Linking farming to market won’t help : The Tribune India

Join Whatsapp Channel

Linking farming to market won’t help

The Centre must avoid managing agriculture through the market. It must protect agriculture from the effects of the monopsonistic market structure.

Linking farming to market won’t help


Sucha Singh Gill

There is unfolding of the policy of the NDA government towards agriculture. Contrary to election speeches of Prime Minister Narendra Modi, the government has kept quiet about the Swaminathan Commission report about fixing the MSP of agricultural commodities at cost plus 50 per cent. At the same time, the government has given indication towards reduced FCI operations. It has been in the air that FCI operations will be reduced to 50 per cent in Punjab and zero per cent in Haryana. This has been on the recommendations of the Shanta Kumar Committee report, which has also recommended deregulation of fertiliser prices.

On the stockholding of grains, the thinking is that the state should not procure and hold foodgrains beyond the requirements of the PDS. For PDS, the states are expected to procure as per their own requirements. The Government of India wants to wash its hands of from grain procurement — these are indications that the government wants to manage agriculture of the country through the market where private traders/trading companies will play an important role in the purchase and sale of agricultural commodities.

Even in land acquisition for private business, the government views the public private partnership (PPP) to provide compensation to landowners and pension of Rs 5,000 per month to farmers whose land is acquired and have attained the age of 65. This is a break from the thinking which the country adopted since 1964-65 on the eve of the initiation of Green Revolution. This made the country not only self-sufficient in food requirements, but also piled up stocks of grains much beyond the country’s requirements for public distribution. This policy also helped the large number of small and marginal farmers to stay in agriculture.

With the introduction of new economic policy, the government began to withdraw its support to agriculture. First, it happened with sizeable reduction of public investment in agriculture that led to reduction in private investment in agriculture in 1990s. The area under irrigation became virtually stagnant. There was also decline in the form of support to agricultural research and extension services. In the new policy thinking, the gap was expected to be filled by private corporate capital, both foreign and the Indian companies, through establishment of agri-business, which would promote agricultural research labs.

In between, some expert committee appointed by the Centre recommended to freeze procurement prices in 2002 to link these with the global market. The results of such policy changes proved to be disastrous for Indian agriculture. This put the agriculture of country in the trajectory of slow growth rate and pushed many farmers into viability crisis, especially the small and marginal farmers. A large majority among them were pushed into a debt trap. Nearly 2.32 lakh among them committed suicide between 1997 and 2007, and several lakh farmers were pushed out of agriculture.

The labour absorption capacity of agriculture diminished and became negative.  Along with poor farmers, a large number of agricultural labourers left agriculture and moved to urban areas in search of jobs. A majority of them landed in urban slums. As yet the economy is not ready to absorb such large scale displaced workers from agriculture. The greed of corporate sector to acquire agricultural land for business, industry, mining and real estate displaced many farmers from their place of living and deprived them of their livelihood.

A large number struggles of farming people from different parts of the country led to some reversal in the policies pertaining to land acquisition (enactment of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013); Food Security Act; increase in MSP of agricultural crops; increase in public investment in agriculture; and timely procurement of surplus produce at MSP in states like Punjab and Haryana restored some confidence in agriculture. The growth rate in agriculture picked after 2003-04. Still much more needed to be done to save farmers and farming. At this stage, shift in policy towards more market-oriented management of agriculture will spell quick demise of a vast majority of small and marginal farmers.

The reduction in the quantity of procurement to meet only PDS requirements will force many farmers to sell their produce at a price lower than the MSP. The greater involvement of private traders and trading companies will add to greater fluctuation in prices of agricultural commodities. The prices would fall at the time of harvesting and rise to high level in off-season. This is a mechanism which works for vegetable and fruit prices, where there is neither MSP fixation nor public procurement. This will further make agriculture more unviable for poor farmers. Their land will go out of their hands to bigger farmers and also in the control of corporate farming. The fall in public investment will further lead to fall in private investment. The fertile line will also shift towards non-agricultural uses as poor farmers will be forced to sell/mortgage or lease out their land.

In the long run, the people will be forced to leave agriculture in large number. In between, a large number of farmers deprived of their land and livelihood, will commit suicide. The quick and forced shrinkage of peasantry can create food insecurity in the country. This has happened in many countries. Agriculture cannot be managed mainly through the market.  The market today is monopsonistic in the world. This market form prevails when the number of sellers is very large and the number of buyers is small.  The sellers are forced to sell at cheap rate when harvest is just made. The weak bargaining/stay in power of the farmers leads to distress selling. This happens in India in East UP, Bihar and eastern states where there is no infrastructure to procure grains.

In the larger interest of the country and to avoid a national tragedy of farmers’ suicide, the government must avoid the method of managing agriculture through market. It must put in place a mechanism to protect agriculture from the negative effects of the monopsonistic market structure and provide support to small and marginal farmers to make farming viable and provide them the support of effective public agriculture, research and extension system.

A lot more needs to be done by the government to save water, restore land fertility and develop crop varieties. This requires more allocation of public investment in agriculture. A mechanism has to be created to provide timely and adequate support to farmers whose crop fail due to the vagaries of weather. The present conditions pertaining to the payment of crop insurance and compensation is a cruel joke. The market economy will create further distress. The earlier it is recognised, the better it is for the country and the farmers.

Top News

Cash-strapped Congress gets fresh IT notice of Rs 1,700 crore, say party insiders

Cash-strapped Congress gets fresh I-T notice of Rs 1,800 crore

Ajay Maken addresses a press conference

Arvind Kejriwal's wife releases WhatsApp number for people to send messages for jailed AAP leader

Arvind Kejriwal's wife launches WhatsApp campaign to garner support for AAP leader

In a digital media briefing, Sunita says her husband has cha...

Alka Rai, widow BJP MLA killed by Mukhtar Ansari, says 'justice has been served', visits Ram Mandir

Alka Rai, widow BJP MLA killed by Mukhtar Ansari, says 'justice has been served', visits Ram Mandir

Alka Rai is the wife of MLA Krishanand Rai, who was shot dea...

High alert across Uttar Pradesh after gangster-turned-politician Mukhtar Ansari's death

High alert across Uttar Pradesh after gangster-turned-politician Mukhtar Ansari's death

Umar Ansari alleged that his father was subjected to slow po...


Cities

View All