People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 10

March 11, 2007

The Budget And Agricultural Labour


Suneet Chopra


TO understand the impact the economic policies are going to have on agricultural labour we must first understand that those looking for unskilled work in the rural areas are a growing army. According to the census figures the number of rural landless has grown from 7 crores 47 lakhs in 1991 to 10 crores 75 lakhs in 2001. At the same time, the days of work available to agricultural labour in a year have gone down from 100 days in 1991 to 72 days in 2001. This means that the agricultural policies of both the present UPA government and the NDA government before it have failed to check the dispossession of the small peasantry by pursuing policies of allowing the landlords and speculators to consume the resources of the small and marginal farmers by leaving all development to money-lenders and charging farmers exorbitant rates of 14 percent interest, when the same banks and governments gave loans to industrialists for as little as 4 percent. So it is no surprise that nearly 2 lakh farmers burdened with debt have committed suicide.


What is worse, the governments over the last ten years have taken no steps to ensure that at least those having to live on reduced earnings are able to survive. Government policies have done the opposite. They have allowed prices of inputs to rise by refusing to intervene or have even profited from them at the cost of the starving, over 20,000 of whom have died in the last ten years.


Both the NDA and UPA governments raised the prices of petrol consistently. They said it was because of world prices of oil rising, but what they failed to tell the people was that they were fleecing the Indian people by taxing them on the rising price itself, so where the global oil companies fleeced the people for their part, the Indian government at the centre instead of giving them relief added to their loot. In fact, this loot was slightly more than that of the oil companies. Even now, despite the fall in oil prices, the Indian government has failed even in this budget to abandon its policy of levying a value-based tax on oil making it impossible to curb inflation effectively.


What they have done with oil, they have done with other inputs. The price of fertilizers have doubled. But how government policy of both the NDA and UPA government ensured this is important. The NDA government closed down Indian fertilizer plants of a capacity of 20 lakh tonnes in Bihar, Jharkhand, Orissa, Andhra Pradesh and West Bengal, on the excuse that Indian fertilizers were more expensive than imported ones at $80 a tonne. But when India stopped its own production and went on to the world market, the prices rose to $200 to $280. So the argument of cheaper imports is a spurious one as the entry of India as a buyer raises prices at once because of the size of our demand. Ultimately, the Indian people pay the price.


The same thing has happened with wheat procurement. When the FCI was procuring grain at Rs. 650 to Rs. 700 a quintal with a long wait for payments, foreign players like the Australian Wheat Board paid as much as Rs.750-Rs.850 per quintal hands down. Not unnaturally, the farmers sold their stock to them. So the UPA government had a procurement crisis on its hands. In 2000-01, with a production of 6908 lakh tonnes of cereals, 206.30 lakh tones was procured; but in 2005-2006, at around the same level of production, procurement came down to 91 lakh tones. Now, the Indian government will have to import grain at Rs. 1250 to Rs. 1300 and private parties have cornered it at Rs. 750 to 850 per quintal, as prices have soared because of our entering the market. In 1998 the same thing happened. Foreign grain was bought and a kickback of Rs. 11 crores 25 lakhs was paid by the Australian Wheat Board a Cayman Islands bank account. An enquiry was started but suppressed in 2004. So corrupt officials feathering their nests on the misery of the people cannot be ruled out this time as well. 


The present budget leaves us in no doubt. The allocation for PDS this year is Rs.26, 085 crores, only 6 percent or so more than last yearís Rs.24, 570 crores. This means that the figure is roughly the same as last year when the government failed to check an over 10 percent increase in foodgrain prices. It obviously has no intention of doing so this year either. So the pious statements of importing grain and vegetable oil from abroad is more to fill pockets with than as a serious attempt to check inflation.


The Public Distribution System is also being used as a sop. When it was initiated it was a general system of rationing that not only kept a tab on price rises but also ensured that ration card holders were given food and essentials at reasonable prices. Moreover the Essential Commodities Act (which covered 70 items once) has been reduced to a couple of items today. The rationing system has been broken into two arbitrary APL and BPL categories while the BJP-led NDA government raised the prices of rationed grain to nearly double making it impossible for the poor to buy food. Worse, forward trading in foodgrains was permitted, allowing scamsters and hoarders the chance of raising prices and fleecing those least able to afford food whose availability has declined consistently over the years. And when stock accumulated it was announced that people had gone for more nutritious foods! The present UPA government appears to be singing the same tune even though Leftist pressure has forced a number of items off the forward trading list. But feeding the poorest is an issue the budget debate must address.


Finally, while the Left-led struggle for the passage of an effective NREGA as opposed to the toothless draft proposed by the UPA government has succeeded and 330 districts are now in its purview, the central government is still out to defraud the people. While Rs. 11300 crores had been allocated for 200 districts in 2006-2007, this year the figure is Rs. 12000 crores for 330 districts. Per district expenditure has been brought down from some Rs. 56 crores to Rs. 34 crores. So it is evident that while the quantity of food available per capita has declined because of the ill-advised agrarian policy that cut down government expenditure on agriculture in the hope of filling the gap with private players, the reverse has happened. Not only did farmers face ruin, agricultural labour got less work. At the same time prices of food rose because of forward trading, hoarding and the breakdown of the public distribution system. The only way to cushion the poorest is to give them work for their survival. But that the allocation for the NREGA denies. Moreover, the last resort, land to the tiller, is also ruled out with the allocation for land reform being brought down this year and generous land grants to industrialists and multinationals.


Given this reality the budget means hunger, privation and unemployment for the poor. Our representatives in parliament should raise these issues in the budget debate and ensure changes are effected. But more than that, the agricultural labourers and rural poor must take part in militant agitations to ensure effective measures against the price rise and hoarding that pushes prices up; for the revival of a universal PDS pegged at half the present-day ration prices and the revival of the Essential Commodities legislation; and a minimum of Rs. 25000 crores for NREGA this year to provide necessary employment. It is necessary to bring the people to the streets as government allocations in the budget indicate not a change in a pro-people direction but a persistent pursuit of a path committed to the bourgeois-landlord class interest of dispossessing the small producer and driving the poorest to the sweat-shops of the unscrupulous under the threat of starvation. Such a fraudulent policy must be fought against and not be tolerated.