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January 18, 2021 Monday 10:00:09 AM IST

Elephant in the Room

Finance

The last time India saw its national capital under siege by protestors was in 2011 when an anti-corruption wave brought tens of thousands to Delhi, demanding the United Progressive Alliance government to come clean or else!

Few would have foreseen then that it would be the farmers’ turn next to come up with a protest of even greater intensity nine years later and blockade the capital. That too against a National Democratic Alliance government that is well entrenched in power with the coalition leader Bharatiya Janata Party having an absolute majority.

Elephant in the room                                                             

In retrospect, this had been in the coming for a few decades now. Agriculture has been the elephant in the room for the Indian economy and we could only have pretended not to see it for a limited time. The elephant is now prowling all over the national capital and the whole nation appears gripped by its demand for remunerative and assured prices for farm produce.


An elephant it indeed is. Rough estimates put those who make a livelihood from agriculture in India between 55-60 per cent of the population. In pure numbers, that is a whopping 800 million people dependent on agriculture, a statistic that would shock the whole world. For added astonishment there is the fact that the 60 per cent contribute only 15 per cent to the GDP.

To put that in perspective, the United States had 60 per cent of its population in agriculture in 1900 and has consistently reduced that number – with changing technology, farm research and high-yielding crops – to just 2 per cent today. In other words, India in 2020 is where the US was 120 years ago in terms of the number of people deployed in agriculture.

Sentiments but no solutions

Farmers have always been the beneficiaries of an outpouring of sentiment in the country, as they are today, but the sentimental support has often been exposed as hollow in more ways than one.


A large majority of those supporting farmers are not in the profession themselves, would not send their children into a career in agriculture, protest when food grain or vegetable prices go up, would not marry a farmer or settle down in a rural area, and are unhappy about frequent farm loan write-offs.

The latent hypocrisy in supporting farmers but not wanting to do anything with farming comes through most clearly in marriage alliances, where farmer grooms are the least sought after. From Hisar, Haryana to the Marathwada region in Maharashtra to Idukki district in Kerala, young men in agriculture find it difficult to find brides.

The sheer groundswell and enthusiasm to support farmers may give the impression that farmers are everybody’s darlings but true sentiments are apparently different.

Twin pain points


As the current crisis pitches farmers against the government for the latter’s enactment of laws to liberalise the farm sector, there are two clear pain points, namely subsidies and surpluses.

Contrary to what a few generations of Indians have been taught in school, India is no more a food deficient nation, but in fact a net food exporter and ranks a commendable eighth among the world’s largest food exporters. Our public warehouses are overflowing and we struggle to export our surplus wheat, rice and sugarcane.

Of course our farmers were heroes in the first four decades post-Independence when we were still urging them to make the nation food self-sufficient. But ever after they succeeded in it we have been grappling with the financial costs of cultivating surpluses every year. In 2020, even the Reserve Bank of India acknowledged that managing our food surplus was a major challenge for the country.

The surplus takes us to the second pain point which is entwined with it, namely subsidies and support prices. A massive farmer population that has been brought up for decades on subsidies and support prices is finding it difficult to visualize a future without those. Their urban siblings will shudder at the sheer volumes of subsidies given away – a whopping Rs 1.36 trillion in subsidies in this fiscal for fertilisers alone!


Way out

An agitation that cripples the national capital is as self-defeating as a law that is bulldozed through parliament with no discussion with elected legislators or the wider stakeholder community. Discussions for each side to assess the situation and explore solutions are the way out.

Farmers must appreciate the financial implications for the nation when taxpayer money has to be channeled as support price for farm produce that is already in surplus. No nation will be able to perennially support 60 per cent of its population with a range of subsidies.

On the other hand, the government must take responsibility for not having created enough non-farm jobs that farmers could have moved into. In fact, many of those who went to urban centres as farm refugees are now forced to reverse-migrate to the thankless farm sector.


A new future

Given India’s food surplus, the future opportunities definitely lie in preservation, processing and value addition of farm produce. A well-networked cold chain across the country and processing units for farm produce, along with making value-added products should be the new focus areas.

Farmers’ co-operatives can also tap the opportunities in storage by constructing warehouses and member farmers will be able to avail loans by producing warehouse receipts.

Farmers have been our heroes during our long years of food deficiency. It would be cruel to let them down at a time when they have served up a surplus that we never could imagine.



Joe A Scaria

The author is former Senior Assistant Editor of The Economic Times and is a YouTuber with the Joe-metric View channel. Read more articles..
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