis?
That such a tragic serial death dance is being enacted in a state which is considered to be the most prosperous as far as agriculture is concerned tells us clearly that the crisis is the outcome of an inherently flawed high crop productivity linked intensive farming model. I have heard agricultural economists and policy makers often shift the blame to low crop productivity, failure to go for crop diversification and lack of irrigation. In a State which has 98 per cent assured irrigation and where the per hectare yields of wheat and paddy match international levels I see no reason why then farmers should be dying.
As per the Economic Survey 2016, the per hectare yield of wheat in Punjab stands at 4,500 Kg/hectare which matches the wheat yields in United States. In case of paddy, the average yield is 6,000 Kg/hectare, quite close to the paddy productivity levels in China. With such high yields and with abundant irrigation available why farmers should be dying? To say that these farmers are lazy, drunkards and do not spend the loans for the purpose they take cannot be true. If it was so, I see no way Punjab could have topped global crop productivity; how Punjab could feed the entire country with its grain surplus every year, and that too continuously for the past 50 years.
Punjab is in a terrible crisis because of the economic and development policies that encourages intensive agriculture. To meet its food requirements, erstwhile Punjab (including Haryana that later split) became the focal point of a highly intensive agriculture, beginning with wheat, rice and then followed with the shift towards cultivation of cotton as a cash crop. While intensive farming played havoc with soil fertility necessitating more application of chemical fertilizers; excessive use and abuse of chemical pesticides has contamination the food chain as well as the environment. The result is that Punjab is fast turning into a cancer hub. 
Still worse, as the PAU report points out, intensive cultivation of cotton subsequently turned it into a suicide crop. The genetically modified Bt cotton, and the resurgence of the white fly insect attack followed by the failure of the crop varieties to withstand pink bollworm attack, added to the mounting debt. In fact, more than 80 per cent of the farm suicides have taken place in predominantly the cotton belt, comprising the six districts of Sangrur, Patiala, Mansa, Bathinda, Barnala and Faridko. Incidentally, these six districts are also the constituency of the two political families – Prakash Singh Badal and Capt Amarinder Singh.
The tragedy is that we haven’t learnt any lessons. While the Ministry of Agriculture and Niti Aayog are pushing for the same policies for the rest of the states, wanting them to ape Punjab’s level of crop productivity, the resulting human tragedy is being simply glossed over. As if this is not enough, the effort now is to push Punjab deeper into the environmentally harmful web of agribusiness, which requires more intensive farming adding to more Greenhouse Gas Emissions. It’s like moving from the frying pan literally into fire.
What Punjab desperately needs is to move away from the intensive cropping system. If we have to save farmers, Punjab has to move towards an ecological sustainable farming system, implemented in a time bound manner. It requires a shift in the research mandate of the PAU accompanied by policies and programmes that encourages farmers to shift without suffering any economic loss. Addressing the sustainability crisis without providing an assured monthly income will be meaningless. Punjab must take the lead by setting up a State Farmers Income Commission, with mandate to work out a mechanism to provide a guaranteed income linked to agro-ecological farming practices. 
Categories: Ecological News

India should blame itself for WTO deadlock over public stockholding

Fri, 12/15/2017 - 16:51

A stitch in time saves nine. That is exactly what India failed to do. The deadlock over a permanent solution to the issue of public procurement of food is the outcome of repeatedly postponing a legal protection measure that India needed the World Trade Organisation (WTO) to put its stamp on.If only India had acted—when it was required to act—there would have been no room for any “deep disappointment” at this stage.At the root lies the temporary reprieve granted under the ‘Peace Clause’ provision that restricts any country to challenge India’s procurement of staple foods for its food insecure population. The ‘Peace Clause’ that was affirmed in July 2014 does provide India an exemption for all times to come, but will for all practical purposes ensure that a sword of Damocles keeps on hanging for perpetuity. Finding a permanent solution to the critical issue was therefore a necessity.The United States has refused to oblige. It is increasingly under pressure from its 30 farm commodity export groups, which have time and again, expressed concerns at India’s “price support programmes that have more to do with boosting farm incomes and increasing production than feeding the poor”. The US is, therefore, keen to see that India dismantles its food procurement operations or is forced to freeze the procurement prices so as to keep it within the prescribed limits. A low price to Indian farmers will be a serious disincentive resulting in a short-fall in domestic production. The US farm export groups see a huge market here. The US has nothing against feeding the poor under the National Food Security Act (NFSA) but want India to source supplies from the US instead.In other words, it takes away India’s right to buy food for the disadvantageous populations from its own resource poor small and marginal farmers at the Minimum Support Price (MSP). Nearly 99.15 per cent of India’s 600 million farmers fall in the category of resource poor.Since India has already exceeded the limit prescribed under the Aggregate Measurement of Support (AMS) for developing countries that treats the procurement price beyond the permissible de minimis level of 10 per cent of the total value of production as agricultural subsidy, India is under pressure to prune its procurement prices. Although India claims that it is still far away from breaching the 10 per cent level, when it computes the agricultural subsidy in the terms of US dollars, the US also knows that when presented in terms of Indian rupees, India has already breached the de minimis level by a whopping 24 per cent in case of paddy and is fast inching the threshold level for wheat.These US farm commodity export groups, which ironically receives monumental federal support every year, have questioned the need to provide any relaxation in current discipline even on a temporary basis. Accordingly, such an exemption will result in more subsidy outgo and result in further damage to US trade interests. There is no denying that the US had more than doubled its subsidy from $61 billion to $130 billion between 1995 and 2010. Further, the US-based Environmental Working Group has worked out that the US paid a quarter of a trillion dollars in subsidy support between 1995 and 2009. These subsidies have not been reduced in the subsequent farm bills, which every five years makes a budgetary provision for farm support programme. Most of these subsidies are presented under the Green Box in WTO parlance that does not require any cuts to be made. India’s food procurement comes under the amber box provisions and requires to be drastically pruned.This was of course well-known. But at the Bali WTO Ministerial in 2013, the then Indian Commerce Minister Anand Sharma initially had insisted that the Trade Facilitation Agreement, a treaty that the developed countries were pushing aggressively, be taken simultaneously with public stockholding of food in India (along with some other developing countries under the G-33 banner).No trade facilitation without food security proposal. But at the final stages, for some strange reasons, Anand Sharma softened his stand and agreed to support the demand for trade facilitation. Although the WTO director general Roberto Azevedo had appreciated India’s position on food security and had agreed to work out a permanent solution in the next four years, by the XI WTO Ministerial in Buenos Aires in Dec 2017, I see no reason why India should have given up so easily.Anand Sharma had made the right noises in the media but when the final moment came, he readily signed the trade facilitation agreement. All he could wrest in the bargain was a four year 'Peace Clause' for the food subsidy issue that is crucial for not only India's food security but also food self-sufficiency.The deadline for bringing each member country on board for a Trade Facilitation Agreement was July 31, 2014. The NDA government had taken over, and like it always has been, India made the right kind of noises but at the end signed on the dotted line.“India has made it clear that state-funded welfare schemes for the poor are non-negotiable, and it is willing to take the blame for delaying WTO’s Trade Facilitation Agreement rather than hurt the interests of small farmers,” the Hindustan Times (July 21, 2014) reported. India, in fact, was threatening to stretch the deadline for launching a new trade facilitation treaty to December 31, 2014, extending it by six months so as to seek an early solution to India’s food security needs in the meantime. Nothing like that happened. Empty warnings remained unheeded.Indian trade officials knew this was the only way to seek a permanent solution. In the same news report, trade officials were quoted as saying: “India’s concern is that once TFA is implemented, none of the developed countries is likely to come back to the negotiating table to discuss food subsidy or any other non-binding outcome of the Bali Ministerial,” Hindustan Times reported.Indian went to the Nairobi WTO Ministerial 2015, led by the then Commerce Minister Nirmala Sitaraman, affirming to seek a permanent solution for public stockholding programmes and a special safeguard mechanism (SSM) to protect small farmers from import surges. Again, loud noises before the conference, but at the end failing miserably to emerge out with some concrete outcomes. A news report in Mint (December 21, 2015) summed up the disappointment: “In the final analysis, it is clear that India failed in its objectives to secure credible outcomes on its demands for SSM, permanent solution for public stockholding programmes for food security... Perhaps this is the first time that India left a WTO ministerial meeting so diminished.”I am, therefore, not surprised to see India returning back from the XI WTO Ministerial empty handed, without a permanent solution for the critical issue of food security.It has all been the outcome of India’s own doing.#
Categories: Ecological News

The black hole of Indian economy

Tue, 12/12/2017 - 14:40
Image courtesy: Newsfirst 
Prime Minister’s Economic Advisory Council chairman Bibek Debroy has stirred a hornet’s nest. Admitting that revenue worth 5 per cent of GDP is lost to corporate tax exemptions, he said unless these exemptions are eliminated, the tax-to-GDP ratio is not going to go up. 
And what kind of tax exemptions are we talking about? As per a reply given in Parliament, Rs 6.11-lakh crore of tax concessions was given in 2015-16 alone. In the 12-year period, between 2004-05 and 2015-16, the total tax concessions given to the industry, earlier clubbed under the category of ‘Revenue Foregone’ in the Budget documents, is almost equal to a whopping Rs 50-lakh crore.
Yes, you heard it right. Rs 50-lakh crore.
This is the black hole of Indian economy. I have still not added the revenue foregone figures for 2016-17 fiscal, simply because the sub-head Revenue Foregone has now been erased from the budget documents. This came after extensive lobbying by some well-known economists who wanted the Revenue Foregone category to go as it brought bad name to the industry. The Finance Ministry complied but it certainly does not mean that tax exemptions have been removed. This is clearly evident from what Debroy further states: “If these tax exemptions were eliminated, the tax-to-GDP ratio will be 22 per cent.” 
For several years now, I have emphasised on the urgent need to eliminate tax exemptions being doled out year after year to India Inc. Some economists had argued that these tax exemptions were necessary to provide an impetus to revive industrial growth, increase manufacturing, boost exports and create jobs. But the industry continues to slog, manufacturing is down and exports are being provided with more subsidies, only 15 million jobs were created in the ten year period 2004-05 to 2013-14, and another 6.5 lakh jobs added in the three year period between 2014 and 2017, India continues to be faced with jobless growth.
If these tax concessions were eliminated and the additional revenue generated was instead used effectively for social betterment programmes aimed at removing hunger, malnutrition and poverty, India could have made poverty history. If the removal of the entire annual subsidy on LPG cylinders, adding to Rs 48,000-crore, is being calculated as a massive financial saving good enough to remove poverty from the country for one year; using the same yardstick my analysis shows that Rs 50-lakh crore given as tax exemption was good enough to wipe out poverty for 100 years.
If even a fraction of the huge revenue foregone had been invested in agriculture; much of the grave agrarian distress that prevails could have been addressed. Agriculture continues to be starved of financial resources, and with each passing year the public sector investment has been on the decline. Of the 3.30- lakh farmer suicides across the country in past 21 years, Punjab alone has recorded 16,000 farmers suicide since the year 2000. While 98 per cent of the rural households in Punjab continue to live under debt, as many as 94 per cent of indebted households have more expenditure than income.
As a result, with incomes declining farm credit keeps on piling. With mounting indebtedness killing farmers, the demand for waiving outstanding loans is met with stiff resistance. Recall, a few months back the Bank of America’s Merrill Lynch had worked out that Rs 2.57-lakh crore of farmers’ loans expected to be waived-off in the run-up to the 2019 general elections, will amount to 2 per cent of India’s GDP. What Merrill Lynch computed was based on a hypothetical estimate, which in reality is not going to happen. So far only about Rs 80,000-crore of farm loan waiver have been promised in UP, Maharashtra, Punjab, Karnataka and Tamil Nadu, only a fraction of it has been actually delivered.
This year alone, Rs 55,356-crore of bad debt of India Inc was written-off in the first six months of the financial year. While Merrill Lynch never told us how much will the corporate tax exemptions add up to in terms of tax-to-GDP ratio, nor did the media hold prime time shows seeking waiver of the debt write-offs, the total corporate bad debts written-off by the state owned banks in 10 years, between 2007 and 2017 swelled to Rs 3.60 lakh. This works out 2.8 per cent of the GDP.
In addition, an estimated Rs 10-lakh crore, and that includes what is being written-off by banks, has been classified as stressed loan. These are being restructured and an appropriate ‘haircut’ is being allowed to settle the amount. A recent news report says that the Stressed Asset Stabilisation Fund, created in 2004, to recover IDBI banks bad loans for instance has settled certain cases with ‘haircuts’ of more than 90 per cent. Haircut basically means the stressed amount that the bank will not be able to recover. I don’t know why a similar haircut is not being allowed to small farmers in Punjab (with land less than 5 acres) who have been denied a loan waiver of Rs 2-lakh if their outstanding loan amount exceed this limit by even Rs 100.
To remove the inherent anomalies a beginning has to be made to restructure the economy. Removal of tax exemptions is the first step. #
Sinkhole in the tax landscape. DNA. Dec 12, 2017http://www.dnaindia.com/analysis/column-sinkhole-in-the-tax-landscape-2566886
Categories: Ecological News

When the dreaded Pink boll worm strikes back

Sun, 12/10/2017 - 10:09

Pic: The Hindu
Former Finance Minister and senior BJP leader Yashwant Sinha decision to lead the Kapus, Soyabean, Dhan (Cotton, Soyabean, Paddy) Parishad protest in Akola in Maharashtra, and the drama enacted over his ‘detention’ and release, has drawn attention to the damage inflicted by a tiny insect pest -- pink bollworm. This dreaded pest – the tiny wily worm that eats the cotton balls, has destroyed nearly 70 per cent of the standing crop in Maharashtra, the country’s biggest cotton grower, and another 20 per cent in Madhya Pradesh, besides causing extensive damage in Telengana, Andhra Pradesh, Tamil Nadu, Karnataka and Gujarat.
Pink bollworm resurgence has been so severe that reports of farmers unable to harvest even a kilo of cotton forcing them to uproot or burn the standing crop have poured in from several parts of the country. In Maharashtra alone, more than 80,000 farmers, till Nov 30, have sought and applied for crop compensation. With Chief Minister Devendra Fadnavis having accepted Mr Sinha’s demand for compensation for the crop losses, the number is expected to swell in the days to come. Former Food and Agriculture Minister Sharad Pawar too has thrown his weight behind the beleaguered farming community, already reeling under a terrible agrarian crisis, to demand an adequate crop compensation package. 
Out of a total of 42 lakh hectares under cotton cultivation in Maharashtra, standing crop in 20.36 lakh hectares in 18 districts has been ravaged by pink bollworm. While the crop loss has been estimated to exceed Rs 15,000-crore, ginning mills too are finding it difficult to source cotton this year. Of the 150 ginning mills in Maharashtra, only about 100 are in operation and that too working at 50 per capacity. The bleak crop prospects have also hit cotton exports. According to industry estimates, the exports this year will be one-fifth less, coming down to 6 million bales (of 170 kg each) against the earlier estimate of 7.5 million bales.
Not only have a surge in crop losses, failure of genetically modified cotton to ward off insect pests also has taken a heavy human toll.  News reports of 50 farm workers succumbing to suspected pesticides poisoning, at least 25 lost their eyesight and another 800 admitted to various hospitals in Maharashtra had come in. Another 6 deaths and hospitalisation of a few hundred more have been reported from Tamil Nadu’s cotton belt – Perambalur, Ariyalur and Salem. The tragedy primarily occurred because the genetically modified Bt cotton crop had failed to resist the dreaded bollworms pests as a result of which farmers have been forced to resort to sprays of deadly cocktails to curb the insect menace.
First the pesticides treadmill, and then the noose thrown by genetically modified crop varieties, I find that like the legendary warrior Abhimanyu in the great Indian epic Mahabharata, cotton farmers are also being pushed into a chakravyuha from which there is no way out. Let me illustrate. Mahabharta tell us the story of valiant Abhimanyu who died fighting while trying to force his way through a chakravyuah. He had learnt the art of smashing through the seven layers of the human chain of the chakravyuah. But didn’t know how to come out. In lot many ways, I find the Indian farmer is also like Abhimanyu. He has been forced to get into a chakravyuah but does not know how to emerge out of it.
As a senior agricultural scientist had once told me: “In the early 1960s, only six to seven major pests were worrying the cotton farmer. The farmer today is battling against some 70 major pests on cotton.” The greater the attack of insect pests, the more is the use and abuse of potent chemicals.Just four years after its release in 2002 with much fanfare, Bt cotton became susceptible to the pest it was supposed to guard against. This was the first generation GM crop introduced by Monsanto-Mahyco. In 2006, the first generation genetically modified cotton was replaced by a still more potent Bollgard-II. As the area under Bollgard-II grew, the Nagpur-based Central Institute for Cotton Research (CICR) first first sounded a warning bell. “There is resistance to Bollgard-II. We have collected some insects. They are eating up the cotton balls,” the then CICR Director Keshav Kranti had told the media. Instead of making an effort to take the farmers out of the chakravyuah thrown around by Bt cotton, the biotech industry is now ready with a still more potent Bollgard-III.  
Even prior to the failure of Bollgard-II recorded by CICR scientists, 80 per cent crop loss was reported in the cotton belt in Raichur in 2014, causing an estimated loss of Rs 40 lakh. In 2015, Bollgard-II failed to protect the crop in Karnataka resulting in a huge crop loss. Over the years, excessive use of chemical pesticides had upset the insect equilibrium as a result of which some of the minor pests turned into major pests. The devastation that followed was seen in Punjab (also in Haryana and Rajasthan) when whitefly destroyed two-third of the cotton crop causing an estimated loss of Rs 800-crore and leading to the suicide of 15 farmers.
Since the days of Bollgard-II, insecticides use has increased from 0.5 Kg per hectare in 2006 to 1.20 kg in 2015. The Cotton Advisory Board in India estimated the cost of cultivating cotton increasing by three times ever since Bt cotton was first introduced in 2002. Farmer suicides have also seen an upsurge in the cotton belt in the same period. But I find no sincere effort being made to emerge out of this chakravyuah.
There are two possible pathways to emerge out of the crisis. First and foremost, is the onus of the entire loss that farmers have suffered should be borne by the seed companies. Although Maharashtra has filed FIR against 5 seed companies that were supplying Bt seeds, the loss burden should not be with the state governments. I do not agree with Sharad Pawar when he says the State should compensate farmers. The makers of Bt cotton seed should pay for the losses. The seed Act also needs to make it abundantly clear.
Second, instead of introducing the third generation Bollgard-III varieties, and thereby compounding the existing crisis, the agricultural research focus should shift to alternative methods. Agricultural universities should be directed to stop any further research on GM cotton, and shift the focus to bio-control and integrated pest management techniques that sparingly use pesticides as the last resort. Already Burkina Faso has shown a remarkable jump of 20 per cent in cotton productivity after phasing out Bt cotton. Turkey too has shown excellent results with IPM techniques. Rejecting GM cotton, and restricting the use of chemical pesticides, Turkey has doubled its cotton yields. #
बीटी कॉटन के चक्रव्यूह से बाहर आना होगा Dainik Bhaskar. Dec 9, 2017https://www.bhaskar.com/news/ABH-LCL-bt-cotton-has-to-come-out-of-the-maze-5765023-PHO.html

Categories: Ecological News