For over two decades, the conversation on farmer issues had languished. Realising the stupor a few years ago, agricultural issues were sought to be made a central topic of discussion in India. Even as the momentum of the debate increased, and understanding was created on the fact that perpetual farm distress had become the horrifying new normal, there was a failure to protect the farmer’s turf from academics. This must be acknowledged. Every policymaker has focused on, including in the columns of this paper, policies that tackle food inflation, while we farmers fear and have long argued about ways to counter deflation. This is just one among the many reasons that farmers are at odds with agriculture academicians.
Last year, fearful of inflation, the new government restricted potato exports. I argued against the restrictions (‘Making a hash of it’, The Indian Express, July 5, 2014) to no avail. This season, potatoes have sold for as low as Rs 2 per kg. When prices fall, the government does a disappearing act. Now, the government has banned the export of onions. Onions, which farmers sold for Rs 6 per kg three months ago, are now retailing for Rs 40 per kg. Food inflation has more to do with issues of hoarding, governance, lack of enforcement of regulation and marketing bottlenecks than production constraints. The future looks bleak for farmers, though achhe din seem to be here for traders. There is absolutely no reason for the government to interfere with the potato and onion markets, where it gives no support price to farmers. Our problem is not too little of the right food but too few policies of the right kind.
Policymakers first aggravated food inflation and are now conveniently propagating the import of food as a way to keep it in check. Economists have pessimistically built their arguments on the assumption that domestic food inflation is here to stay, that it cannot be solved at home. But farmers are optimistic that they can produce enough to feed the nation and are, in fact, threatened by deflation. Different objectives require different approaches. Economists continuously justify and advocate the abolition of farm subsidies in India to save resources, even as we are encouraged to import. In contrast, we farmers suggest reducing subsidies per quintal of production.
If one listened to farmers, one would know that they advocate improving the quality of produce, increasing the production of most crops by 20 per cent and, subsequently, increasing farmer profit by simply making available the best farm machinery. These gains can be realised without any extra seeds, fertiliser, pesticide or water. The small size of holdings don’t justify the costs of ownership. Availability of machinery does not mean individual farmers should actually own the machinery, which leads to indebtedness. The Indian government must incentivise leasing as well as permit duty-free imports of better, cheaper farm machinery. There are many more such simple interventions that could have a powerful effect. Like the UPA, if the NDA remains convinced that only academicians possess knowledge and that the opinion of farmers is a burden, we will permanently remain a developing country.
The artificially high international commodity prices fell partly because, in 2013, China banned banks from accepting agriculture commodities as collateral for raising funds. Supply will continue to outpace demand for years to come. This month, the Food and Agriculture Organisation validated our deflation forecast. Presently, many multinational commodity firms are setting up shop in India to purchase grains. But their long-term objective is to use their network for distribution of imported food. Many countries like the United States, Canada, Australia, Brazil and even African nations that grow surplus food have already deduced that India as well as China will be their biggest markets in the future and are positioning themselves to take advantage of this. Their strategies are premised on the conviction that our policymakers will repeatedly fail and that water scarcity will create opportunities they could exploit. To believe that imports are the solution to food shortages and inflation is naive.
In order to reduce water usage, economists suggest reducing the import duty on rice from 70 to 5 per cent. This is far-fetched. They further suggest incentivising farmers to shift from rice to pulses production with a paltry sum of Rs 3,000 per acre. Farmers won’t shift to pulses for even three times that sum. For the record, farmers won’t shift from paddy to pulses even if the electricity subsidy is withdrawn — though withdrawing this subsidy will definitely result in reduced water usage, if that’s the objective. It is common practice for industry associations and international corporate-funded institutions to commission studies, projects and reports to influence policy. But allowing only them to frame farm policy is similar to asking GM seed manufacturers to frame food-labelling guidelines.