Liberal Altrnatives


Needed, a `Marshal Plan’ for farm sector


Sharad Joshi,  in 2000 wrote about the need of  a `Marshal Plan’ for farm sector. This article was published earlier in The Hindu Businessline Wednesday, March 29, 2000.The article is reproduced here.

THE decisions of the national conference of farmers at Tirupati (March 15-17) appear to have provoked very strong reactions. Most critics agree that the farmers are in dire straits and that the Government has been indifferent for years. There is an awareness that the further opening up of the economy, through phase-out of import quantitative restrictions, strengthen the very existence of Indian agriculture as a vocation. “The tone of the Tirupati resolutions is understandable, but the tenor is erroneous.” This is the conclusion most critics have drawn.

Their sage advice is that “India has millions of hungry mouths and the Indian market can absorb all that the farmers can produce. The farmers should, therefore, improve productivity; the government should improve the infrastructure of roads, marketing a nd irrigation and the farmers’ organisations should concentrate on improving co-ordination between their constituents and the officials implementing Centre- and State-sponsored production programmes.”

The leaders of the farmers’ conference are certainly not innocent ingenues. They arrived at the Tirupati Action Programme after three days of mature and in-depth deliberations. The farmers’ organisations that gathered at Tirupati were not the type that s eek subsidies on inputs and ever-increasing support prices for outputs. These organisations have been demanding removal of restrictions on domestic trade and export of agricultural produce. The liberal farmers’ organisations felt obliged to announce a ra dical programme of non-payment of all dues taxes, tariffs and cess and to exhort farmers to prepare for a reduction in production.

Reduction in agricultural production is a very difficult programme to implement. The farmers will consider recourse to such an extreme measure only in situations where increase in production brings lesser income. Alternatively, they could consider such a course of action justified if they feel cornered, with no escape route.

That the farmers feel driven to the wall is obvious from the spate of suicides in various States. This year again the early reports of suicides have already come from Warangal in Andhra Pradhesh. No glittery celebrations and brouhaha of info-tech advance ments can cover the stark realities of farmers’ misery. Let us recapitulate the situation of the Indian agriculture since Independence.

Nehru, a socialist at heart, tried to improve the agricultural infrastructure, constructing irrigation and power-generation dams, legislating land reforms and promoting co-operative credit and market institutions. These policies brought the country to a `ship-to-mouth’ existence by the 1960s. Lal Bahadur Shastri allowed the entry of the Green Revolution technology, and also installed a support price mechanism and the Agricultural Prices Commission. His Jai Jawan, Jai Kisan policies took the country to s elf-sufficiency in food.

The farmers found that despite the rise in productivity and increase in production, they continued to be the losers, burdened by crushing debts.

Successive governments followed trade and price policies deliberately twisted against the farm sector. Restrictions on movement, storage, processing and export and the dumping from abroad, impoverished the farmers. These policy measures brought about an erosion of capital stock in the agricultural sector. The farmers were forced to rely on inferior technology and management packages.

When the economic reforms came in 1991, the farmers hoped that their day had come at last, and that all restrictions on agricultural trade would be removed, and that all industries in the backward and forward linkages will be delicensed. In fact, the eco nomic reforms barely touched the agricultural sector. The WTO agreement contained a stipulation under which the Government was obliged to remove trade restrictions, limit the scope of the public distribution system (PDS) and supply the same from open- market purchases. The Government simply ignored these obligations.

The Government, however, could not resist the pressures from the WTO for long to phase out quantitative restrictions, and now it is obliged to allow imports of agricultural produce. By April, the Indian farmer will find himself besieged on the one side b y inimical policies and on the other by the onslaught of imported commodities that would be both cheaper and better.

Government policies that denied farmers remunerative prices and imposed negative subsidies of about 87 per cent have been affected and led to the break-down of the farm sector infrastructure, as also a backwardness in technology. While the genetically-en gineered cotton is flooding the international markets, the Government is dithering about permitting even field trials in India.

The farmers’ organisations know very well that the final solution can come through immediate freedom of access to market and to technology. They also know that Bharat can be reconstructed rising above the rot, wrought about by 50 years of economic aggres sion by India. Some sort of a Marshal Plan to help upgradation of infrastructure and technology would be necessary.

The Tirupati conference of farmers made the desperate appeal hoping to bring the Government to senses. If the farmers produce just enough for themselves and village consumption, the Government will have to wake up. Stalin sent tanks on kulaks in a similar situation; farm organisations hope the Government will have better sense.

Needed, a `Marshal Plan’ for farm sector

This article was published earlier in The Hindu Businessline Wednesday, March 29, 2000

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