Despite Government Claims, Farmers’ Pay Has Yet to Rise, Says Indian Agriculture Expert
14:32 GMT 08.12.2021 (Updated: 11:40 GMT 10.12.2022)
Farmers in India have been protesting since November 2020 against three farm laws passed by the federal government the preceding September. Even though the federal government repealed the legislation just more than a year later, the farmers continue to demonstrate in their demands for a law on the Minimum Support Price (MSP).
Despite the repeal of three farm laws after a year of protests, the debate over the impact of the legislation is still raging.
Sputnik has spoken to celebrated agriculture expert Devinder Sharma to discuss the controversial farm laws, what issues farmers are actually facing and how agriculture in India can beсome sustainable.
Sputnik: India ranks second worldwide in farm outputs but farmers are still suffering under huge debt. Why is that?
Devinder Sharma: Despite harvesting a record 308 million tonnes of foodgrains, 325 million tonnes of fruit and vegetables, and 204 million tonnes of milk, Indian farmers are burdened with mounting debt and deprivation.
In the Food and Agriculture Organization (FAO) report released in March 2021, the gross value of food production in India was assessed as $400,722,025 million. With farmers producing so much economic wealth for the country, what remains unexplained is why farmers are living in misery.
This is essentially because we have kept agriculture deliberately impoverished. As a policy, the emphasis has been to move people out of farming into the cities, which are in need of cheap labour. It is primarily because farmers have been denied a rightful income that the industry is in crisis.
With low incomes and mounting indebtedness, farmers' distress has only multiplied. As we learn from the Economic Survey 2016, the average farm income in 17 states of India - roughly half the country - was a paltry INR20,000 ($267) a year.
In other words, farmers in half the country were somehow surviving on less than INR1,700 ($22.50) a month, not even enough to rear a cow. Several studies have shown that farm incomes have either remained frozen or have declined for more than two decades.
Sputnik: The Indian government has been talking about doubling farmers’ income by 2022. Do you think the government is doing enough to deliver? If not, what should the government do?
Devinder Sharma: Claims notwithstanding, the government's own think-tank, Niti Aayog, estimated in a study that growth in average farm income remained at less than half a percent every year, in the five years between 2011/12 and 2015/16. For the next two years, estimated growth in real farm income is estimated to be "near zero".
Subsequently, the report of the Situational Assessment Survey for Agricultural Households 2019, presented in September this year, clearly shows that income from crop cultivation (excluding non-farm incomes) have declined in the six years since the last report was tabled.
There is no denying that several schemes and programmes that have been launched over the years are for the improvement of the farming community, and this includes the launch of a direct income support initiative to provide land-owning farmers with INR6,000 ($79.50) per year.
Although this is a tectonic shift in policy planning, with the focus shifting from price policy to income policy, agriculture really needs a radical overhaul in economic thinking. That is what the continuing farmers' protest has clearly called for. Besides the repeal of three contentious farm laws, farmers are asking for an economic rethink that aims at making agriculture economically viable and profitable.
Agriculture is certainly crying out for reform - but that does not mean privatisation. After the withdrawal of the farm laws, what farmers need is a legal sanction for the Minimum Support Price (MSP) so as to assure them of a guaranteed income, and this needs to be followed by ushering in adequate transformations in the food system, moving towards sustainable farming systems producing healthy food in a healthy environment.
Sputnik: The farm laws enacted by the federal government last year were met with mixed reactions: a lot of farmers were in favour of the legislation, but thousands objected to the laws by taking to the streets. What’s your take on the farm laws?
Devinder Sharma: After a year of farmers' protests, the government has done well to repeal the farm laws. In fact, it would have been much better if these laws had been repealed earlier. Nevertheless, as I have always maintained, market reforms in agriculture have failed to prop up farm incomes anywhere in the world. To expect the same failed reforms to do miracles in India was a misconception. India needs an indigenous version of reforms that caters to our own needs, and built on our own inherent strengths.
The belief that markets would do wonders for Indian agriculture is utterly misplaced. All around the world agriculture is in distress because markets have created conditions that have forced farmers increasingly to abandon farming.
In fact, the farmers' share of the final consumer price has consistently fallen, making it extremely difficult for farmers to survive.
Take America, where the amount a farmer gets from each food dollar in 2018 plummeted to just 8 cents. Two years earlier, a farmer's share in the end consumer price was 14 percent. This steep decline only shows how ruthlessly markets have been exploiting farmers.
Sputnik: The protesting farmers feared that the laws would leave them at the mercy of big corporations. So, what is so bad about corporations getting into agriculture?
Devinder Sharma: Well, the question that needs to be asked first is what advantages farmers see from corporates getting into agriculture? If corporations have driven farmers out of agriculture in America and Europe, Indian farmers need to be appreciated for knowing the difficulties farmers have faced everywhere else. Mainline economists and a dominant media must applaud Indian farmers for pointing out the threats arising from the corporate takeover of agriculture.
In America, there were approximately 650,000 dairy farmers in the early 1970s. These were technology-rich dairy farms with high-milk producing cows, a kind of dairy model that policymakers in India would like to emulate. But since then, 93 per cent of the US dairy farms have closed down.
This was not because the demand for milk had crashed but because the entry of Big Agriculture with mega-dairy farms had replaced small dairy farms. Although the production of milk actually increased, there are now no more than 34,000 small dairy farms.
In any case, with the countryside becoming increasingly empty, and with more than 1,00,000 farms closing down between 2011 and 2018, rural America is faced with a painful decline.
Indian farmers understand the consequences of the corporatisation of agriculture. They know they will be pushed out of farming, and in desperation would be forced to sell off their meagre landholdings.
Sputnik: Don’t you think that if the corporations become involved in agriculture, the sector would become more organised?
Devinder Sharma: The question is not whether agriculture would become more organised with the entry of corporates, the question that needs to be asked instead is whether the corporates have the potential to provide for economically viable livelihoods in farming. If agriculture has to go the same devastating way as in America and Europe, why move onto the same beaten track?
In America, hardly 1.5 percent of the population now remains in farming. In Europe, the situation is no better, with many European countries having only 1 to 2 or 3 percent of the population remaining in the farm sector.
Take France, the country with the highest share of population in European agriculture. In early March, French farmers had hung suicide dolls on trees outside their parliament to show how severe the farm crisis was. This is despite French agriculture operating in a free market economy.
I think agriculture will automatically become organised once the farm workforce gets a living wage. With the assurance of a higher income in the hands of farmers once the MSP becomes a legal right, pride in farming will be restored.
The need of farmers is dignity and fulfilment, and that can only come from a guaranteed income. That is the true freedom farmers await. More money in the hands of 50 percent of the population engaged in agriculture, would translate into a huge rural demand thereby revitalising the wheels of development.
This would make farmers gainfully employed and reduce the employment pressure on the cities. This in reality will also lead the country towards achieving the Prime Minister's vision of Sabka Saath, Sabka Vikas (Collective Efforts, Inclusive Growth).
I am a strong advocate of the dire need to make agriculture a powerhouse of economic growth. For a country such as India, with 70 percent rural households directly and indirectly engaged in farming, the time to rebuild agriculture is now.
It is time to think afresh and recast the outdated economic design that relied on sacrificing agriculture to industry. It is time to reverse this economic thinking. Times have changed, and as I have repeatedly said, agriculture alone has the potential to reboot the economy. That's the new normal India should be looking forward to.