Exit Policy for Farmers
Posted by Ramoo on April 6, 2008
As India is dumped with cheap agricultural products, farmers are being squeezed out of their livelihood, putting the nation’s food security at stake
Devinder Sharma Delhi
When Union Finance Minister P Chidambaram said the other day that India could do with 20 per cent of the existing farmers, he was merely echoeing what the World Bank/IMF have been saying for long. No wonder, the government seems to be in a tearing hurry to lay out an ‘exit policy’ for farmers.
From food self-sufficiency to market economy, the world has come a long way since the days of Green Revolution. But some 20 years back with the World Bank/IMF clearly tying up credit under the structural adjustment policies with crop diversification, the agricultural policies began to change. It is now forcing India to shift from staple foods (crucial for food security needs) to cash crops that meet the luxury requirement of the western countries. In the process, India, like other developing countries, is being forced to dismantle state support to food procurement, withdraw price support to farmers, and relax land-ceiling laws that enable the corporate sector to move into agriculture.
As I flip through the pages of the World Development Report 2008, I realise how meticulously the corporate takeover of Indian agriculture has been planned. The language used in the report may be fancy and seductive, but the message it conveys is crystal clear. Amidst the talk of sustainable agriculture and restoring soil fertility, it actually talks of providing appropriate training to the rural population to move them out to the cities. It also talks of encouraging land rentals, and thereby moving the agribusiness companies to gradually take over farming. Contract farming, food-retail chains and corporate agriculture are the ways it suggests for making agriculture more competitive.
This reminds me of what a former vice-president of the World Bank and the then chairman of the Consultative Group on International Agricultural Research (CGIAR), Ismail Serageldin, had warned way back in the mid 1990s. Addressing a conference at the MS Swaminathan Research Foundation in Chennai, he had quoted a 1995 World Bank study, which had predicted that the number of people migrating from the rural to the urban centres in India by the year 2010, which is not far away now, would be equal to twice the combined population of UK, France and Germany.
The combined population of UK, France and Germany is close to 200 million. In other words, 400 million are expected to be taking the distress migration route. It now dawns on me that the 1995 World Bank study was not intended to be a warning. It actually laid out a roadmap, that was subsequently strengthened in the annual reports from the World Bank. The World Development Report 2008 only takes us to the final step. With the process to exacerbate the exodus from the rural to the urban centres already in place, it now suggests setting up industrial training institute where farmers could learn to be factory workers.
Facilitating the process is the plethora of national policies that are either being amended or recast at a frantic pace. Ever since economic liberalisation was ushered in 1991, every policy worth the name is being either amended or recast. Whether it is the seed policy, water policy, biodiversity policy, forest and tribals policy, environment policy, biotechnology policy, trade policy, food safety policy or the kisan policy, the underlying objective is crystal clear – pave way for private control. As far as agriculture is concerned, the policies framework is to facilitate the entry of the agribusiness industry.
Let me illustrate. Prime Minister Manmohan Singh had sometimes back addressed a full meeting of the Planning Commission. He had stressed on a speedier amendment of the Agricultural Produce Marketing Committee (APMC) Act to “allow for contract and free marketing, organised retailing, smooth flow of raw materials to agro-processing industries, competitive trading and adoption of innovative marketing system,” so that these are in tune with the demand of the domestic food industry. This move is also aimed at integrating Indian agriculture with the global economy, something that is spelt out by the World Trade Organisation (WTO).
By simply tinkering with the food management system, so assiduously built over the years, the government allowed private companies to make purchases directly from the farmers. The result: unwarranted wheat imports – touching 55 lakh tonnes in 2006 and another 35 lakh tonnes in 2007 – basically aimed at dismantling food self-sufficieny, the hallmark of national sovereignty. More importantly, wheat imports are coming at a time when there is no shortfall in its domestic production. Within a matter of few months, India has turned into world’s biggest importer of wheat.
Not only the Planning Commission, the prime minister has also been holding brain-storming sessions with the chief executives of key industries and stakeholders. No wonder, the Indian industry and business is upbeat at the potential of agriculture (read agribusiness). What, therefore, repeatedly comes out is the urgent need to invest Rs 1,50,000 crore in the next 10 years to provide a boost to the agro-business industry so as to achieve an annual growth rate of 10 per cent in food processing. Isn’t it strange that while there is no money for bailing out farmers in distress, there are no dearth of resources for the agri-business industry?
While the negative impact of WTO Agreement on Agriculture has not been studied in full, the government is preparing to enter into still more exploitative trade treaties with the Asian countries. The Free Trade Agreement that the government is contemplating to sign with the ASEAN countries puts four of India’s major commodities – oilseeds, tea, edible oils and pepper – on the chopping block. India has promised to further reduce the import duties thereby turning the country into a dump yard.
Setting up a time-bound National Food Security Mission by enhancing production of wheat, rice, pulses and edible oils comes at a time when the government itself is lowering the custom tariff, thereby allowing cheaper imports. Take the case of edible oils. India was almost self-sufficient in edible oils in 1993-94. Ever since the government began lowering the tariffs, edible oil imports have multiplied turning the country into the biggest importer. Small farmers growing oilseeds and that too in the rainfed areas of the country had to abandon production in the light of cheaper imports.
Liberalisation of the farm sector has already seen import surges. Agriculture commodity imports have gone up by 300 per cent between 2000-2004. Coconut oil imports for instance increased from 7,291 metric tonnes in 2004-05 to 22,307 metric tonnes in 2005-06. The import of pepper similarly increased from 2,186.3 tonnes in 1995-96 to 17,725.3 tonnes in 2004-05. These are not isolated cases. Imports of spices and plantation crops, including tea and coffee have been on an upswing. Importing food commodities is like importing unemployment.
A Indo-US agriculture technology cooperation is being put in place without first ascertaining the reasons behind the terrible agrarian crisis, much of it is the result of imposing environmentally-unfriendly alien technology, as the government embarks on the faulty promise of a ‘second’ green revolution. Coming at a time when the commerce ministry is on a fast track to bring in Special Economic Zones, the Indian industry is moving ahead to set up ‘rural hubs’ that will displace a large population of farmers. Fertile land is being increasingly acquired for industrialisation and real estate.
Privatisation of mandis, opening of food retail trade to foreign direct investment and pushing aggressively the highly controversial ‘contract farming’ is part of the agricultural reforms being undertaken. Budgetary support to the states undertaking such reforms has already been spelt out. In the name of increasing food production and minimising the price risks that farmers continue to be faced with, encouraging contract farming, future trading in agriculture commodities, land leasing, forming land-sharing companies, direct procurement of farm commodities and dismantling the procurement system have little or nothing to do with revitalising agriculture.
It is certainly time for farmers to exit agriculture. With farmers already disappearing from the US and with EU fast keeping pace, it is now India’s turn. What is, however, not being realised is that with cheap agricultural products swamping India, and with farmers being deliberately pushed out of agriculture, we will soon be a witness to probably a much bigger and heinous environmental displacement. This time it is not going to be for big dams and hydel projects but agriculture. And still worse, it is not happening inadvertently, it has been part of the design. Wait and watch for the resulting consequences.