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Mainstream, VOL LVII No 11 New Delhi March 2, 2019

Comprehending Farmers’ Distress

Sunday 3 March 2019

by Suranjita Ray

The political narrative of the Bharatya Janata Party (BJP) that promised to double the farmers’ income by 2022-23 has raised serious qualms not only because the real income of the farmers has remained stagnant during the last few years but also due to the farmers’ increasing distress across the country. The democratic upsurge of farmers’ movements has not only exposed the flaws in the agrarian policies of ineffective procurement, obstinate trade, restrictive marketing, and highly distorted pricing that have contributed to the farmers’ distress, but it has also influenced the present mainstream politics of the country. Mobilisation politics by the farmers’ movements in particular has compelled both the ruling as well as the Opposition political parties to pass resolutions and make promises to prioritise the farmers needs and demands.

The BJP’s resolution that ‘we are conceptualising an independent, able, strong and prosperous farmer as our annadata who will take the country’s economy to great heights’ comes in the wake of its defeat in the recent Assembly elections in Madhya Pradesh, Chhattisgarh, and Rajasthan that was ascribed to the growing agrarian distress and the farmers’ anger against the government. The Congress Party misses no opportunity to assert that it will write off loans of farmers across the country after the 2019 elections as its promise to waive farm loans within ten days of elections seems to have helped it win the elections in the above States. (Ray, 2019: 23-24) Despite the fact that farm loan waivers benefit only the relatively well-off farmers with larger land holdings and excludes a majority of the farmers with small and marginal holdings who borrow from the local money lenders charging exorbitant interest of 25-50 per cent, political parties have prioritised the populist move to waive farm loans.

Several studies find that the farmers are hit the hardest due to the low prices for farm produce. The increasing prices of farm inputs and lower prices of agricultural produce have landed the farmers in the debt trap. The retail food inflation in 2017 and 2018 ruled even below the inflation of the overall consumer price index. (Damodaran, 2019:18) The marketing and trade policies remain restrictive and pro-consumer often at the cost of farmers. (Gulati, 2019:10) Studies also find that the policies to assure a Minimum Support Price (MSP) and loan waiver cannot reach to more than 20 per cent to 30 per cent of the peasantry respectively. Therefore, it has been argued that a stable income policy for farmers is a better policy approach.

Income Policy Approach

The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) proposes a transfer of Rs 6000 a year as annual direct income support to the small and marginal farmers cultivating less than/up to five acres. It aims at benefiting a target of more than 12 crore small farmers and their families which will amount to Rs 75,000 crores in the next financial year. The Ministry of Agriculture and Farmers Welfare has written to all the States to initiate the work of identification of the beneficiaries and expedite the process of updation of land records. States have to designate a nodal department for publicising the scheme adequately to ensure early disbursement of Rs 20,000 crores in the first instalment of cash transfers of Rs 2000 each up to 10 crore farmer families before March 31.

The social protection scheme is a targeted income transfer scheme that aims at only the landholding class. Though income support is a more equitable way to address the crisis than loan waiver, it is pertinent to understand that a major step to ameliorate the farmers’ distress which has gripped many parts of the country is to assure adequate income to the agricultural labourers, tenant farmers, sharecroppers and the landless, all of whom are excluded from the PM-KISAN scheme. In fact, given the abysmal state of land records, many farmers who do not have land pattas and in particular the adivasi farmers who practice mixed farming in the forest lands will remain excluded from the benefits.

Many Opposition parties alongside the policy analysts argue that the much-awaited farm package, unveiled in the Interim Budget, is ‘too little and too late’. With this amount of money, the farmers will not be able to even procure their fertiliser requirement for one acre of land. More importantly, the strategy of cash transfer of Rs 2000 before March 31 is seen as a desperate measure of the BJP to buy farmers votes by transferring cash to their account before the Lok Sabha elections a couple of months away. The Congress President has also announced a Minimum Income Guarantee (MIG) if the party is voted to power. While the idea of basic minimum income guarantee was proposed in the Economic Survey 2016-2017, and steps to increase farmers’ income is a central question in the policy circles, it is important to monitor the strategy, its implementation and both the short-term and long-term impact.

The policy analysts argue that while the Universal Basic Income (UBI) based on Philippe Van Parjis’ book, Real Freedom for All, 2005, argues for ‘fair distribution of Real Freedom to pursue the realisation of one’s conception of good life’, it has been interpreted wrongly by the policy-makers. In fact, the proposal of the UBI in the Economic Survey, 2016-2017 is an attack on the welfare schemes as UBI should be an add-on-to or supplement to and not a replacement of the existing anti-poverty and social security programmes. Parjis’ proposal is based on progressive taxation and the philosophy of redistribution and is not to replace the existing benefits through cash transfers. The UBI is not targeted but universal and unconditional and is not tied to work/employment and should be in cash for basic needs such as education, health, and food.

Therefore, a welfare state should play a primary role in protecting and promoting the welfare of the deprived, and it is significant to get the basics of the welfare policies correct. It is important to work on the strategies to improve the efficiency of the existing social security interventions that will secure adequate livelihood to those who are vulnerable to the processes of deprivation rather than replacing some of these schemes with direct cash transfers. Direct Benefit Transfers (DBT) is not an absolute good. The one-time payment will have little impact unless the development strategies address the systemic deprivations which not only persist but also continue to increase. A comprehensive process should not be symbolic which looks at the quantitative indices and ignores the ground realities and substantial increase in inequalities, alienation, disparities and deprivations that add to the paradoxes of development.

Better Policy Options

In the present context of the agrarian crisis, Telengana and Odisha have become the reference States for taking adequate steps to address the farmers’ distress. The Rythu Bandhu scheme in Telangana, initiated by Chandrashekar Rao, and KALIA (Krushak Assistance for Livelihood and Income Augmentation Scheme), initiated by Naveen Patnaik in Odisha, are constantly being referred to as better policy options which will benefit the farmers.

The Telangana Government made its first instalment and second instalment with a support of Rs 4000 per acre each before the post-monsoon kharif and rabi winter crop seasons. Therefore, a farmer with five acres holding and cultivating two crops would thus get Rs 40,000 per year which is at least a partial support towards the cultivation cost. This is a better policy option than a flat Rs 6000. While the Rythu Bandhu has yielded political dividends and has reached 90 per cent of the farmers costing Rs 12,000 crores per annum, its success to a large extent depends upon the reliability of the land records. Many see it as a scheme for the pro-big farmers as it benefits the big landlords the most. And the tenants, sharecroppers and landless labourers, who are the most vulnerable sections to processes of deprivation, are kept out of the coverage.

In comparison to Rythu Bandhu, KALIA, which was launched in Odisha on December 31, 2018 by the Chief Minister will benefit the sharecroppers and cultivators most of whom own little or no land. The Odisha Government has credited Rs 5,000 each to the bank account of 12.45 lakh farmers across the State to cover more than 50 lakh families in the first phase including sharecroppers and landless families. Financial assistance of Rs 25,000 will be provided for over five seasons to every farm family owning up to two hectares of land to purchase seeds, fertilisers, pesticides and use assistance towards labour. Alongside, crop loans upto Rs 50,000 will be interest-free and farmers will get the cash assistance during the six crop seasons for over a period of three years.

At the recent Krushi Odisha 2019 event in Bhubaneshwar, the Chief Minister claimed that 92 per cent of the cultivators in the State will benefit from the scheme. The beneficiaries include every category from big farmers to the landless. However, as tenancy is illegal in Odisha, the major challenge of identifying a tenant and an agricultural labourer remains. Many landowning households, in particular the small and marginal farmers, have no land records.

The scheme encourages cultivation and associated activities as it targets 10 lakh landless households and specially the Scheduled Caste (SC) and Scheduled Tribe (ST) households who will be supported with one-time payment of Rs 12,500 and the vulnerable families will get another Rs 10,000 for activities like goat rearing, mushroom cultivation, beekeeping, poultry farming and fishery. (See also Ray, 2019: 25-26; Patnaik, 2019: 6)

Few States, in particular West Bengal and Jharkhand, are also moving in the same direction as agrarian distress in the present context is seen mainly in terms of low agricultural prices and consequently poor farm incomes. Therefore, though raising issues of assured income as a policy shift that was ignored earlier is a good step, the larger question that needs to be addressed is—can income transfers resolve the crisis in agriculture? Our past experiences suggest that rapid growth might have led to sustainable income poverty reduction as per the norms of poverty estimation, but it has failed to empower the marginalised and poor to fight the everyday structural constraints of society. Therefore, it is important to capture the complexity of power relations in a particular context of a society to understand the cumulative deprivation, exploitation, oppression, suppression, humiliation and denial of justice to the powerless.

Few Proposals

Studies propose a long-term policy strategy to tackle the agrarian crisis that is embedded in the unequal structures of landholdings and control over means of production, and semi-feudal relations at the grassroots. Though the agrarian distress has brought farmers directly in confrontation with the state, the institutional mechanisms have failed to address the basic issue of redistribution of the productive resources. The demand for land rights by small and marginal farmers, landless, adivasis and Dalits and the demand to protect the fertile land, water, forest reserves and mineral resources from unprecedented land grab and land acquisition in the name of development across the country has to be prioritised in the agenda of public policies.

One of the important proposals to reduce agrarian distress is to consolidate land holdings alongside land development activities to raise or enhance farmers’ incomes. We find an increasing decline in the average size of farm holdings. The average farm holding size declined from 2.3 hectares in 1970-71 to 1.08 hectares in 2015-16. The average size of a marginal holding in 2015-16 is only 0.38 hectares which is less than an acre. (Rangarajan and Dev, 2019:8) During the last few decades there has been an increase in the share of small and marginal farmers from 70 per cent in 1980-81 to 86 per cent in 2015-16. (Ibid.)

The Draft National Land Reform Policy 2013, which focuses on ensuring effective distribution of land to the landless poor and protecting them from losing land, restoring of alienation of lands, effective safeguards for lands of the SCs and STs, homestead rights, tenancy rights, land rights for the women, and effective use of common property resources, is an important policy suggestion.

While 70 per cent of the rural population in the country still depend upon land and land-based activities to earn their livelihood, the Socio-Economic and Caste Survey 2011 shows that almost 54 per cent of the rural population are without any ownership of land. In fact, 5 per cent of farmers control almost 32 per cent of India’s farmland as per the Agricultural Census 2011-12. It is therefore important for the government to act on some of the pending bills and policy recommendations concerning patterns of land use, redistribution of land to the landless poor, measures to prevent land acquisition, and right to access the common property resources.

Measures such as land improvement, land consolidation and soil conservation, irrigation, water management and watershed development, animal husbandry, dairying, poultry, fisheries, farm forestry and small-scale industries need to be integrated to include large masses as beneficiaries in the development programmes. Agriculture has to be understood beyond increasing farm produce. Strategies to integrate farming with procurement, marketing, and pricing, need to be worked out to benefit the farmers. While interest subvention for loans for farming is important, institutional credit needs to be expanded to do away with the exploitative role of the moneylenders.Though some of these issues might figure in the political narratives of some of the political parties before the elections, it is pertinent to prioritise its implementation to address the persistence of farmers distress, after these political parties win the elections.

References

Damodaran, Harish (2019),Farmers Bear The Burden Of Deflation’ in The Indian Express, January 17, page 18.

Gulati, Ashok (2019), ‘What The Farmer Is Owed’ in The Indian Express, January 21, page 10.

Patnaik, Sampad (2019), ‘Kalia: How Odisha New Scheme Supports Farm Community With Payments’ in The Indian Express, January 16, page 6.

Rangarajan, C. and S. Mahendra Dev (2019), ‘Removing The Roots Of Farmers’ Distress’ in The Indian Express, January 28, page 8.

Ray, Suranjita (2019), ‘Bringing Farmers To The Centre -Stage’ in Mainstream (Republic Day Special), Vol. LVII, No. 6, January 26, pages 23-28.

Suranjita Ray teaches Political Science at Daulat Ram College, University of Delhi. She can be contacted at suranjitaray_66[at]yahoo.co.in

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