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Farmers, Economists & Democracy || Midweek Matters 41

03-01-2022published_dt 2022-01-03T07:51:05.125Z03-01-2022 13:21:05 IST
Updated On 05-01-2022 14:26:34 ISTmodified_dt 2022-01-05T08:56:34.336ZUpdated On 05-01-20222022-01-03T07:51:05.125Z03-01-2022 2022-01-03T07:51:05.125Z - 2022-01-05T08:56:34.336Z - 05-01-2022

Hello and Welcome to

Midweek Matters.

I notice that there is an insidious project underway with regard to the now-repealed Farm Laws. The ruling party, an influential section of our economists, a large and vocal section of the urban middle class, and the mainstream media are stealthily, but effectively, pushing a narrative. It is this: that the farm laws were necessary. Agriculture is badly in need of reforms. These laws were in the right direction. They are in the interests of the farmers. A small section, some vested interests to be more precise, have opposed them. And the poor Prime Minister gave in on the eve of important state elections. The discourse tells us how a desirable set of measures had to be sacrificed at the altar of democracy. The country's grand reform project was derailed by an organized and determined minority. In the process, the victorious farmers are shown as stubborn, backward, and incapable of understanding the goodness of those laws. The government is shown as well-intentioned, and a victim of mob politics. Farmers' demand for MSP is demonized as something that messes up with the markets and in any case, is fiscally unviable. Today I want to interrogate this narrative. And show that the farm laws are merely aimed at accelerating market dynamics in the sector without addressing the core issues that plague the agriculture sector in the country. And how this narrative's understanding of agriculture merely as an economic sector, the peasant as only an economic actor, and food as nothing but a tradable commodity is completely flawed. 

The BJP's farmers' wing, the Kisan Morcha, held its National Executive meeting a couple of days ago in Gurugram. One message from it is clear. The Party is reeling under the humiliation meted out to it by the farmers. The mighty Prime Minister's climb down on the three Farm Laws, his apology, and the subsequent repeal of the laws in Parliament is something that the party is not able to stomach. It forcefully evangelized the goodness of the laws. Branded the agitating farmers and their supporters as anti-nationals, terrorists, Khalistanis. But in the event of PM's capitulation, how does one put up a brave face? The Union Agriculture Minister who attended Morcha's meet gave the template. He described the PM's climb down as large-heartedness. Aitihaasik Badhappan. He told the Morcha's leaders that the farm laws were intended for the good of the farmers. But they were repealed because of a small section of the farmers were against them. Don’t miss his insistence on 'a small section.' The PM too underlined in his address to the nation that it was only a small section that opposed them. The Minister gave another dimension to the spin. He said as we are celebrating Azadi ka Amrit Mahotsav, the PM didn’t want any disagreement in any corner of the country! So the task for the Kisan Morcha is to convince the farmers of the country that it was the large-heartedness and benign disposition of the PM as we celebrate the 75th anniversary of our Independence that led him to repeal the laws. Quite a task! 

Farmers don’t write columns in pink papers. Their leaders are not suave talkers like our neoliberal economists nor are they ferocious debaters like the ruling party spokespersons on prime time television. They are not telegenic. So the media space is unkind to their cause. I won’t go into the specific clauses of the laws and how they’re detrimental to the interests of our farmers. There’s already a huge body of writing on this. I will take issue with only two points that our economists put forward. I will take the essay published by Ashok Gulati and Shweta Saini in the Financial Express on 20 December 2021. This is not to single them out for criticism. But only because their writing is very competently articulated and captures the essential elements of the narrative against the agitating farmers. It’s a representative piece of writing. First, let me quote what it said about the democratic process in policymaking.

Especially policy that impacts a sector that is so large and vital to our economy. I was aghast at reading this paragraph. Just see if you also feel the same. This is what it says: "…in a democratic system, policies are not always framed on a scientific basis. They are often influenced by various lobbies, including politicians who, at election times, offer freebies like free electricity, farm loan waivers as 'doles for votes.' This short-sightedness results in suboptimal or even irrational policy choices, which, in due course, harm the economy, environment, and even farmers." 

There’s a dark but undisguised suggestion here that the democratic process is inimical to sound policy. And that elections, which are an essential process of democracy, result in irrational policy choices. Could their words mean anything else? So what do our economists tell us? They tell us that they are the repositories of sound policies and custodians of scientific choices. The beneficiaries of their prescriptions may not even know how much good their prescriptions do to them. A very arrogant view of policy-making typical of neoliberal economists and believers in technoscientific solutions to socio-economic issues. They don’t say it, but they’d be happy if an autocrat is in office and lends their ear to the scientific advice they proffer. In fact, I suspect that our PM must have fallen into some such a trap. Because Chief Minister Modi was a fierce advocate of Minimum Support Price. And Prime Minister Modi didn’t care to share with the nation why, when, and how he got converted to a new position on it. Here’s what he said on MSP as CM and would be PM. Please see this brief clip. 

Any leader, political party, or government with an abiding faith in the democratic process would have encouraged a robust debate on the farm bills inside and outside the Parliament before passing them. This sinister belief that democracy is inimical to sound policy must be behind the hurried passing of bills without a debate. The announcement of their withdrawal was evidently without consulting the Cabinet. It approved the decision post facto. And there was again no debate in Parliament.

Our economists also feel that the MSP is undesirable. This is their reasoning, and I quote Gulati and Saini. "…this will not only mess up the economy but also ultimately turn out to be anti-farmer. The reason is simple: it ignores the basic logic that prices are largely decided by the overall demand and supply." They go on to say that if the procurement at MSP is not severely restricted, and I quote their very words, "giving a better deal to farmers is likely to blow up the fiscal of the central government." Yes, they said it. Their and their cohorts' estimates of how much it costs the exchequer may be disputed. But that’s not the point. The point is the overall attitude of our economists towards agriculture, peasants, and their the human condition in our rural economy.

Let me take you through some important details about our agriculture, the farmers, their incomes, and their predicament. 

It is important to keep in mind that about 54% of the country's total workforce is engaged in Agriculture and allied activities. That means when we deal with agriculture, we are dealing with more than half of our working population. About 58% of our rural households are engaged in agriculture. That means, when we deal with agriculture, we are dealing with 6 out of every 10 families in rural India. Slightly over 40% of our agricultural labor are women. And 30% of our cultivators are also women. Now you begin to imagine the enormity of the section who sustain themselves on agriculture. The number of people, households, elders, children, their livelihoods, education, healthcare, well being. Don’t imagine the sector. Imagine the people. 

Urban India and urbanized intelligentsia need to understand the rural predicament. I will give you just a small set of data to illustrate how unequal their incomes are. And how this inequality has widened over the years. In the 1980s farm cultivators' income was about 34% of non-farm workers' income. By 1993-94 it worsened to 25% of non-farm income. During 2004-05 to 2011-12, there was a slight improvement but no better than 1983-84 level. The growth of inequality is not because the agriculture sector was doing badly. All this happened while the agriculture sector was doing quite well. From being food deficit in the mid-1960s we are now a food surplus nation. We have about 45% more food available in the country per person per annum. Food production has grown by about 3.7 times. In other words, the peasant has given us an abundant increase in food availability. But in return, he is further impoverished. Distress is so much that in the last two decades about 2.5 crore people have left agriculture. Unskilled as they are, they ended up in low-wage jobs in construction and other urban sectors. 

What kind of farmers are these? The all India average of landholding is 1.08 hectares. Small and marginal holdings, that is 0 to 2.00 hectares constitute about 86% of land holdings in the country. A large proportion of the cultivators are unsecured tenants, with little or no rights of title. They still depend on non-institutional sources of credit up to 40%. Another important point to be kept in mind is that only 10% institutional credit is available to allied agricultural activities such as livestock, forestry, and fisheries. No political party, no alliance, and no government can escape the responsibility for this state of affairs in our agricultural sector and for the dire straits of our farmers. Farmers have very little power over their products, no facility to store and wait for better market prices, cannot stave off the rapacious money lenders, the fertilizer and pesticide vendors who advance money for farm operations. Now the farm laws tell them that the government will not give them a support price. To a farmer who cannot really sell his produce locally is shown a promise that he now has a choice and opportunity to sell it anywhere in the country! The farmer who is unable to face a small local middleman is told that a giant corporate will now give him a remunerative price. And is also told that, impoverished as he is, he can take on the corporate in a legal battle if it reneges on a contract. If they are apprehensive, our economists castigate him that they don’t understand how good the market forces are going to be. The latest CMIE study tells us that there is pessimism in our rural areas. The proportion of households that stated that their incomes were higher than a year ago fell from 14 percent in the week ended November 14 to a low 8.4 percent in the week ended November 28. But our technocrats are insensitive to the distress in our countryside. 

Agriculture produce is not just a tradable commodity. It is food. The land is not just a factor of production like any other. It is a live entity and the farmer has an organic bonding and sentimental relationship with it.

Without addressing issues like land ownership, title, availability of dependable seeds, fertilizers, pesticides, irrigation, energy supply, infrastructure, research and development, access to credit, storage, transportation, and a host of other vital issues, the government, and our economists want to address the marketing issues. They want us to believe only marketing needs reform and not the other vital areas.  On the one hand, farmers are told that loan waivers are bad for the economy and the government can’t afford to pay MSP. On the other hand, the central bank data revealed recently that in the period between April 2013 and March 2021, a staggering 10.83 lakh crore rupees worth of nonfarm sector bank loans were waived. This doesn’t inspire confidence about the government in our farmers. 

It’s high time that our union government and the expert economists listened to the farmers, reached out to them to understand their condition. The country would be better off if they give the farmers half the importance that they give to the gods of the market. An angry, disempowered, indebted, miserable farmer does not help the country reach its goal of a five trillion dollar economy.

That’s all we have time for this week. 

I want to take a break as the year is drawing to a close. It’s time for unwinding, reflection, and some indulgence. I will be back again after Sankranthi. See you next year. 

on Wednesday 19th January 2022, as usual in the afternoon, lunchtime at 1:00 o’clock. 

Merry Christmas, Happy New Year and have a wonderful Sankranthi. 

Stay safe and do take good care of yourselves and all your loved ones. 

Until then, Bye.