Madhya Pradesh farmers' strike: Instead of making glib promises, netas should free farmers of pricing shackles

As India focusses on the tragic deaths of farmers who died in police firing in Madhya Pradesh and the subsequent violent protests in the state, other states — Tamil Nadu and Maharashtra — have been and are in an agitation mode as well. There are state-specific issues in each case — and very real ones — but here is the larger point — no government (state or central) and no political party (whether in power or out of it) really has a clue about addressing the problems plaguing the agriculture sector and farmers.

The Narendra Modi government is probably realising that it is easier to make glib promises about doubling farmers' incomes than to deliver on it and that's simply because it's not something any central government can deliver on its own; state governments need to be on board as well. And the opposition is not realising that merely ranting about the callousness showed by the government and mindlessly repeating demands for loan waivers and procurement price hikes will not do. All it will do is expose the utter bankruptcy of ideas on their part.

The film fraternity has also got into the act. Last year, Nana Patekar and Makarand Anaspure set up a foundation to provide financial assistance to farmers and their families. Akshay Kumar also earmarked Rs 90 lakh for at least 200 farmers' families. They need to be commended for having their heart in the right place, but the problems that farmers face, need solutions. Solutions which are driven by the head as well. They need to become spokespersons for the right kind of policies instead of merely repeating what politicians say.

The violent agitations in Madhya Pradesh have been particularly shocking because just a few months earlier, the state was being toasted for its stupendous performance on the agriculture front — almost 14 percent annual growth for the past five years. But, as Shyam Ashtekar of the Shetkari Sanghatan points out, growth in yields doesn't mean growth in income. NITI Aayog's member, agriculture, Ramesh Chand, pointed out recently, that the farm income per cultivator is Rs 9,761, which means that more than half the farmers will be below the poverty line.

Madhya Pradesh farmer agitation. PTI

Madhya Pradesh farmer agitation. PTI


The pat solution proffered to deal with this problem is to increase the minimum support price (MSP) or bring more crops under its ambit. While this may be needed in some instances — like the hike in MSP for pulses last year to encourage cultivation — there are limits to this. Increase in procurement prices need to be accompanied by steps for procurement by the state, storage and processing facilities and the like. Else, if there is a glut in production, farmers will be forced into distress sales, as is happening in Maharashtra in the case of arhar dal. Out of 20 million tonnes of production, the government bought only 6 million tonnes and that too with deferred payments, Ashtekar points out.

What's more necessary is for farmers to be freed of the many shackles on where and how they sell their produce.

The Modi government has been pushing for agricultural market reforms far more aggressively than previous ones. It has had success in setting up the e-National Agricultural Market (E-NAM). Figures given out by the agriculture ministry in end-April showed that 417 regulated markets from 13 states are part of the scheme, that 42.18 lakh farmers and 89,199 traders have registered on the E-NAM portal and the turnover in 69 commodities notified for trade touched Rs 16,163 crores.

While this is a significant milestone, these are just the initial steps. E-NAM has not yet allowed farmers to trade across mandis. Electronic bidding takes place only within mandis and not even among different mandis in a state and there are reports that in many markets physical trading is being logged as electronic trading. The onus of meaningful implementation lies squarely with the state governments. That also holds true for other reforms relating to marketing, contract farming and land leasing.

But many of these will require going against entrenched vested interests and political elites. It is far easier to announce MSP hikes, even if farmers don't always get more money in their hands.

Ditto for announcement of loan waivers, which precede almost every election. The Congress always makes it a point to boast about its humungous loan waiver during the UPA-1 regime. But as agriculture economist Ashok Gulati pithily said in this article: "If a loan waiver was the solution to the problems of the peasantry, there should not have been any farm distress after 2008-09. But those problems still persist, simply because their answers lie somewhere else."


Unfortunately any criticism of agricultural loan waivers is met with whatboutery over corporate loan write-offs. But even if one concedes that both are equally harmful for the economy, there is ample evidence that loan waivers don't help even the farmers very much.

Take the case of the 2008-09 one. A Comptroller and Auditor General (CAG) report found that 13.5 per cent of loan accounts were denied the waiver though they were eligible for it, while as much as Rs 20.5 crore was spent on waiving debts of non-eligible farmers. Worse, many of them had taken loans for non-agricultural purposes. Debt waiver receipts were not issued, records were tampered in over 2,000 cases with claims totalling Rs 8.6 crore. Eminent agricultural economists like Abhijit Sen and S. Mahendra Dev have cautioned against indiscriminate loan waivers.

The late Sharad Joshi, who set up Shetkari Sanghatan and was an ardent advocate of freeing agriculture of all government regulation, was in favour of loan waivers and restructuring of loans because, he argued, government policies were responsible for pushing farmers into debt. "Whatever a farmer sows, ultimately he reaps debt," he used to say. That is why he was also in favour of waiving electricity dues of farmers. Give farmers freedom and they will not need waivers of loans or electricity dues waivers and would even be ready to pay income tax.

Unfortunately, politicians talk of only one part of what Joshi advocated - the waivers - and completely ignored the call for freeing agriculture. That is why Chand, in his address quoted earlier, railed against political populism spoiling farmers even as there is little progress on marketing reforms.

The laundry list of what is needed to be done to better the lot of farmers is well known but there is little action on this. And that is simply because the returns on populism are immediate and that on investment in infrastructure, extension and research and even marketing reforms come with a lag. When advised to undertake some agricultural reforms, the chief minister of a northern state where agriculture was ailing is supposed to have asked - when will I see the results. When told it will take some years to see the benefits, he dismissed the suggestions and wanted new ones which will show results and get him votes in a few months.

If political parties of all hues are genuinely interested in the plight of farmers, they will sit down together and work out short term and long term solutions. Unfortunately, most of them are like the chief minister mentioned above. The farmer, unfortunately, will be nothing more than a political plaything.

Click here to follow live blog on farmers' unrest in Madhya Pradesh


Published Date: Jun 09, 2017 10:35 am | Updated Date: Jun 09, 2017 10:46 am



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