Image: Amit Dave/Reuters
HARSH REALITY Farmers plough a field before sowing cotton seeds in a village in Gujarat. While agricultural growth has picked up in the last seven years, the reality is also that farm business income has started declining.
With little breakthrough in terms of technology, chances of production increases are bleak. Nor is the external environment of any help with prices of agricultural commodities expected to remain low because of conditions in the developed countries. But even in our own country, the deceleration in growth rates and the increasing fiscal deficit implies stagnation in demand of agricultural commodities and reduction in subsidies.
Not so long ago, the story of farmers’ suicides was all over the media. But just when it looked like we have gone past this sad episode, stories of farmers’ suicides have again started pouring in and this time from hitherto agriculturally advanced states such as West Bengal. But how can we expect the farmer to produce and feed the country when he himself/herself is staring at debt and losses?
However, the plight of the Indian farmer has received less attention than agriculture as the source of food and raw material. But herein lies the catch. Most of the working class dependent on agriculture, including agricultural labourers and marginal cultivators, are also net consumers of food. How can we ensure that those who produce food also consume the food that they produce?
Raising incomes through state support is the only way out. The largest subsidies are delivered to farmers in the most developed nations. By all means, the Indian farmer is the least protected. But here we have taken away whatever subsidies they had on fertilisers, distorted the market for fertilisers and energy prices, and are now staring at the proposal of increase in diesel prices which is imminent any day.
The saving grace is the system of Minimum Support Prices which remains the only effective subsidy. But even this is available for only two crops—rice and wheat. Why is it that we are self-sufficient in rice and wheat, but are net importers of almost all other major food crops such as pulses and oilseeds? Partly because these crops do not enjoy even this minimum support from the government. But even this measure of support may be in danger if we move to cash transfers instead of actual delivery of food grains through the public distribution system (PDS).
The present NFSB may have many flaws including the fact that it still relies on the leaky TPDS (targeted public distribution system) rather than an efficient universal PDS as has been shown by many states. But the real failure is that it is silent on committing anything on improving the well-being of the farmer. The limited provisions have been put merely as enabling provisions rather than integral component of the Act itself.
The real success of the food bill should not be measured in terms of how much food grain is delivered through the public distribution system. The food bill will be a success when there is nobody demanding food at cheap subsidised prices through the fair price shops. But that will only happen when the livelihood of the farmers and agricultural labourers, which constitute bulk of the poor, increases to the extent that they do not need subsidised food. Either way, the only way out is to revive agriculture, but more importantly, revive the fortunes of those whose livelihood depends on it.
What needs to be done
The writer is a Assistant Professor of Economics at Jawaharlal Nehru University and Visiting Fellow, Centre de Sciences Humaines, New Delhi.