Agrarian Crisis: Are We Barking Up the Wrong Tree?

The suicide by Gajendra Singh Kalyavat in an Aam Admi Party rally on April 22 in the national capital had sharply brought into focus the plight of the farmers in the country. Sadly, instead of discussing what made farmers to commit suicide the media and the politicians debating who was to blame for the death of Gajendra Singh. What was his financial status? Was the suicide note really written by him? Why the AAP leaders did not call off the rally? etc were the polemics to score brownie points.

Occasional loan waiver, better prices, structural changes in marketing, credit at cheaper rates etc are policy prescriptions bandied about by the pundits. These prescriptions may have some placebo effect and will not solve the farmers’ problems in a sustainable manner because the very base with which the farmers operate is so tiny that even in the best of the conditions they cannot eke out a decent living. Any natural disaster such as the unseasonal rains in North India would push them over the cliff. Instead the focus should be how to supplement the farm income from other activities.

I am reproducing an article written by me in the Hindu Businessline newspaper on November 25, 1999 titled Wanted, a new deal for rural India.  I believe the issues highlighted then are relevant even today.

Wanted, a new deal for rural India

S.R. Asokan

Published in The Hindu Businessline on  Nov 25, 1999

In the ninth year post- liberalization, market is the new mantra, re­placing the discredited· socialistic pattern of planning, growth and distribution. However, the vast majority re­main outside the market mechanism ­mostly in rural India eking out a living on meager resources. Naturally, the benefits of liberalization have largely by­passed them.

Successive governments have not ac­corded due importance to agriculture. Except for making the right noises noth­ing much has been done- to raise rural incomes. The present BJP-Ied coalition Government promises to unleash a sec­ond generation of reforms targeting agriculture and allied sectors, but is yet to find a Cabinet minister for the Agricul­ture Ministry. The attention agriculture is getting can be gauged from the clamour for ministries such as finance, Indus­try, commerce, and so on, by the National .Democratic Alliance (NDA) constituents, there were no takers for the agriculture portfolio. Yet, the challenges faced by the Agriculture Ministry are no less daunting than those in 'high­ profile' ministries.

The average size of agricultural hold­ings in India is 1.55 hectares. Nearly 60 per cent of the farmers, constituting 63 million farm families, own less than one hectare - that is, 315 million people de­pend on such small holdings for their livelihood.

The average size of a marginal farm is 0.39 hectare. Assuming that the farmers can grow, two crops a. year and can choose the crops to' be grown, such as paddy, wheat, bajra, sugarcane and cotton the income from the best· possible combination of these crops does not ex­ceed Rs 4,000 per annum (see Table). If the rental value of land is deducted from the cost the income level rises to Rs. 8,000.

These marginal farmers 'supplement their income by doubling as agricultural laborers, rearing milch animals, and so on. Thus, they strive to make a living with some dignity rather than slip into destitution. In addition to the millions of marginal farmers, there are an estimat­ed 70 million landless agricultural laborers in the country.

It has to be conceded that there are variations across the States with regard to development; resource endowments and so on. For example, a marginal farmer in Punjab may be better off than a small farmer in Maharashtra or Guj­arat. The average size of a marginal farm is 0.17 hectare in Kerala - with the high level of literacy, one does 'not presume that they eke out a living from this small patch of land alone; but the same cannot hold true in Orissa and Bi­har. Whichever way one looks at it, there are more than 370 million rural Indians barely able to make ends meet.

There is no way the benefits of liberalization would reach them unless some urgent and drastic measures are adopt­ed. An export-Ied growth strategy for agriculture as advocated by some has no relevance to the marginal farmers as they consume most of whatever they produce. Therefore, the emphasis should be to improve the skill levels of these multitudes and reduce their dependence on agriculture and allied activities.

Cost and returns from various crops for 1995-96 for 0.39 hectares

	Sugarcane	Cotton	Paddy	Wheat	Bajra
Value of the main and by product	16,369	6,022	7,399	6,998	2,252
Cost of cultivation	12,315	3,831	5,947	5,398	2,247
Net returns	4,054	2,191	1,452	1,600	5
Rental value of land	2,711	1,003	1,990	1,939	665
returns	6,765	3,194	3,442	3,536	670

Source: Report of Commission on Agriculture Costs and Prices, 1997-98. Ministry of Agriculture

Though there are several Central schemes that aim to provide gainful employment to such people, the efforts de not match the enormity, of the problem The Training of Rural Youth in Self Employment (TRYSEM) scheme in operation for the past two decades; aims at training rural youth in the 18-35 age group in some trade, to help them get wage employment or start their own small businesses. Though the scheme was well-formulated, the implementation has been tardy. Evaluation studies of the scheme have found that the train­ing was for too short a period, not enough to improve the skills of the trai­nees.

Further, Identifying the youth and finding suitable trades matching their aptitudes was often difficult. The few trained youths also found· it difficult to get Small loans from commercial banks to start their business.

Another important scheme is the Ja­wahar Rozgar Yojana (JRY). It aims to provide employment to marginal farm­ers and agricultural laborers during the lean season. The supplementary in­come generated is crucial for the surviv­al of many poor families. According to the latest Economic Survey, the wages earned under the JRY were but a small proportion of the amount required helping the beneficiaries cross the poverty line.

Thus, the whole approach to poverty alleviation needs to be reviewed. Instead of introducing new schemes, the existing ones should be reformulated and strengthened, and their implementation properly monitored and evaluated. The approach should address both short and long-term issues. In the short run the JRY should be continued to put the vital extra income in the hands of the underprivileged.

The TRYSEM should be expanded, say up to the age of 45.  Those in the upper end may be trained for the skills required locally.  The younger members of the group, depending on their educational qualification, should be given longer periods of training to enable them to move out of agriculture. The kind of skills and the quality of manpower needed in a district should be studied and the training provided accordingly.  Wherever possible the corporate sector could be co-opted in this vital task. Its technical and managerial skills could be used for training. The big and medium industries located in a district could be approached for such services. Special and intensive efforts have to be made in the backward districts.

Apart from improving the traditional skills, new skills - with the help of modern technology, - must be introduced. For example, the Bangladesh Grameen Bank, apart from helping small businesses (mostly run by women), provide a cell-phone network throughout the country. In India, photocopying centres and STD booths have generated a lot self-employment for the youth in several small towns. Therefore, the key is identifying the needs and catering to them.

Rural youth themselves could be consulted on the kind of skills they wish acquire. The youths trained in self employment must form self-help groups to generate their own credit with minimum assistance from commercial banks.

The approach to poverty alleviation should be both short and long-term. In the short term, employment guaranteed schemes, such as the JRY, should be continued. In the long term say the three-five years, the overall skill level of the youth should be improved. The strategy must be to raise the income of the vast multitude so that they can economic mainstream and the benefit of market-dependent growth percolate down to them.

As Noam Chomsky put it, “Freedom without opportunity is a devil’s gift and the refusal to provide such opportunity is criminal. The fate of the more vulnerable offers a sharper measure of the distance from here to something that might be called civilization”.

Published in The Hindu Businessline on  Nov 25, 1999