Indian Agrarian Crisis now moved to

Farmer-the most endangered species

Budget 2008-09 Wolf in sheep clothing

Posted by Ramoo on April 9, 2008

By Dr. Vandana Shiva

Finance Minister P. Chidambaram, delivered his 2008-09, budget speech in Parliament on February 29, 2008 as revolutionary and path breaking and a solution to farmers distress. However, it continues on the path of trade liberalisation, corporate control and debt creation that has led to massive dislocation of farmers and the epidemic of farmers suicides. The budget is in fact a wolf in sheep’s clothing.

Why are farmers committing suicide? The reasons are clear—rising costs of production and falling prices of agricultural produce. The government’s pride in announcing that agricultural credit has reached Rs. 2,40,000 crore by March 2008 hides the fact that more credit means more debt. Instead of promoting low cost sustainable farming systems based on principles of agro ecology, which frees the farmer of debt the government’s policy thrust is to continue financing high cost, non-sustainable agriculture, and hence a debt creating agriculture.

The highlight of the budget was the loan waiver of farmers debt to the extent of Rs. 60,000 crore. This is a mere four per cent of all bank loans. What happens to the remaining 96 per cent? And most farmers are indebted to money lenders, not to banks. The Finance Minister’s speech was totally silent on the private debt that farmers are victims of.

The Finance Minister referred to the loan waiver as “discharging a deep debt of gratitude to farmers”. However, the debt to farmers is far from discharged in the present budget. Farmers need fairness and dignity. All aspects of fairness and dignity for farmers are missing. Farmers are in distress because seed has been monopolised by corporations like Monsanto selling toxic Bt. Cotton to farmers on credit and trapping them in debt. Not a word in the budget addressed the seed rights and seed sovereignty of farmers or the need for action to prevent monopolies over seed, the first link in the food chain. The Finance Minister in fact announced tax exemption for the seed industry and equated a gene giant like Monsanto with small and marginal farmers. Nor did the Minister pay a debt of gratitude to farmers by announcing an increase in Minimum Support Prices (MSP). If the Finance Minister had announced for farmer run community seed bank, it would have been an indication that he understands the causes of the agrarian crisis and has some sense about real solution of farmers need.

The budget speech referred to the volatile global economy and its impact on domestic prices of wheat. Yet the government has continued to import high cost wheat, linking the food rights of the poor in India to a global casino economy based on betting on commodities future markets. The reference to the Prime Minister’s statement that “we are determined to become self-sufficient in food grain” becomes vacuous in the context of failure to increase MSP for farmers, and in the context of the governments continued preference to create markets for global MNC’s rather than our own farmers. Three vital elements for ensuring the nations food security and food sovereignty are-


Stopping wheat imports,

bringing back Quantitative Restrictions (Q.Rs)

scrapping the U.S India Knowledge Initiative in Agriculture which in effect is a plan to hand over control of India’s seed sector to Monsanto, domestic and International grain trade to agribusiness corporations such as Cargill, Conagra, Levers etc and the retail market to Walmart and Reliance.

The budget has been put forward when North India has had massive crop damage due to frost and floods. Yet the weather related crop insurance is a pathetic 50 crore. There is no anticipatory strategy for adapting agriculture to climate change. In fact the very systems of small scale, biodiverse, organic agriculture which will solve the problem of farmers indebtedness will also help small and marginal farmers adapt to climate change. And instead of mitigating climate change, the budget actually is a recipe for increasing emissions. The Minister made a commitment to continue and increase subsidies for chemical fertilizers, even though chemical fertilizers emit nitrogen oxides, which are 300 times more lethal than carbon dioxide. The Ministers reference to raising more loans from the World Bank for large irrigation projects portends threats of water privatisation as shown in all World Bank water sector loans. How much of the Rs. 20,000 crore irrigation budget is redressing of the failed River Linking Project was not clarified.

Over all, the budget is more of the same. It is the policy wolf that has created the agrarian crisis parading as a sheep offering rescue to our distressed farmers.

(The author is a respected social activist and founder director of Navdanya and can be contacted at

One Response to “Budget 2008-09 Wolf in sheep clothing”

  1. What about those farmers who have paid up their loans honestly?
    While everyone has a great sympathy for the impoverished poor drought torn farmers, isn’t it that our finance minister is making those farmers who paid their loans on-time to look like big idiots? Isn’t the finance minister just encouraging the financial indiscipline of greatest order? Wouldn’t the same impoverished farmers, who will now be taking fresh new loans, expect the same relief when they default on their new loans?
    Moreover, what is the guarantee that the really needy farmer will get its loan waived off and the clergy of Indian bureaucracy and the clerics won’t eat up all the loan waivers by promoting their chosen beneficiaries?

    The better and real way to help out farmers is to provide agriculture a private business sector status and let the farmers and the farmers organisations to decide the price for farmer’s hard work and its product.

    Subsidies are actualy like a two-ay swords which will keep cutting heads on both sides.

    The sucking socialistic statism of Indian politics and economy is burdening the poor more than anything else can, the only solution for such gimmicks is striving for free-market economy with no hold of politics on economy.

    Laissez-faire principle alone can provide a relief for the hard workers.

    India needs to forget the bufoonery of keynese and adapt the wisdom of Ludwig Von Mises and Rothbard.

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