The Narendra Modi government’s claims that demonetisation has had little impact in rural areas, a severe shortage of cash impacted farmers across most northern Indian states and worsened their condition after last November’s decision, MS Swaminathan, the father of the green revolution,told.
“There’s no careful study on the impact of demonetisation but in a purely cash economy, especially for farmers who deal with cash, there will certainly be an impact,” Swaminathan, who is away in the UK, said over the phone.
Swaminathan’s reaction comes in the wake of a deepening agricultural crisis which has, over the past several weeks, seen farmers across Madhya Pradesh and Maharashtra demanding a minimum support price for their produce.
Loan Waiver Not a Viable Option
In a series of tweets earlier, Swaminathan had decried the move of announcing loan waivers, which hampers the credit system in the long-term. “Loan waiver should not become the method of improving economic viability of farming. You have to find a way of stabilising the income of farmers,” Swaminathan said.
After Yogi Adityanath announced loan waivers for farmers in UP in April, to the tune of Rs 36,359 crore, similar demands have been made in other states, with the Devendra Fadnavis-led Maharashtra government waiving loans for 3.1 million marginal farmers with immediate effect. But many experts, including former Planning Commission chairman Kirit S Parikh, have criticised the loan waiver as it leads to long-term pain in the form of rise in inflation and slow pace of growth.
Loan waiver involves a large amount of money, the question is how do you spend this money? I believe loan waiver will be necessary now due to prevailing conditions but in the long-term, agricultural planning should include strengthening of rural infrastructure.
A recent BofA-ML (Bank of America Merrill Lynch) report said that loan waiver will cost India Rs 2,57,000 cr or 2 percent of GDP before 2019 elections. While many see loan waivers as a political tool to appease farmers, agricultural scientists like Swaminathan bemoan spending huge sums for clearing dues instead of directing the same amount to revamp infrastructure at the ground level.
Responding to the question of whether there was an alternative to farm loan waivers, Swaminathan said, “Rich farmers have benefited more than the poor farmers.”
You could spend that money to strengthen roads, communication, agriculture technology, training and capacity building that will give long-term benefit. You’re going to spend so much money on loan waiver, when the same amount could be utilised to improve agricultural production, both in the short-term as well as long-term.
‘Farming Is Not a Life-Taking Enterprise’
Ninety-two-year-old MS Swaminathan is credited with developing high yielding varieties of wheat along with American plant scientist Norman Borlaug, which helped India curb shortage of grains in the 60s and feed its burgeoning population. He laments the absence of social protection measures that are driving farmers to the extreme in Mandsaur and elsewhere.
“Farming is a life-giving and not a life-taking enterprise, farmers’ death and suicide is very unfortunate. But those who commit suicide are driven to the extreme,” Swaminathan told. While six farmers were killed in police firing in Mandsaur on 6 June, five other farmer deaths have been reported since from the BJP-ruled state that had reported the highest growth rate of 11 percent among the states in 2015-16.
The current crisis in MP owes its origins to the fact that farmers are not getting due prices despite bumper produce. Food price disinflation with a steep fall in the price of vegetables added to the woes of marginal farmers.
The Shanta Kumar Committee Report (2015) had revealed that only six percent of farmers are able to avail of the benefits of MSP (Minimum Support Price) through sale of foodgrains to government agencies. It’s the gap between MSP pricing that’s offered to farmers that needs to be bridged by the government.
“Public procurement, public distribution, pricing and marketing are four areas that should receive high priority. Any scheme meant for addressing the distress of farmers should consider marketing and pricing as areas that deserve high attention,” said Swaminathan.
Hit by Note Ban
Swaminathan, who had authored a report after the National Commission on Farmers was established in 2008, suggested the “C2 Plus 50 percent principle” (total cost of production plus 50 percent of the cost of cultivation) for payment to farmers in order to make farming a viable option.
In the aftermath of agitation by farmers in MP’s Mandsaur, a ground report from MP’s Shujalpur mandi revealed that notebandi had a disastrous impact on farmers as they struggled to sell their produce in the mandis which are hugely dependent on cash. The new measures of electronic transfer introduced by Shivraj government also added to the confusion.
Promise of Doubling Farm Income
The Mandsaur violence in the wake of the farm distress has caught the Modi regime and the state governments on the wrong foot even as the former boasts of raising agricultural output through a slew of schemes announced in 2014.
A fact-checked revealed that most of the so-called gains of the present government are simply the continuation of the trends over last 10 years. In fact, NaMo’s targets on irrigation are rather modest compared to what has been achieved by the erstwhile Congress-led government at the Centre in 1996. Swaminathan, however, is hopeful that the prime minister’s promise of ‘doubling the farm income’ by 2022 is doable. “Doubling of farm income is feasible, it requires a few steps and is necessary if you want to ensure that farmers have a decent life,” Swaminathan told.>