Farming woes: The cure is not more socialism

Agriculture sector’s real problem is lack of reforms.

That rhetoric and events are no substitute for reforms is increasingly becoming evident in the economic sphere. The farmers’ march from Nashik to Mumbai once against highlighted this fact, along with underlining the growing rural distress.

It is instructive to note that the march was organised by the All India Kisan Sabha, the peasants’ wing of the Communist Party of India (Marxist) or CPM. Now the CPM is a party which seems to be on the verge of extinction. Its ideology, which resulted in the death of over 100 million people, has been globally discredited. Yet, the Reds managed an impressive show. The 170-km march to the Maharashtra Vidhan Sabha not only saw the participation of 30,000 farmers and tribals, but also elicited considerable support from other sections of society.

The entire credit for success of the march goes to the Narendra Modi regime’s ineptitude, for the government remains entranced with the meretricious charms of socialism and statism. This is the reason that there have been few reforms in general and fewer in agriculture—a sector that has largely been bypassed by liberalisation.

It needs to be mentioned here that neither the Modi government nor the state governments in Maharashtra and other states under the Bharatiya Janata Party are any worse than the previous ones in terms of competence or integrity. The point, however, is that a great deal was expected of them, which they have failed to deliver, thus fuelling frustration, even exasperation, in various sections of society.

Since agriculture is a most neglected sector because of lack of reforms, even slight problems cause a lot of pain. So, despite a good monsoon in 2016-17, many farmers in Maharashtra faced hardships in selling their produce primarily because of demonetisation, a gigantic policy blunder; the prices the farmers got were meagre. The failure of monsoon this year made the matters worse for them.

The BJP, like other parties, refuses to accept the real problem—lack of reforms in the farm sector. Unsurprisingly, the political class is also loath to opt for the only solution— freeing it from a myriad controls. So, they don’t offer a meaning- ful policy framework; what they offer are reactions, usually knee-jerk reactions, and populist announcements. In 2017, Maharashtra announced a farm loan waiver worth Rs 30,000 crore.

Since it was not even a proper palliative and resulted in a long march, the state government has accepted the protesting peasants’ demands for the expansion of the list of those eligible for the farm-loan waiver, rise in agricultural workers’ pension from Rs 500 to Rs 1,000 per month, and transfer of land titles under the Forest Rights Act.

While the campaign in Maharashtra has been withdrawn, it has triggered similar ones in other parts of the country. By the time of writing these lines, there are reports about Uttar Pradesh farmers planning a one-day protest march in Lucknow. Similar movements in other parts would not be surprising, given the intensity of farm distress.

The biggest problem is that neither the Modi government nor its policymakers are willing to abandon statist measures and let the entrepreneurial spirits of farmers and others take care of agriculture. For instance, a policy paper called “Doubling Farmers’ Income” by the think-tank Niti Aayog, headed by the Prime Minister, was mostly about state intervention, focusing little on private participation.

It acknowledged that the technologies developed by public sector institutions “have very poor marketability”, but continued to lay almost the entire emphasis on state-run bodies. “ICAR [Indian Council of Agricultural Research] and SAUs [state agriculture universities] should develop models of marketing system for different types of socio-economic and bio- physical settings combining all their technologies in a package with focus on farm income.”

The report, which was prepared by Niti Aayog member Ramesh Chand last year, was also bullish on the minimum support price (MSP) mechanism, a remnant of the socialist era that refuses to die. “Ensuring MSP alone for farm produce through competitive market or government intervention will result in sizeable increase in farmers’ income in many states,” the report said.

What about the private sector participation in farming? Well, the report doesn’t rule that out, but makes it clear that the idea is “to attract responsible private investments in production and market” (emphasis added). What on earth are irresponsible private investments? Those made by Dawood Ibrahim’s cronies? And are irresponsible private investments allowed in other areas?

Evidently, the Niti Aayog paper favours private investments that are aimed at fair profit making, not profiteering. Now, only a JNU professor can explain the fictitious distinction between fair profit making and profiteering. That is the crux of the matter: the Modi regime, along with its advisers, religiously follows the economic philosophy upheld by JNU-types, the saffronites’ contempt for the lal salaam university notwithstanding. So, it thinks that the cure for socialism is more socialism.

Unless the government comes out of the spell of socialism, there will only be palliatives but no prosperity in the countryside.