People's Democracy

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


No. 14

April  03, 2011


Agriculture and Budget: Business as Usual


Suneet Chopra


IT is evident that when one runs with the hare and hunts with the hounds, it is the hare that is the loser. The present budget does exactly that with the rural hare and the corporate hound. And most budgets have been doing that for nearly two decades now, with devastating effect on our food security, inflation, declining rural employment and increasing inequality of income between the urban and rural sectors, leading to the withering away of resources of the rural masses who still constitute over 60 per cent of our people. So, once more the budget has given the aam aadmi the go by. Moreover, the Rs 11, 500 crore direct tax concessions to the better off are to be offset by the increase of Rs 11, 300 crore through indirect taxes paid for by the people. This is consistent with successive governments’ policies of making the already poor pay for the prosperity of the rich.


The agricultural sector, whose share of the GDP has plummeted from 31.4 per cent in 1991 to a miserable 14.2 per cent in 2010, while having to support over half the population of the country,  has been starved once more of the resources it badly needs. Agriculture has seen a cutback from Rs 17,695 crore in 2010-11 to Rs 17,523 crore in 2011-12, while rural development has been truncated from Rs 89,629 crore to Rs 87,845 crore since the last budget. Moreover, subsidies on fertilisers have been reduced by 9 per cent, on food by 9.4 per cent and on oil by a massive 38.5 per cent, representing a cut of Rs 20,000 crore. This will be devastating for the rural masses, over 70 per cent of whom are below the 2200 calorie line already and reflect the growing poverty of our villages where 33 lakh farmers have been joining the landless each year since 1991.


This policy has been pursued under the erroneous belief that if the government pulls back from the agrarian sector, private investment will rush in to take its place. We have enough experience that this does not happen. On the contrary, the flight of government investment from agriculture and rural development has led to private investment following suit. Now, the government has decided to increase credit to the rural borrowers at 4 per cent interest if they have paid their previous dues, the very thing for which they were excluded from the debt-relief programmes earlier. Also, the finance minister’s exhortation to the banks is to give more loans to the poor and marginal farmers as in earlier years the lion’s share of rural credit has instead gone to agro-industries. It is evident from this exhortation that he does not believe that anything is going to change this time either.


At the same time, the rural drinking water programme has got only Rs 8,099 crore. This is Rs 400 crore less than the amount actually spent on the programme last year. The Indira Awas Yojana is again stagnant at Rs 8,996 crore. Given the increase in the price of cement and building materials because of ongoing government policies, it too will be insufficient for the job. The Prime Minister’s Gram Sadak Yojana has got Rs 18,217 crore, more than Rs 1,600 crore less than the last year’s expenditure of Rs 19,886 crore at. The National Mission for Protein Supplements, organic farming and extending the Green Revolution to the eastern region sound good, but it seems it would remain a non-starter in view of the flood-prone character of the region, with no allocation of irrigation facilities to match it. This failure to meet the urgent demand to improve the rural infrastructure will no doubt affect employment as well. But even though wages under the MNREGA have been linked to inflation, the outlay for the scheme has been brought down by Rs 100 crore to Rs 40,000 crore, despite the ministry asking for no less than Rs 63,000 crore. So a serious attempt at employment growth seems out of question.


To add to all this, we have the ominous threat of more free trade agreements, fluctuations in agrarian prices and the already ruinous crisis the peasantry faces today, which has resulted in 2,16,500 farmers’ suicides over the last one decade and a half, with the figure peaking at 17,368 in 2008-09. The budget does nothing to reassure the farmers and agricultural labour that the government is concerned about their suicides and hunger deaths. It seems to be going on with business as usual.


This essentially means going ahead with the corporatisation of agriculture and unleashing speculators on the agrarian market, forcing both distress sales and distress production. All these are likely to go on as before. Ashok Gulati, director of the International Food Policy Research Institute, states: “It’s an average budget and lacks the reforms agriculture needed. The steps cannot give you sustained growth in agriculture.” Eminent agronomist, M S Swaminathan, chairman of the Farmers Commission, saw it as an opportunity missed on the global scale to make our agriculture pay, while even a number of the members of the National Advisory Council headed by Congress president, Sonia Gandhi spoke of it as being “unimaginative.”


These are understatements. If one looks at the allocations for public health schemes, the nation vector borne disease control programme (which includes malaria) has been reduced by 23 per cent, routine immunisation by 17 per cent, the national TB control programme by 11 per cent, and the trachoma and blindness control programme by 4 per cent. Thus one realises that this budget cannot but deepen the crisis of agricultural viability. The promise of coupons to farmers instead of fertiliser subsidy and to consumers instead of the PDS will both create problems of delivery and wreck the already existing institutions of support to the farmers as well as consumers. What we can therefore expect is more sales of land, more suicides and more insecurity of life and livelihood in the rural areas. This is hardly the price the majority of our fellow citizens should be expected to pay to ensure that a handful of corporates profit from the increasing ruin and misery, as the budget seems to be bent on doing. In fact, nothing less than the reversal of these anti-people policies will do. It is thus the bounden duty of the organised movements of the peasantry and agricultural labour to join hands with the working class to ensure these policies are reversed.