The Hindu Business Line : The marginalisation of agriculture

The central and most essential fact about Indian agriculture is that it suffers from either the caprices of Nature or, when Nature is benign, by the tyranny of governmental interventions.

Agriculture as a vocation is seen as a passage to poverty and indebtedness.

Sharad Joshi

A large number of researchers and scholars who study agriculture in India are intrigued by the extreme penury of the farmers and the low levels of productivity. It surprises them that the peasantry of a country so well endowed in water resources and sunlight should be so miserably placed.

It was only as late as in 1990 that the World Trade Organisation (WTO) clearly established that the Government of India imposed a negative subsidy on farmers.

Negative subsidy

In WTO parlance, the term ‘negative subsidy’ has a specific meaning. It refers to cases where the income received by the farmer by the sale of his proceeds is less than the income he would have received in a hypothetically free market where the government does not intervene in any manner.

On the other hand, ‘positive subsidy’ refers to cases where the farmers receive an income that is higher than what they would have received in a hypothetically free market, thanks to the intervention of the government.

The central, and most essential, fact about Indian agriculture is that it suffers from either the caprices of Nature or, when Nature is benign, by the tyranny of government interventions.

It is astonishing that most learned reports and books on Indian agriculture skilfully avoid referring to this central fact.

For years, economists and agronomists have held that the poverty of the farmers and the low productivity of agriculture are interconnected, and both are caused by illiteracy, wasteful expenditure, and large incidence of alcoholism and other vices among the farmers. It is strange that this calumny persisted for long decades of British Rule as also the first five decades since Independence.

Farmers and agriculture are the source of all wealth and multiplication thereof, at least in the physiocratic sense. In the peasant idiom, ‘if a farmer sows one seed the crop is hundred- or even a thousand-fold.’

How come the one industry where there is an actual physical multiplication suffers from the most serious deprivations?

Best of vocations?

Practically every regional language in India has a proverb that maintains that agriculture is the best of all vocations; trade comes next and service is the least honourable of all. The proverb holds good though the reality has turned upside down, particularly after Independence. Now a job, particularly in government service, is the most prestigious, and agriculture is seen as a passage to poverty, indebtedness and suicide.

Though learned economists and erudite scholars refuse to recognise the fact of negative subsidy in agriculture, there is abundant evidence that agriculture is the most arduous of all vocations.

The children of farmers who had the good fortune of getting higher education systematically preferred jobs and turned their backs on ancestral lands. Daughters of non-agrarians have, for decades, clearly expressed their reluctance to be married into agricultural families. The life of a farmer housewife is continuous misery, comparable to life imprisonment. Now, even farmers’ daughters prefer grooms involved in non-agricultural vocations.

Lethal intervention

The instruments of intervention that the Government used were simple but lethal.

Until as late as the 1960s, the Government imposed a compulsory levy on foodgrains produced by farmers. If a farmer produced less than what was required to be given as ‘levy’, he had to make good the difference by purchasing the foodgrains in the open market at higher prices and delivering them to the Government at lower levy prices. If he failed to discharge his ‘levy’ obligations, he risked being handcuffed and paraded in public.

All transport, storage, trade, processing and export of agricultural produce were severely restricted, if not totally banned.

This was done by raising the bogey of consumers’ interest and the obligation on the part of the government to ensure food security.

The government did put up a show of ensuring remunerative prices by introducing a system of Minimum Support Price (MSP). But it manipulated the system, to make it work not as the minimum price the farmers should receive but as the signal of the maximum price the traders need to pay for the agricultural produce.

The government did not need to depress the prices of each of the hundreds of agricultural commodities. It could depress the agricultural economy in general and keep the farmers permanently ‘needy’, by depressing artificially prices of just about a dozen commodities.

These anti-farmer policies were sought to be justified by various arguments:

The desirability of a low-cost economy;

The need to promote industry by keeping prices of wage goods and raw materials low; and

Need for comprehensive consumer protection.

Thus, the state policy on agriculture has essentially been one that exploited ‘Bharat’ for the benefit of ‘India’.

(The author is Founder, Shetkari Sanghatana and Member of Parliament, Rajya Sabha. blfeedback@thehindu.co.in)

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