Agrarian Crisis and Farmer Suicides in AP Continue; Contract farming is not a solution; Government should protect farmers not companies


August 3, 2012

Agrarian Crisis and Farmer Suicides in AP Continue; Contract farming is not a solution; Government should protect farmers not companies


The latest National Crime Records Bureau data on farmer suicides once again puts Andhra Pradesh to shame. The state recorded the second highest number of farmer suicides in the country at 2206. Meanwhile, the state government has acknowledged only 141 as “genuine farmer suicides” in 2011. Through RTI and fact-finding visits by Rytu Swarajya Vedika and many member organizations, all the farmer suicides are due to various reasons related to agricultural distress. It has been found that only 1 out of 15 or 1 out of 20 genuine cases is being recognized through the due process as specified by G.O. 421/2004. If the government is even refusing to acknowledge the existence of a crisis, how can it expect to solve the problems?


This year, farmers are reeling under the effect of delayed monsoon and the government has not taken effective measures to help farmers. The new data from National Sample Survey Organization shows that 60% of people in rural areas are able to spend less than Rs.35 per day. It is clear that despite the hype about the 9% growth model, unless the issue of agricultural incomes is addressed especially for the large proportion of small, marginal and medium farmers, majority of Indians will continue to be in a distress state.


While the government has not taken concrete steps to address the problems underlying the crisis, or responded to the demand for a separate Agriculture Budget for the state, the recent action by the Agriculture department is to issue a notification dated 30/06/2012 on “contract farming”! This indicates the government’s intention to give a boost to contract farming in the state, without learning any lessons from past and ongoing contract farming experiences.


Response from Rytu Swarajya Vedika


  1. There are many issues underlying the crisis – such as unremunerative prices, low public investments in agriculture, small farmers getting squeezed in the market, rising costs of cultivation, lack of storage, marketing support and lack of collective bargaining. Instead of addressing these, the government should not promote contract farming as the solution and deny their responsibility on all the issues mentioned above. Unless these problems are solved, the crisis will continue.
  2. Unless the core structural issues are addressed, contract farming will be yet another way of exploiting the individual farmers, and an easy way for corporates to enter into agriculture and dominate the value-chain.
  3. The experience of contract farming in A.P. in seed production, and crops like gherkins, vegetables and cocoa, shows that hardly any contracts are in writing, and when the farmer gets a raw deal, there is simply no protection. Farmers face many issues with grading, payments, fair prices and so on. How many contracts have been registered so far? How many violations have been noted and action taken? None of the lessons from experiences are taken into account in the notification.
  4. The contract farming model has the danger of a few corporations controlling the cropping pattern, cultivation practices (from seed to crop husbandry) and the market – the government should have clear safeguards to avoid that situation.


Specific demands for contract farming notification:


1)      The government should closely regulate the contracts so that the farmers’ interests are safeguarded. The government should be there as a third party in the contract, to ensure that the small farmers get a favorable deal.

2)      Contracts should be with farmer groups and not individual farmers so that there is better bargaining power.

3)      There should be a clear constraint on price fixation. For each crop, the government should fix a minimum floor price based on cost of cultivation + %margin where the margin should be between 30% to 50% based on the crop. None of the contract prices should be allowed to go below the floor price.

4)      The quality constraints and grading parameters should be fixed according to clear norms specified by government based on experience of farmers. In the current situation, farmers often lose out because large part of their produce is classified as lower grade and gets very cheap prices.

5)      If there is price variation after signing the contract is beyond 25% of what has been agreed upon, there should be scope for re-negotiation within certain constraints fixed by the government.

6)      The current rules require the company to deposit only Rs.2 lakh as security. This deposit should be 20-25% of the total volume of purchases by the company, not a fixed amount.

7)      The payment mechanisms should be clearly specified, and most of the money to the farmer should be paid at or before the delivery of the produce. If there is outstanding payment from the company, interest should accrue on the farmer.

8)      In the contract farming agreement, there should be a clear liability clause which holds the second party accountable for the services they are providing which may be in the form of technical advice, seeds, pesticides, fertilizers,, herbicides, irrigation, land preparation.

9)      According to the sub section (4) if the farmer fails to fulfil the quantity and quality of the crop which was decided by both the parties gives the company the entitlement to refuse to take the delivery of agricultural produce which the farmer would have to then sell to the market and if surplus is left he/she can use it for himself/herself. A pre-defined quantity and quality would trap the farmer into fulfilling an obligation, over which they have no control.


In conclusion, we demand that the government should focus on implementing real solutions to the problems of the farmers, and not push contract farming as the solution. The regulation governing contract farming is very weak (including the recent notification) and does not protect the interests of the farmers. The regulation should be made much stronger based on the many demands described above.


Participants from Rytu Swarajya Vedika:


Dr. G.V. Ramanjaneyulu, Centre for Sustainable Agriculture:       09000699702,

Vissa Kiran Kumar, coordinator, Rytu Swarajya Vedika:                   09701705743,

Ravi Kanneganti, editor, Tolakari magazine

K. Sajaya, Caring Citizens Collective:                                                        09948352008,

Dr. A. Prasada Rao, agricultural scientist                                                 09490098903,

Karthik, Human Rights Forum                                                                     09346677007,

Brief on IFFCO mega dairy project proposed in Nellore, Andhra Pradesh

Facts about the case:

General information-

· Indian Farmers Fertilizer Co-operative Limited (IFFCO) is the world’s largest fertiliser cooperative federation based in India.

· It proposes to set up a Special Economic Zone (SEZ) in Nellore district of Andhra Pradesh.

· The total project area is 1023 Hectares which will cover villages Regadichelika, Racharlapadu, Chowduputtedu, Uchaguntapalem, North Ammuluru, Bodduvaripalem; Mandals Kodavaluru, Dagadharthi and Allur in Nellore district.

· This land was acquired 15 years ago at very low price by IFFCO to set up a Naphtha based fertilizer plant in Nellore.

· IFFCO Kisan SEZ Ltd. is being setup as an Agribusiness Special Economic Zone based on the concept of Integrated Agropark.

· Kisan SEZ has requested the government for stamp duty exemption, exemption fee for conversion of agricultural land for non-agricultural purpose and exemption from holding land more than the ceiling.

The mega dairy project-

· A mega dairy is proposed as a part of the SEZ. IFFCO is the main proponent of this dairy.

· It proposes to develop an intensive dairy through a Special Purpose Vehicle (SPV) consisting of IFFCO Kisan SEZ-Fonterra-Global Dairy Health consortium.

· IFFCO Kisan SEZ is a fully own subsidiary of IFFCO.

· Global Dairy Health is an Indian company interested in enhancing milk production by establishing large scale integrated milk production systems around the world.

· Fonterra is a New Zealand based dairy company and is world’s leading exporter of dairy products.

· The proposal is to set up a modern integrated mega dairy farm with 40,000 cows at one place.

· 9,000 Holstein Friesian & Jersey breed pregnant cows with yield of 30 – 35 litres of milk per cow per day will be imported in the next 3 years in batches of 3000 cows each.

· 31,000 cows of local breeds such as Gir, Sahiwal, Deoni, Tharparker and Ongole will also be added to this dairy.

· Along with the pregnant cows, 20,000 doses of semen (sexed and regular) and 5000 doses of embryos will also be imported.

· The proposed plan in India is to build the prototype of Fonterra’s intensive dairy model in China (Tangshan)

· The milk from Fonterra’s dairy in China is responsible for death of 13 infants due to contaminated milk.

Issues of concern:

• Conflicting with Directive Principles of State Policy

• Animals kept within such a system are highly stressed, unable to express necessary natural behaviour such as grazing, grouping, exercising, and forming bonds.

• Animals kept at high stocking densities are more likely to contract diseases. Additionally, there is an increased likelihood of the emergence of novel zoonotic diseases.

• Genetically manipulated high yielding cows such as the proposed imported breed have shortened lives, reduced fertility, greater propensity for disease, and physiological and development problems.

• Animals kept within an intensive system have a high likelihood of enduring injuries such as leg and foot lameness and mastitis.

• The adaptability of imported cows to the climate of Nellore is of particular concern as this will increase stress in the animals.

• Calves may be removed from the mother before natural weaning; the fate of male calves is also a significant question.

• The cows with natural span of 10-12 years become dry in average 6 years in mega dairy operations. This can lead to unending problem of stray animals.

• Cow slaughter and transportation for slaughter results in additional welfare implications.

• Threat to native cow breeds.

• Effect on cooperative system

• Violation of provisions of Andhra Pradesh Cow Protection Act

• Past experience: Andhra Pradesh imported 300 cattle from Australia about a decade ago for breeding purposes. However, import of animals from Australia was unfortunate. These animals were suffering from diseases and had to be quarantined where they died.

GO MS 133: Contract Farming: Boon or Bane?

Download: 2012 GO MS 133 Government of AP

Contract Farming (CF) is the new subject to be watched in the State. With the issuance of a GO recently, doors are open for the entry of Indian and foreign companies to have direct agreements with farmers to finance them, provide quality inputs and buy their produce at pre-decided prices. With this, the CF activity which has been at a low level so far is expected to go up, and as and when FDI gets into retail, it will pick up even more.

While governments, companies and economic reformers assure the CF will benefit Indian agriculture and farmers, critics warn of various harmful consequences. They demand legal protection to farmers which the companies and governments do not appear to be accepting. The Government of A P has given a 30-day deadline for all the concerned to react on its GO.

–Ashok Tankasala

The Government of Andhra Pradesh has issued a GO recently to facilitate Contract Farming (CF) in the State. The order has put it plainly that the measure is being taken in the context of WTO and liberalization. Though the CF has not been totally absent so far, it is taken up at a marginal level confined to a few products and companies. For instance, we have Cadbury’s cocoa farming, State Bank of India’s paddy and groundnut in collaboration with Mahindra, and Cotton Corporation of India’s cotton farming deals. The reason for this marginal position of CF is not any opposition from the government but the existing rules and regulations.

Officials have said openly that they are for it; the late Chief Minister Y S Rajasekhar Reddy opposed direct corporate farming, but welcomed contract farming. It’s a different matter he could not go ahead with it in the face of strong resistance from some of the opposition parties. The AP Market Rules of 1966 do not permit companies to deal directly with farmers. Even local traders have to obtain pre- licences from the authorities to buy agricultural commodities from farmers. All that is supposedly to protect the interests of farmers, most of whom in the country fall under ‘small and marginal’ categories. They happen to be uneducated and innocent who cannot properly understand the stratagems and machinations of the market forces.

Even though this condition of farmers continues till date, the Government of India initiated a defining change in the farmer-market relations, under the influence of liberalization. Accordingly, the Centre formulated a ‘Model Act’ for CF a few years ago and forwarded it to the states for adoption. Now that the State has issued the GO and it is only a matter of time before the Act comes into effect. Once that happens, the level of commercial capital in the agriculture, in the form of crop investments and trade, is likely to go up. Introduction of advanced technology and farming/management methods will follow.

That being so, there has been a wide debate in the last few years over the very desirability of CF in the country. It began when the UPA Government in its Approach Paper to the 11th Plan in 2008 accorded priority to the CF. The debate covered issues like the failure of governments to uplift the agricultural sector and farmers, the likely harm or benefit from the CF, the possible ill effects of the entry of Indian and foreign companies into this area integrating the sector with international markets, loss of bio-diversity and possible threat to food-security. It may settle one way or the other only after several years, after taking stock of the net impact of this new phenomenon.

For now, the opinion is sharply divided. While companies, government officials and economists extol CF benefits to Indian agriculture and farmers, others debunk the whole argument. One may not agree with the CF kind of solution to the woes of Indian agriculture and farmers, but there is no denying the fact that agriculture needs a big push. For instance, while the GDP grew at a rate of 7.6 % during the 10th Plan period, the growth of agriculture declined to 2%. The reasons were low levels of investments, poor research, weak infrastructure, non-provision of adequate quality inputs and services to farmers and non-protection of their interests. In a country where about 70 % of farmers cultivate no more than two acres, these conditions naturally make the activity utterly unprofitable.

Now, as per the governments and experts, CF is the best solution to overcome this problem. Under this system, they suggest, irrespective of the size of land holding, farmers can have quality seeds, pesticides, insecticides, fertilizers, crop loans, advanced technology, management expertise and finally a guaranteed market for their produce. The prices will be the ones mutually agreed upon in advance. That way a great number of risks faced by farmers for all these years will be eliminated.

The entire process is done in a mutually agreed upon advance document form. In case of any disputes the Marketing Department will intervene. Agreements will also have provisions allowing farmers to sell their produce to other bidders. CF protagonists cite these advantages to push for contact farming in a big way with the tantalizing prospects of farm growth hitting 4 % as envisaged by the Centre.

They also point out, under the present system farmers are not only denied proper inputs, technologies and management advice but also compelled to sell their produce only to authorized traders at designated markets. This is giving scope for exploitation. Traders often form syndicates and decide prices arbitrarily. While officials look the other way, even the minimum support price (MSP) is not paid.
Apart from governments, various public and private sector organizations such as the Planning Commission, FICCI, CII, ASSOCHAM, NABARD and MARKFED and banks have been batting for this system.

However, critics, some of whom remind of the failure of Kuppam venture attempted by Chandrababu Naidu government with Israeli participation, warn that actually the CF is not as rosy as it looks on the paper. Even though certain benefits like better inputs, services and market guarantee do accrue to farmers, experience shows that companies often raise issues of quality of produce and tend to reduce prices like any normal trader in the market yard. Marketing Departments which have dispute redressal mechanism, generally side with companies. Records show that such problems are on the rise.

According to Dick Levens, agricultural economist of University of Minnesota, cautions, through CF the food systems of different countries will get under the control of MNCs. With everything from seeds to marketing managed by them one will become totally dependent on them and lose agricultural independence. P V Sateesh of Deccan Development Society, who studied CF of the USA, mentions a report which concluded that chicken farmers there were pauperised because of their lack of bargaining strength in dealing with corporations.

“Companies blacklist growers who try to organise resistance against unfair practices.” Similar have been experiences in several other countries, experts say. A report in the monthly newsletter (May 2008) of ICRISAT corroborates this view. There are several conditions that are to be in place to ensure its success. The ICRISAT article goes on to list them. However, in the Indian context, experts express doubts as to the role played by governments.

A special study done by Sukhpal Singh of IIM Ahmedabad on working of CF in different countries of the world and in India concluded the system has not benefited the farmers. That is not because the system itself is harmful but due to how it is practised in a given context, he says. The government is the culprit in this. At another level, “Contract farming, in political economy, is one mode of capitalist penetration of agriculture for capital accumulation and exploitation of farming sector by the agribusiness companies”, he warns. His suggestion is to form cooperatives for increasing the bargaining power of contract farmers. In fact, his opinion is echoed by some other experts too.

It remains to be seen whether the Government of Andhra Pradesh will make a study of the subject seriously and sincerely, by inviting expert opinions and organising discussions, or will leave things to the mercy of companies and other market forces.

What is Contract Farming?

Contract Farming (CF) is an agreement between farmers and marketing or processing companies. According to it the companies tell farmers in advance what crops to cultivate and how much. After harvesting is done the crops are sold to the contracting companies. Supply should be at the time specified. These are called forward agreements. This may happen in case of livestock also.

. Prices of the produce are determined before hand through mutual negotiations.

. The crop quality should be as per the specifications of the company. If not, the company may refuse to buy it. Or buy at reduced prices.

. Agreement may provide for input and technical advice support to farmers. Inputs may include financial loans, quality seeds, insecticides, fertilizers, required machinery etc. Technical advice is management of crops from land preparation and sowing to harvesting.

Terms and conditions of CF may differ depending on farming conditions, crops, farmers, companies, technologies etc.

The GO

The Agriculture & Cooperation Department of the State Government issued GO Ms. No. 133 on 30th June, 2012 on Contract Farming. It amends the A P (Agricultural Produce & Live Stock) Market Rules, 1969.

The GO says, “… in view of the changed scenario in the trading of agricultural commodities and with the advent of WTO, the Government of India have piloted a Model markets Act to all the States for adoption. As a part of liberalization, certain amendments have been made to the A P Market Rules, 1969. (Now) It is proposed to amend the Market Rules, 1969 suitably so as to make provisions for private marketing and contract farming.

The said amendment will be taken into consideration by the Government on or after the expiry of a period of 30 days from the date of publication of this Notification in the AP Gazette and any objections which may be received may be considered by the Government. The objections and suggestions may be sent to Special Chief Secretary (AM&C) Department.

Main amendment is: In Rule 73-A: The contract farming producer and contract farming buyer shall be at liberty to mutually decide the terms and conditions of the contract farming agreement, which shall not be contrary to the provisions of the Act and Rules and same shall be informed to the Market Committee/Asst Director.
The Model Agreement comprises 20 provisions. The essential ones among them are:

. It is hereby agreed by between the farmer and the company that the farmer agrees to cultivate and produce and deliver to the company, and the company agrees to buy from the farmer, the items of the quality and quantity at price mentioned in the agreement.

. The farmer shall supply the items to the company within the agreed time. After expiry of the time this agreement shall automatically come to an end.

. The farmer agrees to supply the quantity of produce agreed according to the quality mentioned in the agreement. If it has no such quality the company can refuse to buy it. In that case the farmer can sell it at reduced price with mutual negotiations.

. The farmer agrees to adopt instructions or practices in respect of the land preparation, nursery, fertilization, management, irrigation, harvesting and any other, as suggested by the company.

. The company agrees to provide following services to the farmer during the period of cultivation and post harvest management. (Services to be specified in the agreement).

. The company shall have no rights whatsoever as to the title ownership, possession of the land/property of the farmer, nor shall the company in any way alienate the property of the farmer particularly nor mortgage, lease, sub-lease or transfer the land in any way to any other person or institution during the continuance of this agreement.

. Dissolution, termination or cancellation of the agreement shall be with the consent of both the parties.
In the event of any dispute or differences between the two parties on any matter, that shall be resolved as per sub sections (3) and (4) of the section 11 A of the AP Market Act, 1966.

A fair proposition

We run the country’s largest contract farming operation in potato. We work with nearly 15,000 farmers. Through contract farming our total procurement is about 1,50,000 tons.We have pioneered something called direct seeding of the paddy, which does away with traditional transplantation in which fields are flooded. It saves 30 to 40% of water in paddy cultivation.

Since we grow a potato variety that is only consumed by us, the farmer is well aware that he will have to sell at a negotiated price to us. Although prices tend to move in tandem with market prices, the difficulty for a company is that when the market price falls below your contracted price with the farmer, you can’t reduce your price. But when it moves above the contracted price, you have to increase your price.

The government has from to time examined what should be the nature of contracts between the company and the farmer, and we’ve always advised them that look don’t make it legal, because no company can chase a farmer in a court of law, and vice versa. This is a matter of trust. Let the contract be recorded but don’t have a contract which is sanctified by the government where you introduce a whole lot of conditions. Because different markets, specifications, conditions operate in different crops.

So you can’t look at everything from a single prism. Leave it to the market. But certainly if there is a company which takes farmers for a ride and cheats them, I’m sure the law of the land has enough provisions to discourage and penalize them.

Makes farmer tenant

“When Y S Rajasekhar Reddy was the Chief Minister, he brought up the Contract Farming proposal which he withdrew when we strongly opposed. But now the present government has issued a GO to facilitate that. We will not accept this measure at all. Contract Farming means loss of the farmer-centric agriculture which will be replaced by a company-centric farming. In that situation the government will abdicate its responsibility towards farmers as well as agriculture.

Everything will be controlled by companies. So far when farmers needed inputs like seeds, loans etc they have been approaching the government. That cannot be the case in future. Also agriculturists will not be in a position to decide what to grow in their fields and all that. In effect he will become a tenant in his own land. So, we are strongly opposed to all this.”

CF companies in AP, India

Some of the MNCs, Indian companies, the States they are operating in and products handled by them are as follows:
PepsiCo (Punjab, Tamilnad-tomato, chillies, groundnut, basmati rice and seaweed). Rallis India (Punjab, UP, MP, Maharashtra ,Karnataka, TN- fruits, vegetables, basmati, wheat). Suguna Poultry Farm Ltd (AP, TN- broiler), Unicorn Agrotech (Karnataka- gherkin). Super Spinning Mills (TN-cotton), CG Herbals (Chattisgarh, Odisha-aromatic crops, veiver, patchouli). Sanjeevani Orchards (MP- Pomegranate). Hindustan Lever (MP- wheat). ICICI Bank (MP- wheat). State Bank of India (AP- paddy, groundnut, sunflower in Kurnool district in collaboration with Mahindra Shubh labh). Appachi Cotton Co (TN- cotton). Ugar Sugar Works (Karnataka- barley). Cotton Corporation of India ( AP, in Guntur and Adilabad districts, Maharashtra, Haryana- cotton). Field Fresh Foods of Sunil Mittal (Punjab, HP, J&K, UP,Haryana,Uttaranchal- fresh fruits) , Reliance (Gujarat- herbal gardens),Nader & Ebrahim Group (NEG) of Bahrain (MR- banana).

In furtherance to this, the Deputy Chairman of the Planning Commission Montek Singh Ahluwalia, while on a visit to Oman some time ago, invited West Asian companies for CF in India. There were also reports that Cadbury India had identified areas in Andhra Pradesh and Tamil Nadu for cocoa farming. Already a project to supply mango pulp for making of soft drink Maza for Coca Cola Company has been inaugurated in Chittur district a week ago.

Farmers’ groups can help

Theoretically, contract farming helps to remove market imperfections in inputs like credit, land and labour and marketing of produce. It compliments current paradigms of economic growth, free markets and the private sector.Contract Farming is also controversial regarding its benefits for small land holders and that the peasantry is subjugated to increased control and exploitation, by capital. There is a link between the rise in Contract Farming to diminished role of state in agriculture in the absence of a proper and efficient set-up for marketing, credit and other infrastructure.

It is also argued that contract production leads to exploitation of the farm sector and the companies gain indirect control of land. Farmers may not have exit options in the event of reduced bargaining power as they become overly dependent on their contract crops. The Contract Farming system may also fail when yields stagnate, costs rise andthere are open market gluts.

South-East Asian experience shows the importance of government support for small farmers in enhancing the ability to negotiate favourable contracts. Indian experience shows mixed results that price uncertainty was removed; working capital and extension services provided; productivity of crops in contract farming have increased but cost of production not reduced much.

Contract Farming has been in vogue in Andhra Pradesh in seed production and sugarcane quite successfully. Oil palm, cocoa, vegetables, gherkins, baby corn, marigold, amla and broiler birds also shows that contracts are working well in oil palm and gherkins. But the experience of ‘Kuppam project’ has shown problems in sustainability of crop production and resources, informal nature of contracts without any legal protection, exclusion of small farmers, weak bargaining power of unorganized farmers vis-a-vis company.

Farmers groups could be formed and supported initially similar to IKP women’s groups. Though the amended Agricultural Produce Marketing Committees (APMC) Act contains some provisions to regulate Contract Farming, legal protection for contract growers as a group is essential.

Apprehensions galore

Contract farming (CF) sounds interesting in the midst of chaotic and uncertain agricultural markets.
It is supposed to remove middlemen, vertically integrate buyer and producer and share the cooperative surplus. This also has other advantages when the buyer invests resources in the supply chain in terms of cold storages, transport and other infrastructure.Farmers can also be provided with some improved technology, information over quality, and help them with improved farm management practices to enhance the value added.

However, in practice, there are several apprehensions. In the received experience, there are occasions when the buyers often reneged their promises and refused to buy, forcing the farmers to go for a distress sale. We have extensive experience with seed production in our state. Companies do not prefer to have a prior agreement about the price and tend to purchase at the prevailing market price, which is low in the peak season.

However, one advantage with formal sector markets is that there is less cheating in measurement, less delay in payment etc.But when companies lose their forward markets, they rarely convey the information to the farmers and suspend purchases abruptly, leaving farmers in a lurch. Even if there are written contracts, legal enforceability has its own costs.

In the existing structure of agrarian markets with huge number of farmers competing among themselves presents a clear disadvantage to them. If they organise themselves into a farmers’ cooperative, then their bargaining power can substantially go up.

All in all, the benefits of Contract Farming is contingent upon several aspects such as the true intentions of the companies . As such the existing marking mechanisms have their own strengths and weaknesses. Weighment malpractices, delays in payments, depressing the price in the peak seasons through cartels are associated with present traditional markets. They also have some advantages such as they provide credit to the farmers. Hence it could be difficult to beat their dominance.

Jalayagnam: Rs 1,86,000 cr illusion

Author(s): M Suchitra

Date: Jul 15, 2012

Andhra Pradesh’s Jalayagnam irrigation scheme unviable, contract-driven, says CAG draft report

imageDevadula lift irrigation scheme in Warangal is the second biggest in Asia. But the state does not have enough power to operate it

In 2004 when the Andhra Pradesh government launched Jalayagnam, the mega irrigation programme was touted as a solution to the agrarian crisis in the state’s drought-prone and backward regions. It was also pitched as a programme that would bring relief to the power-starved state. But going by a draft audit report of the Comptroller and Auditor General of India (CAG), it seems Jalayagnam, launched ahead of the assembly polls that year, was an election gimmick of the then Congress government of late Y S Rajasekhara Reddy.

The state neither has enough funds nor water to implement the Rs 1,86,000-crore programme, according to the draft CAG report. Jalayagnam envisages 86 irrigation projects mainly on the Krishna, Godavari and Pennar rivers and their tributaries, and aims at providing drinking water to one-fourth of the state’s 80 million population and irrigation to more than half of the state’s rainfed areas. It assumed the importance of a dream project in the backdrop of the fact that more than half of the state’s cultivated area is rainfed. Over the years, there has been sharp increase in groundwater exploitation, especially in the Telangana and Rayalaseema regions that receive scanty rainfall.

imageBut most of the projects were taken up without carrying out feasibility studies, settling inter-state disputes or obtaining necessary clearances (see ‘Projects faltered’), says the draft CAG report. “It appears that Jalayagnam was largely driven by the urgency to award contracts rather than focusing on immediate benefits to targeted beneficiaries,” it says.

Although 12 projects are said to have been completed under Jalayagnam by January this year, they were actually ongoing projects incorporated into the programme. None of the projects were providing water to farmers when CAG prepared the report, despite claims by the government that it has created irrigation potential for 849,000 hectares. Although the government had promised to complete Jalayagnam in five years, 74 projects are still under construction; 49 of them are far from complete. This is despite the fact that the programme received Central assistance of Rs 4,015.26 crore for 22 projects.

The CAG report says the programme is weighed down by ill-planning, which could render it ineffective.

Planned on unavailable water: No comprehensive study was done on the availability of water for Jalayagnam projects. The CAG audit revealed that the water required for successful implementation of the projects on the Krishna and the Pennar is far more than the water allocated to the state (see ‘Overambitious’). The water allocated to the state is already being overdrawn by existing projects. The government planned Jalayagnam projects on the rivers saying it would utilise flood water. But then flood water is available only for a few days—around 30 days in the Krishna—in a year and cannot satisfy the projects’ demands. Several projects, for instance A V R Handri Niva Sujala Sravanthi and Jawahar Nettampadu lift irrigation Scheme on the Krishna, are technically unviable. Projects like Indira Sagar Dummugudem on the Godavari, too, do not have assured water availability, points out the report.


Not enough power: Thirty-one projects under Jalayagnam are lift irrigation schemes where water needs to be lifted from the rivers by use of motors and pumps, which would require about 206 million units of electricity a day. This is when the average power consumption of the state was 160.80 million units a day in 2009-10. This means even if power supply for the entire state is shut down and diverted for the lift irrigation schemes, there would still be a shortage of 44.2 million units a day. The state will thus not be able to operate the irrigation schemes, notes the report. Being a power-deficit state, Andhra Pradesh purchases power from independent power producers at high rates. Even at the minimum Rs 2.60 per unit, the total funds required for the schemes would be Rs 5,533.58 crore a year, it adds.

imageBenefits inflated to suit contractors: The benefit-cost-ratio (BCR) has been inflated for many projects, says the report. This includes Jalayagnam’s most expensive Pranhita-Chevella lift irrigation project on a tributary of the Godavari. It aims to provide water to seven districts. BCR for the project was worked out based on assumptions, not facts.

The report notes that Jalayagnam appears to be driven by awarding a large number of contracts, without any assurance on completion of works within the envisaged time and budget. The contracts were awarded to favour contractors, putting the state’s interests at risk. “In most cases, the technical sanction was obtained after the bidding, clearly pointing to the possibility of manipulation in favour of certain bidders.” Firms that were not qualified for bidding entered through back doors. CAG’s audit also revealed that parties in joint venture (JV) firms changed their partners several times to form new JVs to bag contracts. In the Pranahita-Chevella project, four firms obtained 16 contracts worth Rs 22,885 crore by forming JVs in 16 different combinations.

High on aspirations, low on funds: The state government started implementing all Jalayagnam projects simultaneously without assessing the availability of funds. As a result, the programme has put huge financial burden on the state. As of April 2011, the state incurred a liability of Rs 1,27,084 crore—87 per cent of the state’s budget for 2012-13. Besides, the government is yet to adequately compensate and rehabilitate the 131,000 families, including indigenous people and farmers, displaced by the projects.

“…the government is saddled with a huge number of projects which are nowhere near completion. The financial burden of these incomplete projects on the state exchequer will be felt for a long time to come,” notes the report. Instead of taking up 86 projects simultaneously, the government should have prioritised projects over medium to long term and focused its attention on a few projects, ensuring that adequate resources are allocated and the projects are implemented properly, observes the report.

The state irrigation department is now in the process of proposing changes in the draft report and preparing explanations to the charges raised in the report. “The draft report has made sweeping statements without going deep into ground realities,” says S K Joshi, principal secretary with the irrigation department. “CAG believes in a step-by-step process whereas the government believes in a parallel process. The government is keen to see that farmers in rainfed, drought-prone regions get irrigation facilities fast, he says. Refuting the allegations regarding inter-state disputes over Jalayagnam projects, Joshi cites the recent agreement between Andhra Pradesh and Maharashtra for Pranhita-Chevella project. He hopes the final CAG report will include the proposed changes.

నేల తల్లీ.. విలపిస్తోంది రైతు రాజ్యంలో రైతే కూలీ!.. లక్ష ఎకరాల సంతర్పణ భూములు కోల్పోయిన రైతులు 52,235 మంది అవి పొందిన పారిశ్రామికవేత్తలు కేవలం 250!

బ్యాంకుల్లో తాకట్టు.. జగన్ కంపెనీల్లో రూ.కోట్లు పెట్టుబడులు
పరిశ్రమలూ రాలేదు.. సాగుకూ యోగ్యం కాదు
అన్నమో రామచంద్రా అంటున్న అన్నదాత
ఉపాధి వేటలో వలసబాట.. ఒక్కడి కోసం వేల మంది బలి!

హైదరాబాద్, జూన్ 4 : రాష్ట్రంలో కారు చౌకగా భూములు పొందేందుకు వైఎస్ రాజశేఖర రెడ్డి హయాం ఓ స్వర్ణ యుగం! తన హయాంలో ఆయన లక్షకుపైగా ఎకరాల ప్రైవేటు భూములను అస్మదీయులకు సంతర్పణ చేశారు. ప్రభుత్వ భూములను పక్కన పెడితే 53,235 మంది చిన్న, సన్నకారు రైతుల నుంచి సేకరించారు. వీటి విలువ సుమారు రూ.92,650 కోట్లు! ఈ భూములన్నిటినీ కేవలం 250 మందికి మాత్రమే కట్టబెట్టారు. భూములు పొందిన పారిశ్రామిక వేత్తలు ఆ మేళ్లకు ప్రతిఫలంగా జగన్‌కు చెందిన కంపెనీల్లో పెట్టుబడులు పెట్టారు.

వెనకబడిన అనంతపురం జిల్లాలో ప్రతిష్ఠాత్మక సైన్స్ సిటీ ఏర్పాటుకు అప్పటి ముఖ్యమంత్రి వైఎస్ రాజశేఖర రెడ్డి నడుం కట్టారు. ఈ ప్రాజెక్టు కోసం 60 వేల ఎకరాలు సేకరించాలని నిర్ణయించారు. జిల్లాలోని ఆమడగూరు మండలంలో 42,883 ఎకరాలను, ఓడి చెరువులో 16,767 ఎకరాలను సేకరించాలని నిర్ణయించారు.

పేద రైతులను పీడించి మరీ తక్కువ ధరకే భూములు లాక్కున్నారు. ఫలితంగా, 23 గ్రామాలు కూడా కనుమరుగయ్యాయి. ఆ భూములను బ్యాంకుల్లో తాకట్టు పెట్టి పారిశ్రామికవేత్తలు రుణాలు తీసుకున్నారు. జగన్ కంపెనీల్లో పెట్టుబడులూ పెట్టారు. కానీ, సైన్స్ సిటీ అటకెక్కింది. ఇటు ఫ్యాక్టరీలూ రాలేదు. అటు సాగు చేయడానికీ వీల్లేదు. రైతు మాత్రం జీవచ్ఛవంగా మారాడు.

గుంటూరు – ప్రకాశం జిల్లాల్లో వాన్‌పిక్ ప్రాజెక్టుకు 25 వేల ఎకరాలు సేకరించాలని నిర్ణయించారు. ఇందులో 18 వేల ఎకరాలను సేకరించారు. ఈ భూ సేకరణ ప్రక్రియలో ఎంతోమంది మత్య్సకారులు తమ భూములను కోల్పోయారు. ఇక్కడ వాన్‌పిక్ ప్రాజెక్టు రాలేదు. అక్కడి రైతులకు ఉపాధి దొరకలేదు. కానీ, జగన్ కంపెనీల్లోకి రూ.800 కోట్ల నిధులు మాత్రం ప్రవహించాయి.

కడప జిల్లా జమ్మలమడుగు నియోజకవర్గంలో బ్రహ్మణి స్టీల్స్ ఏర్పాటుకు మైనింగ్ మాఫియా కింగ్ గాలి జనార్దన రెడ్డికి 14 వేల ఎకరాలు కేటాయించారు. ఇక్కడ పరిశ్రమల రాకతో లక్ష మందికిపైగా స్థానికులకు ఉపాధి లభిస్తుందని ప్రకటించారు. ఆ భూములను తాకట్టు పెట్టి గాలి జనార్దన రెడ్డి రూ.350 కోట్ల రుణం తీసుకున్నారు. కానీ, అక్కడ పరిశ్రమా రాలేదు. రైతులకు ఉపాధీ దొరకలేదు. ఇక, వైఎస్ హయాంలో ప్రత్యేక ఆర్థిక మండళ్ల హవా నడిచింది. దేశంలోనే అత్యధికంగా రాష్ట్రంలో 119 ప్రత్యేక ఆర్థిక మండళ్లకు గ్రీన్ సిగ్నల్ లభించింది.

వీటి కోసం దాదాపు ప్రతి జిల్లాలోనూ వేలాది ఎకరాల పచ్చని పైరు భూములను సేకరించారు. సెజ్‌ల ఏర్పాటుతో రూ.1,05,445 కోట్ల పెట్టుబడులు వస్తాయని ఊహల పల్లకిలో ఊరేగించారు. ప్రత్యేక ఆర్థిక మండళ్లు రాలేదు. కానీ, ఏపీఐఐసీ సేకరించిన ఆ భూములు రియల్ ఎస్టేట్ మండళ్లుగా మారాయి. భూములు కోల్పోయిన రైతులకు, ఉద్యోగాలు ఆశించిన నిరుద్యోగ యువతకు ఎలాంటి ప్రయోజనం దక్కలేదు. కానీ, ప్రత్యేక ఆర్థిక మండళ్లలో భూములు పొందిన అరబిందో, హెటెరో తదితర సంస్థలు జగన్ కంపెనీల్లోకి పెట్టుబడులను మాత్రం ప్రవహింపజేశాయి.

త్రిశంకు స్వర్గంలో భూములు
భూమికి పచ్చకోక కట్టినట్లు 2004కు ముందు కళ కళ లాడిన భూములు ఇప్పుడు ఎందుకూ కొరగాకుండా ఉన్నాయి. అప్పట్లో దేశానికి ఆహార భద్రత కల్పించిన అన్నదాత ఇప్పుడు తన బతుకుకే భద్రత కరువై విలవిల్లాడుతున్నాడు. బ్రహ్మణీ నుంచి వాన్‌పిక్ వరకూ జరిగిన తంతు గమనిస్తే.. తెర ముందు కనిపించే పారిశ్రామికవేత్తలు ఎవరైనా.. తెర వెనుక ‘మేళ్లు’ మాత్రం జగన్‌కే. ఆయన ఒక్కడికీ లబ్ధి చేకూర్చేందుకు కొంతమందికి గాలం వేసి వేలమంది రైతులను వీధులపాలు చేశారు.

ముఖ్యమంత్రిగా బాధ్యతలు స్వీకరించిన కొత్తలో నల్లారి కిరణ్‌కుమార్ రెడ్డి రాష్ట్రంలో ఒక్కో పారిశ్రామికవేత్తకు ఒక్కో విధంగా భూ కేటాయింపు చేయడం అశాస్త్రీయమని, అసంబద్ధమని వ్యాఖ్యానించారు. రాష్ట్రంలో కొత్త భూ పంపిణీ విధానాన్ని తీసుకువస్తామని అట్టహాసంగా ప్రకటించారు.

గతంలో రైతులకు తక్కువ ధర చెల్లించి లాక్కున్న భూములను తిరిగి వారికే అప్పగించాలని వాన్‌పిక్ విషయంలో మంత్రి డొక్కా మాణిక్య వరప్రసాద్ డిమాండ్ చేస్తున్నారు. ఈ మేరకు సీఎం కిరణ్‌కు లేఖ రాశారు. దీనికితోడు, పరిశ్రమల పేరిట కేటాయించిన భూములు రాష్ట్రవ్యాప్తంగా వృథాగా పడి ఉన్నాయి. వాటిని వెనక్కు తీసుకుని తిరిగి రైతులకే అప్పగిస్తారా లేక ఆ భూములను ప్రభుత్వం తన ఆధీనంలో ఉంచుకుంటుందా అనే సందేహాలకు కిరణ్ సర్కారు నుంచి ఇప్పటి వరకు జవాబు లేదు.

ఉన్న భూమి పోయింది
నాకున్న రెండెకరాలను పరిశ్రమల పేరుతో ప్రభుత్వం తీసుకుంది. అందిన పరిహారం రుణాలకు, వ్యక్తిగత అవసరాలకు సరిపోయింది. ఉన్న భూమి పోయి కూలీగా మారాం. పరిశ్రమలో ఉద్యోగాలు, ఇంటి స్థలాలు ఇస్తామన్నారు. ఆ మాటే మరిచారు. భూమికి యజమానులుగా ఉన్న మేము ప్రస్తుతం కూలీలుగా మారాం.
– మాతయ్య, కోనేటిరాజుపాళెం,
నాయుడుపేట, నెల్లూరు జిల్లా

బజారున పడ్డాం
శ్రీసిటీ సెజ్ కోసం నా భూములు లాక్కున్నారు. వచ్చిన పరిహారం అప్పులకే చాలలేదు. ముందు చెప్పినట్లు ఫ్యాక్టరీల్లో ఉద్యోగాలివ్వలేదు. దున్నడానికి భూముల్లేవు. చెయ్యడానికి పనీ లేదు. ఇప్పుడు బజారున పడ్డాం.
– మునికృష్ణయ్య, చెంగంబాకం,
సత్యవేడు మండలం, చిత్తూరు జిల్లా

Drought dries up foodgrain production in AP


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Production of foodgrains, oilseeds and cotton in Andhra Pradesh have registered a fall in 2011-12. Both kharif and rabi seasons were hit by drought, forcing the Government to declare over 90 per cent of allmandals as drought hit.

Sugarcane, chillies and turmeric bucked the trend with production rising.

Advance estimates prepared by the Directorate of Economics and Statistics have pegged foodgrain production at 183 lakh tonnes (lt) last season, lower than 203 lt in the previous one.

Though kharif saw an increase in rice production at 86 lt (75 lt), the overall rice production for the year decreased to 130 lt (144 lt). This led to the overall fall in foodgrain production, largely due to fall in rabi season.

The paddy area came down to 41 lakh hectares (48 lakh ha), while that of oilseeds fell to 19 lakh ha (24 lakh ha). Cotton production was down to 34 lakh bales of 170 kg of lint from 39 lakh bales.


Production of oilseeds too has been estimated lower. The projections expect virtually no production of palm oil against 3.76 lt last year.

The worst hit has been the groundnut crop. Production is down by 50 per cent to 8.8 lt from 15 lt, dragging the oilseed production to 13 lt (31 lt). This fall has been attributed to failure of kharif.

“Tobacco, castor, sunflower and soyabean too have shown a fall compared with year on year figures,” an official of the State Agriculture Ministry said.

While the sugarcane production went up to 159 lt from Rs 149 lt, chillies production increased to 9 lt (6.38 lt).