Farm­ers need their dues, not doles from the trea­sury

The land­locked farmer is not a free cit­i­zen. The dra­co­nian laws must be tossed into the dust­bin of so­cial­ist his­tory

Hindustan Times (Delhi) - - COMMENT - Shyam Ashtekar is a mem­ber of Shetkari Sang­hatana The views ex­pressed are per­sonal

That farm loan waivers are po­lit­i­cally es­sen­tial for 2019, but are nei­ther suf­fi­cient nor cu­ra­tive for the cur­rent agrar­ian dis­tress is a no brainer. The leg­endary farmer leader, Sharad Joshi, ar­gued that farm­ers are no eco­nomic of­fend­ers and hence mafi (par­don) is an un­eth­i­cal coinage. He ar­gued for kar­ja­mukti (free­dom from in­debt­ed­ness) be­cause the In­dian State with its de­vi­ous laws has in­flicted chronic bank­ruptcy, sui­cides and forced mi­gra­tion on the farmer. Hence farm­ers have huge dues from the gov­ern­ment. This re­ally makes a case for re­turn of ill-got­ten wealth to farm­ers.

The five ma­jor Nehru­vian so­cial­ist in­stru­ments of farmer ex­ploita­tion in­clude: (a) The land ceil­ing acts forc­ing farm­ers to part with long-ac­quired as­sets with­out com­pen­sa­tion; (b) The dra­co­nian Es­sen­tial Com­modi­ties Act de­press­ing farm pro­duce prices and breed­ing sys­temic cor­rup­tion; (c) The APMC mo­nop­oly cre­at­ing an anti-farmer nexus of po­lit­i­cal thugs, traders, agents and head load­ers; (d) The For­eign Trade Reg­u­la­tion Act ma­nip­u­lat­ing ex­ports and im­ports to de­press do­mes­tic farm prices at will; and (e) the Land Ac­qui­si­tion Act. There are more laws on beef ban and on wild an­i­mals’ pro­tec­tion caus­ing un­told loss and suf­fer­ing for count­less farm­ers.

The shield to anti-farmer laws af­forded by the Sched­ule IX is an il­lib­eral legacy of the Con­sti­tu­tion mak­ers, erod­ing farm­ers’ as­sets, un­leash­ing sys­tem­i­cally bi­ased mar­kets and un­re­mu­ner­a­tive prices, prevent­ing exit from farm and also en­try of non-farm­ers to farm­ing and, hence, any se­ri­ous in­vest­ment. The re­sult­ing loss to farm­ers, as the Gov­ern­ment of In­dia of­fi­cially told the World Trade Or­ga­ni­za­tion (WTO) in 1992, was a huge 72% vis-à-vis bor­der prices — a jizia on farm­ers. The ag­gre­gate neg­a­tive sub­sidy (about 6-7% now) con- tin­ues till this date. The ques­tion now is: Are the BJP, Con­gress, so­cial­ist rag­tag par­ties, in­clud­ing the green/swadeshi bri­gades, will­ing to undo this cause of farmer dis­tress be­yond waivers? All of them did and are con­tribut­ing to this ex­ploita­tion un­der var­i­ous pre­texts in­clud­ing high food prices.

And there are com­plex is­sues within waivers. Of­ten farm loan waivers help only some farm­ers (usu­ally un­der ~1-2 lakh loan limit) and for barely a year or two. Be­sides, pri­vate lend­ing con­tin­ues to sap farm­ers. Farm­ers be­yond a hold­ing size and term loans are ex­cluded. In fact, the big­ger the farm size and in­vest­ment, the big­ger is the loss. There are also the un­paid power bills. Shetkari Sang­hatana is against any free­bies and we hold that free power means poor qual­ity and ir­reg­u­lar sup­ply, which is most detri­men­tal to farm­ers. That free power gives a cover for leak­ages and cor­rup­tion is an­other mat­ter. The poor qual­ity power to farms is ac­tu­ally a left­over sur­plus at night (oth­er­wise a waste if not used), hence de­serves no pay­ment at all.

The Shetkari Sang­hatana has ar­gued for a par­a­digm shift from loan waivers to real Kar­ja­mukti, be­cause the so­cial­ist State has in­ten­tion­ally and sys­tem­at­i­cally caused farm bank­ruptcy. The land­locked farmer is not a free cit­i­zen of In­dia. The five dra­co­nian laws and sched­ule IX must be tossed into the dust­bin of so­cial­ist his­tory. Free the land mar­kets and align farm pro­duce trade with the WTO frame­work, and re­place food pro­cure­ment and pub­lic dis­tri­bu­tion with di­rect cash trans­fers for the poor. We call for in­fra­struc­ture in­vest­ment from pub­lic and pri­vate sources. Farm­ers should en­joy ac­cess to any tech­nol­ogy, in­clud­ing GM, in mar­kets. Any waiver must be em­bed­ded in lib­eral re­forms of agrar­ian po­lit­i­cal econ­omy. The farmer must be free to pur­sue or to quit farm­ing like a free cit­i­zen. Above all, farm­ers should get their due from the econ­omy rather than as doles from trea­sury. This is all what Joshi asked for — a Mar­shall Plan for farm­ers.

For most of the past decade, the grow­ing spend­ing power of China’s ex­pand­ing mid­dle class has fu­elled the global econ­omy. After the 2008 fi­nan­cial cri­sis, I ar­gued that the United States and China would need to swap places — with the US sav­ing more and con­sum­ing less, and China do­ing the op­po­site. Un­til the past year, that is largely what had been hap­pen­ing. Not so any­more.

Last week, Ap­ple pub­lished a let­ter to share­hold­ers re­vis­ing down its ex­pected rev­enues for the first quar­ter of 2019, cit­ing an eco­nomic slow­down in China, which has be­come an in­creas­ingly im­por­tant mar­ket for iphone, Mac, and ipad sales. Though tech in­dus­try an­a­lysts are de­bat­ing whether in­ter­nal dy­nam­ics at Ap­ple might also ex­plain the change, the com­pany’s new guid­ance none­the­less adds to the ev­i­dence that Chi­nese con­sump­tion is slow­ing.

A sus­tained de­cline in Chi­nese con­sump­tion would be even more wor­ry­ing than the cur­rent Us-china trade dis­pute. Given that US trade poli­cies and other ex­ter­nal in­flu­ences should not have much ef­fect on do­mes­tic Chi­nese spend­ing, the prob­lem may be more deeply rooted in China’s eco­nomic model.

To un­der­stand what is at stake, con­sider all that has changed just within the past decade. At the end of 2010, do­mes­tic con­sump­tion ac­counted for around 35.6% of Chi­nese GDP, ac­cord­ing to of­fi­cial Chi­nese data. That was re­mark­ably low com­pared to most other economies, not least the US, where con­sump­tion ac­counted for al­most 70% of GDP. In nom­i­nal dol­lar terms, China’s do­mes­tic con­sump­tion thus was around $2.2 tril­lion, or al­most five times lower than that of the US ($10.5 tril­lion).

Yet China’s high over­all growth rate meant that Chi­nese con­sumers could po­ten­tially play a much larger role, with far-reach­ing ben­e­fits for global brands such as Ap­ple, BMW, Burberry, Ford, and many oth­ers. As of 2017, Chi­nese con­sump­tion as a share of GDP had risen to 39.1%, rep­re­sent­ing just over $5 tril­lion in nom­i­nal dol­lar terms. That is an in­crease of al­most $3 tril­lion in just seven years. And though Chi­nese con­sumer spend­ing still lagged far be­hind that of the US ($13.5 tril­lion in 2017), the gap has nar­rowed.

If China were to con­tinue on the same tra­jec­tory in terms of nom­i­nal GDP growth and do­mes­tic con­sump­tion, its con­sumer

CHI­NESE POL­I­CY­MAK­ERS WILL NEED TO CON­SIDER PRO­VID­ING MORE DI­RECT FIS­CAL SUP­PORT, AS WELL AS RE­FORM­ING THE HOUSE­HOLD REG­IS­TRA­TION SYS­TEM, WHICH DE­NIES RIGHTS TO RU­RAL MI­GRANT WORK­ERS

PARDEEP PAN­DIT/HIN­DUS­TAN TIMES

All po­lit­i­cal par­ties are con­tribut­ing to the ex­ploita­tion of farm­ers un­der var­i­ous pre­texts, in­clud­ing high food prices

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