Why Telangana election might become a proxy battle between TRS and farmers


Why Telangana election might just become a proxy battle between TRS and farmers
By CR Sukumar, ET Bureau | Dec 01, 2018, 11.00 PM IST

Agriculture is a major economic activity in the state, where about 41.75 lakh hectares or 37.25% of land is under cultivation.
Telangana Chief Minister K Chandrashekar Rao (KCR) seems to be on a damage-control mode. With assembly polls due on December 7, he has been on a whirlwind tour of the state to ensure that a scheme his government launched to help farmers does not backfire.

Rythu Bandhu, the farmers’ investment support scheme announced in February, offer cash benefit of Rs 8,000 an acre (Rs 4,000 each in kharif and rabi seasons) annually to agricultural landowners. The scheme, however, excluded “tenant farmers”, or those who till the land but have no legal ownership on it.
The government issued “pattadar passbooks” to beneficiaries, the landowners, while deleting the column on tenants from the passbooks. The government said the idea was to clean up land records and help identify owners of the land. The state, which has earmarked Rs 12,000 crore for the scheme in 2018-19, said if the passbooks are not linked with Aadhaar, the land concerned could be considered benami.
Civil society activists and farmers’ union representatives, however, say it is a deathblow to tenant and tribal farmers in the state as they will not get any money despite being the cultivators. A sister scheme called Rythu Bheema offers group life insurance.
Telangana has 57 lakh agricultural landowners, according to government records. But there are no official records on the number of tenant farmers; estimates, however, say a large number of farmers are tenants.
Agriculture is a major economic activity in the state, where about 41.75 lakh hectares or 37.25% of land is under cultivation. In the 1980s and ’90s, thousands of landlords, mostly in the northern region of the state, had left their villages due to Naxal violence. The rebels distributed lakhs of acres owned by these landlords to poor and landless farm labourers. But these marginal farmers do not have the title to the land.
The tenant farmers pay the landowners rent or give them a share of the produce. The cultivator bears the risk of crop failure. With the fire of discontent due to Rythu Bandhu threatening to spread across the state, the KCR-led Telangana Rashtra Samithi has promised alleviating measures.

The party’s manifesto committee chief K Keshava Rao says the issues being faced by the poor farmers will be addressed. The final manifesto that will be released by December 2 will take care of the small and marginal farmers, he says.
KCR has promised to address the issues of tribal farmers and give passbooks to them, too, within six months of coming to power. He continues to be silent over the fate of tenant farmers. Downplaying the issue, TRS’ deputy floor leader in Parliament B Vinod Kumar says the government has after a deep and careful study decided to delete the “possession” column from the pattadar passbooks. This column was deleted to clean up land records and because the column was also leading to disputes between landowners and tenant farmers, he says.
“The government will extend the Rythu Bandhu and Rythu Bheema benefits to tenant farmers provided there is a formal tenancy agreement with landowners.” To matters worse for tenant farmers, banks disqualify them from loans if their names are not on the passbooks. Having the government-issued loan eligibility cards is another way for these people to get credit access.
“The KCR government’s move has taken away the limited privileges that tenant farmer had for decades,” says Kanneganti Ravi, a member at the Centre for Sustainable Agriculture and convenor of the Telangana Rythu Joint Action Committee. “Forget about getting Rythu Bandhu money, now these tenant farmers cannot even claim any government benefits or relief measures. They cannot access bank loans either.”
Almost all political parties are promising to extend the scheme to other sections of farmers and also increasing the sop to Rs 10,000 a year from Rs 8,000 now. However, an association of the scheme’s beneficiaries, Rythu Bandhu and Rythu Bheema Labdidarula Samakhya, has raised objections.
L Pandu Ranga Reddy, president of the body, says it will be difficult to identify tenant farmers as the column in the passbooks pertaining to tillers has been removed. “No landowner would give in writing to a tenant that the land has been leased.”
In June, the TRS government said new passbooks were being issued to some 57.24 lakh farmers and cheques have been issuedto 52.64 lakh farmers who have linked their passbooks with Aadhaar. About 90% of the beneficiaries have been covered and the balance 10% would be covered as soon as some technical errors were sorted out, it said.
The state has released Rs 6,000 crore in the first round. The second round of Rythu Bandhu cheques have also been disbursed but details of the number of farmers and amount aren’t available. The scheme has only helped rich landowners get financial assistance running into lakhs, says Bhutham Veeraiah, general secretary of the Telangana Rythu Kooli Sangam, an affiliate body of CPI-ML. During the first tranche of Rythu Bandhu cash disbursals, in May, there were several news reports of rich farmers coming to their villages in high-end cars to receive the cash benefit.
“The Rythu Bandhu scheme has benefited the absentee landlords more than the cultivating farmers,” says Veeraiah. Nearly 80% of agricultural land in villages are being cultivated by tenant farmers, he said, though government records show otherwise. A large number of tenant farmers have plots up to three acres to cultivate.
“The scheme was not made applicable to tribal farmers either — this section cultivates on about seven lakh acres of forestlands. Similarly, tenant farmers cultivating around 1.5 lakh acres of endowment lands and waqf lands were also denied the scheme.”
In a state that comes second in farmer suicides, after Maharashtra, says Ravi, tenant farmers bear the brunt all the time. Land revenue officials had even stopped recording the names of tenant farmers for several years now, he says.
A study by his non-government organisation, Rythu Swarajya Vedika, and Tata Institute of Social Sciences showed more than 75% of the farmers in Telangana who killed themselves between June 2014 and April 2018 were tenant farmers, and 94% were marginal, small and landless farmers. The study also found that most farmers who killed themselves had no access to bank loans and were heavily dependent on moneylenders. Nearly half of these farmers had no outstanding bank loans but had an average of Rs 4 lakh per head of private loans.
“Our study showed that most of these tenant farmers couldn’t benefit from the loan waiver schemes often announced by governments as they were denied formal bank loans. Though the Andhra Pradesh Land Licensed Cultivators Act-2011 provided loan eligibility cards to tenant farmers, it was not implemented effectively. In some instances, thanks to certain proactive district collectors, a few thousand tenant farmers were granted loan eligibility cards.”
Referring to the body blow from the TRS government, Ravi says, “Some 20 lakh tenant farmers across the state are now frustrated that they have been denied Rythu Bandhu support, bank loans and loan waivers.” Rythu Bandhu has made landlords return to villages. They are threatening the tenant farmers tilling their land, says Veeraiah of CPI-ML.
“In many instances, the absentee landlords, now back in control as their names are on the pattadar passbooks, have forced the tenant farmers to buy their land.” He says the distress is high in the districts of Karimnagar, Warangal, Komuram Bheem-Asifabad, Adilabad, Khammam, Bhadrachalam-Kothagudem, and Jayashankar-Bhoolapalli, and some parts of Mahabubnagar and Medak. The situation has started getting more politicised now.
In its election manifesto, the Congress led coalition, People’s Front, has promised to extend the benefits of Rythu Bandhu to tenant and tribal farmers. “There has been widespread discontent among the farmers in Telangana since the TRS government’s land regularisation scheme recognised the rights of historical owners of the land rather than the tenant farmers, who account for over a third of the farmers in the state,” says Mallu Bhatti Vikramarka, chairman of Telangana Pradesh Congress Committee’s Campaign Committee.
Land rights were always central to many critical movements in the region, including the peasant rebellion of the late 1940s and the Naxal movement in 1960s and 1970s.
“The ensuing elections in Telangana will be a fight between the common people and feudal forces,” adds Vikramarka. In a communique dated October 13 that was distributed in the affected areas, state secretary of Communist Party of India (Maoist) Haribhushan said: “The TRS government has retrieved land from Dalits, tribals and downtrodden communities in the guise of land resurvey and handed the lands back to the landlords. The Rythu Bandhu and Rythu Bheema schemes were actually aimed at benefiting the rich farmers and landlords. These schemes have hurt the poor farmers.” Echoing similar views, Telangana Jana Samithi President M Kodandaram says thousands of farmers across the state have lost their rights because of the government’s programme.
“In many cases, farmers weren’t issued passbooks. They could not get Rythu Bandhu money or bank loans. The state’s farm sector is under severe distress today as agriculture products are not getting remunerative prices. The loan waiver promised by TRS is yet to come.”
Another factor has added to the farm distress. Tenant farmers who agree to pay landlords higher upfront rent to grow commercial crops such as cotton and chillis ended up with huge losses as market prices were unremunerated, says Veeraiah. Adverse feedback from lawmakers and ruling party cadre on the growing distress at the ground level may have made the chief minister rethink on denying benefits to tenant and tribal farmers, says political analyst Manchala Srinivasa Rao.
“For the first time, KCR has acknowledged the issues facing tribal farmers. At public meetings in north Telangana, which has a high population of tribal farmers, he was seen repeatedly promising them that he would soon confer them with rights to the forestlands that they have been cultivating on for decades,” adds Rao.
The farmer discontent comes even as the state is yet to address the woes of at least 50,000 farmers who lost their lands to government projects — especially the Kaleshwaram irrigation project and Singareni Coal Collieries’ open cast mining — but have not received compensation according to the Land Acquisition Act 2013, says Rachna Reddy
Bollu, the advocate who has fought dozens of farmer cases in various courts. Going by the turmoil in rural Telangana, the forthcoming elections might well turn into a battle over cultivating rights of agricultural land, and, therefore, a proxy battle between the KCR-led TRS and distressed farmers.

The Downside of Repeated Debt Waivers

The Downside of Repeated Debt Waivers

Debt waivers are supposed to help farmers make agricultural investments, repay future debts and tackle any other situation. But the history of waivers in India tells a different tale.

Credit: PTI

Credit: PTI

India is facing an agrarian crisis. There is no doubt that the majority of the small and marginal farmers are indebted. According to the Reserve Bank of India, the amount of outstanding loans given out for agricultural and allied activities by the regional rural banks has increased from Rs 1.80 billion in 1980-81 to Rs 1329.67 billion in 2015-16. According to the 2009 India Human Development Survey, the average outstanding loan for a household was above Rs 50,000. The most popular and yet most debated public policy response to tackle this problem of spiraling farm debts in India has been debt waiver programs.

The theoretical argument in support of debt waiver policies originated in the macroeconomic context of debt relief programs for low income countries. For instance, Bolivia received on average $614 million in foreign aid per year between 1998 and 2002 towards debt relief. These numbers went up further in recent years. Sachs, in his 1989 work, argues that a very high level of outstanding debt reduces the incentive for the debtor to exert effort to repay, a concept captured by the Debt Lafer Curve. Krugman shows that in such a situation a policy of debt forgiveness could induce the optimal level of effort from the debtor and maximise repayment. A similar logic can be borrowed in a microeconomic setting like the agricultural loan waivers. Farmers who run into huge debts, due to uncertainties associated with agriculture, are less likely to be able to come out of the debt trap without any help from outside. Debt waivers are supposed to help the farmer come out of the unforeseen situation, make agricultural investments and be able to repay future debts. The problem arises though, when we consider the specific history of farm loans waivers in India.

A typical agricultural loan contract in India uses land as collateral, which are freed once the loans are repaid. Loan waivers protect households from confiscation of their land by credit institutions in case of default. Effectively, the practice of repeated loan waivers, announced in the wake of state level elections, have contributed towards shaping an expectation among farmers about government intervention to free up their collateral in case of default. This has led to a loss of credibility in the enforcement of loan contracts between the farmers and the banks. The hope for future loan waivers is likely to have generated incentives among farmers to utilise agricultural loans for unproductive purposes and adversely affect agricultural investments.

While the debate regarding efficacy of loan waivers has gained momentum in recent times, agricultural loan waiver programs have been around for a while in India. In 1990, Prime Minister V.P. Singh announced a waiver of up to Rs 10,000 for agricultural loans per household. It cost the government Rs 100 billion to complete the waiver and it took the banks, involved in the scheme, nine years to recover the funds from the government. In the same year, the then chief minister of Haryana, Devi Lal, announced a Rs 2275 million waiver for both cooperative and commercial bank loans. In 2008, the UPA government announced one of the largest debt waiver schemes in the history of India, the Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS). ADWDRS became the most prominent waiver program, at least partly because of its size – a massive Rs 716 billion. It also served as a precursor to the series of state level waiver schemes that followed. In November 2011, the Samajwadi Party government announced a debt waiver of Rs 17.20 billion for Uttar Pradesh, while the Andhra Pradesh (TDP party) and Telengana (TRS party) governments came up with their own waiver packages of Rs 240 billion and Rs 170 billion respectively in 2014-15. In 2016, the AIDMK party announced its waiver package of Rs 57.8 billion for Tamil Nadu as part of its election manifesto. Despite having the second largest fiscal deficit last year, when the BJP won the elections in UP, the state once again had a debt waiver package ready to be implemented. The BJP’s electoral manifesto had committed to write off loans of small and marginal farmers, which would approximately cost the government Rs 370 billion. The states of Maharashtra, Madhya Pradesh, Punjab, Haryana, Tamil Nadu and Gujarat are also in the pipeline to announce their own loan waiver packages, taking the cumulative loan waiver amount in the year 2016-17 to approximately Rs 3200 billion, equivalent to 2.6% of the country’s GDP.

Despite large sums of money being spent on these programs, little is known about their effectiveness. Are they really helping the farmer increase their productivity and pull them out of the debt trap?

Uttar Pradesh debt waiver scheme

To understand how potential beneficiary households respond to repeated waiver programs, we evaluated the UP Rin Maafi Yojana (UPRMY) announced in recent research (Chakraborty and Gupta 2017). Under UPRMY, a household qualified for a waiver based on the amount of loan borrowed and repaid. A timeline of the roll out of the waiver program can be seen in Figure 1.


Figure 1: Map depicting phased implementation of the UPRMY

Under the UPRMY, approximately Rs 1700 crore was disbursed as debt relief covering approximately 7.3 lakh farmers from 74 districts. The program was rolled in a phased manner over a period of three years from 2012-2015. About 42 districts received the relief package in 2012-13. In 28 districts, the program roll out happened in 2013-14. The remaining four districts received the waiver in 2014-15. Figure 2 tells an interesting story. Irrespective of which district received the waiver in which year, repayment rates fell dramatically right after the announcement of the waiver program, across all districts of UP. The average rate fell from 25%-50% in 2010-11 (pre-announcement) to 10%-25% in 2011-12 (post-announcement).

Consumption and investment behaviour of eligible vs. non-eligible households

We analyse the change in household behavior following the UPRMY using primary data collected in 2015 from 5,270 individuals in 770 households across six districts of UP. The districts were chosen to include regions from different phases of the program roll-out. Auraiya and Kanpur Dehat received the waiver in 2012-13. Agra and Firozabad received the waiver in 2013-14. We also include Lakhimpur, the only district that did not receive the waiver at the time of data collection and Sitapur, which received the waiver in 2012-13 and is adjacent to Lakhimpur. In each district a household qualifies for loan waiver if it had borrowed an agricultural loan of up to Rs 50,000 from the UP Gramin Vikas Bank. Further, the household was required to have repaid at least 10% of the borrowed amount on or before the programme announcement date.

Table 1: Household Behaviour In Response to UPRMY

Variable Received Loan Waiver Not- Received Loan Waiver
Consumption 41479 32728
Productivity 29397 38690
Income 52623 59051

Note: Consumption, is the yearly consumption expenditure in rupees; Income, is the annual income of a household; Productivity refers to the value of total production over farm size.

The average consumption value of households that received the loan waiver is roughly Rs 41,000, much higher than those of households who did not receive the waiver. This is in spite of the fact that the households that did not receive the loan waiver had a higher income and a higher level of agricultural productivity.

We delve deeper in to this apparent evidence of moral hazard using more rigorous statistical techniques. We compare differences in consumption and investment decisions between potentially eligible and not eligible households in districts that received the waiver vis-à-vis the differences between potentially eligible and not eligible households in districts that did not receive the waiver.

Our findings suggest that eligible households in districts that received the waiver had higher consumption expenditure, approximately by Rs 8,000 per year, as compared to non-eligible households. What is of greater concern is that eligible households also tend to spend significantly more on social events such as weddings, family occasions and so on. In addition, we find that eligible households had no significant productivity gain as a result of receiving the debt waiver compared to non-eligible households. Given that households in the same districts face similar agricultural shocks the insignificant productivity difference between eligible and not-eligible groups suggests a failure of the program to achieve its desired goals.

Rethinking policy interventions

Eligibility of households for loan waiver frees them up from debts and builds expectations of future credit availability. Consequently, the need to arrange for debt repayment falls. In other words, our results indicate, repeated debt waiver program have led to willful defaults. Farmers borrow from banks for agricultural investment but do not undertake the investment. Instead they use up the loan for consumption and are unable to repay the debt in the future. These findings, coupled with Figure 2 suggest that blanket waiver schemes lead households to stop repaying debts irrespective of their waiver eligibility status. This could be detrimental for the financial sustainability of this line of policy. It is important to note, however, that our findings do not speak against loan waiver programs altogether. Rather they warn against implementation of loan waiver programs based on simplistic eligibility rules that do not account for the actual needs of the farmers and the agricultural shocks they have faced. The agricultural sector in India is still vastly affected by scanty rainfall, poor irrigation facility and loans from private moneylenders with high rates of interest. A majority of the defaults could be a genuine disability to pay back due any of these reasons. However, a more thorough understanding is required regarding the effectiveness of different interventions. An alternate policy to explore is agricultural insurance which has seen an extremely low take up rate from farmers so far.

Tanika Chakraborty is assistant professor of Economics at the Indian Institute of Management, Calcutta, on leave from Indian Institute of Technology, Kanpur. Aarti Gupta, an angel investor by profession, has a Phd in Economics from IIT Kanpur, with her doctoral thesis on Loan Waivers in India.

2017: Parliamentary Standing Committee Report on GM Crops

Here is the report of the Parliamentary Standing Committee on Science & Technology, Environment & Forests on GM crops, presented to the RS Chair on 25th of August. This is A UNANIMOUS REPORT, AND 11 OF THE 31-PARLIAMENTARIANS COMMITTEE ARE FROM THE BJP.,%20Env.%20and%20Forests/301.pdf

The main gist of what they are saying is carried in these media reports:





2017 renuka chowdhury panel report on GM crops

GM: Parliamentary panel flags severe loopholes in existing field trial system of GM crops | India News – Times of India

NEW DELHI: Just as when the government is readying its response in favour of genetically modified (GM) mustard for submission in the Supreme Court, a parliamentary panel on Friday flagged severe loopholes in existing methods of field trials of transgenic crops and asked environment ministry to examine the impacts of such crops “thoroughly” before taking its final call.

Source: GM: Parliamentary panel flags severe loopholes in existing field trial system of GM crops | India News – Times of India

A new movement is born


A new movement is born

Yogendra Yadav
Over 150 farmers’ bodies have come together on a common agenda

A new movement is born
TWIN AGENDA: The focus is on fair and remunerative prices and freedom from debt.

Yogendra Yadav

IS the farmers’ movement in India entering a new phase? Six weeks is too short a window to answer this question with certainty. But the nature of farmers’ protest across the country since the beginning of farmers’ strike in Punjab shows signs of something new. This impression is confirmed in a two-week journey connecting farmers, organisations and movements across six states. This journey, Kisan Mukti Yatra, began on July 6 at Mandsaur, exactly a month after the police firing that killed six farmers. The yatra passed through six states before arriving at Delhi. This yatra was a good window into the new world of farmers’ movements, closer to the ground, I am now convinced that we are witnessing the beginnings of a tectonic shift in the history of farmers’ movements.  The media has begun to notice some outward signs of this shift. There have been stories about jean-clad new-age farmer activists. The use of WhatsApp and smartphones has also drawn public attention. But such stories tend to miss the real point. Farmers’ movement is adjusting to the new realities of Indian agriculture and the changing nature of Indian politics.  This is the third generation of farmers’ movements. The first generation comprised a series of peasant rebellions in colonial India. The Mappila peasant rebellion; Gandhian Satyagrah in Champaran, Khera and Bardoli; and Tebhaga struggle in Bengal were largely a reaction of the oppressed peasantry to the British colonial land tenure system. Indepedence brought hope to the peasantry; their movement subsided for a while. The second generation of farmers’ movements took place in the 1980s, led by Mahendra Singh Tikait, economists-turned-activist Sharad Joshi and maverick Majumdar Swami. This was a protest of the relatively better-off farmers, who faced marginalisation in modern, industrial economy. The struggle was waged principally on the issue of remunerative prices. On a parallel track were the struggles of landless labourers, led mostly by Naxalites, against oppression by big landlords. The third generation of farmer activists faces a new context. In the last generation, landholdings have fragmented. The farming sector, as a whole, has faced pauperisation. Farming is clearly an unviable activity. The economic and the ecological crisis of Indian farming is turning into an existential crisis for the Indian farmer. Today’s farmer movement has to face the reality of farmers’ suicides. This new movement is erasing the traditional distinctions of landlord, peasant, sharecropper or landless farmer. Impoverishment of rural India has forced farmers’ movements to bring all sections of farmers together. ‘Kisan mazdoor ekta’ has been a slogan of the Left for a long time, but it is only recently that the slogan has found resonance inside farmers’ movements.This expanded definition of farmer has encouraged the inclusion of various social segments. Dalits and Adivasis are predominantly engaged in farming activities. Yet they were not seen as farmers by mainstream farmers’ movements. This prejudice is beginning to change. As is the greater willingness among peasant movements to engage with Dalits and Adivasi issues. There is also a willingness to recognise women farmers who contribute about two-thirds of the labour. In ideological terms, the new farmers’ movement is moving away from older binaries. The earlier focus on landed versus landless has given way to a realisation that both of them are victims of the economic system. The urban-rural divide epitomised by the binary Bharat versus India has also undergone some rethinking. There is, after all, large chunk of Bharat within India, if not the other way round. There is also a growing realisation that the ecological crisis affects farmers as well as non-farmers and unhealthy farmer cannot but produce unhealthy food for the country. The move away from ideological rigidities has allowed for political unity and policy focus. In an unprecedented move, more than 150 farmer organisations have come together under the umbrella of All India Kisan Sangarsh Coordination Committee. This coalition includes organisations with very diverse political-ideological leanings. It brings together organisations from different parts of the country representing different crops. If this coalition holds, it has tremendous potential for decisive intervention on this issue. Perhaps for the first time, all the farmers’ organisations have agreed upon a common agenda. All organisation within AIKSCC, and even those outside, have agreed to focus their energies on the twin agenda of fair and remunerative prices and freedom from debt. In keeping with the broader definition of a farmer, both these demands have also been defined in a more comprehensive manner. Fair and remunerative price is not limited just to MSP and procurement which benefit less than 1/10th of the Indian farmers. Now the farmers’ movements are demanding actual delivery of the support price announced by the government for all crops and for all farmers. Alternatively, they want deficit payment to cover the gap between the price announced by the government and the price realised by the farmers. Similarly, the demand for freedom from debt is not confined to Kisan Credit Card loans or loans from rural cooperative banks. The demand now also includes freedom from the debt trap of private moneylenders.  This basic shift is reflected in the changing leadership of the new farmers. At the middle rung, the leadership of farmers’ movement comprises leaders with rural roots and urban exposure. They are from farming families, but not always practicing farmers. They understand the pain of the farmers but also speak the language of policy makers. They lead struggles on the ground, but also use RTI and litigation as tools. This youth leadership is the backbone of the new farmers’ movements. Would this new generation of farmers’ movement be more effective than its predecessors? While the need for farmers’ struggle has become more acute than before, the conditions for their mobilisation are more difficult today. It would take an imaginative and uncompromising yet inclusive leadership. Herein lies the challenge for farmers’ movements.