People's Democracy

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


No. 35

August 30, 2009



Neo-Liberal Agenda 

Exacerbates Drought Suffering


A Prasada Rao


EVEN as the people of Andhra Pradesh are reeling under the severe impact of drought, the Congress-run state government is firmly refusing to heed the opposition demand to 'declare' drought affected regions. In the discussion on the drought situation in the state during the ongoing session of the state assembly, the government sought to confine the discussion around �declaration of drought�.  Stating that it recognises the severity of the drought situation, it asserted that all necessary action needed for contingency cropping and for mitigating the  hardships of the people is being taken. The All India Kisan Sabha and other farmers organisations have represented to the governor to intervene and advise the government to declare drought and take all necessary steps to mitigate the sufferings of the farmers. 


The ostensible reason the government cites for its refusal to declare the affected regions as 'drought-hit' is that banks would stop lending to farmers! It is totally unconvincing and is not supported by facts. According to Para 1.8 of the Handbook for Management of Drought in Andhra Pradesh (popularly called the drought manual), the commercial and cooperative banks operating in the concerned areas are expected to take the following steps, subject to NABARD and other relevant department guidelines:

�i) Reschedule agricultural term loans, crop loans �  and  ii) grant new loans for financing economic support schemes and allied activities  etc. ��


After a recent meeting of state-level bankers with the chief minister, the bankers have gone on record to clarify that drought declaration does not come in the way of their sanctioning credit to the affected farmers. That what the government has been stating all along was not true thus became clear.


When this is the factual situation, why is the ruling Congress party so stubbornly refusing to declare the drought affected areas ��  despite itself agreeing that the current drought is serious enough to do the same, and that it will wait at least till the end of August to consider declaring? The answer lies elsewhere and not in the 'drought'.







When drought affected areas are once identified and declared as such, the state government is duty bound to initiate several steps prescribed in the Handbook for Drought Management, which involves considerable expenditure. The government, obviously, does not want to spend this amount and discharge its obligations fully in this regard. Instead, it wants to wait up to the end of August, by which time it expects monsoon to revive (which has partially happened) and provide some relief.


Another major reason for the state government to adopt this stance is the commitment it has made to the World Bank to go ahead and implement the second generation neo-liberal policies in water and agriculture  sectors, of course, unmindful of its consequences to the people. It has already announced plans to introduce water markets in the state and took several measures including appointment of a Water Regulatory Authority. It has also initiated measures to corporatise agriculture in the name of 'cooperative farming' (actually it is joint company farming, in which the farmers have to sell their lands in lieu of their share capital in the company). Declaration of drought at this stage will obviously disturb the schedule of these so-called reforms.


Some feel that the government is expecting that the present drought will only create conducive ground to force the farmers, via market forces in a disguised manner in the name of financial assistance on selective basis, to accept corporatisation of agriculture. The farmers are being enticed by the argument that in these tough times it is better to agree to cooperative farming as it would transfer the associated risk to corporate entities.





The state is reeling under severe drought in the current year due to total failure of south west monsoon up to almost August 15, with normal rainfall being recorded only in three districts of north coastal region out of the 23 districts in the state. The rainfall deficit in the state as a whole has been as high as 56 per cent (215 mm against the normal 427 mm). In several  districts, rainfall deficit is more than 70 per cent. Even the traditionally heavy rainfall Krishna, Godavari delta regions are also facing severe drought this year. Only 53.4 per cent of the normal 79.07 lakh ha land has been sown, out of which crops in 11.26 lakh ha (27.2 per cent) have either not germinated at all or dried up due to prolonged drought. Dry land crops have been the worst affected. Not even 50 per cent of groundnut was sown. And much of the crop sown also withered due to the prolonged dry spell. Pulse and millet crops have also been the worst affected. Even the condition of the surviving crops is not satisfactory, excepting those under some wells. None of the major irrigations sources received water. Transplanting of paddy � the principal food crop of the state � has been adversely affected. Off take of fertilisers during the current kharif season has gone down by more than 25 per cent.





As for the important aspect of credit disbursement by the banks to the farmers, the situation is not at all satisfactory.  Out of the targeted credit disbursal of Rs 14,100 crore during kharif of 2009, only 16 per cent has been disbursed up to August 2. It reached Rs 7019 crore i.e. 49.8 per cent by August 15. The chief minister has asked the bankers at a meeting recently to achieve the target of disbursements by the end of August, which given the past record is highly unlikely. In fact, the situation on the ground is that many banks have stopped giving crop loans to farmers at the start of the season itself, expecting crop failures due to the dry spell. Also, during last year, which had normal rainfall, the total credit disbursed by the banks during kharif hardly crossed 50 per cent of the target. This situation of lack of credit from banks is forcing the farmers to take credit from private money lenders at abnormally high lending rates. This is one of the reasons for the recent spurt in farmer suicides in the state. The number of farmers who committed suicide in the state in 2008 was 211. Against this, the numbers of farmers� suicides in the state in the first and second quarters of 2009 were 40 and 43, respectively. Their number rose to 56 during July and to 141 as on August 25, which is quite disturbing.


The severity of the current drought is comparable to that of 2002. During that year also, monsoon failed up to August 11 and resumed only thereafter. After revival of monsoon , heavy rains made up a large portion of the rainfall deficit of the entire year. But successive heavy rains caused extensive flood damage to the remaining crops. As many as 1042 mandals, out of a total of 1128, had to be declared as drought affected. Contingency cropping then executed by the state government helped in stemming the substantial fall in agricultural production. In spite of this, the food production fell to 80.4 (1993-4 =100) from 122.9 during a normal year.





The state government has reduced the total allocation to agriculture for crop husbandry from Rs 880 crore (2008-09 revised estimate) to Rs 812 crore during 2009-10. If the original estimate is taken, the reduction will be much higher at Rs 518 crore. This is after excluding the allocation made towards assistance to farmers not covered by the central debt waiver scheme. Coming from a government that claims itself to be a champion of farmers, this reduction actually made the life of farmers more difficult in this drought situation. Similarly, in the case of allocation for horticulture, the reduction from the budget estimate is of Rs 21.3 crore out of Rs 133.8 crore. In case of sericulture, the reduction is much steeper from Rs 25.46 crore to a measly Rs 3.7 crore. Allocations for centrally sponsored schemes have been similarly  reduced from Rs 323.2 crore to  Rs 209.7 crore i.e. a reduction of Rs 114 crore.  Allocation for rural development has been reduced similarly from Rs 3865 crore (revised estimate) to Rs 2276 crore.


During the first tenure of Congress regime in the state (2004-2009), certain measures taken by the central and state governments �  of course at the insistence of the Left parties, particularly at the centre �  provided hope and sustenance to the farmers. This was reflected in the reduction of farmers� suicides in the state. After the recent general election and election to the state assembly, both the governments have embarked on pushing through their neo-liberal agenda aggressively. These policies, coupled with a failing monsoon and a steep rise in prices of all essential commodities with no concomitant raise in the price of their produce, is pushing the peasantry into greater distress. This is being reflected by the sudden spurt in the suicides of farmers after the elections.  The situation may only worsen and this is the time for the democratic movement to take up the farmers cause in a big way and force the governments to change their anti-farmer, anti-people policies.


(The writer is retired professor at the Acharya N G Ranga Agricultural University, Hyderabad and is associated with AIKS)