Ahead of the Lok Sabha election, farmers are up in arms again. Underscoring that 50 per cent of the population is engaged in farming, the Mohali-based agricultural expert Devinder Sharma says the path to realise the Prime Minister’s vision of “Sabka Saath Sabka Vikas” (Together, for everyone’s growth) passes through agriculture. In this interview, he spoke on a range of issues concerning agricultural distress. Excerpts:
The farmers’ protest coincides with the government’s announcement of Bharat Ratna for Chaudhary Charan Singh and M.S. Swaminathan. How do you view this dichotomy?
Yes, there is a contradiction. Both Chaudhary Charan Singh and the distinguished agricultural scientist M.S. Swaminathan were champions of farmers and farming. While Charan Singh wanted 60 per cent reservation for children of tillers in government jobs, the laws he brought in for the consolidation of land holdings and abolition of the zamindari system helped transform the rural economy. They provided an enabling environment for the Green Revolution to take root. He would often say that a farmer is born in debt and dies in debt. To ensure they are not cheated, he would advise them to keep one eye on the plough and another eye on New Delhi, implying that they cannot remain oblivious to the policy framework being worked out for them.
Prof. Swaminathan brought in a remarkable technological transformation, pulling the country out of a hunger crisis. The transition of India to a food-secure economy will remain a golden chapter of its 20th century history. But, over the years, Prof. Swaminathan realised that increasing crop productivity had not brought income security to farmers. Crop production had increased steadily but farm incomes fell steeply.
As chairman of the National Commission on Farmers, his recommendation to provide farmers with weighted cost plus 50 per cent profit, “C2+50” as it is popularly known, triggered a nationwide campaign by farming unions demanding the formula be implemented to calculate prices.
Like Charan Singh, Prof. Swaminathan realised the despicable conditions in which farmers lived, and went a step ahead by suggesting a pricing formula to bring economic justice to beleaguered farmers. The best tribute the country can pay him is to implement the Swaminathan Commission’s recommendation.
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The National Crime Records Bureau data indicate that there has been no let-up in suicides among farmers and agricultural labourers. The BJP came to power on the promise of “Sabka Saath Sabka Vikas”. But its promise to double farmers’ income by 2022 has not happened. What is your view on the government’s efforts in this direction since 2014?
When the government announced in 2016 that it would double farmers’ income over the next five years, the question I was often asked was what was the income of farmers that the government had promised to double. Quoting Economic Survey 2016, my reply was that the average farming income in 17 States, roughly half the country, was barely Rs.20,000 a year. In other words, farming families were living on less than Rs.1,700 a month. This was not even enough to rear a cow for farmers in Punjab.
Subsequently, the Situational Assessment Survey for Agricultural Households, presented in 2021, showed that farm household income in India was Rs.10,218 a month. In fact, farm income was computed to be lower than the monthly wages of MGNREGA workers. Income from farming alone (not including non-farm activities) was a paltry Rs.27 a day. Farming was at the bottom of the pyramid.
With farm household expenditure being lower than that of rural households, the latest Household Consumption Expenditure Survey 2022-23 also reiterates the precarious condition in which farming as a profession finds itself.
With such low farm incomes, indebtedness in the sector is growing. It is like a serial death dance on the farm. With incomes remaining static or on the decline, there are no signs that indicate any lessening of the tragedy on the farm. Whereas it should be clear that to realise the Prime Minister’s vision of “Sabka Saath Sabka Vikas”, the pathway is through agriculture. Given that roughly 50 per cent of the country’s population is engaged in agriculture, there is no other way than to enhance farmers’ income. We cannot leave farmers behind.
“Making MSP a legal right will not be an economic burden; it will, in fact, lead to an economic boom.”
Some agricultural economists believe that legalising MSP for 23 crops is not practical owing to the exorbitant fiscal cost and because the government already gives subsidies for agriculture.
Both assessments are incorrect. The Rs.10 lakh crore figure being tossed around as the fiscal cost is primarily meant to create a fear psychosis. While this appears to be the total cost if all farm produce is procured, what farmers are demanding is that the MSP becomes a benchmark price below which no trading takes place. It does not mean the government has to procure everything.
Moreover, there are independent estimates of the additional cost, which vary between Rs.21,000 crore, according to Crisil, and Rs.1.5 lakh crore, according to a former Chairman of the Karnataka Agricultural Prices Commission.
To say that agriculture receives a lot of subsidies is another fallacy being propagated.
The Organisation for Economic Cooperation and Development [OECD] has said that Indian farmers have been incurring losses since 2000. In fact, India is the only country among 54 major economies studied where farm losses are not covered by budgetary support.
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What are the imminent grave threats to farmers and farming today?
For several decades, agriculture has been reeling under a severe crisis. It is essentially an outcome of policies that have kept farmers deliberately impoverished. The economic design is aimed at pushing people from rural areas to urban centres because cheaper labour is needed to keep economic reforms viable. The macroeconomic policies punish farmers by keeping farm incomes low.
Any rise in food prices, that crosses the RBI’s food inflation bracket, is kept under tight control. The inflation basket is so designed that a rise in onion and potato prices surprisingly becomes a cause for concern for an economy heading towards $5 trillion, whereas the real drivers of inflation such as housing, education, and health are not counted. As long as the RBI does not repackage the inflation basket, farmers will remain at the bottom of the heap.
Markets everywhere have failed to enhance farmers’ income. Farmers are paying a heavy price for the failure of markets to put more money in their hands. Otherwise, I see no reason why OECD countries should be providing a subsidy support exceeding $260 billion to agriculture.
Making MSP a legal mechanism is the way forward. India should take the lead. I am sure the rest of the world too will follow. It will not be an economic burden but will, in fact, lead to an economic boom. The markets will not be distorted; they will automatically adjust. After all, 84 per cent of the farmers (who do not benefit from the MSP regime) are dependent on markets and get 25-30 per cent lower price than the MSP announced. When there is more money in their hands, they will obviously spend it in the markets, thereby creating a huge rural demand. This will boost growth.
