A round-up from States

Published : Jan 20, 2001 00:00 IST

The farmers of Andhra Pradesh are driven to distress sale, the godowns in Punjab are overflowing, and in Bihar a strong protest movement is on.

ANDHRA PRADESH farmers have been hit by an unprecedented crash in crop prices. Procurement by the Food Corporation of India in the State has been tardy owing to a lack of storage space in the FCI godowns, which are filled with the previous year's stocks. This situation has led farmers to resort to distress sales of foodgrains, and in extreme cases to suicide. The N. Chandrababu Naidu-led Telugu Desam Party, the party in government in the State and an ally of the NDA, has done precious little to provide relief to the farmers.

The farming community is gripped by unrest as never before. Although the problems are not exclusive to Andhra Pradesh, the discontent and frustration among farmers are perhaps more pronounced in the State than elsewhere as relief by way of market interve ntion by the FCI and State agencies has not materialised. Farmers have suffered the vagaries of the monsoon but the present crisis is not attributed to natural calamity but to an unprecedented crash in the prices of rice, groundnut, tobacco, cotton and c hillies.

The State has maintained an upswing in the production of foodgrains thanks to additional areas brought under the coverage of canals and borewells. According to the Department of Agriculture, foodgrains output in 2000 was 132 lakh tonnes as against the no rmal output of 125 lakh tonnes. In 1999, it was 149 lakh tonnes. For the current year, the State has set a target of 163 lakh tonnes. Marketing has emerged as an insurmountable problem as consumption levels, including the off-take for the PDS, did not gr ow correspondingly. Moreover, cold storage facilities and value addition in the form of processing units did not keep pace with additional production.

However, Agriculture Minister V. Sobhandreeswara Rao does not agree with the perception that the farmers' woes have been wrought by surplus production. "India's food production is around 210 million tonnes as against the current demand of 240 million ton nes. There is still a shortage of 30 million tonnes. There is scope for strategies to absorb additional production levels and make farming viable," he argued.

The State government has put the blame on the Centre. In fact, Chief Minister Chandrababu Naidu suggested during a national debate on the implications of the WTO regime that indiscriminate import of rice, edible oils and other produce and inadequate proc urement by the FCI were responsible for the problem. The State government has set up a task force to study the crisis.

The crisis began unfolding in October with the FCI slowing down the procurement of rice in view of space constraints. The FCI launches its annual procurement drive around October and lifts about 10 lakh tonnes of rice a month. Its warehousing capacity in the State is around 25 lakh tonnes. Fifteen lakh tonnes of rice and five lakh tonnes of wheat were in the godowns before the start of the current procurement season. The problem was compounded with rice millers holding 15 lakh tonnes and farmers about 1 0 lakh tonnes out of last year's production. This led to a glut in the market, causing prices to fall sharply.

As against the minimum support price of Rs.510 a quintal for common paddy and Rs.540 a quintal for the Grade A variety, farmers could not secure more than Rs.450 a quintal. In fact, the minimum support price itself was not commensurate with production co sts, agricultural officials admit.

The fate of farmers who took to oil palm cultivation after incentives were offered under the Oil Seeds Mission is no better. They are reeling under the impact of the dumping of palmolein in the Indian market by Malaysia and Indonesia. Andhra Pradesh lead s in oil palm cultivation, with 50,000 hectares under palm plantations. Indiscriminate imports have destroyed this sector. The 8,000-odd oil palm growers are planning to begin an agitation demanding payment of arrears that are due from oil processing uni ts.

Faced with protests by farmers at market yards and with the Opposition parties backing the restive farming community, the State government turned its ire on the Centre. But the assurances by the Centre to arrange direct purchase of 10 lakh tonnes of padd y and procure 10 lakh tonnes of rice every month (the FCI procures around 55 lakh tonnes of rice every year) were not kept. Of the 10 lakh tonnes of paddy, the FCI has agreed to procure three lakh tonnes while the State government, through its agencies l ike Markfed, made a commitment to procure seven lakh tonnes in one month. The procurement by both the Central and State governments did not touch even a lakh tonnes by mid-December.

Andhra Pradesh used to export about 10 lakh tonnes of rice to other countries and sell 20 to 30 lakh tonnes to other States after setting apart about 40 lakh tonnes for the PDS. The FCI procured 55 lakh tonnes of rice last year, of which the PDS requirem ent was ploughed back to the State. But in the last two years, exports declined as the State's rice was found to be more expensive at $5 to $10 a quintal.

Rice and groundnut account for 40 lakh hectares of the 80 lakh hectares of cropped area in the kharif season and 15 lakh hectares of the 35 lakh hectares of cropped area in the rabi season. The market for groundnut is none too encouraging. As against a m inimum support price of Rs.1,220 a quintal, the farmer gets only Rs.1,100. A farmer in Karnataka gets Rs.1,380 a quintal. Maize was sold in Andhra Pradesh markets at Rs.320 to Rs.350 a quintal as against the minimum support price of Rs.445. Chillies wort h about Rs.100 crores are lying in cold storage in Guntur for want of a market.

During the latest round of Janmabhoomi (an interface between government officials and people from January 2 to 8), Ministers and officials faced hostile groups of farmers who gave vent to their anger at being let down by the government. Activists of Cong ress(I), the Communist Party of India and the Communist Party of India (Marxist) organised demonstrations at gram sabhas and gheraoed Ministers, demanding relief for farmers. Truckloads of rice bags were brought to some gram sabhas. In Vijayawada, activi sts of Left parties dumped paddy bags in the river as a symbolic protest against "the indifference of the government".

Unfazed by these protests, the Chief Minister attended a number of gram sabha meetings in early January to explain the government's action plan. "For the cause of the farmers, we have even threatened to withdraw support to the NDA government," was his re frain.

The large number of suicide deaths of farmers has pushed the government on the defensive. The CPI(M) claims that more than 400 farmers ended their lives unable to bear crop losses, debt burdens and non-remunerative returns on their produce. The party wan ts an independent commission to probe the deaths.


IT is Punjab, India's wheat granary, that best illustrates the paradox of economic liberalisation: godowns overflowing with foodgrains, and a hungry population that has no access to it. Massive stocks of paddy harvested last year and 12 lakh tonnes of mi lled rice are occupying storage space in Food Corporation of India godowns in the State. In addition to this, 90 lakh tonnes of wheat from last year's spring harvest is rotting in storage. All this must be cleared to make way for this year's wheat harves t which will arrive in April and 67 lakh tonnes of paddy that is on its way. But a full-blown crisis threatens to develop as the FCI is unable to find buyers for Punjab wheat in other States. This is not all.

While last year's paddy harvest disaster has not quite come to an end, new and frightening prospects are already confronting the growers of oilseeds and wheat in Punjab and the apple farmers of Himachal Pradesh. The World Trade Organisation regime is sta rting to make itself felt on the ground. Farmers and experts alike feel that Punjab's produce could be pushed out of the marketplace by heavily subsidised imports of agricultural produce.

The Punjab government is still figuring out how to use the Rs.350-crore bailout made available to the State's farmers last year. About 110 lakh tonnes of paddy was purchased by private rice millers and government institutions in October after delayed pro curement caused prices to crash. Standards were relaxed to allow millers to turn into rice a relatively low 64 per cent of the weight of the paddy they were issued. Even at these low standards, some 67 lakh tonnes of rice ought to have been milled by now . If milling is not speeded up, much of last year's crop could also be devastated by rain and pests. The enormity of the problem becomes clear if seen in the light of what happened to the 90 lakh tones of wheat from last spring's harvest procured by Stat e agencies for the Central pool on behalf of the FCI.

The government has embarked on speedy expansion of storage facilities and asked the Centre to procure its entire stock of foodgrains on behalf of other States. But the real problem lies elsewhere. Savage cuts in subsidies for the public distribution syst em have put previously affordable foodgrains out of the reach of poor consumers. In addition, the poor quality of PDS supplies from Punjab -- the result of deliberate and politically motivated relaxation of standards -- have given a bad name to the State 's foodgrains. Moreover, States like Andhra Pradesh and Orissa, which had purchased large amounts of Punjab grain in the past, have improved their own production and thus reduced their demand.

If these problems are not serious enough, worse seems to be in store. Punjab's Finance Minister Kanwaljit Singh sees dark times ahead for the State's farmers. In a speech in Jalandhar on August 8, he pointed out that the WTO regime had led to indiscrimin ate imports of agricultural commodities, notably of vegetable oils. Farmers in the West, he said, were able to undercut Punjab farmers because of the enormous agricultural subsidies they enjoy. The Centre, he said, signed the WTO agreement in 1994 withou t consulting the States. "If farmers in Punjab are to survive," the Minister added, "we must address the problem right now."

Sadly, Kanwaljit Singh is among the very few to take the issue seriously. Food and Supplies Minister Madan Mohan Mittal told journalists in Hoshiarpur on the same day that the WTO would not affect farmers' interests. Some import duties, he said, would so on be imposed on agricultural imports. No one in New Delhi, however, seems clear on what these duties will be and when they might actually come into force.

IN their 1996 book, Impact of GATT on Punjab Agriculture, economists G.S. Bhalla and Gurmail Singh pointed to other serious problems. Punjab currently suffers from serious groundwater depletion problem. In 85 of 117 development blocks, the use of groundwater has exceeded the recharge, leading to an annual drop of between 0.3 and 0.5 metre in the water table. This is posing a threat to the long-term sustainability of irrigated agriculture. The answer to this problem is to reduce dependence on wate r-intensive crops such as paddy and wheat and sugarcane. However, in a liberalised market environment, such changes would be difficult since the government's ability to influence cropping patterns through pricing is reduced.

Punjab's problems are not unique. Last year, apple growers' associations in Jammu and Kashmir expressed deep concern over fruit imports, pointing out that their sales were affected by cheaper imported produce. Exotic and not-so-exotic fruit from Australi a, New Zealand and elsewhere is already widely available in metropolitan cities and, because of heavy subsidies, is often cheaper than the produce of Indian farmers. Proponents of liberalisation argue that farmers in Punjab and elsewhere can compete by g rowing high-value agricultural produce, like tulips and strawberries, for example. Such operations, however, are highly capital-intensive and of little relevance to tens of thousands of small and medium peasants already crippled by high input costs and c hronic indebtedness.


IN the volatile political landscape of Bihar, the collapse of the Central government's paddy procurement mechanism and the distress sale of paddy by its producers have become issues around which the ruling Rashtriya Janata Dal (RJD) is building a mass mo vement. The Congress(I), its coalition partner, has launched a series of agitations on its own against the "anti-farmer policies" and to put pressure on the Bharatiya Janata Party-led government at the Centre to amend its procurement policies. The State BJP is concerned about the political damage an "agricultural crisis affecting 70 per cent of the population" might inflict on the party in the next elections.

Laloo Prasad Yadav, the RJD president, submitted a memorandum to Prime Minister A.B. Vajpayee demanding that the Central agencies purchase at least 20 lakh tonnes of the 80 lakh tonnes of paddy produced this year at the minimum support price and that the FCI open one procurement centre for every two blocks in the State. The FCI's parameters on moisture and foreign matter contamination, he said, should be relaxed, as had been done in the case of Punjab, failing which, the State government should be given an equivalent subsidy so that it could procure the foodgrains itself. The FCI, he stated, had not purchased even a quintal of paddy in several districts, including Rohtas, Bhojpur, Sasaram, Nawada and Gaya. Laloo Prasad told Frontline that most of the F CI's procurement centres were non-functional. They were not accepting paddy, forcing farmers to resort to distress sale. He claimed that the State government had provided all possible assistance to the FCI, including additional storage space. He also dem anded a ban on the entry of foodgrains from other States into Bihar.

The first phase of the RJD's agitation started on December 31 at the Bhitihrawa Ashram in Champaran set up by Mahatma Gandhi. The State-wide agitation would culminate in a Desh Bachao rally (save the nation rally) at Gandhi Maidan in Patna on Marc h 4. Laloo Prasad is currently touring the rural areas to mobilise farmers with the slogan of "Desh Bachao Gaon Bachao". Party spokesman Shivanand Tiwari told Frontline that a rally would be held at the Boat Club grounds in Delhi on January 30. Me anwhile, farmers have already resorted to rail and road blockades at several places in Bihar with their paddy-laden tractors to force the Centre to procure paddy at the minimum support price.

In the first phase of the Congress(I)'s agitation, its State and district units staged dharnas and demonstrations in front of the FCI's purchase centres. Pradesh Congress Committee president Shakeel Ahmed said that only Rs.90 lakhs worth of paddy had bee n procured so far in Bihar. He accused the NDA government of neglecting the interests of Bihar farmers.

"There is an agricultural crisis and it is perhaps the single most important issue in the country today," said Sushil Kumar Modi, the BJP leader of the opposition in the Assembly. He appealed to Union Food and Supply Minister Shanta Kumar to relax the pa rametres of the FCI and sought an immediate ban on the import of foodgrains from other States. At the same time, he blamed the State government for the plight of farmers, alleging that it had neither opened a single procurement centre nor given funds to the cooperative societies to purchase foodgrains at the local level. He further stated that owing to the 4 per cent sales tax levied by the State government, cheaper foodgrains were coming in from West Bengal, Uttar Pradesh and Madhya Pradesh.


IN Orissa, the Biju Janata Dal-BJP coalition government has sent an urgent message to the Centre requesting it to stop immediately any further dispatch of foodgrains as the godowns in the State are already full and consequently, procurement activity has come to a near standstill. Food and Civil Supplies Minister Bedprakash Agrawal of the BJP drew attention to the fact that while procurement by the FCI had stopped, there was massive import of rice and wheat to the State for storage in FCI godowns.

Chief Minister Naveen Patnaik wrote to the Prime Minister urging him to stop the movement of foodgrains to Orissa and offload the existing stocks in the State on West Bengal. The arrival of a consignment of 50,000 tonnes of rice from Punjab has been a ma jor cause of worry for FCI officials as the godowns are full and purchase of foodgrains from local farmers has stopped. There are reports of distress sale from various parts of Orissa.

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