Interview with H.D. Deve Gowda, former Prime Minister.
The repercussions of the World Trade Organisation (WTO) agreement will be felt by the Indian farmer since, among other things, quantitative restrictions (QRs) on imports will be lifted and subsidies reduced drastically. Former Prime Minister and Janata D al (S) leader H.D. Deve Gowda has been opposing vehemently the present government's agriculture policy. In an interview to Anupama Katakam in Bangalore, he spoke about the current state of Indian agriculture and the implications of the WTO agreement for Indian farmers. He suggested a review of the agreement when there was still a chance to do so and the use of the clauses in the agreement to protect farmers' interests. "We will take to the streets and begin an active movement if the govern ment does not pay attention to agricultural issues," he said. Excerpts:
How would you describe the state of Indian agriculture today?
Agriculture is basically a very important component of the country's economy. There are two reasons for this. One: more than 65 per cent of the country's population is involved in agricultural activities and two, it has the largest workforce, more than a ny industrial or service sector. The majority of our population is, therefore, dependent on agriculture, which means that we have to safeguard this sector completely. Having said that, economists must realise that Indian agriculture cannot be compared to that prevailing in developed countries. Most developed countries have only 3 to 4 per cent of their populations working in this sector. Their farming methods are highly mechanised, the land holdings are huge and production is at a different level altoge ther. In India, 80 per cent of agricultural land consists of small holdings. Today small farmers are severely affected because of the multilateral agreement that India has entered into. This agreement is impractical for them.
What is the attitude of the government? It has increased the cost of inputs, reduced subsidies on tractors, power and drip irrigation. What steps has it taken to address the issues of the farmer? Where was the need to import palm oil? Did it calculate th e level of domestic consumption? The same will be done for coconut oil. You must safeguard the growers' interests.
Where is the need to ban the movement of vegetables between States? On the one hand, potatoes cost Rs.10 a kilogram in Mumbai and on the other, they are being thrown away in Karnataka. These are indications that this government is not sincere in protecti ng Indian agriculture. The farmer is in a very sad situation. Farmers committing suicide is a terrible thing. They need money to be given through cooperatives and commercial banks at a decent interest rate. Why must they have to go to moneylenders? Who e ventually is the cause of their deaths? Lending must be timely and adequate. That is not happening today.
What are the implications of the WTO agreement for India?
The agreement on agriculture under the WTO has had a certain adverse impact on Indian agriculture. When the Narasimha Rao government entered into it in 1994, it should have thought it through clearly. But it did not. We have erred in several areas in the agreement by not taking sufficient precautions at that time.
There is still time to rectify the lapses. There are provisions where clauses can be inserted to protect our farmers. Unfortunately, the National Democratic Alliance government is anxious to give the impression that India is moving forward in its market economy and in globalisation.
By giving this blanket permission, any amount of produce can be dumped in the country. We need first to see how much we need. If we need X quantity and have only Y output we should import only the shortfall. These are some of the basic issues we need to work out.
Within the agreement we have the weaponry to discourage this dumping or experimenting in our country. For instance, we could levy the highest customs duty. There is a provision for it and we can use it. For example, a 300 per cent duty could be slapped o n the import of oilseeds. An anti-dumping duty can be levied. There is also sufficient scope to provide export subsidy. The subsidy given is 2.5 per cent of gross domestic product (GDP). In the agreement, we have sufficient cushion to increase the subsid y three folds up to 10 per cent.
It will take between five to eight years for the final outcome of the WTO agreement. You cannot allow the farmers to suffer that long.
What could be the reasons for the decisions and the route that the government has taken?
There are so many vested interests. Traders are very influential with the present government. I do not want to say more than that.
Had the United Front, which you headed, been in power today, what would you have done? Would you have permitted the free import of agricultural commodities?
Never. Not a single item was permitted to be imported. The United Front government only allowed three million tonnes of wheat to be imported. This was to cover the deficiency in the PDS (public distribution system) and meet the requirement. We would not have been reckless like this. Under the garb of free trade, it should not be "free to exploit".
In fact, to tackle falling prices, the United Front government created a Rs.500-crore corpus fund. Whenever the market behaved badly, we released money, applying the market intervention principle of minimum support price. In my opinion, for this governme nt all this is only on paper, and it is not working in the field.
What in your view are the reasons for the paradox of plenty - massive grain stocks co-existing with reduced off-take through the PDS and the decrease in the efficiency of anti-poverty programmes?
The Central government has committed a huge blunder by increasing the prices of essential commodities. A 'below the poverty line' (BPL) family cannot sustain itself with a 100 per cent increase in commodities such as sugar and wheat; nobody can pay those prices. This is not only my view but also (BJP president) Bangaru Laxman's. It will not move stock.
On the one side there is a buffer stock of 53 million tonnes of foodgrains. On the other, there is nothing in the PDS. Is it not the responsibility of the government to take advantage of the buffer stock and ease the foodgrains crisis? It will be better to find a solution even if it may tax you Rs.2,000 crores to Rs.3,000 crores. It is better than spending Rs.4,000 crores to preserve stocks in the Food Corporation of India godowns.
(Prime Minister) Vajpayee has launched three anti-poverty programmes to cover over one crore people. Under one scheme, he announced that free foodgrains would be given to senior citizens. Unfortunately, the conditions that went along with it stated that the beneficiaries should not be receiving a pension. Widows who collect pension cannot avail themselves of this benefit. The programme rules out most of the people who need help. Will these schemes really alleviate poverty?
What impact does the institutional framework of agriculture have over yields, particularly land ownership patterns and credit availability?
With regard to land ownership patterns, my school of thought is that since most lands are small, hardly any of them are economic holdings. They have now allowed corporate bodies to take these lands on lease. The rent will be given according to the value of two to three years' yields. This is not entirely fair. Agriculture in India is production by the masses. As I said earlier, it has the country's largest workforce. You must be able to provide sufficient returns through products as well as provide fina ncial support. Agriculture needs to be made profitable.
What solutions do you recommend to ease the crisis?
Food-for-work is one solution. Bring down the PDS price hike. Make food available to all BPL people, at Rs.3.50 for a kilo of rice and Rs.2.50 for wheat. Farmers and people in the BPL category should be able to take advantage of the buffer stock. Provide technology, marketing and infrastructure along with investment.
The agricultural sector requires infrastructure. Cold storages need to be built to preserve perishable commodities. It should be done on a massive scale. This could be done by encouraging the private sector and non-governmental organisations to create th e right infrastructure. The government has to evolve a new policy to pull through these times. In another two months it will be three years since the Vajpayee government came to power. What have they done for this sector? Misery and ruin. That is all.
With regard to the WTO, when we go for a revision in the agreement, we must take a very firm stand. Superpowers cannot overpower us and we should lead the way for other developing countries. India should have a well-versed team to tackle the WTO. By send ing Secretaries and Deputy Secretaries who have short tenures and only basic knowledge of the situation, it does not help us. Lobbying must be consolidated.