Maharashtra govt. accuses PMO of delay in releasing funds for farmers,000…
Satya Prakash

New Delhi, February 28, 2007

The Maharashtra Government has accused the Prime Minister’s Office of delay in releasing additional funds for ex-gratia assistance to suicide-affected farmers’ families in the state.
Due to undue delay in release of money from the Prime Minister’s National Relief Fund for this purpose, an amount of Rs 1.80 crore had to be earmarked from the chief minister’s fund for the purpose, the Maharashtra Government said in an affidavit filed in the Supreme Court.
This component of the package authorised district collectors to sanction Rs 10,000 for a suicide-affected family for health and education related expenses, it said, adding an amount of Rs 50 lakh each was placed for disposal with the six District Collectors for this purpose in August 2006.
“This amount has fully been disbursed to the needy families and the state government has been requesting the Prime Minister’s Office for additional funds. The state government has even earmarked Rs 1.80 crore from the chief minister’s fund, with a view to keep the scheme running…otherwise the scheme had to be stopped due to delay in receiving grants from the Prime Minister’s Office,” the Maharashtra Government said in its affidavit.
The affidavit has been filed in response to a PIL by advocate Sanjiv Bhatnagar seeking review of the current agriculture policy in view of suicides committed by thousands of farmers in various parts of the country.
The court had on August 14, 2006 issued notices to the Union Agriculture Ministry and the governments of Maharashtra, Karnataka, Andhra Pradesh and Kerala on the petition that also sought modifications in the agriculture policy to check suicides by farmers.
Maharashtra also complained that NABARD has shown its unwillingness to provide loans under the Rural Infrastructure Development Fund.
On crop loan too, it said that NABARD refinance at the rate of 2.5 per cent would be available only to the tune of the total crop loan requirement and the remaining finance had to be made available by the state agencies which would put them in huge loss.
“Thus, the State Government will have to bear this financial burden of about Rs 200 crore for implementing the decision of the Government of India for providing crop loan at the rate of 7 per cent. The Government of India needs to immediately take the decision of giving 100 per cent refinance at the rate of 2.5 per cent,” the state government said.
It said that 75 per cent of the suicides in the last five years took place in Amravati, Yavatmal, Akola, Buldhana and Wasim districts of Amarawati Division and Wardha District of Nagpur Division of the state. Yavatmal district alone accounted for 27 per cent of the total suicides, it added.
On the reasons behind farmers’ suicide, the affidavit said that it “is a complex problem and need not be understood in the light of indebtedness alone, which is only one of the multiple socio-economic and psychological factors”.
Quoting from a study by Mumbai-based Indira Gandhi Institute of Development Research, it said the main reasons behind farmers’ suicide were indebtedness, crop failure and low return, illness of family members, inability to arrange finance for marriage of daughter and lack of income earning opportunities from subsidiary occupations.
However, the state government asserted that it “is wholly committed to mitigate the problem of farmers’ suicides by comprehensive, scientific and realistic policy package but said impact on the ground certainly would take some time to show.”
Quoting the data released by the government, the petitioner had pointed out that in the last five years an alarming number of 8927 farmers committed suicide in the said four states-Karnataka (5910) Andhra Pradesh (1835), Maharashtra (981) and Kerala (201).
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Chidambaram neglects suicide belt,000…
Sweta Ramanujan-Dixit

Mumbai, February 28, 2007
He made it a point to mention that he had devoted a generous 15 to 20 minutes of his speech to agriculture. But in those 20 minutes, Finance Minister P Chidambaram steered clear of the ‘S’ word.

In all the talk about agrarian crisis and the government’s concern about the same, suicides of thousands of cotton farmers in Maharashtra found no specific mention in the two-hour speech.

Little wonder then, that people like Kishore Tiwari of Vidarbha Jan Andolan Samiti are ‘disturbed’ after the budget. The reason: no clear-cut measures announced to stem the spate of suicides in Vidarbha — Maharashtra’s cotton belt.

“The government spoke so much about the agrarian crisis in its economic survey but the budget does not address this,” Tiwari said. Although Prime Minister Manmohan Singh announced a Rs 3,750-crore relief package in July 2006, the spate of suicides continues with 79 suicides in February alone — 12 of these in the 48 hours preceding the budget.

Tiwari felt the budget should have considered the recommendations of the National Commission on Farmers (NCF). “We have been demanding that farming be made profitable. Input and output costs should be regulated. Giving high-maintenance milch cows is like giving the farmers another reason to commit suicide,” Tiwari argued.

There seems to be no immediate relief in sight for distressed cotton farmers. Farm credit has been expanded which means more money available for borrowing but no reduction in interest rates. But the state government says it is grateful that at least more money is available.

“Having identified the problem in both human and statistical dimensions, the budget fails to provide a strategy for agricultural renewal,” NCF chairman MS Swaminathan wrote in an e-mail to this paper, reacting to the budget. “In the suicide-ridden districts of Vidharbha, we need an integrated package consisting of appropriate and affordable technology, services in terms of seeds, credit, insurance and extension advice. Above all, an assured and remunerative marketing facility.”

Swaminathan welcomed the increased outlay on irrigation and the expansion of farm credit. But he added that this was “not going to prevent farmers affected by economic penury from committing suicides”.

“Vidharbha needs rural godowns and warehouseing facilities which can ensure that farmers are able to get the best possible price and are not forced to resort to distress sales,” Swaminathan explained. “Unfortunately the budget is silent about farmer-centric marketing.”

The state government, though, is trying hard to hide its disappointment and focus on budgetary provisions it can make use of. “Expanding farm credit is an important step because it is crucial that loans are available to farmers,” Agriculture Minister Balasaheb Thorat told HT.

“We can make good use of the Mission for Pulses to increase their production. If it works, many farmers could get diverted towards pulses from cotton.”

The finance minister did outline some long-term solutions: an unimpressive Rs 100-crore for rain-fed area development programmes and Rs 12,400 crore towards water-related schemes.

Fertiliser companies will receive subsidies of over Rs 22,000 crore. Based on a study to be conducted, a pilot programme will be implemented for delivering these subsidies directly to the farmer, the budget stated. But in Swaminathan’s words: “The time for ‘pilots’ is gone and what we need is a movement like the one which triggered the green revolution in the sixties.”

Budget has nothing for farmers…

UPA’s friends and foes attack Budget

New Delhi, Feb. 28 (PTI): The Union Budget for 2007-08 today drew flak from ruling UPA’s friends and foes alike who dubbed it as anti-farmer, anti-common man and listless.

The Left attacked the Government for “ignoring” their suggestions.

Opposition BJP and Shiv Sena dubbed the budget as “anti-poor, anti-farmer and anti-common man” which showed that the Congress-led coalition did not have any growth-oriented vision.

CPI leader Gurudas Das Gupta said the budget was a “deplorable exercise” as it has failed to address the problem of farmers’ suicides or the plight of unorganised labour.

He said the budget had even reduced service tax for corporates instead of raising it for mobilising resources for welfare schemes for masses.

Speaking in similar vein, Das Gupta as also Suresh Prabhu (Shiv Sena) said Finance Minister P Chidambaram’s efforts would not help the “aam admi (common man)” and the budget has no measures to rein in inflation.

Dubbing the budget as “listless, unimaginative and timid”, Prabhu said the finance minister has lost a golden opportunity to jack up the growth rate to ten per cent.

“In an attempt to please all, the finance minister has displeased everyone,” he said.

BJP leader Satyanarayan Jatiya said the budget had not measures for ameliorating the plight of the poor. “It is disappointing as the common man has been left out,” he said.

NDA Convenor George Fernandes said there was nothing in the budget for the common man. “Everything has been done for the rich and the elite,” he said adding that the people would come out on the street in protest against the budget.

Mohan Singh (SP) termed the budget as a “directionless exercise” which has failed to address the burning problems facing the nation, including the agrarian crisis and the spiralling prices.

A Narendra (TRS) said the budget was anti-poor and added that it was unfortunate that nothing had been done for checking the hike in prices.

RJD leader Raghunath Jha and Suraj Bhan (LJP), however, described the budget as development oriented and in favour of the poor.

RPI leader Ramdas Athawale hailed certain measures for the scheduled castes and tribes but said they were far short of expectations.

BJP leaders V K Malhotra and Sushma Swaraj said there was nothing in the Budget for “‘aam aadmi’ (common man), women and senior citizens”.

“While food for dogs has been made cheaper, it will be costly now for ‘aam aadmi’,” they said.

The BJP leaders were of the view that whatever minimal concession were announced by the finance minister would be swallowed by the inflation.

The two senior BJP leaders also questioned the rationale behind exemption granted in the Budget to the corporate sector, adding no serious efforts were made to check price rise as also farmers’ problems.

Describing the Budget as “dead”, Swaraj said Chidambaram had only announced constitution of committees and wanted to know “what he had been doing throughout the year”.

CPI-M leader Mohammad Salim said though there has been more allocation for social sector, there was nothing much for the common man and labourers.

“We also expected that Government should come out with concrete proposals for the welfare of minorities in the wake of Justice (Retd) Sachar Committee Report. But we are disappointed,” he said.

On the agriculture sector, Salim said the Budget has only increased credit flow, which alone will not help address the problems faced by agriculture sector as also the farming community.

Samajwadi Party leader Amar Singh said the Budget clearly speaks that “‘Congress Ka Haath’ (Congress’s hand) is only with the industrialists” and not with the common man as they have been claiming.

“There is nothing in the Budget to check inflation, price rise. There is nothing for women and the comman man,” he said adding that this Budget would lead to Congress’ “destruction”.

“This government has not learnt any lesson from Uttarakhand and Punjab…. ‘Aam Aadmi’ has nothing to do with sensex and GDP. Farmers are still committing suicides,” Singh said.

Replying to a question, the SP leader said Congress chief Sonia Gandhi “is treating Uttar Pradesh as ‘Apna Dushman Pradesh (her enemy state)”.

“Neither was there anything in the Rail Budget for Uttar Pradesh nor in the General Budget presented today,” he said.

Suspended Samajwadi Party MP and Janmorcha chief Raj Babbar said the budget was disappointing as “there was nothing for over 40 crore farmers in it”.

He said while subsidy has been provided to fertilizer manufacturers, there is no relief for its users (farmers).

JD(U) Digvijay Singh said the Budget was “directionless” and had nothing for the Industry or the Agriculture sector.

He also questioned the logic behind the education cess in view of the growing inflation and making states responsible for irrigation.

“This is a directionless budget before the election year’s Budget. We all know what will be in the next Budget”, he said.

NGOs have not changed the Rural India's face…

What hopes NGO would make a change this time? President Abdul Kalam inaugurated a three-day national summit on rural NGOs in Delhi in April, 2006. He spoke with much candour and conviction. What he said is that a large number of NGOs that get lots of foreign funds don’t spend them properly. The funds don’t reach the target groups in the grass-roots. Yes, that is what the President conveyed.

What we all know for sure is the fact that all NGOs are no angels. There are rogues and scoundrels as well! Yes, there are many so-called NGO activities that are positively harmful. From being anti-national activities to religious propaganda and also more subtly lots of brain-washing activities in the names of all sorts of new-fangled ideologies and advocacy programmes.

NGOs in micro-finance is an exception. As they are closely monitored by competent agencies. Even today, in the names of so many mispropaganda farmers can’t own land in a clear, legally entitled manner. So much red-tape binds the farmers. In debt and separate situations! So too in getting market access. Why not NGOs engage themselves in propagating contract farming, getting latest market information available at farmers door steps? Our farm research scientists must be made to work along with farmers, students and teachers for a mandatory minimum months in their careers. So on and on..

The summit was organised by the Capart, the apex body of NGOs functioning under the rural development minister Dr.Raghuvansh Prasad Singh. Singh is a senior minister from Bihar and he must be knowing fully well what ails the NGOs, at least some of the big and hard-working ones. Capart has a new Director-General and he too should be knowing what went wrong with Capart under the previous regime.

Given the new mission articulated by the DG, after his travels and interaction with NGOs, it is now royal development, income generating activities in rural areas through SHGs and, rural infrastructure, market access under the WTO regime, technology for rural India and the deployment of IT, empowerment of women etc. Quite a mouthful!

There is a news item about the Central Government banning some 265 NGOs that were receiving central funds and failed to complete projects allocated to them. In fact, 265 NGOs were blacklisted, of which 19 are in Karnataka. The list of NGOs blacklisted for Karnataka is also published in the dailies.

Now, NGOs are wonderful agencies. They have a critical role to play. A society that has no NGOs would be hell! Yes, we need non-government agencies of all types to advance peoples, various concerns, solve various problems of people. Unfortunately, still India is a bureaucratic country, the role of bureaucrats, petty to high sounding pretentious officials is still a bugbear!

The funds received from foreign sources by the NGOs run from Rs. 1865 crores in 1993-94 to now Rs.5047 crores in 2002-23. The highest concentration of NGOs is in Delhi, Tamil Nadu and A.P. Delhi got Rs.881 crores, TN Rs.775 crores etc. The leading donors are Ford Foundation and now may be Bill Gates foundation.

More interesting is the fact the major expenditure item is on establishment! Rs.674 crores, followed by spending on rural development. The largest number of people employed in NGOs work, next only to government jobs. In Government 20 million. In NGOs 19.4 million! NGOs and vested interests! Yes, the funding of the NGOs is much a sensitive issue and there is a feeling and there is much truth that much of the funds, mostly foreign funds are unaccountable! The NGOs are neither under the control of the Company Law or under the Auditor General.

When it comes to NGOs in agriculture and rural development, there are some controversial issues. Take agriculture. In the past 60 years we have made progress in agriculture. But at the same time we witness unprecedented farmers suicides. What are the causes? In our view, we have over-played sustainable farming etc. We haven’t given farmers freedoms to take to market-driven, commercially viable farming projects.

V.Isvarmurti :: Feb.28.2007 :: Rural India ::

Budget must address 'aam-aadmi' issues of inflation, livelihood…

Gargi Parsai

Focus likely on farm productivity, irrigation potential and rural employment

NEW DELHI: The high economic growth rate in the current fiscal year is marred by what experts now define as the disparate growth of `India’ against `Bharat.’ Farmers’ suicides, inflation, special economic zones (SEZs) on farm land, `unviability’ of small farm holdings, Foreign Direct Investment (FDI) in the retail sector and growing unemployment occupied the centre-stage of national concerns for the better part of 2006. The budget 2007-08, will, therefore, have to address the `aam aadmi’ issues of inflation, livelihood and survival, particularly in the rural and agriculture sector.

The expansion of the National Rural Employment Guarantee Programme (NREGP), issue of farmers’ indebtedness, investment for raising farm productivity and irrigation potential, strengthening rural infrastructure, the Public Distribution System, enhancing the area under pulses and oilseeds and steps to tackle high prices of essential commodities will have to be at the centre of Finance Minister P. Chidambaram’s budget. Education and health sectors also urgently need infusion of finances.

Bharat Nirman and the NREGP shall continue to be the flagship programmes. The number of districts covered under the NREGP is expected to be raised to 330 with an outlay of Rs. 12,000 crore, up from Rs. 11,300 crore in 2006-07. The Pradhan Mantri Gram Sadak Yojna shall also get a fillip with additional funds for rural roads connectivity. Other Bharat Nirman programmes including the Indira Awas Yojna and drinking water will also get higher budgetary allocation to meet targets.

Time and again the Government, more particularly Prime Minister Manmohan Singh, has emphasised that unless the agriculture sector achieved a growth rate of four per cent, the overall economic growth of 8.1 per cent in 2006 will not sustain.

Indeed, quickly achieving four per cent growth rate — even by ad hoc measures — has become the benchmark for the mandarins of the Agriculture Ministry.

However, even after setting up the National Fisheries Board, the National Rainfed Authority, the Bamboo Mission and the National Horticulture Mission, the growth rate of agriculture and allied sectors (including high growth fisheries, animal husbandry and horticulture) remained at 2.3 per cent in 2006-07. The farm sector’s capital formation in GDP was 1.7 per cent in 2004-05, requiring urgent and sustained attention.

Access to credit

With farmers’ suicides symptomatic of the crises in the agriculture sector, credit remains the core issue. Not only does the demand for one-time waiver of farm loans has no takers, but the Government is yet to even address the issue of more than 60 per cent farmers not having access to credit.

The report of the Radhakrishnan Committee, which is looking into the indebtedness of farmers, is awaited. The M.S. Swaminathan National Commission of Farmers Report, which called for a National Policy on Farmers, has also been consigned to a Committee set up by the Planning Commission.

There are no signs either of a Comprehensive Crop Insurance Scheme for farmers to cover risk to crop and livestock.

On the other hand, it is expected that the Finance Minister will almost certainly announce incentives for the creation of a sugar buffer stock with industry, in view of the high production and low international sugar prices, discouraging exports. Pulses and oilseeds are also likely to get attention — the former for quality research inputs and the latter for revision in duty to check domestic prices.

The food and agro-processing industry may get tax concessions for setting up cold chains, abattoirs and food processing parks with linkages with terminal markets. This will also help Wal-Mart, Bharti, Reliance and other corporates entering the food sector.

It is anybody’s guess whether the Government will give in to the demand for excluding wheat, rice and sugar out of the forward market trade to control prices and counter the charge that the United Progressive Alliance Government favours corporate farming and multi-national company trade.

Farm research

In the last two years, the Government has invested in basic and strategic farm research and will continue to do so.

However, there is widespread criticism that farm research is not addressing the need-based issues of stagnation in pulses and oilseeds output. There is also need to invest in research on developing crop varieties resistant to floods and climate change. However, Knowledge Centres may get requisite funding.

The decision on SEZs has been put on hold, but only temporarily.

Apart from this, farmers/workers also face the Planning Commission recommended strategy to shift 10 million agriculture workers to the non-agriculture sector. The proposed National Rehabilitation Policy has done away with the land-for-land component, saying, “wherever possible.”

And, with no jobs (as against mandays) being created to cater for such a huge population of uneducated or semi-literate farm people, the dispossessed rural population faces a crisis of existence.

Farmers and the rural poor, therefore, are seeking in this budget an all-inclusive action plan demonstrating the Government’s concern for their well-being and livelihood.

Free Trade Doesn't Help Agriculture

Anuradha Mittal | February 22, 2007

Foreign Policy In Focus

FPIF asked Anuradha Mittal of the Oakland Institute and Gawain Kripke of Oxfam the following questions:

Is it possible or desirable to construct an agricultural subsidy system in the North that protects small farmers in both the North and South? Is there a role for protective tariffs for agriculture in the global south? Some argue that agriculture should not be included in tariff reduction discussions at the WTO. Is this advisable or even possible?

This is Anuradha Mittal’s essay.

The most forceful justification for agricultural subsidies is that they are needed to save small farmers and preserve a way of life. The current agricultural subsidy system in rich countries, however, has only contributed to the decline of the countryside both in the North and the South. There is thus a contradiction between the purpose and consequence of subsidies making it obvious that there is an urgent need to move in a different direction.

The nearly U.S. $1 billion daily that rich countries spend on subsidies don’t go to farmers who resemble John Steinbeck’s Joad family. Far from benefiting small farmers, subsidies go overwhelmingly to large, capital-intensive agriculture as support is closely linked with production levels and land ownership. Most family farms get nothing but a tax bill.

In the United States, family farmers have been sold out to corporate agribusiness with ever-increasing numbers of farm bankruptcies and foreclosures reaping a grim harvest of suicides, alcoholism, and a loss of community. Subsidizing well-heeled agribusiness interests has ensured the continued exodus of independent family farmers from the land. In the 1930s, 25% of the U.S. population lived on the nation’s 6 million farms. Today America’s 2 million farms are home to less than 2% of the population. The U.S. Department of Labor projects that the largest job loss among all occupations between 1998-2008 will be in agriculture. This is not surprising when the average farm-operator household earns only 14% of its income from the farm and rest from off-farm employment. A New York Times article in 2002 reported, “The biggest economic collapse is happening in counties most tied to agriculture, in spite of the subsidies.” Out of the poorest 50 counties in the United States, 49 are rural counties.

In France, subsidies are skewed toward the rich farmers as well, with 15% of farms receiving in excess of 20,000 euros accounting for 60% of total payments. At the same time, the peasant population has declined by one third, with the number of suicides in the French countryside increasing rapidly.

This agricultural system robs not just the family farmers in rich countries but the world’s poor. Today rich countries like the United States are bound under the Agreement on Agriculture (AOA) of the World Trade Organization (WTO) obligations to commit to reducing domestic and export subsidies, increasing market access, and governing agriculture trade with more rigorous disciplines on domestic farm policies. However, the federal government has been doling out an average of $11.3 billion annually between 1995 and 2004. More than 90% goes to producers of corn, cotton, wheat, rice, and soybeans, with just 10% of farms receiving 74% of these subsidies. These five crops are dramatically overproduced and sell on global markets at below the cost of production, depressing the global commodity prices of crops that developing countries count on while wiping out poor farmers and enriching transnational food-industry giants.

The numbers are alarming. The United States provides 200 times more support in hidden export support than it declares, equivalent to $6.6 billion a year. The U.S. export price of wheat in 1995 was 23% below the U.S. cost of production; by 2001 the export price was 44% below the cost of production. In cotton, despite its higher production costs, the United States increased its world market share even when world prices fell to 38 cents a pound in May 2002. Africa lost about $300 million, with Mali and Benin losing more than their aid receipts from the United States, and Burkina Faso losing more than what it got in Heavily Indebted Poor Countries (HIPC) debt relief. In 2003, around 28,000 U.S. cotton farmers received $2.4 billion, 13 times more than the entire GDP of Burkina Faso, a country where more than two million people depend on cotton production for their living. The result is a reverse Robin Hood effect: robbing the world’s poor to enrich American agribusiness.

Agriculture is the source of livelihood for over 40% of people on earth. Most of these producers are small-scale and subsistence farmers who constitute 75% of the world’s poor. This fact lends strategic urgency to the need to change an agricultural subsidy system in the North that shores up an unjust and unsustainable corporate controlled industrial food system.

First we need to dismantle one of the great myths that free trade helps farmers and the poor. It does not! Attempts to leave farmers at the mercy of the free market only hasten their demise. The focus on export crops for trade has meant increasing yields, with farmers becoming dependent on chemical inputs. Many have stopped rotating their crops, instead devoting every acre to corn, wheat, or some other commodity crop and creating vast monocultures that require still more chemicals to be sustained. This has destroyed our biodiversity. Vast industrial farms require costly equipment for planting and harvesting, increasing the capital intensity of agriculture. As costs rise, prices fall in markets flush with surplus. As prices fall, farmers need subsidies, which are available to big growers and agribusiness only. Land values and cash rents increase. This encourages heavy borrowing. Rich landowners get richer and young farmers cannot afford to get started. An agricultural bubble economy is created. Inevitably it crashes as subsidies fail to keep pace with falling crop prices. Farms go bankrupt. Free trade in agriculture starves our farmers.

Our right to food has been undermined by dependence on the vagaries of the free market promoted by the international financial institutions. Instead of ensuring the right to food for all, these institutions have created a system that prioritizes export-oriented production and has increased global hunger and poverty while alienating millions from productive resources such as land, water, and seeds. The “world market” of agricultural products simply does not exist. What exists is an international trade of surpluses in grain, cereals, and meat dumped primarily by the EU, the United States, and members of the Cairns Group. Behind the faces of trade negotiators are powerful transnational corporations such as Cargill and Monsanto, which are the real beneficiaries of domestic subsidies and international trade agreements. Fundamental change in this repressive trade regime is essential.

Not surprisingly then, farmers organizations and social movements around the world have denounced the liberalization of farm products promoted by the WTO and other regional and bilateral free trade agreements. Instead of trade, small farmers movements prioritize healthy, good quality, and culturally appropriate subsistence production for the domestic market and for the sub-regional or regional markets. These farmers’ priority is to produce for their families and communities, then to seek access to the domestic market before seeking to export.

The Doha Round of the WTO will mean certain death for untold numbers of farmers who will face increased competition from foreign subsidized products when their agricultural tariffs are reduced. If this terrible situation occurs, t he developing countries should be able to defend themselves by not reducing their tariffs on food products and products of their small farmers, and should be provided a Special Safeguard Mechanism , a tool that allows developing countries to
work against the practice of dumping that is killing peasants. Under this mechanism, a developing country can raise the tariffs on a product if there is an import surge of the product. And they should be able to choose for themselves the Special Products (SP) that are exempted from obligations of tariffs and domestic subsidies. In essence, designating products as SP means taking them out of the WTO. In addition the developing countries should also be able to revert to the use of quantitative restrictions, which they had given up in false expectation that the Northern countries would stop their protection. In the wake of WTO talks stalled at the mini-ministerial in June 2006, farmers groups worldwide, including the Asian Peasant Coalition, have already declared that all products are special products! This buffer would at least allow countries to protect their most sensitive sectors from tariff reductions, and therefore protect millions of farmers’ lives.

Agriculture and food are fundamental to the well-being of all people, both in terms of access to safe and nutritious food and as foundations of healthy communities, cultures, and environment. To ensure this we need agricultural subsidies that support communities instead of supporting commodities. Instead of production- and price-linked subsidies, a fair subsidy system would ensure small farmers access to local markets, fair prices for their products, and, when necessary, credit and technical assistance. Such a system would support the development of cooperatives and promote the consumption and production of local crops raised by small, sustainable farms. It would ensure farmers’ rights to land, seeds, and water; support conservation practices; and protect indigenous rights.

In short, this is about ensuring a new system of agricultural trade that would guarantee food sovereignty; the right of people and countries to define their own agricultural and food policies according to the needs and the priorities of local communities, including mechanisms to protect domestic food production; ensure strict control of food imports to stabilize internal market prices; and supply management systems to avoid dumping on the world markets.

Anuradha Mittal, the executive director of the Oakland Institute, is an internationally renowned expert on trade, agriculture, development, and human rights issues.

Trade: A free for all ?

Trade: A Free for all?

While farmers in developed countries, constituting less than three per cent of the population, enjoy huge subsidies, India actually taxes its farmers. With substantive cuts in subsidies for power and fertilizer, and a fall in the selling price of agricultural produce due to dumping by developed countries, farmers face a crisis that needs to be addressed immediately.
He stood defiantly as the truck hurtled straight towards him. And he refused to budge. The truck did not relent either. While participating in the boycott of British cotton imports, Babu Genu was mowed down by a truck carrying foreign cotton. He died instantly.
Babu Genu’s fight is as relevant today as it was 70 years ago when he was killed on December 12, 1930. He died fighting against the colonial government’s free trade policy, which gave British textile imports an unfair advantage over the Indian textile industry and affected the livelihoods of thousands of workers and weavers. In memory of Babu Genu’s fight against imperialism, the Maharashtra Kisan Sabha held state-wide protests on his death anniversary last month to highlight the adverse effects of trade and power sector liberalisation.
At a Kisan Sabha rally in Dindori, Nashik district last month, farmers said that their livelihoods are being destroyed by the new economic policies. Trade liberalisation, cuts in fertiliser subsidies, reduced infrastructure investment and privatisation of the power sector have adversely affected the profitability of agriculture. While costs of inputs like fertilisers and electricity have risen steeply due to cuts in subsidies and privatisation, the prices at which farmers sell their produce have declined due to the glut of imported products in the market.
“Prices have fallen substantially. I used to sell a tonne of sugarcane for Rs 1,000 last year, but this year, the price is only Rs 500. The price of garlic has decreased by around 70 per cent. We are not able to recover the costs. Debts keep accumulating every year,” said Pandit Gangorde, a small farmer from Shendvad village in Nasik.
Pressurised by the US government to “free trade”, the central government agreed to lift quantitative restrictions (QRs) on the import of 1,200-odd items by April 2001, many of which are agricultural products. During his recent visit to the sub-continent, Bill Clinton managed to persuade India to free QRs two years prior to the April 2003 deadline agreed to by OECD countries.
“Foreign countries give their farmers many benefits. They get huge subsidies. But our government has lifted even the most basic protection for her farmers. Imported products are being allowed to enter India at cheap prices. We cannot compete, and will be totally destroyed.,” said Ambalal Sonvane, a farmer from Varkheda village. He added that small farmers have suffered heavy losses due to the government’s liberalisation policies. “We are being hit from all sides. Our costs have risen because the government has reduced fertiliser subsidies and electricity rates have doubled due to privatisation and deals like the Enron project. At the same time, output prices are falling due to imports.”
Agriculture has borne the brunt of liberalisation on many fronts. Cuts in government spending have resulted in reduced public investment in agriculture as well as smaller subsidies. Dismantling of procurement agencies, greater imports and falling world commodity prices have also reduced profitability. The central government’s Report of the Commission for Agricultural Cost and Prices for Crops Growth for the 1995-96 and 1996-97 season warns that wholesale price indices have not risen commensurate to the considerable increases in the prices of important farm inputs.
Moreover, imports have also reduced market prices. “If milk from Denmark (where farming is highly subsidised) enters our market at Rs 7 per litre, when the current price is Rs 13 per litre, do we stand a chance?” asked Chintaman Gavit, Kisan Sabha Nashik district president in Maharashtra. “At first, the consumer may benefit. But once our domestic production has been totally wiped out, they will be at the mercy of foreign producers.”
Surprisingly, the government can do something to prevent the dumping of agricultural imports, but has chosen not to. Says S.R.Pillai, national president of the Kisan Sabha, “Even the WTO rules allow the government to impose tariffs of up to 300 per cent. But despite this crisis, the government has only imposed tariffs ranging from 15 to 40 per cent. In addition, it can impose anti-dumping tariffs. But it chooses not to exercise these powers.”
India actually taxes its farmers rather than subsidising them, according to an article written by Binu Thomas of ActionAid India. “Each farmer in the developed countries gets on average a subsidy of US$ 29,000 a year. The US domestic support for its farmers was US$25.5 billion in 1996, while for the EU it was US$ 85 billion. In both the US and the EU, farmers constitute less than 3 per cent of the population. In contrast, India’s domestic support to its farmers worked out to a negative US$ 23.7 billion in 1995-96 even after providing for fertiliser, electricity, irrigation and seed subsidies.”
Moreover, trade liberalisation has resulted in bizarre situations where India is exporting wheat at a price cheaper than what most Indians are paying. Wheat from Food Corporation of India godowns can now be exported at the same price at which it is sold to people classified as living ‘below the poverty line’, says economist Madhura Swaminathan. “Millions of undernourished and vulnerable people, who are still classified as being ‘above the poverty line’ have been told to pay a higher price for wheat than the price at which the government is willing to sell the same wheat to foreign countries,” Dr Swaminathan points out.
Concern about the Indian farmer’s survival has sparked quite a few protests of late. Last month, farmers from Punjab held a massive rally outside parliament to protest against the reduction of procurement prices offered to farmers by the Food Corporation of India. The Telegu Desam Party recently stalled proceedings in Parliament, objecting to the central government’s failure to ensure that paddy farmers were getting the minimum support price for their produce. In a recent interview, TDP leader Chandrababu Naidu said that farmers need adequate protection from the adverse effects of free trade and the World Trade Organisation.
The themes underlying farmer’s struggles today ring familiar to those fought by freedom fighters like Babu Genu. From colonialism to globalisation. We’ve come a long way. Or is it full circle?
The Hindu Sunday Magazine, 11 February 2001.