Dilemma of the Indian farmer

Rajesh Ramachandran

Just a couple of decades ago, Odisha was known more for starvation deaths in Kalahandi, Balangir and Koraput than its breathtaking beaches or the architectural marvel at Konark. It’s so no more. Now, Odisha is a rice-surplus state — no mean achievement by any yardstick. How did this turnaround happen? Well, it was rather simple. The government began buying paddy. Rice is Odisha’s staple diet, while it is largely a cash crop in Punjab — but the economics of growing paddy remains the same in these two totally dissimilar contexts. There could be production and supply only if there is demand — routine, assured and unfailing procurement. A cabinet memorandum of the Odisha government last month projected a bumper crop of 71 lakh tonnes of paddy this season. But most interestingly, the note assured that the government would buy everything that the registered farmers bring to the mandis. This promise triggers the Keynesian animal spirits in the rural economy.

The long march of Indian farmers — as producers and consumers — from starvation to surplus, thus, has been through the mandis or primary agricultural credit societies, using the prop of the Minimum Support Price (MSP) offered by the government procurement agencies. It is this mechanism that has produced a mountain of food that is nearly three times the prescribed buffer stock. However, in the din of allegations against protesters hurled by the establishment, there seems to be a screeching strain of annoyance over the problem of plenty. Well, the dismantling of the foodgrain procurement regime is all that it would take to make the overflowing government granaries empty. For, the production of foodgrains, be it in MP, Chhattisgarh, West Bengal, Telangana or Punjab, is dependent on demand. Once the demand disappears, production will automatically come down and a sliding graph often stops only after crashing down.

Somehow, the new farm laws and the agitation against them have been portrayed as a Punjabi-Haryanvi problem, which it is not. The threat of privatisation of the procurement process is a pan-Indian fear. It is private procurement that has failed in Bihar and it is the government one that has lifted a fellow Bimaru state, Odisha, out of starvation. Sure, farmers of Odisha, Madhya Pradesh, Chhattisgarh, Telangana, Andhra Pradesh, Tamil Nadu and elsewhere are not visibly protesting like the Punjabi farmers. But the reason is not lack of fear of the new farm laws, it is something else: Punjabi-Haryanvi farmers have got empowered and informed because of decades of government procurement since the 1960s, and they are obviously more organised than their counterparts in Odisha or Chhattisgarh. Most importantly, they live at the gates of Delhi. The network of Bharatiya Kisan Union’s units across Punjab, Haryana and Western UP is undoubtedly the powerhouse that has electrified the farming masses in these regions, and not without reason.

Change ought to have been brought in through example. A recent news report has gone viral, about a $7-billion food corridor between India and the United Arab Emirates to be run by Dubai Ports World and Dubai Multi Commodities Centre. The government should have linked paddy farmers of Bihar and Uttar Pradesh or vegetable farmers of Punjab and Haryana with the corridor to show how effective an alternative procurement mechanism would be. Instead, a corporate house accused of being the government's crony is setting up storage silos in Punjab and Haryana to get into the foodgrain business. It is this involvement of a certain kind of corporate that makes the farmers wonder whether the procurement is going to get privatised and, thus, compromised.

Of course, this is no argument for the efficiency of the government sector, but it is more about the fear of the unknown future involving players who can leverage power over the Central Government far outweighing the collective bargaining capacity of the farmer unions or local politicians. For, the farmers know well that the crying need of investment in this region’s agriculture is not in the foodgrain business. The mandi-MSP-government procurement system has made foodgrain production a viable enterprise. But vegetable farmers are at the mercy of the vagaries of the market, with insufficient storage facility, holding capacity, cold chain or value addition. So, any informed farmer would have expected reforms in the vegetable farming sector to make it a success. Contract farming has been experimented with varying results, and hence, that also does not hold any special charm because a produce linked to the open market makes contracts less attractive. If the market offers a better price than contracted, obviously the farmer would feel cheated and if the market price falls below the figure put in the contract, contractors could renege, as has happened in the past.

The most glaring example of lack of private investment by mega-corporates, governmental apathy and baby steps being taken by genuine entrepreneurs is the fishing industry. For meagre profits, small businessmen are setting up a cold chain from the coasts to the markets of north India for sea fish, which has long been adulterated with formaldehyde for a longer shelf life. No Gujarati conglomerate has yet invested in taking trout from Manali to Thiruvananthapuram or apples from Kinnaur to Kolkata.

The business model of switching from oil to data in search of mega-profits does not work for farmers totally dependent on government payouts. Oilfields, telecom spectrum, sea ports and airports are public resources that a friendly government can sell cheap, but paddy and wheat are a farmer’s lifeline, which he is scared of losing. In this standoff between the government and the farmers, a genuine dialogue, real assurances and illustrative examples could be the way out. The reassuring response from the Supreme Court has set the tone for a resolution. Now, the government needs to appreciate that the protesters are unions of Bharatiya Kisan and it hurts their children guarding the icy battlefields atop the Himalayas when their parents are called dirty names.

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