Andhra Pradesh

Seeds of wrath

Print edition : July 26, 2013

ANDHRA PRADESH can be described as the cradle of corporate and contract farming, with the seeds of the famous Kuppam project, synonymous with former Chief Minister N. Chandrababu Naidu’s vision of agriculture, being sown way back in 1995. The Israeli technology of micro-irrigation in the cultivation of vegetables was launched in 1997 and showcased as a wonder scheme that could change the lives of 85 per cent of the farmers who were below the poverty line.

BHC India, a subsidiary of an Israeli firm, offered the technology as part of an agreement with the State government. A year later, the government came up with stories of dramatic results, all of them debunked in 2000 by a committee of agriculture scientists constituted by the Andhra Pradesh Coalition in Defence of Diversity.

Though the project was implemented through a mutually aided cooperative joint farming society, it had all the trappings of a corporate body. Farmers were members, but none of them had any inkling of the functioning of the society, nor did they know that the society had entered into a contract with a corporate body.

The committee found that the nine directors were all employees of BHC and that land was taken over by the government for BHC. The corporate body managed the land and farming at all stages, including marketing. “Farmers were reduced to daily wage earners on their own land,” said G. V. Ramanjaneyulu, executive director of the Centre for Sustainable Agriculture, a non-governmental organisation.

However, far from being dumped as an exploitative model, corporate agriculture continues to be patronised albeit in a deceptive manner in the State.

The best example is that of Monsanto-Mahyco’s Bt cotton where corporatisation may not be seen on the farm or in a company taking over land or farmers becoming shareholders. But its presence dominates all activities of cotton growing. When Bt cotton was introduced in 2002, public-spirited farm scientists and anti-groups opposed to genetically modified (GM) seeds expressed concern over the monopolistic tendency of Monsanto, the control it would have over the cotton seed and its pricing and the high cost of raising the commercial crop. A decade later, the results are there for all to see.

Native and hybrid seeds have disappeared and Mahyco virtually calls the shots, having captured 90 per cent of the cotton seed market and deciding the price of seeds. Farmers have no option but to return to Bt cotton seed every season. Not just cotton growers, the Y.S. Rajasekhara Reddy government too had to fight a legal battle to make Mahyco see reason and bring down the price. The high cost of raising Bt cotton forced the farmer to take loans at high interest rates and when the crop failed he was left with little option but to take his own life.

Cotton growers in the State agree that the battle against bollworm was successfully fought with Bt cotton and that production had gone up phenomenally, but the problem is the cost. The seed sovereignty that they enjoyed was gone forever and over-production of cotton often brought them misery.

“Corporatisation of farming has to be understood in the broader context of corporatisation of the supply chain where profit nodes are privatised and loss-making nodes are left to farmers,” said Ramanjaneyulu.

He also pointed out that in Andhra Pradesh land was being purchased on a large scale by individuals and companies. “Our study shows that about 20 lakh acres moved out of agriculture and many who cannot buy land in other States [non-farmers are not allowed to buy land in Uttar Pradesh, Maharashtra, and so on] have bought it in the State.” There are fears that a large chunk of this could go corporate.

Another manifestation of corporate farming is in the recent arrival of its clone, contract farming. After the failure of the Kuppam project, the government has not involved itself directly in the promotion of contract farming.

The Andhra Pradesh (Agricultural Produce and Livestock) Marketing Act was amended in 2005 to provide the legal framework for contract farming, but the government has not taken a proactive approach. The amendment became necessary as the original Act placed restrictions on industry from directly purchasing from farmers and on farmers from entering into direct contract with any manufacturer.

Contract farming at present is confined to a few crops and the most popular one is gherkin (pickled cucumber) for the export market.

A number of companies have entered into agreements with farmers and gherkin cultivation is spread over hundreds of acres in eight districts of the State.

Retail chains like Reliance Fresh and ITC have attempted contract farming for cultivation of vegetables in Ranga Reddy district adjoining Hyderabad but they have not been very successful.

The Indian Gherkin Exporters’ Association asserts that contract farming for gherkin has been a successful model, but farmers’ rights activists have their share of concerns. They say contract farming can be useful only if there is an increased bargaining power for farmers or when the government acts as a mediator. But none of the agreements are registered, nor is there any monitoring by the government. Thus farmers are at a great risk. Activists fear that the firms now involved in contract farming could gain greater control over land, manpower and local resources, besides shifting farmers away from producing food crops.

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