Events good, bad and ugly rocked the Indian agricultural sector as never before during the United Progressive Alliance rule. An epidemic of farmer suicides swept rural India even as SEZs gobbled up vast swathes of agricultural land, global food prices hit the roof and the fertilizer subsidy broke the bank. The government's three-pronged approach to tackling agrarian distress -- a whopping loan waiver, a quantum jump in farm support prices and the National Rural Employment Guarantee scheme -- proved to be double-edged swords.
In the run-up to Elections 2009, the Congress has placed the NREG at the centre of its election campaign in the hope of garnering rural votes. But NREG may not have the desired electoral impact, as the scheme has angered just as many voters as it has benefited.
The UPA must be commended for having created universal awareness about NREG. The programme catalysed an increase in rural wages and improved the status of landless labourers. But, as the government itself now admits, it intensified the rural labour crunch by diverting labour away from agricultural activities during sowing and harvesting. For many farmers, it raised cost of cultivation to uneconomic levels, prompting changes in cropping pattern. A very large number of small and medium farmers were hurt, as they were unable to afford either mechanisation or high wages.
The other challenge for the UPA is projecting NREG as a productive social expenditure rather than just another handout to the needy from a mai-baap sarkar. Most village panchayats perceive the scheme as creating no permanent assets for the community. First they dig a hole and then they fill it up, a panchayat member from Narsinghpur in Madhya Pradesh observed.
The Congress manifesto glosses over the UPAs controversial policy on agricultural land, better known as the SEZ policy. In effect, the policy prioritises the claims of industry and urban settlements on natural resources over that of farmers. The electoral impact may vary from nil to negative within the same state. Protests against forcible land acquisition in West Bengal, Haryana, Delhi, Maharashtra and Madhya Pradesh are well documented while in other areas, farmers were sanguine about parting with land if the price was right.
As a result, the UPA adopted a schizophrenic approach. On the one hand, the central government banned forcible acquisition of land for SEZs by states, on the other it looked the other way, as land is a state subject.
It also sought an amendment to the Land Acquisition Act which would have denied farmers alienated from their land access to courts. Had this controversial piece of legislation been enacted, it may well have been a major electoral issue, as it undermines property rights. In its 2009 manifesto, the Congress reiterates its commitment to this bill.
Land alone is not the issue. Lakhs of farmers have been deprived of access to water as once-freely flowing rivers are dammed or canal water diverted to serve industry. In Rajasthan's Chittor district, farmers are praying that the state government ends a 20-year agreement with a PSU downstream and allows them access to water instead. The profligate use of ground water by industry has been just as deleterious for farmers, drying up wells for miles around. Whether this will impact the state or the central government is anybody's guess, as there are few Congress-ruled states.
The Congress manifesto prides itself on easy credit for farmers particularly a Rs 65,000 crore farm loan waiver. The majority of farmers surprisingly, responded negatively. Only the defaulters have benefited. That means the rest of us who paid back loans are fools. Now, farmers are saying they will take loans and will not pay back the money, observes Nathubhai, a small farmer from Mehesana district.
Farmers feel policy makers should focus less on easy credit and more on liberating farmers from the debt trap, so that the continuing saga of suicides stops.
This is difficult, when the UPA is enamoured of so-called progressive technologies that will raise the cost of farm inputs. For instance, by aggressively supporting and promoting multinational seed giants, it has ensured that the farmer is forced to hike expenditure on hybrid or GM seeds. These seeds often need the support of fertilizers which in turn require additional water and pesticides.
A classic example is the marketing of Bt Cotton in Punjab as being pest proof. The initial years were euphoric, as the crops were self-protected against the pernicious bollworm pest. Expenditure on seeds went up but was offset by the decline in expenditure on pesticides and the substantially increased productivity (as a result of saving the crop from bollworm). The farmers didn't realise that while Bt liberated them from one terrible pest, it offered no protection against others. The mealybug raised its fuzzy white head, devastating thousands of hectares under Bt cotton in 2007 and compelling farmers to spend more money on pesticides.
Another significant step by the UPA government to alleviate rural distress was raising the minimum support price for certain agricultural products, such as wheat and mustard. Just last month, MSP for wheat was hiked to Rs 1080 per quintal, against Rs 640 per quintal in 2004. In order to benefit electorally from this move, the government must ensure maximum procurement, despite bulging buffer stocks.
The fallout may be good for the Congress at the polls, but it will mean an increase in the economic cost of wheat and hence, the food subsidy bill already at Rs 48,000 crore in the current fiscal will jump further.
If NREG was the big idea in the 2004 Congress manifesto, the proposed National Food Security Bill is the USP of the 2009 manifesto. The party has promised universal food security, with rice and wheat at Rs 3 per kg for the needy. It can make this promise because good weather in the last two years has ensured decent yields of wheat and rice and therefore, comfortable buffer stocks.
But wheat and rice alone cannot tackle the shocking increase in child malnutrition in India statistically worse than that in sub-Saharan Africa! Pulses, our main source of protein, are in short supply. Per capita availability is less than one-third of the required amount. While the UPA congratulates itself on marginally improved production of cereals, we remain desperately import dependent for oilseeds and pulses. Thus, claims of a breakthrough in agriculture are totally misleading.
Even the tiny increase in production of cereals has been achieved at an enormous cost. The fertilizer subsidy bill, upwards of Rs one lakh crore in the current fiscal five times the 2005 level is touted as evidence of the UPAs commitment to farmers. But this giant expenditure is unlikely to win any votes from farmers who have been complaining of a shortage of fertilizers in recent years and feel the subsidy benefits industry rather than cultivators. The fertiliser manufacturers are making money, not us, says Jigesh, a farmer of Kheda district in Gujarat.
The UPA years have seen no real increase in farm incomes or alleviation of rural distress. If MSPs have gone up, so have input costs. Subsidies have spiralled out of control, with no commensurate increase in productivity.
The UPA agricultural policy, in all its crucial features an extension of the National Democratic Alliance's, will end up eroding the farmers self-reliance and promoting industrialised agriculture. The farmer will be reduced to a labourer on his own land, kept alive by subsidised foodgrains.