ON TO AUGUST 16-31 CAMPAIGN

Agrarian Crisis: Fight for Radical Change in Policies

S Ramachandran Pillai

THE agricultural policies of the BJP-led NDA government at the centre have thrown the agricultural sector into the grip of a serious crisis.  Starvation deaths and peasants’ and agricultural workers’ suicides are increasing. Poverty is expanding to newer sections and areas.   Pauperisation is taking place at a faster pace.  Unemployment is growing.  Country is fast moving towards severe food shortage, famine and starvation deaths.  Every year, the country is ravaged by floods and droughts, and the severity of these is increasing. Contagious diseases, long believed to have been eradicated, are stalking again. Unevenness in growth, both sectoral and spatial, is growing.  India is home to 22 per cent of the world’s poor.  Agricultural workers, poor and middle peasants and casual workers engaged in non-agricultural activities constitute the bulk of the rural poor. Almost half of the children (47 per cent) under three years of age are underweight due to ‘malnutrition’, a euphemism for starvation.  Up to 50 per cent women and 74 per cent children are anaemic. 

India has been proudly claiming about the progress made in foodgrains production after independence.  But now, the situation has substantially changed, particularly after the introduction of the new economic and agricultural policies since 1991. Kartik Rai correctly stated in his article in People's Democracy dated May 12-18, 2003 about the present situation in the following words:

"The 1990s have not only seen a steady decline in the level of per capita food availability in the country as a whole (taking both rural and  urban India together), but the absolute amount of per capita food availability in the year 2002-03 was lower than during the years of the second world war, years that saw terrible Bengal famine".

The seriousness of the situation cannot be explained in any other manner.  The rate of growth of foodgrain production has fallen lower than the rate of growth of population during the last decade, 1991-2001.  The average annual rate of growth of foodgrain production during the ninth plan was low at 1.1 per cent per annum while the annual population growth was 1.9 per cent.  The Government of India’s Economic Survey, 2002-03 admits the fact of decline in per capita per day net availability of foodgrains.   It states that the per capita per day net availability of foodgrains was 510.1 grams in 1991 and it came down to 414.1 grams in 2001 -- a fall of about 23.2 per cent. The drought in many parts of the country will further worsen the food situation. Country is sliding towards severe food shortage, famine and starvation deaths. 

FALLOUT OF NE0-LIBERAL POLICIES

The accumulation of enormous food stock is not because of the production of more foodgrains in the country but because of the squeeze in purchasing power of the rural population due to the implementation of the neo-liberal reforms.

The decline in the growth rate of production can also be seen in the case of most of the crops. The overall rate of growth of crop production has declined from 3.72 per cent per annum during 1980s (1979-80 to 1989-90) to 2.29 per cent per annum during 1990s (1989-90 to 1999-2000).  The rate of growth of productivity also declined from 2.99 per cent per annum in 1980s to 1.21 per cent per annum in 1990s. 

The share of agriculture in Gross Domestic Product (GDP) has declined from 61 per cent in 1950-51 to 24.2 per cent in 2001-02. But the dependence of population on  agriculture has declined only marginally  -- from 77 per cent to 69 per cent -- during this period. In the case of many developing countries, a shift of population from agriculture as an occupation to other sectors can be seen. This has not happened in India, resulting in deterioration of the condition of the rural people. 

The decline in agricultural production is the direct result of the new economic and agricultural policies.  The new policies failed to attract more investments in agriculture.  The public sector investment in the earlier years had played an important role in the development of irrigation, electricity, agricultural research, roads, markets and communication. But the reduction of public investment due to the implementation of the new policies resulted in an overall decline in investment.  Investment in agriculture declined from 1.6 per cent of the GDP in 1993-94 to 1.3 per cent in 1998-99. The decline in investments in agriculture indicates a dismal future. 

The adverse impact of the fall in the rate of growth of production on peasants and agricultural workers and rural poor is aggravated by the steep price fall of  most of the agricultural commodities due to the removal of quantitative restrictions on import and other factors.  The government is not coming forward to protect the peasants and agricultural workers from the effects of the price fall.  Price fall and price fluctuations have negative impact on investments for increasing productivity and production. There are indications of changes in the cropping pattern from foodgrain crops to non-foodgrain, and labour intensive crops to other crops. 

WORSENING LIVES OF THE RURAL POOR

Unemployment is growing fast in the rural part of the country. The growth rate of employment also declined during 1990s. The annual growth rate of employment during 1990s is estimated at 0.58 per cent per annum, which is far below the rate of growth of population. This shows that the number of rural unemployed has increased substantially during this period. It should be noted that the present increases in unemployment is in addition to the backlog of already unemployed.   Due to the fall in the growth rate of production, price crash, lack of institutional credit facilities, rise in price of agricultural inputs, lack of market protection measures, recurrent floods and droughts, pests, the poorer sections among the peasantry are finding it extremely difficult to compete with the richer sections.  The present situation forces them either to sell or lease out their land to richer sections or big business enterprises. The poorer and middle peasants are losing their land. Landlessness is increasing rapidly and it is estimated that the number of landless persons in the country has  increased from 7.46 crore in 1991 to 10.74 crore in 2001.

The number of workdays and the real wages of agricultural workers have declined. The living condition of agricultural workers is worsening. There are no minimum wages, pension, provident fund benefits, social security measures for agricultural workers in most of the states. The mechanisation process in cultivation has thrown many lakhs of  agricultural workers jobless.  Even work under rural employment schemes and programmes like ‘food for work’ has been handed over to contractors who employ machines, defeating the very purpose of these programmes.  Only those works in which machines cannot be used are given to rural workers and that too at very low wages.  The shift from food crops to non-food crops, which is less labour intensive, is leading to more unemployment among agricultural labourers.

Droughts and floods affect the country every year.   About 100 million hectares is considered to be either drought-prone or flood-prone area.  The poorer sections are the worst sufferers during floods and droughts.  The central government and most of the state governments do not provide adequate relief to drought and flood affected people.  The intensity of the adverse effect of the drought and flood is increasing every year since the governments are not taking adequate corrective measures.

STATE-IMPOSED CONSTRAINTS

The policies of the government failed to address the problems of the natural resources like land and water.   This is all the more necessary as India has to feed about 16 per cent of the global population, but has only 2.4 per cent of the total land and 4 per cent of the total water resources.   Only about 40 per cent of the net sowing area of 142.8 million hectares could be brought under irrigation and the remaining area is dependent on rains. Scarcity of water in rain-fed areas is causing serious hardship. Ground water resources are dwindling fast due to poor water harvesting and poor recharging of ground water.  The number of dark blocs where there is overexploitation of ground water of over 85 per cent  is increasing in most of the states.  It is estimated that the dark blocs increased from 253 to 428 between 1984-85 and 1998-99.  It may again be doubled in the coming decade. Out of the total geographical area of 328.73 million hectares, an area of about 107.4 million hectares is considered as degraded.  The present policy of retreat of the state from developmental activities is aggravating these difficulties.

Shortage of electricity and high electricity charges are the other constraints. Uninterrupted supply of electricity has became an urgent demand of the peasantry in many parts of the country.  The central government has not only reduced investments in irrigation, electricity and scientific research but has also taken steps for transferring these areas to big business and multinational companies. Already Sheonath river in Chattisgarh is in the hands of a multinational company. The central government and many state governments are taking steps to privatise irrigation projects. The Electricity Act, 2003 passed by the BJP-led government will have deleterious effects on agriculture and the common man in rural India. There will be severe shortage of electricity for agriculture and in the rural parts apart from the unaffordable high rates for electricity.  The higher charges for water and electricity will adversely affect productivity and production in agriculture.

The non-Left state governments have not only given up land reform measures but also are taking steps to reverse the land reform process.  Many state governments have already diluted land ceiling laws in order to enable big business and multinational companies to grab vast tracts of land.  The wasteland is not given to agricultural workers and poor peasants for development, but is handed over to MNCs and big business.   The government is also providing them big concessions for development. The record of most of the state governments (except West Bengal, Tripura and Kerala) in implementing land reform laws, distribution of ceiling surplus lands, providing fixity of tenure, stoppage of eviction, fixation of fair rent etc is dismal. Concealment of ceiling surplus land and tenancy is widespread.  Land acquisition has been disputed with cases piled up in courts for years without resolution.  The non-Left state governments are doing nothing either to plug the loopholes in land reform laws or to implement them. As per a recent circular of the central government, tribals are being evicted in many states from their land. The central government and many state governments are not taking steps to protect the interests of the tribals. Eviction of tribals from forest land should be stopped immediately.

KEY DEMANDS FOR CHANGE

Expansion of credit facilities is needed to support investments in agriculture to improve productivity and  profitability in agriculture.  The poorer and middle peasants are not getting sufficient institutional credit.   More than 60 per cent of the credit needs are being catered by non-institutional sources.  The peasants have to pay exorbitant rates of interest.   The reduction of interest rates announced by the Central government takes care of only one aspect of those who took loans from institutional sources.  Government should provide adequate institutional credit facilities to all sections of the peasants at lower rates of interest. 

The credit deposit ratio is an important indicator of the degree of involvement of banks in giving loans to agricultural sector.  The rural credit deposit ratio has declined from 1.58 per cent in 1991 to 0.73 per cent in 2001 which shows that deposits mobilised from rural India are being utilised outside.  In other words, rural India is financing other sectors of the economy.  This has a direct bearing on the decline of public sector capital formation in rural sector. 

Seeds is a vital and basic input for increasing productivity and production.  Even the efficiency of other agricultural inputs like fertilisers, irrigation, pesticides is dependent on the quality of seeds. The central government and some state governments have allowed multinational companies and big business houses to capture seed production and distribution. The peasants have to pay higher prices for the seeds.  Many of the private agencies are supplying spurious seeds leading to crop failures.   Certain multinational companies like Monsanto are using Indian soil as an experimental field for their genetically modified seeds.  Many such genetically modified seeds have very serious adverse effects  on other crops, animals and human beings.  Bt. cotton is supplied to peasants without proper field experimentation.  The central government and many state governments are not taking care of the interests of the peasants and agriculture. 

The 1994 Marrakesh agreement that established WTO was an unequal one and goes against the interests of the peasantry and agriculture.   India has implemented its commitments.  Quantitative restrictions on import have been removed and tariff rates have been slashed down, much before the required deadline. The developed capitalist countries have not implemented their commitments. They are giving massive domestic subsidies to the agricultural sector. Our agricultural commodities are facing unfair competition from the heavily subsidised agricultural commodities from the major developed capitalist countries.  This is one of the causes for the price crash of agricultural commodities in India. Our experience shows that the agreement on agriculture and various provisions of the WTO have worked against the interests of our country. If the agreement is allowed to continue in its present form, India will be faced with  serious consequences threatening the very survival of Indian agriculture.  

In the ongoing WTO negotiations, India should play a dynamic role in arresting this trend by bargaining for  renegotiation on various provisions of the agreement on agriculture.  For getting greater market access in the developing countries, the developed countries are insisting for a reduction in tariff rates.   But the developed countries particularly USA, European Union, Japan etc are not willing to reduce their domestic subsidies and export subsidies.  In the WTO negotiations, India should try to rally developing countries to press for elimination of domestic and export subsidies in the major developed countries.  In the negotiations for tariff reduction, India should take a stand that the tariff reduction percentage for the developing countries should be less than half of those applicable to the developed countries and the period of reduction should be more than double than that applicable to the developed countries.  There should be effective protection of the developing countries’ agriculture against the subsidised exports from the developed countries.   Developing countries should be allowed to apply direct import control measures, including quantitative restrictions on import, in respect of those products from the developed countries maintaining export subsidy or domestic support. Tariff reduction commitments of the developing countries should remain suspended until the export subsidies and domestic subsidies in the developed countries are eliminated.   A developing country  may be allowed to identify a select set of agricultural products as "strategic products" for food security, rural development and which are particularly grown by small farms.  Commitments regarding reduction of tariff rates and domestic support should not be applicable to such agricultural products. 

The present agrarian situation demands a radical change in the policies of the central and most of the state governments. The reversal of land reform process should be immediately stopped. Loopholes in the land reform laws should be plugged and they should be implemented.  Ceiling surplus, waste land, forest land without green cover and government land should be distributed to agricultural labourers and poor peasants.  A comprehensive central legislation for providing minimum wages and social security measures for agricultural workers should be passed and implemented.  The government should step up public investments in agriculture and rural development. Irrigation and power facilities should be expanded.  More investment should be made for improving scientific research.  Credit facilities should be expanded. When there is a price crash, the government should immediately intervene in the market for protecting interests of the peasants by providing minimum support price and opening sufficient number of procurement centres. Adequate relief should be provided to peasants and agricultural workers who are  affected  by natural calamities such as drought, flood, pests etc.