Economy India
RAJ ARTHA

Agendas for the Indian Agriculture

The survival, sustainability, and creating of an equitable environment for Indian agriculture requires major reshuffling in terms of revolutionizing marketing, diversifying dependent population over it, establishing a regulatory authority for input markets, and massive nurturing of all agriculture-related allied activities

 

In India, price rises and the plight of farmers, both are debated vociferously in the public domain. But, the basic reason for both problems is not different from one another. There is one common causal factor behind both of these. This factor is the acute underpricing of most of the farmers’ produce items. The irony is that this underpricing ultimately results in higher prices for consumers. Many people believe that higher MSP is responsible for food inflation; but, the fact is that the existence of food inflation is not due to a hike in MSP but rather due to higher MRP of all food items and we all know MSP belongs to farmers and MRP belongs to consumers. But we find, there is a huge gap which exists between the minimum and maximum price of almost all agricultural items, which ranges between 50 to 500 per cent.

The irony is that, the Minimum Support Price (MSP) for wheat or any food grains is always being increased, but either in a formality or in a tokenism manner, despite this our English media keep telling these hikes as inflationary ones; they say any bit of MSP hike will further aggravate the food inflation in the country. They do not know the actual dynamics of India’s food market, which almost all the time passes through either a high supply season or high demand season for all cereals, pulses, oil seeds, vegetables, and fruit items.

Again, I would like to mention here that In India, the existence of food inflation is not due to a hike in MSP rather it is due to an inadequate hike of MSP. The fact is that, in India, the minimum support price does not include the total costs employed over the production, and this scenario is found in almost all agricultural commodities. However, in contrast to this, the maximum retail prices in most cases consist of a huge profit surplus. If we never try to know this fact that if you do not give better and cost-plus prices to the farmers, it will badly affect the all future supply chain of the food items which will ultimately augment the inflationary pressure over the food market for all upcoming seasons and so on.

The whole food management system comprised of minimum support price, procurement & transportation of foodgrains and its storage in FCI warehouses and thereafter its distribution through PDS shops, these all are so faulty and subsidy consuming, which have simply made this system a big den of corruption. Second, it never allows to ensure the marketable benefits to the farmers or growers. Talking about food subsidy Secondly, we ignore the fact the choice factor of our consumers, whether living in urban areas or in rural area, whether rich or poor they want their consumption as per their choice, not by compulsion. Even the poor, if he is a sane person, will prefer to have money and spend it to their different consumables, rather than getting the rotten foodgrains on a particular day. Therefore, it is better to raise his purchasing power through availing gainful employment and bringing them under various social security network, which will care his nutrition and also his choice. But, the existing arrangement makes the demand and supply forces of whole food distribution in an ill shaped manner. The existing PDS system, operating under FCI, has already become subject to be scrapped, because it is doing nothing. First it is growing the burden of huge subsidy over the public treasury. Secondly, it is not paying better remunerative price to the farmers, enabling them better incentive for better cultivation and ensuring consistent and regular supply of all food items in the market in longer perspective. Thirdly, the existing system is promoting black-marketing, because of double supply system. Fourthly, it is creating a large corruption ridden structure also.

Food Security Brings Farmers’ Insecurity

The fact is that despite the existence of PDS, the poor do not want to waste their time over making different food cards and wait for the food supplies to reach the PDS shops. They rather prefer to purchase their food items in the open market. Second thing is that a PDS dealer gets a very meager amount as his commission; despite this, he pays a higher amount of bribe amount to the supply inspector and other officials, despite this, he does not want to leave the PDS dealership, why? It clearly means he sells the government supplied food items in the open market and thus make money. The third point, which is very important to understand that the poor food consumer is a food producer also. We talk about the interests of consumers, but we do not talk about the interests of the farmers. Why? If a parallel supply system will continue, the farmer’s produce will become cheaper in the market, and that is happening so.

It is to be known that farmers are getting less but despite this our economy keeps facing the food inflation. It is happening because we do not have any minimum and maximum price cap for various food items. The million dollar question is, despite the high food inflation, why are farmers not getting better remunerative prices for their produce? The MSP has always been criticized that it does not cover real cost of production. During the harvest season, all agriculture produces are found to be completely underpriced. These are sold at prices that are even lower than the MSP, the MSP which is being decided by the government to check fall in prices during the harvest season. No doubt, present Modi government has hiked the MSP of several items, but until and unless they make it law or enable the purchasing of food items not below than MSP during the season period, we can not the check the selling of food grains at below the MSP,

We should know this FCI has no network in many remote parts of the country. so, farmers are forced to sell their produce at very minimal rates in the season. This is the fundamental reason why are our farmers not getting better incentives to produce more. Sometimes it has been observed that when any particular agriculture item becomes dearer, farmers get motivated to grow more, but in the year to come, government does not ensure an arranged mechanism in order to assured better price for them, as a consequence prices started to fall because of over production and again in the subsequent year the farmer gets disappointed and, in extreme cases, everybody knows they commit suicide. We have the onion as a best example. This year, we had very costly onions in the market, for the sake of better profit, famers grew onions on a higher volume, but it resulted in larger seasonal supplies to the markets, resulting fall in the prices. Now we must be ready for the costlier onion in next season, because farmers have lost interest in growing them. Therefore,  it is very necessary to have a price hedging for all agricultural produces of the country, which protects farmers from losses and protects the consumers from under supply driven price rise.

Overall, the so-called Food Security measures actually work as an antidote for the farming community and as a result, the whole food supply system gets hampered. It consumes a huge amount of subsidy and as a result, the non-plan expenditure gets shoot up.

One should be clear in the mind that food subsidy is neither an agriculture subsidy nor even a part of it. It rather neutralises the open market benefits supposed to come for the agriculture. We should know this fact that our agriculture is operated on negative subsidy terms. It means our farmers are not getting even their actual cost of production.

We are not saying that PDS should be totally scrapped. It is, of course, relevant for places affected by natural calamities. It is relevant for the tribal areas, hilly area, desert areas etc. Here, it will definitely help us in providing smooth supply of food grain items. It can be utilised in areas affected by war and war-like situations; it can be used to ensure zero starvation deaths in scarcity hit areas. It should be utilised to provide relief to any rural family affected by any kind of casualty. But, in the normal course, it is better, we have a nationwide mass banquet program, at least in all municipalities towns of the country in order to check hunger and irregular feeding. This would be real food security, which will be called an effective anti-hunger drive. To avail the prepared food will have maximum corruption that would be that the meal will be eaten twice or thrice by the people. But it will not go for storage loss, procurement loss, decay loss, transportation loss, black-marketing and many more kind of corruption for which the food supply sector is crippled under. One who is in dire need, he can go to langar and have his food. This programmes can be spread all over the country with the support of NGOs, religious trusts and voluntary organisations who need to be given additional food stock, which is not being utilised by the FCI.

All above measures will hardly constitute 10 per cent of existing food subsidy amount, which will save a huge amount of public money, which can be spend in raising the productivity and purchasing power of both farmers and rural labourers. Thirdly, it will smoothen the market forces and leave the choice over the consumers. It will resist huge amount of corruption.

When sugar was decontrolled, we never faced scarcity of sugar. At present both producer and consumer are happy in respect of sugar. But now we are again entering into the controlled regime so far food grain is concerned. It will create lots of problem for producers and consumers both, as well as to the government kitty. This policy will not only help the farmers to have their income security, rather it will ensure price stability in the country. During the season period, the government procurement agencies like FCI, NAFED, cooperative organisations and also corporates will purchase foodgrains and other items at cost plus MSP prices and in the off season period, all these agencies start issuing the purchased items in the open market. In both situations, both producers and consumers will have their stability factor.

Noteworthy Points

  1. To ensure cost plus price over all agricultural produces. Other than milk, cotton and sugarcane, rest items have no cost plus prices in operation. There must be declaration of minimum (MSP) and maximum (MRP) for all essential 35 commodities
  2. Declaring agriculture, a profitable profession, no problem in taxing big farmers having more than 50 acres of land and who live in urban areas
  3. PDS system must be exclusively kept for calamity condition and for the remote hilly, tribal and problem areas, otherwise for other areas, there should be mass banquet programme with the help of NGOs, charity organisations and religious trusts.
  4. FCI, NAFED, CWC and other cooperative organisations must have the role of intervening agency. They must use their ware houses, cold storages etc. in order to store the all purchase agricultural produce in the season period. They will issue it in the open market during off season period.

It will secure both the producers and consumer as well as it will bring the demand and supply equilibrium in permanent manner.

  1. There should be strict monitoring over the demand and supply situation of every essential item. During the bad weather period, there must be quick approval of imports. For maintaining stocks of several agricultural commodities on a daily basis, the mandi control regulation must be strictly implemented with the state administrative machinery.
  2. For the poor class, in place of availing cheaper foodgrains it is better to avail them the food allowances, wage hikes, social security cover, food for work and kendriya bhandar/cooperative shop kind of outlets, which must be opened in every village.
  3. All agricultural inputs must be brought under open market regime and it should be free from subsidy. Fertiliser subsidy should be transferred through bank account. For the appropriate pricing of agricultural inputs, there should be  an agricultural input price re

MGNREGA was Designed Badly,
Hence it Proved to be a Big Fiasco

When the UPA government came to power in 2004, its leader Ms. Sonia Gandhi was very much influenced with the jhola-brand NGOs and political activists, both. Sonia was strongly of the view that the economic agenda of the previous ruling government, the NDA, was simply avoiding the human face of economic reforms. To her, the NDA was, in fact, running very fast on the path of the new economic policy, which had been laid out by her party’s previous Prime Minister, P. V. Narsimha Rao. However, the NDA lost the 2004 general elections and on the contrast, the Congress party, which did not have any hope of getting into power in 2004, ultimately was able to find the trust of the poor.

After UPA came to power, Sonia formed a National Advisory Committee, which had members, who had an ideological bond with Sonia. These persons advised Sonia, to take up issues like ‘Right to Information’, ‘Right to Employment’ and ‘Right to Education’, etc. However, in principle, all these program ideas were very significant for social empowerment and development of the informal sector of the country. Though, on the front of ‘Right to Information’, agitations were already going on for the last nine years under the leadership of Aruna Roy.

On the employment front, rural work force was rushing towards big metropolitan cities and various industrial centers of the country under the effect of the New Economic Policy. On the front of education, it was thought out that country must enhance its GDP expenditure ratio over this. Therefore, UPA took all these three agenda on its priority which actually had come to the Manmohan-led government via through the Sonia route. However, Sonia would have never thought, a time will come when these game changing schemes, propounded by her, would prove to be a reason for her defeat in the 2014 Lok Sabha elections.

The purpose of bringing ‘Right to Information’, was to check corruption in the system. The purpose of the Employment Guarantee Act was to create gainful employment opportunities in rural areas and ‘Right to Education’ was brought in, in order to enhance the literacy ratio of the country. For achieving these goals even additional education surcharge of 0.2 per cent was imposed over all existing taxes, to be paid by the public. Out of these three measures, barring the ‘Right to Education’, rest 2 measures in many ways created a catastrophe situation for the Sonia controlled UPA government.

‘Right to Information’ Act enabled the issue of corruption, to come to the forefront, but in place of controlling corruption, this Act proved to be a tool in promoting the activities of blackmailing by some activists over issues of corruption. This RTI Act provided an opportunity to go into the depths of any occurrence of corruption, provided that if any activist desired to do; but after all, it was not instrumental enough to convict any culprit. Actually, this law was more helpful for the people like media persons, who wanted to report about any corruption occurrence. This act might have provided them clues about those cases of corruption, which were underlying or concealed. But in practice, this Act facilitated mostly those NGO activists who were concentrated more towards some targets. In course of time, these NGOs came up with their political agendas too which also proved to be one of the reasons of the defeat of Sonia controlled UPA in 2014.

In place of piecemeal initiatives like RTI, had UPA government started a big campaign over the issue of corruption comprising all legal, institutional and policy measures, it would have a much deterrent effect over this gigantic problem of corruption, which had been rooted in our system from way back to 1960s and have been flourishing in the system every day.

Out of all above mentioned three measures, the most discussed issue MNREGA was regarded as one of the major reasons for the country’s adverse fiscal and inflationary position. When this scheme was being launched, there were many, particularly the social scientists, who chanted many words in the praise of this scheme. Some said that this scheme would be most revolutionary scheme designed for the sake of rural transformation.

These people might have forgotten this fact that the element of corruption which persisted in every sphere of country’s life would ultimately spoil this very buzzing scheme too. The drafters of this scheme were of the view that the legal entitlement of this scheme would ensure its success. Even prior to this scheme, there were schemes like ‘National rural employment scheme’ (NREP) and ‘Integrated rural development programs’ (IRDP), but country had experienced big fiasco of them also. There must be no controversy over the volume and quantum of funds what MNREGA has been allocated during these years; because we think rural sector deserves more funds, which was not possible despite the presence of big socialist slogans earlier. Fact was that the country never crossed 5 per cent growth rate before the NEP( New Economic Policy) period. When the country ushered into a high growth era, it also enabled higher revenue earning for the government and thereafter higher allocation for the rural area was also become possible.

The present Finance Minister, Arun Jaitley says that until and unless we become business friendly, we cannot have more revenue earning, and then the availability of enough resources for the poverty alleviation schemes. Actually this statement of Jaitley does not reflect his original idea, rather it was the mantra of the Congress party which was the motivational point while launching of new economic policy by them. But the Sonia-controlled UPA had perhaps forgotten this point that the increased allocation for rural development cannot benefit the people until and unless they have foolproof schemes, where there becomes no possibility of siphoning of money by the implementing corrupt officials.

Despite the MNREGA scheme having a firm legal platform and series of modification done by former rural development minister like Jayram Ramesh during the UPA-1 and UPA-2 periods, people in general are of the view that MNREGA has become a scheme of sheer looting of public money, which created many side effects for the economy as whole also. Economists openly said that this scheme was responsible for creating economic crisis in the country in terms of unbridled fiscal deficit and inflation both.

This is a very simple theory of economics, if the money invested somewhere, does not produce anything in terms of goods and services; it creats inflationary effect over the economy. This is the reason during the UPA ruling period price rise was in alarming position and administrator like Sheela Dixit, ex-CM, Delhi, has had to say that a MNREGA was responsible for the high inflation.

On the whole, in the absence of a broad vision, administrative reality and foresighted approach, various schemes initiated by UPA Chair-person Mrs. Sonia were proved to be merely populist ones for the electorates of the country, but in fact became annihilator for the country’s economy. It consequently, till the coming of 2014, our country was trapped in vicious cycle of fiscal deficit, trade deficit, food inflation and investment drought. The poor people, who were earlier dancing to the tune of populist measures, now began to cry over the side effects of these schemes in form of growing price rise and unemployment.

Once during a parliament discussion under NDA-2 government, MPs termed this MNREGA scheme an unwarranted scheme for the country. Many MPs termed this scheme as a ‘digging and filling’ scheme which avoids asset creation in the village and over the community sites. The then Minister in charge of rural development, Nitin Gadkari introduced some minor modifications in the scheme; he announced little reshuffling in the expenditure ratio of this scheme. The labour- asset proportion, which was earlier in 60:40 ratio, brought down to 51:49 ratio.

There must be no doubt about this that, the monetary allocation and transfer of resources to the rural areas must be continuously enhanced, but it before this it is very necessary to ensure that this money gets invested mostly over the items of infrastructure building in the rural areas. Infrastructure means, first on social infrastructure like school, hospital, sanitation, home for weaker etc. and second capital infrastructure means road, electricity, bridges, banks, irrigation canals etc.; investment over these items will automatically create employment opportunities as well as enabling creation of asset in the rural areas. Therefore, we urgently need to club all the capital infrastructure schemes such as PMGSY, MNREGA, PMGAY, PMSJRY, and RIDF into one Rural Capital Infrastructure Development Yojana and clubbing all social schemes like Sarva Shiksha Abhiyan, Midday Meal, NRHM, Nirmal Gram Yojana into one Social Infrastructure Development Yojana.

We should not forget this fact that whatever prosperity the rural India is witnessing now, it is because of remittance economy. Thanks to the mobility of labourers market in the country, which provided an opportunity to the millions of workforce in both the domestic and international market? The mass out flux of labourers from the supplier market to the demand market enabled huge influx of money in the rural areas.

One who says that MNREGA has enhanced the living standard of labour population, they are wrong. If each district of the country has a growth center under PURA (Providing Urban Amenities in Rural Areas, a concept coined by A. P. J. Kalam) model, it would have been better step. The way we are discussing skill development through the spread of ITIs in the country, in the same manner, we need growth centre in each district of county. It would have multiplier effect over the rural economy. For this, it is also necessary to prioritize infrastructure development of rural areas as the main base of our rural development.

Our mantra of rural development must be to accompany (1) infrastructure development (2) human development (3) comprehensive social security schemes along with toilet-cum-house for all destitute and landless families of a village; and (4) garnering as much as employment opportunities out of mentioned earlier three points.

Crisis of Agriculture:
Farmer’s Suicide and Land Acquisition

Nowadays we have immense debate over the plight of farmers and crisis in the agriculture. The irony is that country is continuously witnessing suicide attempts made by our farming community.

We all know agriculture, which still remains a loss making profession and even over this hard reality, both the weather God and nature God, time to time use to bring cruelty in form of untimely rains, drought, snow ball, cyclone, etc., which cripple almost all aspirations of farmers who are involved with this.

Farmers’ suicides in India started around year 2000, which have been continuously on the rise. Now, the party, which is ruling both Maharashtra and the Rashtra, both are facing this turbulence which they were once vehemently opposing.

Let us start the issue, which emanated from the Land Acquisition Bill. This Bill was drafted by the previous UPA government after making long consultations with several groups of the farming community as well as with different political groups. The Modi government at the center had slashed the provision of 70 percent consent of farmers clause while acquiring land and in place of this, it claimed to hike the compensation amount by four times the market value of the land. In contrast, the Congress party says that the right to property is a fundamental right, and so is land ownership. So, a fundamental right of a section is violated while protecting the interests of the big corporates.

It is very simple to understand that in the wake of growing urbanization and industrialisation, there is much possibility that in the coming period, land, lying in the urban areas or on the outskirts of urban areas, would become costlier. The land, being acquired by the government or the corporate, starts appreciating in value terms. Though the Modi government later withdrew this Bill, who had earlier clarified that he was not in favor of giving or allotting any acquired land to the corporates, rather land would be utilised in making roads, schools and hospital buildings, irrigation projects, etc.

When we go into the deeper perspective of this Land Acquisition Amendment Bill, many questions arise. First, we have had a long pending issue of land reforms in the country. Once 75 percent of the land was concentrated in 25 percent rich population and 75 percent of the population comprised of landless laborers, marginal and small farmers, have had only 25 percent of land under their cultivation hold. Many efforts by the government as well as by the Acharya Vinoba Bhave sponsored, famous Bhudan Movement could not finish this task of redistribution of land in the country and finally, the goal of land reforms remained unfulfilled and since then it was put away in the cold locker.

Till the 1990s, because of the continuous lowering of land size and turning of agriculture into a less margin profession, this issue of land reform came into the oblivion mode and people automatically got detracted from the profession of cultivation. In the course of time, this issue of land reforms was fade away, and even for the political parties this issue also had no purpose to be carried forward. Now, after a gap of almost two decades of time, this issue of land reforms has been replaced by the issue of land acquisition, which has taken the center stage now. Growing industrialization and urbanisation have made this issue of land acquisition, a very hot one.

Urbanisation and industrialisation have given the opportunity to all those land and its owners located in urban areas or on the outskirts, to be appreciated on a higher note. The land that was valued in lakhs earlier, is now valued in crores. Whereas, the same land lying in remote and tribal areas has not changed much in terms of value. Land is the same but the opportunity and situation are different. On the other hand, the purchaser of land whether it is realtors, developers, or any sort of promoter, after making an investment over this, gets many times more appreciation. So, here both have a win-win situation but the latter is earning many times more profit than the former. So, our point is to first deliver justice to the farmers lying in the remote areas, who are not getting the benefit of an opportunity and who are entangled in the cycle of poverty, whereas the other has availability of opportunity to get unearned profit and the purchaser of land is getting even more than that.

The right to sell land by its owners should be always protected except in some unavoidable circumstances like acquisition for strategic matters or for some national importance work. So, there is no reason behind keeping 70 percent clause. Either you keep a 100 percent clause for protecting the fundamental rights of property or you keep a zero percent clause if you have real urgency for the development. We want farmers should be always given the option to have land during displacement situations. Second, in the case of purchasing of land by the corporate from them, there should be concept of land bank, where purchasing and selling price of land should be fixed by a quasi-judicial authority, in order to repel any point of dispute.

Many people are of the view that after the purchasing and acquiring work of land, generally the corporates do not start their project immediately and they try to just get the appreciable value of the purchased land. I think in this case, if the land purchased for any project is not being utilised within a year, it should have sharing of appreciation value with the previous land owner. It is reported that all around 5 lakh hectares of land have been kept unutilised for the last 10 years, which were acquired for the SEZ ( special economic zone) project. This is just a gross injustice to the farmers.

Under the third option, if the government wants to use the purchased land for community work like building roads, schools, hospitals and laying out irrigational projects etc., it’s okay, but the land owners must have a clear-cut share in the developed land or they must have job quota in the project or they must be kept in the steering committee of the project like that. In strategic projects, there is no controversy.

In all these matters, if the government claims that it is sensitive to the farmers then it should allow all the above options on case to case basis. The problem is that the government keeps saying that it is sympathetic to the farmers and it is ready to pay them four times more than the market value of the land, but in reality, we find that the market rate of agricultural land is not very high; it is hardly in some hundred rupees per sq. yards. So, until and unless farmland is not kept under the ‘land use’ category, it won’t have substantial gain in selling them by the farmers. Only after changing the land use formula, did the prices of urban land become costlier. So, this Modi government has not been able to prove itself that it is really close to the heart of the farmers or it really wants to bring justice to their cause.

We know it very well and it is true to a great extent that the farmers, living in the urban areas or on the outskirts of any urban area, do not want to do cultivation, because cultivation has become costlier as well as risky and also gains are not substantial, so they choose the option of the maximum returns from their immovable property and that is, using it for real- estate purpose. Therefore, in this case, their interests and corporate interests should have equal sharing between them.

Now, coming to the point of making agriculture a profession of gainful employment or a business of substantial margin. In this regard, the conditions are not prevailing in the country. The fundamental policy of our agriculture still takes it as a subsistence profession, rather than a profitable one. The government keeps saying that it is trying to provide cultivators with all kinds of inputs and infrastructure at comparatively lower rates. The fact is that this policy is operational in the country varied from the 1960s when India started its endeavor to become self-sufficient in agriculture production. This was the time when the foundation of the Green Revolution was laid out in the country. Nevertheless, this policy was good for the country in the perspective, that we should have self-sufficiency in food production. But, in the longer run this policy was not proved to be enough encouraging for the producers. Despite many agriculture input schemes coupled with several provisions of subsidy over petroleum, electricity, fertilizer, and seed, in the end, we found, the net gain to the farmers had always been in the negative term.

It clearly means that farmers are completely lacking the motivation and inspiration to continue with their cultivation with any sort of passion. On this count, the present Modi government has been just the same as the earlier governments. This government hiked the MSP of many items in a routine manner by increasing the MSP by 1 or 2 percent. Now in his last year of the ruling term, the Modi government has announced to ensure 50 percent like in the MSP but that has yet to be grounded in real terms.

We know in the case of sugarcane, cotton and milk, farmers get remunerative prices, but the biggest worry for the sugarcane farmers is that despite the reasonable rates, they never get their payments in time.

I think the present Modi government if it sympathizes at all with the farmers; it should immediately ensure that the payments of the cane growers within one week of its unloading at the sugar mills, otherwise it should bear 12 percent interest over this. So far as the other items are concerned, whether it is food grains, oilseeds, pulses, veggies, etc., the MSP prices never cover its cost in any significant manner. It is still influenced by demand and supply situations. We all know in harvesting and plucking season, the oversupply of any produce pushes its prices towards the falling route. If the government purchases these items it through the network FCI and NAFED and stores them properly and scientifically, it would be a big relief to the producers which will also provide them with price security. In the off-season period, if FCI or NAFED starts selling those items in the open market, it could greatly stabilize the prices also.

If the Modi government is really interested in making agriculture a profession of profit it must immediately bring the concept of minimum and maximum price regimes in agriculture so that farmers always take up agriculture just like any other profession. For availing this environment, the government should try to remove all bottlenecks coming in the way of making agriculture, a profession of profit. For this, there requires a huge infrastructure for storing and regular purchasing and selling of food products in the market. We must not forget this point that in the US, only 3 percent persons are indulged in agriculture, who do cultivation, because of the heavy pouring of subsidies by their government, which is even found to be 70 percent of its total worth, whereas in India, farmers do cultivation even with minus 2 percent subsidy actually realized over this.

Money spent on food subsidies should be diverted towards these things, which could provide gainful employment to the unemployed youth, develop human development indices and provide social security to different age groups.

Farmer’s Suicide

Now, we come to the topic of farmers’ suicides across the country. Any incident of suicide is a very pathetic act, but if suicides are being committed by our life saviors, food-providing ‘farmers’, then this act becomes more pitiable and shocking. From the year 2000 onwards, we have seen regular incidents of farmer suicides taking place in the country. It started in Andhra Pradesh, where some cotton farmers committed suicide because of failed crops, which occurred due to the excessive use of insecticide and thereafter, farmers were in a fix about how to pay back their loans to the banks. These sorts of fears led them to commit suicide. Since then we have had frequent and regular incidents of farmer suicides. The biggest irony is that, we are yet to hear when any big borrower of money ever committed suicide. The latest example is  Neerav Modi and Mehul Choksi and old example is the ex-Chairman of the Kingfisher group of companies, Vijay Malaya. He is living abroad and enjoying his life to the fullest despite having debts and unpaid loans amounting to more than Rs. 9,000 core against him and his companies, whereas, a poor farmer, even after taking a loan of just a lakh or two, is made to feel guilty and forced into committing suicide. Small farmers are made to feel like big-time criminals if they are not in a position to repay their loans in time. Our farming community is simple, honest and very sensible, so they immediately get emotional and end up resorting to suicide.

It is the time each and every farmer must be assured that their profession is not either risky or loss-bearing. We have to take resolve to ensure that agriculture is made free from all risks and must be made lucrative in every condition. If we ensure these two things, farmers will stop dying. I think the government should start making agriculture free from all kinds of pessimism and it should openly assure the farming community that if they feel any depression or disappointment related to their profession, they must immediately report to the block agriculture officer. They should not be ‘lured’ or should not ‘succumb’ to commit suicide. The government should reschedule their loan repayments and in the worst situations, waive the entire interest component of the loans. The suicide committed by Gajendra Singh at Jantar Mantar was a wake-up call to start all that is necessary to make agriculture free from any risk and make agriculture as profitable as any other venture.

Last but not least, we must not treat all sorts of farmers, big, small or urban area farmers, in the same category. We must not allow the farmhouse culture of the rich class living in urban metropolis centres to be categorized and clubbed with agriculture farming. Rather we should introduce special luxury taxes on those who have big agriculture properties in urban areas or in Lal Dora areas and also on those individuals who have more than 50 acres of land. They should be asked to file their income returns like everybody else, which won’t be wrong in any way. I think transferring all agriculture subsidies directly to farmers into their accounts is more necessary than depositing LPG and food subsidies in the consumers’ bank accounts.

However, the Modi government, which is continuously being attacked by the opposition over the Land Acquisition Bill, has announced a hefty increase in the compensation amount given to the farmers for their crop damage. It has also relaxed the compensation norms from above 50 percent loss to above 33 percent loss of crops. The crop insurance scheme has also become operational from the 2016 kharif season, which is said to provide a wider coverage than the earlier crop insurance schemes.

PDS—A Big Fiasco

‘India spends about Rs. 1,00,000 crore on PDS food subsidy to provide cheaper foodgrains to the poor people annually. But, the million-dollar question is—Does this astronomical amount of public money really reaches the pocket of the poor people? Despite having a provision of food subsidy almost all urban poor and 50 per of the rural poor go to the open market to purchase their daily food requirements.

The irony is that our political regime never says that the scheme, which they draft, has any political connotation. They all term their scheme drafted for the sake of the people of the country. But, in reality, they all are politically packaged without considering their economic viability, their economic and social outcome and foremost, their leakage-free implementation. Government should be asked this question, how does a PDS dealer sell wheat, just on a commission of 80 paise per kg, whereas he gives a bribe of rupee 1 per kg to the officials of the food department, even he spends more than 30 paise per kg on transportation from the warehouse to the PDS shop. I have witnessed many PDS dealers who buy acres of land every year through their dealership incomes. How is it possible? It can be fairly assumed that they sell the PDS items in the open market, by changing the time of availability, quality and quantity of the PDS items.

Poor people want to make their PDS cards, which nowadays are of various kinds, like red cards, yellow cards, green card, etc. In fact, it is not easy to get any of the cards. There is a long waiting list, as well as rampant bribery, prevails. Many times people hire brokers to get their cards made. So, people have to face many difficulties, while availing foodgrains from the PDS shops. Though it is mostly observed in urban areas, even to a large extent in the rural areas as well that people purchase their consumption items, particularly foodgrains, from the spot market. They do not want to wait, so they rush to nearby grocery shops. In these circumstances, if govt, whether of UPA or NDA really feels that this food security scheme provides food security as well as relief from inflation to the people, then it has only one better option left—either go for nationalizing the whole agriculture sector and food distribution or fully withdraw subsidies from both agriculture inputs and food distribution and make agriculture a profession of profit or give it the status of an industry.

It is attentional here, the government, terms this scheme food security, in fact, it is a ‘food-grains’ security only, it is not a nutritional security. Even at the cost of huge tax money collected from the people this food grain security is not food security, because a PDS shop can never provide quality food grain. Then, what will be of Aamir Khan’s campaign about ‘Kuposhan Bharat Chhodo’. Until and unless the government will provide items like milk, curd, egg, meat, vegetables, pulses and sufficient edible oil to the poor, how will malnutrition be omitted?

But, the government is not doing all these things. The fact is that it is not possible to distribute all these things individually all over the country, as I have said earlier that people want to purchase food items in the spot market and they only need the necessary purchasing power. If the government is able to establish a chain like Safal or Mother Dairy outlets throughout rural India, then this kind of scheme can be availed by the people. As it was earlier seen in the case of edible oils and onion when it became costlier, the NCT Government of Delhi started selling it at prescribed prices through Mother Dairy and Safal outlets in order to provide price relief to the consumers. But no government can always do these kind of things. So, the only practical option left is to ensure it through the market, otherwise, the nexus between corruption and subsidy will continuously remain.

So, the crux point is that the intention of this government is very bad and it is desperate to grab the votes. Nevertheless, voters will have to understand, the controlled shop will never provide them the choice of consumption and opportunities for a better life. And the way the government is trying to manage these things, its immediate effect will come in two ways, first it will have huge inflationary pressures over the economy, which the government already had witnessed in 2008 when schemes like MNREGA and loan waiver scheme pushed up the fiscal deficit from 4 percent to 6 percent, and it resulted in the inflation rate crossing the 19 percent mark. So, this time, the same is likely to happen, and the farmers’ plight will emerge in a new way.

The food security scheme will definitely bring down the open market rate of wheat and rice. There is two reason of this; the first one is who buys cheaper foodgrains from the PDS shop, he does not purchase it in the open market, so demand would be lesser against the available supply, Second the rationed food items may be sold in the open market in order to get the higher market price. It consequently supply will surpass the demand of food grains. So, in both cases, prices of rice and wheat will likely to be less in the open market. These circumstances will deter the farmers because whenever they need cash money, they sell their stored foodstuffs in the open market, but under this circumstance, they will not have better prices of their produces. It will compel farmers to make suicide and self-immolation like that.

At last, in these circumstances, farmers would like to become wage labourers rather than farmers. Therefore, in so many ways, this government is doing a blunder by bringing this food security scheme. At last I would like to say that the food security scheme should be continued, but only in those areas, where natural calamities have come or are likely to come. It should be made operational in remote areas, tribal areas where the market has no access.

Currently, over 50 percent of the food subsidy is being spent in the name of grain to be rotten, storage, transportation of foodgrains and of course mismanagement of everything. It demands a better assessment of whether the government really wants to feed the poor people or corrupt FCI. Despite having a provision of food subsidy today almost all urban poor and 50 percent of the rural poor go to the open market to purchase their daily essential food requirements. Does the government not know this reality?

There are numerous cases of corruption, which are generally being heard and read in media from time and again across every nook and cranny of the country. Take for instance, in Arunachal Pradesh, former Chief Minister Gegong Apong who was the longest-serving chief minister in the country was arrested on August 2010 on charges of PDS scandal. It is alleged that during his 23 years of rule of the state he has been procuring all the PDS food items only to siphon off to the contractor or the intermediaries who sold them in the black market. His long unchecked rule of the state as the Chief Minister has witnessed unabashed corruption and loot of the exchequer which was said to be misappropriation of Rs. 1000 crore.

Even in a state like Nagaland, the country has witnessed rampant corruption in PDS over the past many years. As per the report available, despite the presence of innumerable BPL families in the state PDS food items such as rice, wheat, etc., were not distributed among them for the last 25 years. The government statistics say that every month Nagaland receives about 27,590 quintals of BPL rice, 11,790 quintals of wheat, 13,380 quintals of AAY rice (meant for senior citizens), etc. It is said because of the unholy nexus between the elected representatives of the government, FCI officials and a pocket of middlemen, all these PDS food items meant for the poor people of the state were fallen into the hands of a contractor who was based at Kolkata. Even before these food items reach the local dealers, all PDS food items are sold away directly from the FCI godowns. It’s also found that the contractor who is behind the show earns over Rs. 10 to 12 crore by selling these food items in the black market every month. Such is the degree of corruption involved in the so-called India’s Public Distribution System even in the northeastern part of the country these two examples are only the tip of the iceberg. Apart from this, we all know about two mega scams of food grains in UP.

This article was also written during UPA period; therefore, the context of the article belongs to that period

 

 

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