Punjab a disaster waiting to happen due to disarray in State finances

The breadbasket of 40 years ago has been pushed into heavy public debt due to gross mismanagement.

Farmers raise slogans as they block train tracks with tractors in Devi Dass Pura village in Amritsar during the protest against the proposed farm laws in October 2020. | Photo Credit: PTI

In the popular imagination of Punjab, social movements are peaceful mass collective resistance intended to defend economic and political rights. But there are exceptions. Two legacies of armed resistance repeatedly come up in public discourse: one by Guru Gobind Singh, the tenth Sikh guru, against Mughal rulers, and the rule of Maharaja Ranjit Singh in erstwhile Punjab in the form of Khalsa Raj from 1801 to 1839. But there is a legacy of peaceful mass resistance as well. While the Ghadarites and Babbar Akalis of the pre-Independence era were militant movements, the Pagree Sambhal (a metaphor for self-respect, literally “take care of your turban”) movement of canal colonies (now in Pakistan), led by Ajit Singh in 1907, and the various tenant protests, including the Gurdwara reform movement between 1920-25, were peaceful people’s movements.

In post-Independence India, the tenant movement against princely states for proprietorship, the anti-betterment levy movement by peasants against the Punjab government during 1958-59, and the more recent farmers’ agitation at Delhi’s borders from November 2020 to December 2021 against the three agricultural laws are examples of peaceful mass movement by farmers. But the naxalite movement of the late1960s and the Sikh militant movement of the 1980s are instances of the militant streak in Punjab’s history. These movements were largely concentrated in rural areas, more often than not initiated and sustained by the landowning Jat Sikh class. The popular belief is that the Green Revolution package was introduced in Punjab to curb armed resistance by naxalites.

History has chiselled Punjabi farmers out of a unique triad—caste, class, and religion. Nearly 80 per cent of arable land is controlled by Jats, a dominant caste which constitutes nearly 21 per cent of the rural population. Jats are also largely Sikh by religion. Jat Sikhs, one of the core mobilising forces among farmers, dominate in political and other institutions of governance. Interestingly, unlike other religions, Sikhism is not exclusionary. Sikh philosophy is closer to Buddhism in being against religious and caste divisions, horizontally or hierarchically. Sikhism is more of a political and social reform movement than one that leans towards spiritualism and mysticism. Since the Left ideology also stood for social justice, it turned out to be a natural ally of Sikh believers. This connection is true even of the recent farmers’ agitation.

There is also a correlation between the agrarian crisis and the re-emergence of Sikh militancy under Amritpal Singh Sandhu. Let us attempt to analyse the ground realities with a focus on rural Punjab.

Paying the price

Punjab, popularly known as the bread basket of India, is now passing through a series of crises, economic, political, social, and environmental. It is still a primarily agricultural State that pioneered the Green Revolution in the late 1960s. The impact of agrarian transformation was so dramatic that by 1981 Punjab emerged as the Number 1 State in India. However, there began the crisis, too, as the rate of growth in agriculture soon started sliding, plunging farmers into heavy debt due to the decreasing rate of return on every unit of investment.

An irrigation canal in Fatehpur village of Patiala district in Punjab no longer carries water for irrigating the fields. Farmers now depend on tube wells, which have caused the water table to drop drastically in the region. | Photo Credit: AKHILESH KUMAR

A shift from agriculture as a way of life to agriculture as a commercial venture transformed rural life, with profit rather than family needs determining the choice of crop. The neoliberal economic policies introduced after 1992 further fortified the unequal exchange between the cost of agricultural inputs and the price of agricultural produce. Excessive mechanisation and the use of insecticides/weedicides squeezed labour demand drastically. The organic cooperation between erstwhile peasants and local labour was badly shaken, pushing the latter out of the agricultural labour market. The introduction of new cash crops reduced the demand for labour to nearly two months in a year, that is, only during the peak periods. The introduction of paddy crop in Punjab also attracted trained and cheap labour from Bihar and eastern Uttar Pradesh at the cost of local labour.

Debt burden

Commercialisation of agriculture expanded the marketing infrastructure and a new category of moneylenders called arhatiyas (commission agents) emerged. At the same time, the effect of economic policies pursued by Manmohan Singh as Prime Minister and Montek Singh Ahluwalia as Deputy Chairman of the Planning Commission during their first stint burdened the farmers with debt that broke their back. In the name of liberal finance to agriculture, the limit of bank loan per acre was suddenly enhanced nearly six times.

A warning sticker on the tank of the pesticide sprayer in the farm of Jarnail Singh in Jajjal village, Punjab, in 2013. The Green Revolution introduced Punjab’s farmers to chemical fertilisers and pesticides, which have contaminated food and soil. | Photo Credit: Prashanth Vishwanathan/Bloomberg 

This was achieved with the help of the National Commission on Farmers under the chairmanship of M.S. Swaminathan, which submitted its five-volume report between 2004 and 2006. Until then the loan limit was Rs.50,000 per acre and banks were stingy in passing loan applications. By 2006, the limit was enhanced to Rs.3 lakh per acre while net profit per acre hovered around Rs.50,000. Banks also softened the earlier harsh conditions for loan approvals in the name of helping farmers. The decade that followed found farmers in the pincer grip of a debt trap, with arhatiyas on one side and banks on the other. Consequently, there is hardly a day when farmers do not lose their lives to suicide.

The drastic shift in agriculture also had a direct bearing on the pattern of consumption among the farmers of rural Punjab. Instead of looking for productive investment of their newly earned surplus from agriculture, most big farmers opted for conspicuous consumption. The burden of debt, therefore, continued to pile up.

Mismanaged State

At the political level, Punjab has been grossly mismanaged and people of the State are quite aware of that. While in power, most of the leaders of the traditional political parties conducted themselves more as feudal lords than as committed servants of society. Over the past two decades, some political leaders patronised the drug and mining mafias and flaunted a luxurious lifestyle with the ill-gotten money. Gangsters are everywhere in Punjab now. Amidst the chaos, the people have been left to fend for themselves. For more than a decade farmers yearned for a political outfit that would be more sensitive to their woes. Out of desperation, Punjabis made the Aam Aadmi Party their first choice and electorally uprooted the more entrenched politicians.

A farmer inspects a sunflower at a field in Nabha village in Punjab in May 2005. Sunflower is one of the most lucrative oilseed crops. | Photo Credit: Ajay Verma/ REUTERS 

Policy planners, economists, and philanthropists gave plenty of timely warnings about the pending disaster in rural Punjab, but political leaders paid no heed. None of the ruling elites cared to advise farmers not to take unproductive loans that would push them into debt traps. Using populist measures in place of planning, encouraging dependency through freebies instead of making farmers self-sufficient, and bolstering a network of corruption instead of providing efficient services have become the order of the day.

The gross mismanagement pushed the State into heavy public debt, which is now more than 50 per cent of the Gross State Domestic Product (GSDP). The net result is all-around disaster. Agricultural land has not only lost its fertility but also become toxic due to the excessive use of chemical fertilisers, weedicides, and pesticides. The continuous neglect of canal irrigation has shrunk the area under canal irrigation from 37 per cent to 27 per cent. Free power supply to more than 14 lakh tube wells also added to the neglect of canal irrigation. The excessive extraction of underground water through tube wells has pushed 75 per cent of rural blocks into the dark zone (an area where groundwater depletion exceeds the rate of recharging). It is believed that in the next 15 years, agriculture in Punjab will face a severe crisis for want of irrigation water. Could there be a bigger tragedy than the land of five rivers (Punjab) ending up parched?

Despite repeated advice from agricultural scientists, no attempt has been made to diversify the present cycle of wheat-paddy cultivation. It is estimated that around 5,000 litres of water is consumed to produce merely 1 kg of rice. Politicians often like to boast that Punjab constitutes 1.53 per cent of the geographical area of India and 2 per cent of its population, but produces 17 per cent of its wheat, 12 per cent of its paddy, and nearly 10 per cent of the milk.

What they do not tell is that this is due to the over-exploitation of natural resources and manpower, besides ruining the environment by the excessive use of chemicals. Agrarian land has been exploited to the hilt, with more than 84 per cent of Punjab under agriculture. Consequently, only 6.1 per cent forest cover is left against the prescribed requirement of 33 per cent.

Rapid decline

The rise and fall of Punjab’s agriculture sector is tragic. Within four years of the Green Revolution’s start in 1967, the income of Punjab’s farmers jumped up by 70 per cent. The sudden spurt in economic growth resulted in the development of infrastructure. All villages in the State were electrified by 1974. Thus, Punjab emerged as a model State, a position it held until the mid-1980s. It slipped to fourth position by 2001 and to 16th position by 2020. It is estimated that between 2000 and 2010, Punjab was the second slowest growing State in India.

The managers of Punjab failed the hard-working people of the State. The real agrarian crisis set in during the last two decades. For instance, the real growth of gross State value added in Punjab was 5.4 per cent for 2022-23 whereas the all-India figure of gross value added was 6.7 per cent. Clearly, the “bread basket” of 40 years ago is now sinking to the bottom. Just before the pandemic, the unemployment rate in Punjab was 9 per cent (this has now come down to 6.8 per cent, which is lower than the national average of 8.6 per cent).

A farmer sprays peticides in a field in a village on the outskirts of Amritsar. | Photo Credit: PTI

The free play of market forces in agriculture not only led to the unemployment of agricultural labourers but also rendered small and marginal farmers unviable. The average debt among small and marginal farmers is nearly eight times their annual income compared to 2.7 times among medium and large farmers. In contrast to the pre-Green Revolution period, small and marginal farmers now lease out their lands to rich farmers. Thus, the rate of suicide is also high among small and marginal farmers as compared to rich farmers.

The drop in Punjab’s rate of growth below the national average has impacted farmers the most. And they are struggling to come out of the crisis by providing collective resistance on the one hand and changing the guardians of governance on the other. The agitation against the three agricultural laws by the Union government was the natural culmination of the deep agrarian crisis. It is worth remembering that the primary sector in Punjab still contributes 28.94 per cent to the GSDP, whereas the secondary and tertiary sectors contribute 25.15 per cent and 45.91 per cent respectively. Punjab’s economy, therefore, is still heavily dependent on agriculture and allied occupations. Its restive farmers are going to be on the centre stage of the political arena in the near future.

Until a responsible government takes charge and addresses these deep-seated crises, it will not be possible to bring Punjab out of the disturbing phenomenon of cyclical militancy.

Manjit Singh is a retired professor of sociology, Panjab University, Chandigarh.

Highlights

• There is a correlation between the agrarian crisis and the re-emergence of Sikh militancy in Punjab. After the Green Revolution, the rate of growth in agriculture soon started sliding, plunging farmers into heavy debt.
• At the political level, Punjab has been grossly mismanaged and people of the State are quite aware of that. The gross mismanagement pushed the State into heavy public debt.
• The real agrarian crisis set in during the last two decades and the drop in Punjab’s rate of growth below the national average has impacted farmers the most.
• Until a responsible government takes charge and addresses the deep-seated crises, it will not be possible to bring Punjab out of cyclical militancy.