March - April 2002   
  Vol. 2 No.2   
Know Your Founders Oddities, Eccentricities, Etc. Corporate Commentary Back to Main Page Editorial


First it was the onion farmers, then it was the cotton farmers followed by groundnut farmers ?A wave of suicides all over our rural sector totalling, in a single district like Anantpur (Andhra Pradesh), between 1997 and 2000, to over a thousand! The police dutifully recorded these not as starvation suicides which they were, but as committed by the chronically sick due to “unbearable stomach ache?

All this is because of the pitiful neglect of the rural sector in spite of Mahatma Gandhi’s avowal, way back in 1916, that “our salvation can alone come through the farmers.?The much promised, tomtommed reform of the agricultural sector, remains mostly on paper. Even technologies available to farmers throughout the world are denied to farmers in India like, say, genetically modified cotton seeds.

In this article (published courtesy: Freedom First) BHANU PRATAP SINGH, a farmer himself and former Union Minister of Agriculture, writes about Kisans in Distress.

Bhanu Pratap Singh

The National Sample Survey Organisation of the Gov-ernment of India had some time back reported that the incidence of rural poverty had increased to 42.58% in 1998 as against 37.27% in 1993-94. But the Government of India has now come up with an announcement that rural poverty had declined to only 24% in 1999-2000. Though it has been admitted that the latest estimate of poverty is not strictly comparable with the earlier estimates; nevertheless, it has been asserted that these provide clear evidence of a substantial decline in the overall poverty ratio in the country.

One may ask: When the estimates are not comparable, how can the claim of substantial decline in rural poverty be accepted, particularly in the light of the large number of suicides committed by farmers in various parts of the country? All the recent trends,relating to the rural economy, point in the opposite direction. The growth rate of agricultural production has sharply declined.

There has also been a perceptible decline in the prices of nearly all farm products. According to the National Income Accounts, the G.D.P. growth rate in the farm sector has been no more than 0.8% per annum, during the last two years, which is less than half the growth rate in population. Increase in employment in rural areas has also been no more than 0.67% per annum, which again is much below the growth rate in population. The Planning Commission in its Mid-Term Appraisal of the IX Plan has recorded: ‘‘During the nineties, the growth rate in availability of foodgrains per capita has come down to (? 0.28% per annum, as compared to a growth rate in per capita availability of (+) 1.20% per annum during the eighties. The food consumption of the poor in India has gone down in the last 10 years’’.


What is the reason for the increasing rural poverty? Is it due to persisting inclement weather that our agricultural growth is stagnating? Have we run short of natural resources which support the rural population? Have we fully exhausted the potential of our farm sector? The reply to all these questions is an emphatic No.

Favourable Climate

According to the Economic Survey 2000-2001, rainfall between 1990 and 2000 has been between 91 to 119 per cent of the normal, which cannot be said to be unsatisfactory.

India is also richly endowed by Nature. Her most abundant natural resource is her agro-climatic condition. In the world as a whole, the percentage of arable to total land area is only 11; in India, it is 51.5. Our climate also being moderate, enables us to grow two to three crops in a year; whereas in most parts of the world, due to severe winters, only one crop can grow in a year. We, in India, also have more irrigated land than any other country in the world. Yet another vast resource, which we have not fully developed, is our human resource. Nearly half of our rural population is illiterate. If we develop our two main resources ?agro-climatic and human ?which augment each other, India will no longer be the home of the largest number of poor people in the world.

We are still far from achieving the full potential of our agriculture. According to the Production Year Book 1997 of the Food and Agricultural Organisation (FAO), our per hectare productivity of cereals was only 2232 kgms, whereas it was 5298 kgms in the U.S. and 4845 kgms in China. If we increase our productivity even by 50%, rural poverty can be substantially reduced, as has already been demonstrated in Punjab. The question that calls for a reply from the government is, ‘‘Why has per hectare productivity of our agriculture remained so low?’’

Why Low Productivity?

The poor performance of our agriculture can be attributed to the cumulative impact of the injustices perpetrated against agriculturists, in the last 20 years, by all those who have been in power. Even after the dawn of the economic reforms, there has hardly been any change in the restrictions and control on the movement and trading of farm products. These continue to be imposed with the only purpose of creating local gluts, and thereby keeping farm prices depressed. The government has been quite successful in these manipulations.

According to Reports of the Commission on Agricultural Costs and Prices, the terms of trade between agriculturists and non-agriculturists with reference to the triennium ending 1971-72=100, have all along been adverse to agriculturists. In other words, agriculturists have all along been paying for their purchases a higher price than what they were receiving for their produce. Such long persistenting adverse terms of trade against farmers have reduced their profits, savings, and ultimately their capacity to invest in land. Capital formation in the farm sector, as a percentage of the total in the country, has sharply declined from 18% in 1980-81 to only 5.5% in 1998-99. The most revealing fact is that the government’s own contribution, in percentage terms, towards capital formation in the farm sector, now stands reduced to less than one-third of what it was in 1980-81.

It needs to be realised that unless the government spends more in rural India on the creation of the necessary infrastructure to support a faster growth in agriculture, even higher levels of investments by farmers themselves will not yield the desired results. Lack of infrastructural support is one of the main causes for the backwardness of agriculture in India. This view has now been substantially corroborated by the Union Ministry of Agriculture, which in its National Agricultural Policy (N.A.P.) has diagnosed the ailments from which Indian agriculture is suffering in the following words:‘‘Capital inadequacy, lack of infrastructural support and demand side constraints such as controls on movement, storage and sale of agricultural products, etc. have continued to affect the economic viability of the agricultural sector. Consequently, the growth of agriculture has tended to slacken during the nineties. Agriculture has become a relatively unrewarding profession, due to generally unfavourable price regime and low value addition, causing abandoning of farming and increasing migration from rural areas. The situation is likely to be exacerbated further in the wake of integration of agricultural trade in the global system, unless immediate corrective measures are taken’’.

Illiteracy and Poverty:

The above diagnosis by the Ministry of Agriculture of the ailments from which Indian agriculture is suffering is correct. But nothing has so far been done to improve the situation. The Government of India has also so far not taken into cognizance the following facts relating to agriculture:

* That agriculture is now a modern technique of production, which cannot be readily adopted by functionally illiterate farmers. Whatever the government may claim about the growing percentage of literacy in villages, not even one in four agriculturists of India can measure the length and breadth of his field and calculate the quantity of chemicals that need to be applied to his field. Such farmers cannot adopt the latest techniques of agricultural production.

*That rural poverty cannot be eradicated, or even reduced by distribution of state charity, which in any case, is largely swindled on its way to the poor. The only way to reduce poverty is to enable the poor farmers to produce more for themselves and the nation. This will, however, be possible only by upgrading the rural economy by providing it a better infrastructure. To do so, Plan Expenditure on Agriculture and Allied activities, Rural Development, Irrigation, Education and Health will have to be raised to the level of at least 50% of the total Plan expenditure, as was done during the First Plan period, but which has now been reduced to less than 29% during the IX Plan. This will have to be raised again to at least 50% if the rural economy is to be revived.

Rotting Foodgrains

*That the Public Distribution System has utterly failed to achieve any of its objectives. It does not provide any real support to farmers because, often, support prices as fixed by the government have not covered even the cost of production and never the increased cost of living of agriculturists. Coarse grains are hardly ever procured. Most of the rice is procured as levy from rice mills, which are under no obligation to purchase their paddy from farmers at minimum support prices. Also, no less than three-fourths of the total foodgrains procured by the government are only from three states, Punjab, Haryana and Andhra, which produce no more than one-fourth of the total grains produced in the country. The producers of three-fourths of food grains in the country do not get the benefit of either a free market or of government purchases at the M.S.Ps.

* And, lastly, in spite of the ballooning subsidies paid to the Fertilizer Corporation of India (FCI) ?Rs.2,850 crores in 1991-92 to Rs.12,125 crores in 2000-01 ?it has failed to achieve any of its objectives.

Its ever mounting stocks, rotting in godowns, are due to confusion, corruption and inefficiency in the system, and not due to over-production of foodgrains in the country. While more than 6 crore tons of foodgrains are rotting in government godowns, more than half of our children and their mothers remain undernourished.

The viability of the farm sector cannot be maintained except by maintaining parity between prices received and prices paid by farmers. The prices received by farmers have always been at a lower level than the prices paid by them. Unless this situation changes, faster development of agriculture will not be possible. To change this situation, a more equitable price policy will have to be adopted, and a more efficient marketing system organised.

To achieve higher production at lower costs, the process of mechanisation of agriculture will have to be accelerated. Agriculture in India is most mechanised in Punjab, where unemployment and the incidence of poverty are much less than in other states in India. Mechanisation reduces the total cost of production, because mechanised power is much cheaper than human power. Japan and South Korea have amply demonstrated that the small size of land holdings is no impediment to mechanisation of agriculture.

Unfair competition

Global agricultural markets are yet far from being a level playing field. How unfair is the competition in agriculture between developed and developing countries is evident from the following comments made by the World Bank in its Annual Report on Global Economic Reforms:

‘‘There is stark contrast between words and deeds and double standards applied 
by the Quad countries (USA, EU, Japan and Canada).

‘‘The Quad countries, tariffs for trade among themselves range from 4.3 per cent in Japan to 8.3 per cent in Canada, but their tariffs to keep out developing country exports are, in some cases, as high as 550 per cent. Products with high tariffs in Quad countries, include major agricultural staple food products, such as meat, sugar, milk, dairy products and chocolate, where tariff rates frequently exceed 100 per cent; and tobacco, some alcoholic beverages, fruits, vegetables, textiles, clothing and footwear. These are the sectors in which the developing countries have a competitive and comparative advantage. High trade barriers imposed by the industrial countries on agriculture and processed food imports, along with agricultural subsidies, have contributed to a decline in the developing countries?share of world trade in these commodities. These trade distortions have particularly affected the poorest countries because a host of other domestic policy and institutional weaknesses inhibit their diversification into less restricted sectors.’’

Besides these protectionist measures, governments of developed countries are still very heavily subsidising their agriculture. For example, in USA, subsidies paid to agriculturists in 1998 added upto Rs.24,000 per hectare. Opening local food markets to such unequal competition will not prove a prescription for improving efficiency; but a recipe for destruction of livelihoods on a massive scale in our country.

(Courtesy: ‘Freedom First? July-September, 2001)


The Nazarana Evil

Despite the fact that it was the peasantry in India that initiated anti-imperialist and anti-feudal struggles, not much historical research has gone into the investigation of this aspect of the Indian liberation movement.

The peasant struggles against the British began soon after the intrusion of the latter into the agrarian structure of the country by the acquisition of ‘diwani?rights in 1765. Beginning with the Sanyasi ‘‘Rebellion’’ of 1772, these struggles were numerous, spreading over a period of nearly one and a quarter century, up to the First World War. The Non-Co-operation Movement was the first major attempt by Gandhiji to enlist the peasants?support for the programmes of the national movement. ‘‘Our salvation can alone come through the Farmers...’’ said Gandhiji in 1916.

‘‘We must work downwards,’’ said Canning the Governor General of India in 1858, ‘‘...if we work upwards, elevating the village proprietors... we will succeed in nothing but in sowing dissension between the two classes of lords and cultivators of the soil, making discontented subjects of the first, and getting little gratitude from the second’’. Thus maintenance of British authority was his sole purpose after the struggle of 1857 and the old maxim of ‘divide and rule?was carried further into the countryside. In course of time this laid the foundation of the class war which erupted in the early twenties of the twentieth century in Oudh.

The Biritish Government recognised the taluqdars as the owners of the land and naturally the peasantry of Oudh was converted into tenantry. The landlords in due course became accustomed to a life of luxury and extravagance for which they always needed money. They had no sympathy for their tenants and less interest in agricultural reforms or prosperity. They were not contented with the legal rental enhancements. Their increased money demands led them to find new ways for their fulfullment. Soon their ingenuity discovered loopholes in the new Rent Act, which was enacted to bring some relief to the tenantry, now became a formidable instrument of oppression.

Foremost amongst these oppressive methods was the practice of taking nazarana ?an extra premium on rent taken as gift payment. The tenants had to pay some extra money as nazarana, beside paying the normal rent for securing holdings, and for retaining them. If they had been fortunate enough to maintain them, they had to pay again to get a fresh lease after the expiry of the septennial period. Nazarana used to be an extortion and the sum varied from district to district. The sword of eviction was wielded every year to pressurise the tenants into paying higher nazaranas and abwabas i.e. cesses. In case these extortion demands were not met, the tenants were ejected from their holdings.

The nazarana evil had penetrated to the extent that some tenants were painfully forced to commit the heinous sin of ‘Kanya Vikray?(sale of daughter) in order to raise nazarana money. Only one case is being mentioned here from the ‘Mehta Report?which is full of such harrowing details given by the tenants before the enquiring Deputy Commissioner: One Gayadin Dubey, a poor dilapidated Brahmin, who nearly broke down when he began his statement before me... two years ago the mufrid zamindars sued him for arrears and suit was decreed. He paid the money by selling the cattle. Then the mufrid zamindars wanted to eject him and held out the ultimatum that if he did not pay nazarana of Rs.500/-, he would be ejected. He had nothing left so he had to sell his daughter ten years old to husband about forty years old... the nazarana of Rs.400/-, as the demand had been reduced to that amount, was paid out of the proceeds of the sale of his daughter. Peasants still continue to suffer.

?Prem Kapoor