BURDEN OF FARMING OUTWEIGHS REWARDS

On March 14, 2007, when 14 farmers died in a clash between villagers and police forces in Nandigram of West Bengal over acquisition of land for an industrial project, few had imagined it would mark a turning point in the state’s politics. Buddhadeb Bhattacharjee of the then ruling Left Front in West Bengal had just stormed to power on the promise of reviving the industrial glory of the state, but Nandigram proved to be his nemesis. Overnight, farmers across the state turned hostile; the Opposition closed ranks; the intelligentsia distanced itself from the “bhadralok” chief minister and eventually, the Left lost the plot in a state it had ruled for 34 years.

Cut to 2017, the nation is perhaps staring at another Nandigram moment. The killing of six farmers in a police crackdown in Mandsaur in Madhya Pradesh earlier this month has put the spotlight on India’s worsening farm crisis. The farmers’ unrest that has since spread to other parts of Madhya Pradesh and elsewhere in India is a wake-up call. For it is a result of years of neglect of agriculture, something that still provides livelihood to twothirds of the India’s 1.3 billion people.

At the core of the problem lies a growing mismatch between what it takes to grow food and what a farmer fetches for his produce in the marketplace. Economists explain this using the phrase ‘terms of trade for agriculture’, which improved for a brief period in the 1990s before turning unfavourable for most part of the new millennium.

Sample this: In 1992, a typical farmer in Punjab paid ₹6 per litre for diesel to keep his generator sets running, bought a sack of diammonium phosphate (DAP) for ₹200 and hired labour at a daily wage of ₹40-50. Twenty-five years on, diesel costs 10 times more, DAP prices have increased more than five times and farm wages are 10 times higher. In contrast, the minimum support price (MSP) of wheat, which is what most of Punjab grows, has increased only five-fold in this period — ₹330 per quintal to ₹1,625 per quintal.

In other words, the burden of farming has grown much faster than the rewards it brings. Demonetisation made it worse. As my journalist colleague Harish Damodaran wrote, “We’ve entered deflation territory in farm produce, whose proximate trigger clearly has been demonetisation.” Much of the trade in farm goods is cash-based and financed through a chain of intermediaries — wholesale buyers, processors and retailers. Demonetisation crippled this network of informal credit, causing a free fall in the prices of farm goods across the board.

A five-part series that will appear in this newspaper, starting tomorrow, brings out the depth of the despair that is sweeping farmlands across India.

The imbalance between input costs and remunerative prices, however, is just one explanation for the growing farmers’ unrest. From sluggish infrastructure to lack of research breakthroughs, India’s farm sector faces many challenges. For most crops, yield per acre grew at a slower pace over the past one-and-a-half decades compared to the 1980s and 1990s. So did the expansion of the irrigation network. Successive governments have paid little attention to building research and institutional support to the farming community. As we speak the most premiere agricultural research institution, IARI, is into its third year without a full-time director.

Public investment in agriculture has been stagnant for nearly a decade, while private capital flows have not picked up enough to provide the stimulus that the sector needs. As a result, growth in agriculture has decelerated from an annual pace of 2.8% in 1990s to 2.4% through the decade of 2001-10 and to 2.1 % in the first half of the current decade.

All of these need a holistic policy response. Interventions such as loan waivers or MSP revisions can at best offer temporary succour. At worst, they deflect attention from the real issues behind the crisis that has been in the making for long — India is reaping what it sowed as it scripted a story of economic transformation that left the farmers out.

LOAN WAIVERS OR MSP REVISIONS CAN AT BEST OFFER TEMPORARY SUCCOUR. AT WORST, THEY DEFLECT ATTENTION FROM THE REAL ISSUES BEHIND THE CRISIS