Sons of the soil

SONS OF THE SOIL –
Farmers continue to commit suicides – may be at a slower pace due to the recent loan waivers announced by successive state governments – TN , UP, Maharashtra, now Punjab , MP may follow and secondly farmers are now busy with the sowing season as due to prospects of good monsoon their hopes have again increased of making it this time. But the last year’s bumper crops particularly in Tur Dal has resulted in heaps of unsold stocks at their door steps and whatever has been sold is at half the price of last year. So there is no end in sight for the rural distress.
Everybody including the governments know the reasons . They have known those for decades but political expediency has always had the upper hand. Giving remunerative prices to farm products or allowing farmers to sell their produce at a prices profitable to them by removing all controls through politically important market mechanisms , would have serious political repercussions .
It would result in inflation which would bring in the wrath of the middle classes ( who are willing to spend obscene amounts on luxury goods and other consumer items but don’t want to spend little more on basic essential food items) . Secondly the political parties across all colours would loose control over the farmers community.
Everybody also knows that Loan waivers is not the solution. Leaving aside the moral angle ( that it sets a bad precedent and encourages farmers to intentionally default,at the same time it is not fair to those farmers who worked hard and repaid their loans on time etc.), it just does not solve the farmers’ problem. At best it provides only a temporary relief in the form of reduced mental pressure on the farmer and providing him access to fresh loan.
It does not provide a long term solution . Because the farmer has to go through the same grind . Take fresh loan, sow the seeds , cultivate the crop , harvest the produce and then what ? Fight and hope for remunerative prices and some how try to fix the maths of income and expenditure. One good year may take him one step forward towards comfortable economic situation but the next bad year due to either draughts or floods or untimely rains or even bumper crop takes him five steps backwards. Progressively things have gotten worse for him in last two to three decades.
The simple facts are
- A land holding of upto five acres is just not economically viable at current level of input costs and productivity. 86% of our farmers fall in this category.
- As institutional finance is restricted to crop loans ( and that too not adequate), for all his personal requirements the farmer is heavily indebted to private money lenders and is not likely to come out of it in the near future
- Allied activities like dairy or poultry farming has provided some relief to a section of farmers but only in a limited way and natural calamities affect these activities also adversely.
- With growth of technology and communications and spread of consumerism a farmers expenses ( or at least his desire to spend) on items like mobile phones,TV , motorbikes , clothes , better education for children and better healthcare etc. are increasing . And why not? He also deserves a better quality of life and access to conveniences provided by technology and nation’s progress.
But loan waivers is not the solution. It certainly cannot improve the dismal conditions of majority of farmers which have continued and aggravated over the decades.
Simple truth is his income has to be adequately more than his costs ( which should include expenses for a decent life style for his family) and should leave him with reasonable surplus .
Is’nt this reasonable? Is’nt this what a small trader to a big industrialist works for and achieves?
Why a farmer who is involved in one of the most important and essential activities has been deprived of this for decades?
Compare this to the obscene amounts earned by film/TV actors, cricket players , fashion models and designers or even item girls . These are all involved in fringe activities – entertainment, sports , fashion apparel etc. The attempt is not to grudge the earnings of these guys but there has to be some parity, some equitability considering the year round hard work put in by the farmer and the huge risks he is exposed to on account of nature’s vagaries and market’s uncertainties.
There is talk of doubling farmers’ income in next five years . This can be done only in two ways – doubling the productivity and /or doubling the price for his produce accompanied by reduction in costs of inputs.
For increasing productivity farmers need better farm practices , mechanization, high yielding varities of seeds , appropriate amounts of fertilisers/ pesticides, stopping soil erosion and improving health of the soil even with help from government.,Individual farmer is ill equipped to do any of these especially when his primary concern is to somehow survive from year to year.
Doubling the prices is unthinkable for any political establishment . Input prices are going to increase and not come down.
There is only one way out as a long term solution. Corporatization. I know lot of people will jump at this suggestion – especially communists and activists who claim to protect farmers’ interests as they have vested interest in continuing present conditions of farmers.
But the truth is we need farming to be done on large scale to become a viable enterprise. Just as a car manufacturer or clothes manufacturer has to achieve break even level and then achieve profitability taking advantage of economies of scale , agriculture should also achieve economies of scale to take advantages of increased productivity with better inputs , mechanization , better storage facilities, better supply chain management , better utilization of manpower, conservation/ management of water – over all professional management.
And individual farmer in his present state just cannot do this. So allow corporates( with maximum 49% shareholdings ) to come in , form companies with farmers as shareholders in proportion to their land holdings . A company owning 1000 ,2000 acres of land can and should invest in modernization of farm activities , take up the storage and marketing and also processing of farm products. The existing farmers should not only be shareholders entitled to profit sharing but also be employed on the farms to ensure regular income for them ( salaries).
It should be part of the deal for a corporate to come in , to invest in providing housing , education facilities and health services to the farming community who will be the share holders.
Benefits to the farmer will be huge – regular income, availability of good basic facilities, share in profits , no need to worry about marketing of produce or its prices etc. Also farmers’ next generation which is currently reluctant to continue in agriculture will be willing to consider this option thereby reducing the problem of shortage of manpower in agriculture.
It holds the potential to completely change the rural scene bringing in prosperity and taking away the distress.
Some people may argue that this can be done by forming cooperatives .But we have seen what happens to cooperatives as politicians jump in and make a mess.
Agriculture should be treated as an industry and those who know how to run an industry should be given the management of this industry with the expertise and experience of the ones who know their soil and who will be allowed to retain ownership and share in profits.
The ownership structure and the compensation to be paid to the farmers in addition to shareholding etc. can be worked out in detail once the principle is agreed upon.
However these changes will need lot of things to be in place. First is the political will to really bring farmers out of present rut. Secondly appropriate changes in the agricultural land laws will have to be made. Thirdly adequate safeguards will have to be built in the system so that corporate do not take undue advantage and farmers’ interests are properly protected.
But this will have to be done otherwise the farmers conditions and consequent discontent will grow fast and will result in disintegration of agricultural activities in the country thereby leading to a food crisis and large imports of food items instead of exports. more