by Harish Gupta, National Editor, Lokmat Group
Prime Minister Narendra Modi has a way of making juicy promises studded with numbers that he emits with great certitude. Some time it works, sometime it doesn’t. When it fails to work, it blowbacks on his government with unfailing accuracy. Just as it’s happening for over a month now. A rosy promise he made in 2014 is now chasing him. During his general election campaign, Modi assured the farming communities that, if he could wield power, they’d get a 50 per cent return on their investment in agriculture. Such return on investment in the medium term is many times over that in oil, gas, or even information technology in its heydays.
But the fact is that Return on Investment (RoI) in agriculture is moving southward, not the other way round. I am not sure if the government has the vision to see light at the end of the tunnel in which agriculture in India has gotten itself imprisoned over decades. Had successive governments implemented some innovative schemes in the agriculture sector, farmers would not have suffered as they did during the several decades. Modi knew the plight of the farmers as he was at the helms in Gujrat as Chief Minister. In 2014, Modi offered moon to the farmers and that’s Modi’s present unenviable situation. With farmer unrest setting off as Jat farmers’ pandemonium in Haryana and Delhi, it has now engulfed Maharashtra, parts of Uttar Pradesh, even distant Tamil Nadu. In Madhya Pradesh, where an insensitive state government failed to curb police brutality at Mandsaur, bordering Maharashtra, six farmers were killed in firing. Adding insult to injury, Union Agriculture Minister Radha Mohan Singh, whose calling demanded of him to rush to the spot, remained unperturbed as he appeared on a television program the same day by the side of a yoga tycoon, and bending his torso in the same asana as the latter’s. Meanwhile, the next day at Mandsaur, Congress vice president Rahul Gandhi was grabbing headlines as police of the BJP-ruled state of Madhya Pradesh prevented his entry and arrested him.
Agriculture accounts for only 17.32 per cent of India’s GDP yet 58 per cent of the rural households depend on it as the principal means of livelihood. Common sense dictates that a sector being so overcrowded, its stakeholders would insist on multiple reforms, like educating and re-skilling themselves for alternative vocations, forcing the state to invest heavily on agricultural infrastructure, help diversify produces and design ‘smart’ subsidies. In all these tests, if the Congress-led UPA were an utter failure, the BJP-led NDA is under performer.
However, the Modi administration was quick at promising reform. Irrigation is an example. Only 47 per cent the country’s farms are irrigated, though it generally means pumping up groundwater with bore wells and dry up the underground aquifers. It is sheer waste of water. However, the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), with a Rs 54,000-crore allocation (in five years), is floundering because it has little interest in minor irrigation that brings water directly to the farmer—the budget for such schemes has been cut 30 per cent this year. The explanation was that higher allocations have been made to the states. The government’s focus is on large projects, 92 of them, most of which are under various stages of completion. The problem is such long term projects do not help the farmer facing consecutive droughts in short term.
Irrigating India being too challenging a task, the Modi administration has gone for the easy option, which is loan waiver. For this, however, the copyright goes to Congress which waived farm loans countrywide in 2007. Its futility is best shown by agricultural economist Ashok Gulati in a chart that shows the state-wise tepid and unequal growth of agricultural output between 2007-09 and 2014-15. In 2004-05 prices, the annual growth rate of agriculture in India was only 3.2 per cent. Punjab, once the granary of India, witnessed its declining growth trend dropping even faster to 1.3 per cent.
Loan waiver, therefore, is not linked to agricultural productivity. Instead, it is a fallout of rural indebtedness which has become, over centuries perhaps, a signature of India’s village life. From Nehru to Modi, no regime could combat it. Up to 57 per cent of farm families in Maharashtra are indebted. For India, the National Sample Survey Organization (NSSO) measured it as 52 per cent in 2013. The anxiety of loan default sits on the mind of India’s rural people like dead weight, accounting for most farmers’ suicides (in Maharashtra, 4,291 in 2015). Politicians try to cash in on this anxiety, like Yogi Adityanath who, after taking charge of Uttar Pradesh, promised a loan waiver of Rs 30,792 crore.
And that blew the fuse on the farming front. Across Maharashtra, Madhya Pradesh, Tamil Nadu and Telangana, farmers are demanding full waiver of all outstanding loans. Maharashtra has already buckled under farmers’ pressure, and others too may not have much option. But, with total agricultural loan standing at Rs 12.6 lakh crore, it can be fully written off at the peril of “severe systemic consequences”, as minister of state for agriculture Parshottam Rupala said in Parliament. The other anodyne in the government’s chest of medicines is the Minimum Support Price (MSP) mechanism. As subsidy, MSP has gone a long way in curbing India’s crop diversity, by keeping it primarily a wheat-and-rice country. But, with rising income levels, popular food choice is changing, and, according to a study by Credit Suisse, per capita consumption of cereal is dropping 1 per cent annually over the last 30 years. That explains bursting cereal warehouses.
What is destroying agriculture? Can it survive with so many people jostling for a sector of so little value? How can farming be modernized when the holdings are pocket handkerchief-sized? Modi rightly abolished presentation of a Railway Budget. But its high time that a separate Krishi Budget be introduced. This will force the bureaucracy completely insensitive to plight of the farmers and rural economy and lame-duck ministers to help in changing the face of the farmer. My humble advice is Modi’s yoga-loving ministers and chief ministers can apply their mind to these issues, rather than assuring fictional profit in agriculture, or busting the exchequer to write off bad loans.
