Beware money-lenders: help the farmers…

The law enforcing agencies would now onwards keep an eye on the money-lenders. The Central government, concerned over suicides by farmers on a large scale, has taken the issue seriously and going to the root of the problem. The Centre would soon issue directives to the Chief Ministers of the state governments for taking stern action against the erring money-lenders. It may be noted that Maharashtra which has reported maximum number of suicides by the farmers, has already initiated steps in this direction. According to the Union government, the farmers get entrapped into the hands of the wily money-lenders and when they fail to pay the instalments, the interest keeps on rising, leaving no other option for the farmers but to end their lives. Most of the farmers rely on nature for providing water to their crops. In case the rains are below normal or fail, the crops suffer incalculable damage. This leads to great mental tension among the farmers forcing them to end their lives. Answering a query in the Rajya Sabha, the Agriculture Minister Sharad Pawar said that a study by the ministry had revealed that 60pc farmers were even today taking loans from the money-lenders at high rates of interest. It may be also noted that the money-lenders were charging 5pc monthly interest or 60pc interest annually. The government is trying its best to make available the loans to the farmers at appropriate rates of interest. Every state has framed money-lending rules and its strict implementation could save the farmers from the designs of the money-lenders. Mr Pawar also informed the members that the report of the Farmers Commission, under the chairmanship of Swaminathan, has been received and the government would take appropriate measures accordingly. It’s a matter to ponder over that states where farming is good, there the tendency of suicides by farmers is high. In backward states like Bihar and Orissa, the suicide rate of farmers is less.  

Budget 2007 is an exit budget for farmers, says Devinder Sharma

Express News Service

Ludhiana, March 7: Well-known activist, and Director, Forum for Biotechnology and Food Security, New Delhi says the Budget is an exit-budget for farmers. “This budget does not want the farmers who earn their livelihood. This budget wants them to give up agriculture,” said Dr Sharma, who was in PAU today to deliver a lecture. “The intention of the government help the farmer can be gauged from the fact that farmer suicides continue despite the so called futuristic budgets,” he said.

Ridiculing Dr Manmohan Singh announcement of a grant for Vidharbha and subsequent claim that the impact of it would be visible in six months at farmer suicide ridden land, Dr Sharma said the impact was visible, as the rate of suicide rate has gone up from one in every eight hours to one in every four hours.

Dr Sharma said, “Farmers need credits and need income, too, and for that we need to work towards making agriculture sustainable. But the mindset of our policy maker has changed from that of sustainable agriculture to commercial agriculture. Our finance minister says that and more clearly does out agriculture minister who candidly says there is no place for small farmers

Neoliberalism and the Ideology of the cancer cell: Growth for the sake of profit


“As Dr. Muhammad Yunus, the Nobel laureate, said, “Faster growth rate is essential for faster reduction in poverty. There is no other trick to it.” So said India’s minister of finance, P. Chidambaram in his budget speech. Drawing on his words must have seemed a politically correct thing to do. Mr. Chidambaram might want to add another quote to his cupboard. This one from the late Edward Abbey, environmental activist and writer. “Growth for growth’s sake is the ideology of the cancer cell.” Few things grow as relentlessly as that cell does, with such fatal results. As the cancer of neo-liberalism claims an ever-higher toll, its greatest theologians now include standard disclaimers in their chant. Growth has to be “inclusive” and “sustainable.” Even the World Bank and the International Monetary Fund have learned these escape clauses. In any case, growth in India this past decade has been neither. The appalling distress in the countryside is just one measure of this. Election after election also rubs it in. Especially that of 2004, which brought the United Progressive Alliance to power.

Even going by the government’s economic survey, by its own other data, agriculture is choking. Per capita growth has been negative. Farm incomes have taken a beating. Thousands of farmers commit suicide each year. The government has long known there is a frightful crisis, one driven by human agency, by state policy. Yet, for all the noise, Central plan outlay on agriculture as a share of GDP sees no increase worth the name. Nor is there anything that touches the acute farm distress on the ground. In that the trend of falling state investment in sector after sector continues, this budget does not break with neo-liberalism. It just dolls it up.

One of the most important steps the UPA took in 2004 was to assign the National Commission on Farmers the grim task of studying this crisis. The work of the NCF caught the imagination of farmers nationwide. In Vidharbha or in Andhra Pradesh, farmers when they speak at all of `relief packages’ do so with scorn. What they do demand is action on the NCF’s findings. It is hard to find to find a single one of its many vital proposals addressed in this budget.

There are no steps towards a Price Stabilization Fund. None at all towards debt relief, let alone a waiver. Nothing has happened that will make input costs cheaper. Racketeering on that front is not only left alone, it can dash on regardless. The ‘huge’ boost for rural credit does not touch the high interest rates, which are such a major source of the trouble. And government knows very well that small and marginal farmers have gained almost nothing from its earlier `expansion’ of credit. No incentives for food crops in crisis regions. No action, to cite just one problem, to prevent the dumping of American cotton subsidized by billions of dollars and devastating prices here and around the world. (In just marketing year 2001-02, as an official report shows us, U.S. raw cotton exports to India had tripled to more than a million bales.)

There is no move to use valid tools like raising duties to halt a process that is literally killing Indian farmers. Import duty on cotton remains at a low 10 per cent. Indeed, the lowering of other duties in many cases will hit other sectors of Indian agriculture too. Not just cotton. If this is a pro-farmer budget, it’s scary to think of what an anti-farmer one would look like. As always, the standards of judging the deal given to poor Indians differ totally from those used to measure what a `sulking India Inc.,’ gets. The big boys shouldn’t be too disheartened, though. Business as usual will resume after a pause for the Uttar Pradesh elections.

Even as the budget is hailed as `pro-farmer,’ there comes the embarrassment to the Centre from a Congress-led State. Responding to a PIL on farm suicides, the Maharashtra government tries telling the Supreme Court that the Center’s dragging its feet over funds for Vidharbha was a big factor in the problem. True, it backs off pleading an error when this is highlighted in the press. But it gives you a picture of how bad things are.

Many have shown that some of the `higher allocations’ of the budget are negative when adjusted for inflation. The Left, for instance, points out that spending on the government’s flagship employment programs is up by 7 per cent. Which amounts to stagnation, given inflation levels. The increase in outlays on food subsidies, at 6.2 per cent, means a cut in real terms.

There is also a rather clumsy dodge on the National Rural Employment Guarantee Scheme. To begin with, it was given Rs.11,300 crore [one crore = ten million] when it needed much more. And that was for 200 districts. Now it is to be “expanded” to 330 districts. But the outlay goes up by just Rs.700 crore. So the number of districts covered goes up 40 per cent. The money goes up six per cent.

The `huge’ hike in outlays for health still does not bring us to even the modest 2-3 per cent of GDP level promised in 2004. View education outlays as share of GDP and you see how far behind we still are. In the end, though, it’s not just about sector to sector funding. It’s the whole direction. And in that very little has changed. India is still on a path damaging and dangerous to the poor.

Big media, though, now view the Finance Minister with a `how-could-you’ air of injured innocence. He actually had to face some questions on television. He was questioned. But from a point of view which, at most other times, he would have been happy with. That is, the liberalization and `reforms process’ from a corporate outlook. (India Shining has been back for a while, jostling for space with India Rising and India Poised. But that’s another story.)

Mr. Chidambaram accused one interviewer of being obsessed “with the corporate sector.” That was code for `wait till after the State elections.’ (“Our program continues after a small non-commercial break.”) He even tried to explain that a “thrust” on agriculture in fact favored Indian industry. And he had a real point there. But I doubt it went home. The debate amongst the elite is still in terms of a `let down.’ A `setback in the pace of reforms.’ For the media, this is India with a shining black eye.

And so we have a budget that gives `top priority’ to agriculture. And eight more farmers have taken their own lives in Vidharbha. This is now a region where farmers killing themselves are directly addressing the Prime Minister or Chief Minister in their suicide notes. After the Prime Minister’s Independence Day Speech in 2006, you might have expected something different. That was a rare occasion. Dr. Singh spoke clearly of the state of our farmers. Even more rare for an I-Day speech, he singled out Vidharbha for special mention. And he clearly acknowledged a major crisis was on in agrarian India. Not a trace of that sentiment can be found in the philosophy or the numbers of this budget.

Nor is there even a sense that much has been learned from the polls in Punjab and Uttarakhand. There is even some bravado about how the Congress has fared better in rural Punjab. The price rise, among other things, was and is a major issue. But the government’s response to it is at most levels tokenism. Not a lesson has been learned by this government. Like others before it, it imagines it will make a few `course corrections’ just before the polls. It has forgotten the reasons for its win in 2004. Nor does it want to see just how awful the crisis in the countryside is.

We are now at that mid-way mark where, historically, the Congress revives the Bharatiya Janata Party. A party gasping for breath after 2004 regains its oxygen. The Congress is hard at work on this in Maharashtra, too. The government’s terrible power cuts have a clear regional, urban, and class bias. Talleyrand is said to have remarked of the Bourbon monarchs of France after their restoration that they had learned nothing and forgotten nothing.
The UPA has gone one better. It has learned nothing and forgotten everything.

P. Sainath is the rural affairs editor of The Hindu (where this piece initially ran) and the author of Everybody Loves a Good Drought. He can be reached at:

Governor vows relief measures for farmers

By Akhel Mathew, Correspondent

Thiruvananthapuram: Farm sector figures as the main thrust area of Kerala’s 2007 budget session that began yesterday.

In his policy speech to the 12th session of the assembly, Governor R.L. Bhatia stressed that the crisis-ridden agriculture sector, which reported recently a string of farmers’ suicides due to financial troubles, would top the government’s priorities.

The governor also focused on the need to concentrate on agriculture-related areas and “sunrise” fields like information technology and tourism.

Bhatia declared the year ‘Haritha Varsham’ (year of agriculture). Aid would be made available to farmers in Palakkad and Idukki districts. A special council would be formed for the welfare of farmers.


An insurance policy for fishermen’s families, a debt relief scheme for fisheries sector, a loan scheme for fish vendors, a housing scheme for poor families and a commission to study schemes for scheduled castes and scheduled tribes and land allotment to them were some of the welfare measures announced by the governor.

A separate court to deal with cases of atrocities on women and two special courts to deal with cases of atrocities on scheduled castes and scheduled tribes would be set up.

A plan to promote “responsible tourism” would be pushed in 2007 to ensure that the benefit of the sector went to the local community as well.

High inflation result of wrong policies…

Tall promise of providing farm credit at 7% in last year’s Budget stayed a pipe-dream, writes Narendra Modi

The Union Budget for 2007-08, including the Railway Budget, has failed miserably in providing the necessary impact for growth initiatives to the economy.

It is often stated that India lives in villages. More than 60% of the common man earns their livelihood in rural India, but their share in the nation’s GDP is less than 20%. Therefore, the first and foremost task for the Union finance minister should have been to suggest measures for improving agriculture productivity for food grains, pulses and oil-seeds; so as to raise the farm income by introducing better irrigation system like drip and sprinkler irrigation, introduction of bio-technology, application of better farm techniques, including better seeds and organic farming. However, this Budget has failed to address these vital issues effectively, as the provisions suggested are more of token nature and insufficient to meet the country’s demand.

The Indian agriculture sector is facing a serious crisis. As per the Economic Survey, growth in agriculture sector during 10th Plan will be only 2.3%, against the target of 4%. The tall promise of providing farm credit at 7% in last year’s Budget has remained a pipe-dream. This is proved by the fact that there have been more than 10,000 suicides by farmers in the last few years. What is more painful to note is that many of the suicides have taken place in more developed states like Maharashtra, Andhra Pradesh and Karnataka. In the last few years of the UPA regime, farmers have suffered the most.

The second priority for the economy, according to me, is to ensure growth without inflation or growth without tears for the common man. The NDA government had taken the economy on take-off stage, without high inflation. However, under the UPA government, the overall growth target of 10th Plan of achieving 8% of GDP is unlikely to be achieved by the country. On the other hand, due to various wrong policies of the UPA government, the monster of inflation is raising its head, with inflation rate surging to more than 6 to 7%, affecting the lives of the common man.

The Central Budget has claimed higher resource mobilisation through service tax, excise and customs. However, these three taxes are either directly or indirectly passed on to the common man. The finance minister has given tax reduction for ‘‘cat and dog pet-food’’ by lowering custom duty from 30% to 20%. However, he has not shown any compassion for the common man and his articles of daily necessities.

MAT has been extended to companies, availing benefits under S.10A & 10B of the I-T Act for Infrastructure projects, which will be counter-productive for infrastructure development. While providing special funds for history and culture on 150th year of Independence, Sardar Patel’s contribution is forgotten, which is regrettable.

Our third top-most priority is to build excellent infrastructure in terms of power, road, port, air-port, railway, irrigation, etc. The golden quadrilateral road project was started by the NDA government and it was to be completed in 2003, but under the UPA government, it is still incomplete. Similarly, the east-west, north-south corridor road project is way behind its target, because of poor monitoring under the UPA government. In the power sector, the performance of the UPA government in the last few years has been very dismal in terms of achieving targets for generation of thermal, hydro and atomic power, because of which the country faces huge short-fall of peak load power.

In the sector of port development, instead of encouraging mari-time States, like Gujarat, to undertake nation building activity, through port connectivity, the railways have shown utter neglect in providing railway linkage. Thus, the UPA government has missed the bus in taking a major leap forward in the infrastructure sector, which could have provided a solid base for rapid growth in the first decade of 21st century.

The writer is chief minister of Gujarat

At the margin of economic boom…

Rasheeda Bhagat

There is a growing chorus against the viability of Indian agriculture. A checklist of concerns and a wish-list for Budget 2007…

The tottering Mulayam Singh government in Uttar Pradesh faced another blow last week as 35-year-old Maniram, a farmer from Mahoba district, tried to immolate himself even as the UP Chief Minister was thundering at a rally in Mahoba: “Not a single farmer has committed suicide in UP during my regime and those making such claims are Opposition-sponsored agents. Farmer suicides are taking place only in Congress-ruled states like Maharashtra and Andhra Pradesh.”

Maniram sustained over 50 per cent burn injuries and was in a serious condition. He was protesting the district administration’s “callous approach” in compensating him for the death of his animal. According to his neighbours, Maniram was in dire straits as he had already sold his land to pay back agricultural loans.

Add to this the continuing suicides in the Vidharba region and the agrarian crisis is getting worse as we are on the eve of another Budget.

Shabby governance, outdated or non-existent land records, lack of effective marketing mechanisms or value addition to their produce, bribes and corruption in accessing government subsidies or credit earmarked for them at low interest rates, and inability to access latest technology or agricultural practices have all contributed to making agriculture unviable in India. “In this backdrop, it is no surprise that the small and marginal farmers and wage labourers are increasingly at the margins of an otherwise growing economy. But they constitute the vast majority of India, and status quo cannot be sustained for long,” says Jayaprakash Narayan, National Coordinator of the Hyderabad-based Loksatta, which he prefers to call a `movement’ rather than an NGO.

On the threshold of yet another Budget, the bright intelligent faces of young men from Tamil Nadu one had met at the Infosys campus in Bangalore last year come to mind. Many of them were the children of farmers from Tamil Nadu, none of them wanted to follow the family profession and all of them were thrilled that children from medium-sized farm families were finally going to benefit from India’s booming IT sector. Their one-line answer to the shift from agriculture. “Agriculture in India is not viable.”

So what makes agriculture unviable in India? And what kind of intervention is required to make it viable? What would be a farmer’s wish-list if he could reach his voice to the Finance Minister?

Analysing the various factors responsible for the farmer’s dire plight, increasing numbers opting for suicide and high distress levels among farmers, particularly small farmers and tribals who cultivated their land, Narayan blames the ineffectiveness of our extension machinery; “most farmers are not able to gain from modern technologies for want of knowledge and poor availability of inputs.” He also blames wild price fluctuations adding uncertainty and gives the examples of tomato and onion prices that oscillate dramatically in the 1:30 ratio range. “No farmer can withstand such vagaries when the margin of survival is thin. Even non-perishable commodities like cotton witness wide price range, and farmers have no staying powers or storage facilities to wait for better prices. Industrial lobbies force government to lower tariffs, and OECD (Organisation for Economic Co-operation and Development) farmers often have a price advantage thanks to huge subsidies,” he says.

Also, lack of effective marketing mechanisms, “except in Punjab and Haryana where Sir Choutu Ram’s Mandi Act created vibrant markets” and failure to create a linkage with retail chains have put producers at the mercy of middlemen. “You only have to see the fruit and vegetable markets to understand the plight of the farmers, and even small traders,” he adds.

K. Bhanumathi, Director of the Visakhapatnam-based NGO Samata that works for the rights of tribals in Andhra Pradesh, is sceptical about government schemes coming to the rescue of small farmers and tribals, whose land is consistently being taken away from them on one pretext or the other. “Even the Andhra Budget says it has allocated a large sum for agriculture; but the details tell you that the money is mainly for big dams and big irrigation projects and not for small farmers.”

She accuses the government of taking away land from farmers. “Under the land bank system the banjar (infertile or waste) land that was originally allotted to landless labourers is now being taken away from them for irrigation projects. What is effectively happening is that land is being taken away from one set of farmers/tribals and given to another set that is agitating for land. Empty promises are being made but we find that no real rehabilitation is taking place.”

She adds that any Budget scheme that seeks to help the small farmers should ensure that the land they already have stays with them, and they are given access to water and power at affordable rates.

Bhanumathi doesn’t agree that we Indians are paying too little for our food. “On the contrary prices of all commodities have gone up but the tragedy is that the farmers are not getting more money. The cost of their inputs — water, power, etc — has gone up; so what the government needs to do is ensure that there is more efficient distribution of water and power.”

Echoing Narayan’s thoughts P. Arunachalam, a sugarcane farmer, who also grows some paddy in Cuddalore district of Tamil Nadu, says the fluctuating prices of grains hit farmers badly. “The price of paddy is very low during the harvest season and the increase goes up to Rs 200 per quintal. But how many farmers have storage facilities to wait for better prices? Farmers should be given godown facilities at affordable prices. For those who produce perishables such as vegetables or red chillies and tamarind should be given cold-storage godowns.”

With “agriculture being a gamble against the monsoons”, crops should be completely insured and the farmer’s entire family should be given medical insurance, he suggests.

Credit availability

Coming to accessing credit, Narayan says 60 per cent of Indian farmers have no access to credit from commercial and cooperative banks and borrow at 36-100 per cent. “Costs of private education and hospitalisation add to the burden. The cheap credit offered by government can at best reach the formal credit sector. Even there, given the corrupt and incompetent delivery system, there are too many leakages. In any case, government’s capacity to expand interest subsidies is limited, given the fiscal imbalances. There is no substitute to revitalisation of cooperative credit sector. Evidence shows that in most rural areas, the savings are higher than the credit disbursal. Despite adversity, rural people are naturally thrifty. We need to build a strong and viable credit system that can reach all rural families, backed by effective land records management,” he says.

K. Raghunandan, President, Sugar Division of EID Parry, adds that aggressive canvassing by moneylenders and bondage, along with “hassle-free availability of loan from them at much higher rates of interest” was pushing the Indian farmer into a deeper hole. “Add to this exploitation by moneylenders, local customs and celebrations exhausting working capital, and loan waiver schemes by state governments affecting his credit eligibility, most farmers fail to get new crop loans in time.”

He adds that banks give loans to crops like sugarcane as the recovery is assured with the support from the factory with which the farmers are associated. For other crops banks are hesitant to extend loans to farmers who are unable to repay them, as the price of their produce does not match the cost of production. Also, the labour component of farm produce has gone up from 11 to 25 per cent with migration of labour to
urban centres.

Budget wish-list

On his wish-list from the Budget for the agri sector, Narayan says, “Only a combination of daring and innovative strategies, and restructuring of rural economy will rejuvenate rural India.” The Vaidyanathan Committee recommendation to revitalise the cooperative sector should be implemented, but a second dose of debt relief similar to the 1989 Charan Singh scheme is not an option. “Ensure that coops are fully member-controlled, well managed, and financially viable in order to expand their reach and re-deploy rural savings in rural economy,” is his suggestion.

Boosting storage, marketing, and agro-processing through infrastructure, equity and technology support, and member-controlled markets is critical, he adds. For commodities like cotton that get huge subsidies in OECD countries, import tariffs should be raised to protect Indian farmers. “The largest number of suicides are by cotton farmers across the country, and unfair competition from abroad is at the heart of this crisis. Also, a massive boost to healthcare and agriculture will significantly reduce the burden on rural population. Again, altered incentives and accountability are the keys to outcomes. Mere allocations and pious platitudes are not sufficient.”

Economic hubs should be created within rural hinterland, but “with a judicious combination of infrastructure, incentives and market mechanisms. Every family aspires for an urban house site whose value is likely to escalate significantly. This should be leveraged to promote these economic hubs, and encourage skill promotion and orderly migration to neighbouring small towns.”

On what corporates that are directly engaged in acquiring farm produce can do to help farmers, Raghunandan says, “We have an agri crisis because research findings or even inputs like seeds, fertilisers, pesticides, do not reach farmers in time. Add to this the vagaries of the monsoon and lack of irrigation facilities, no assured market for end-products, exploitation by middleman and rising cost of inputs.” Also, monoculture and non-application of organic content led to soil depletion and reduced yield.

Indian corporates, he says, can help by ensuring supply of farm inputs like fertilisers, pesticides and good quality seeds at reasonable cost; reducing the lab-to-land time, providing a one-stop-shop service concept, helping in the introduction of more organic farming and better storage facilities, investing in building food processing industry so that farmers can get remunerative prices through value-added products, developing field instruments to suit Indian field condition particularly for small farm holdings, coordinating with research institutes to improve services at rural level and also playing the role of marketing agencies to export agricultural products.

Land acquisition for SEZs

Narayan says the abdication of government in key social sectors and the appalling failure in education and healthcare impose a disproportionate burden on poor and rural population. “Low literacy and poor health diminish productivity. Access to even indifferent quality private services costs a great deal, and impoverishes farmers and agricultural labourers,” he says.

When it comes to land acquisition and SEZs he feels we have to create equity in land for the small farmer. “Certainly we need to industrialise, or build projects. But the land loser cannot be asked to pay the whole price for economic growth.” He suggests 20-30 per cent more land than required should be acquired and extra land, after development, should be re-allotted to the land losers; this in addition to the compensation at the time of acquirement. Rural people should also be empowered with skills to make them productive workers in non-farm sector, with credit and infrastructural support to help the transition from agriculture to industrial economy,” he adds.


EID Parry’s Raghunandan has these suggestions to help farmers:

Fix responsibility and accountability for extension workers, reward and award system needs to improve.

Reduce gap between lab and land.

Arrange easy availability of inputs in time.

Ensure remunerative price for end product.

Introduce strong and robust crop insurance scheme.

Like other countries give subsidy for agriculture.

Open more farmer training centres in villages.

Direct procurement of end product at field level.

Innovate and identify micro mechanisation suited to rural conditions.

Strengthen existing cooperative system for input service and procurement work.

Improve education and healthcare facilities in rural areas.

Provide water for dry tract and avoid water wastage to sea, improve storage.

Protect agricultural workers by effecting minimum wage rule.

Need-based and result-oriented research.

Mandatory and increased agri-business micro-credit by all lending institutions.

Doorstep services to genuine agri entrepreneurs.

Tax relief and incentive scheme to agri-oriented industry at rural level.

Change present government agricultural procurement systems.

Response may be sent to

India Not Shining?…

There have been a lot of dissapointing news for the nation in the past month or so:
1. Farmer suicides -> Despite government interventions, farmers in Vidarbha and elsewhere continue to kill themselves. Reasons? Governments not doing enough to solve their problems. Aam admi’s party no longer cares for the poor. Solutions? Eliminate private money lending. Do away with BT Cotton and similar sinister schemes. Waive farmer loans in a manner similar to that of waiving industrial loans.
2. Inflation -> Spiralling costs of essential commodities. Reasons? Might be out of the control of the government. Solutions? No short term remedy in sight. Medium and long term controls already in place. Effects? The poor keeps getting poorer. Who is responsible? Of course the government, they must have a vision to foresee such damaging scenarios and mitigation plans for quick fixes.
3. Energy Shortage -> Power cuts and load shedding hours increase to alarming levels – more so – in the rural areas. Effects? Unemployment, Lack of infrastructure leading to slowdown in the fast growing economy. Reasons? Lack of long term planning by past governments. Solutions? Continuous long term planning and immediate shift to re-usable energy resources wherever possible.
4. Terror attack on the most sensitive train the country. If this is the condition for the train which is supposed to be the most secure, then what is the status of all other trains? India continues to be the softest terror target in the world. Reasons? No control on infiltration. No effective anti terror central law. Minority appeasement policies of central and UP government with an eye towards cheap electoral gains in the coming elections.
Tough times…