People's Democracy

Agrarian Crisis: Adopt Correct Approach

V S At NDC Meeting

The following is the full text of the speech delivered by Kerala chief minister V S Achuthanandan at the NDC meeting held in New Delhi on May 29, 2007

IT is a matter of great gratification that this meeting of the National Development Council has been called to discuss the severe crisis facing the farm sector of the country. My own state Kerala has been one of the worst-hit states, with nearly two thousand suicides till date.

It is important however that we do so with a correct approach. I say this at the outset itself because the approach of the NDC sub-committee is unacceptable to us. It. sees the agricultural crisis not as a crisis of the peasantry and agricultural labourers but as a problem of deceleration in output growth rates per se. According to this approach in order to overcome the crisis we need to open up agriculture to contract farming, corporate farming, corporate retail chains, and crop diversification away from foodgrains. And for bringing about all these changes, we may have to also undo land reforms, notably tenancy reforms and ceiling legislation.

The basic problem with this approach is that it will give rise to a net displacement of people from agriculture. Corporate retail chains will displace large number of petty retailers. The shift away from foodgrain production will reduce net labour demand in agriculture. The undoing of land reforms will render farmers landless as has happened in Mexico. This displacement of people from agriculture, in the context of “jobless growth” in industry and services, will worsen the already miserable condition of the agriculture-dependent population.

We find the suggested modification of tenancy legislation particularly unwelcome. We have just celebrated the fiftieth anniversary of the first communist ministry in the state. We shall do nothing that goes against Kerala’s glorious achievements in the sphere of land reforms initiated by the first ministry.

It is for this reason that our alternative approach emphasises the protection of peasant agriculture from globalisation, through deliberate interventions by the State. The way to higher growth is State support through the provision of debt-relief, of institutional credit, of tariff protection, of assured remunerative prices, of extension services, of good quality affordable inputs, and of rural infrastructure including in spheres such as education and health.

In the absence of such support, productivity augmenting measures like watershed management will not yield the desired higher’ growth within peasant agriculture. A similar comment is in order over the Vaidyanathan Committee report. Unless the agrarian crisis is overcome, its recommendations will not improve the viability of the cooperative sector. The various “packages” announced by the central government have failed for this very reason. They provide debt relief, and include measures for productivity increase, but never contain any measures assuring remunerative prices.

We in Kerala have undertaken several measures for protecting ‘peasant agriculture from the debilitating impact of global integration. An important step is the Debt Relief Commission. This legislation is unprecedented in post-independence India. A second measure is the assured procurement price of Rs 8.50 per kg for paddy. This has already reversed the sharp decline in area under paddy cultivation, besides increasing output by nearly 30 per cent.

Support for cash-crop farmers of course is outside the purview of the state governments. There are certain cash crops where the competition is with the more or less equally impoverished farmers of the tropical regions of other developing countries. Kerala’s cash crops belong to this category. In the absence of an agreement among producing countries, competition here would only mean cut-throat competition resulting in a “race to the bottom”. The central government’s habit of entering into free trade agreements without consulting the states would only intensify such “race to the bottom”.

In WTO negotiations we should not agree to reduce the existing bound levels of tariffs. The tariff policy should ensure remunerative prices to the cash crop producers. The curtailment in government expenditure on rural development had also contributed to the agrarian crisis. The UPA government reversed this trend by enacting the National Rural Employment Guarantee Scheme (NREGS). But the budgetary provision under this Scheme has been inadequate. The fact that the potential of NREGS is great becomes apparent from Kerala’s experience. It can be further strengthened if the agricultural operations on marginal holdings are covered under the NREGS. Further, the alleviation of distress in peasant agriculture requires a stepping up of public health and education facilities, which, again in the period of liberalisation, have got severely run down.

It is not enough to protect and nurture peasant agriculture. Its productivity has to be raised. It has to undertake value addition and diversification. And it has to be modernised to reduce the drudgery. If such modernisation is carried out in the framework of capitalist farming it will only worsen unemployment and destitution. But they can be carried out within the ambit of peasant agriculture through group farming, cooperatives and other collective forms of peasant operation.

I shall end with a suggestion. Since agriculture is a state subject let each state be allowed to pursue its own strategy. When our strategy in Kerala is beginning to yield dividends it is unfair to ask us to adopt another that we do not believe in. We would request the central government therefore not to link the Additional Central Assistance (ACA) to the adoption of a particular strategy. We would also urge it to give us additional support for our strategy so that our attempt to provide debt relief and an assured procurement price for paddy and coconut is sustained. Let there be freedom to pursue alternative strategies.

Lastly, I would like to draw your attention to the fact that the Eleventh Five year Plan should have been finalised well before now. We are already into the Plan period. The Approach paper to the Eleventh Five Year Plan, which itself was delayed was approved by the National Development Council nearly six months ago. It is surprising that the Plan document is still not ready for presentation to the Council. I would urge the prime minister and the Planning Commission to expedite the preparation of the Plan and to convene a meeting of the Council at the earliest for presenting the Plan document. (INN)