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Sunday, May 16, 2004

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Riposte from the rural poor

By Gargi Parsai

NEW DELHI, MAY 15. The reforms relating to the rural poor and the farmers did the National Democratic Alliance in. It was rather late in the election campaign that the NDA partners realised that India was not shining for small farmers, sugarcane growers, cotton growers and farmers in debt. Thousands were going hungry because they did not have the purchasing power to buy foodgrains, despite overflowing granaries. There was also little to feel good about for thousands of rural, tribal families displaced and dispossessed by mega projects whose voice the NDA Government stopped hearing long before the Supreme Court gave its judgment in the matter. Too late did it dawn on the ruling dispensation that the outlook was rather bleak for millions of youth seeking jobs — not man-days for a few weeks through construction of roads or mega dams on river-links.

Just as the Narasimha Rao Government, with Manmohan Singh as the Finance Minister, had decided to give reforms a human face during its last year in power in 1996, the NDA government had identified thrust areas for each Ministry to accomplish just before elections were declared. Hurriedly a National Agriculture Commission was set up to study what ailed the agriculture sector.

During this phase schemes were announced that shone mostly only on paper, especially in the farm sector. The introduction of farmers' income insurance scheme on pilot basis, contract farming, privatisation of farm marketing and call centres were a few.

But what the farmers found unforgiving was the non-fulfilment of the assurance on one-time waiver of interest on loans for those whose crop had failed in the 2002-03 drought through 17 States. The funds for the waiver have not been made available till now, which has hit thousands of farmers.

A good monsoon last season may have added a quarterly sheen to the economy with an over eight per cent GDP growth rate, but in effect as against 6.2 per cent in 1998-99, during the five years of the NDA rule the growth in agriculture and allied sectors has been 0.3 per cent in 1999-2000, minus 0.4 in 2000-01, 5.7 per cent in 2001-02 and minus 3.1 in the 2002-03 drought year.

Although infrastructure and agriculture were regularly described as thrust areas in subsequent budgets, they were not usually backed by concrete policy support. The poor performance of the farm sector during the Ninth Plan is said to be due to the declining trend of capital growth. In 1980-81, capital formation in agriculture as a percentage of the gross capital formation in the country was 15.4, which declined to 9.9 per cent in 1990-91 and to 7.1 per cent in 2000-01.

Initially and consistently for political reasons, excessive minimum support prices were announced for wheat and rice, pushing them out of the reach of the poor sections of the population. As a result, offtake was very low in the Public Distribution System, resulting in burgeoning foodstocks. The high cost and prices made Indian foodgrains non-competitive in the (highly subsidised) international market and became unviable for export. Consequently, farmers were burdened on one hand with the rising cost of inputs — even in its last budget, the NDA government raised the price of diesel, pesticides and fertilizers — and on the other, with non-remunerative price for their produce. A freeze this year on the minimum support price of wheat led to further resentment within the farming community. Sugarcane cultivators also in parts of the country have not been paid for their produce, resulting in arrears of over Rs. 2,000 crores. There was an unwillingness to address even a simple complaint like the sugarcane growers being underpaid by sugar mills on the basis of recovery.

Without really being given a level-playing field under the World Trade Organisation (WTO) regime, the farm sector, as also consumers, was left to the vagaries of market forces. There was lot of talk of diversification, construction of cold storages, setting up of agro-processing units and so on, but after the opening up of the Indian market and removal of quantitative restrictions on agriculture commodities, farmers were mostly left to fend for themselves. Things were allowed to drift when the foodgrain stocks mounted to over 610 lakh tonnes. Partially to clear stocks, the government responded by making foodgrains available to traders, exporters and for domestic open sale market at subsidised rates. Open sale prices were lower than the prices ration card holders paid and the Antodaya Anna Yojna was announced to give subsidised foodgrains to the poorest of the poor, pushing the food subsidy bill to over Rs. 27,000 crores.

Cancun negotiations notwithstanding, there is a perception that in its pursuit of reforms, the NDA government initiated policy decisions favouring private trade and facilitating the entry of multi-national corporations in the seed sector and biotechnology which were divorced from ground realities. Hundreds of farmers resorted to suicide even in Punjab, Andhra Pradesh and Karnataka. The NDA Government was not seen to have taken any major step to stem the tide. Neither were farmers or farm organisations consulted nor were the concerns of the farm organisations taken into account. There is a criticism that whether there was a consensus or not, the government went ahead with its reforms-oriented decisions.

Whether it was the opposition to the Mahyco-Monsanto variety of genetically-engineered BT cotton crop whose seeds were priced exorbitantly, or lack of compensation by the MNC for failure of the crop, or pushing through the Rs. 560,000 crore interlinking rivers project or dislocating slum dwellers, or farmers' suicides, the NDA displayed a "disconnect" with people on the ground. The unkindest cut for those below the poverty line was the campaign that people were feeling good and India was shining. The silent and suffering majority made themselves heard. With their vote.

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