Ill-informed politicians claim that farmers benefit from increasing vegetable prices when in fact the latter receive a minimum price for their produce. Unscrupulous traders and middlemen make a killing by engineering shortages
“While, like last year, I seek the blessings of lord Indra to bestow on us timely and bountiful monsoons, I would pray to goddess lakshmi as well. I think it is a good strategy to diversify one’s risks”, said then Union Minister for Finance Pranab Mukherjee while presenting the Budget for the year 2011-2012. The statement is symbolic of the unfortunate ways in which our Ministers have been keen on invoking divine power rather than depending on science, technology and ground level solutions to rescue India’s dwindling agricultural sector. This sector employs around 50 per cent of India’s workforce but it’s contribution to the gross domestic product has been decreasing year after year.
“As per latest estimates released by Central Statistics Office the share of agricultural products/agriculture and allied sectors in GDP of the country was 51.9 per cent in 1950-1951, which has now come down to 13.7 per cent in 2012-2013 at 2004-2005 prices...” This statement of Union Minister of State for Agriculture Tariq Anwar last month in a reply to a query in the Rajya Sabha shows the pathetic downfall of a once-glowing sector. Even in absolute terms, India’s foodgrain production declined to 250.14 million tonnes in 2012-2013 from 259.32 tonnes in 2011-2012.
What continues rising in this sector is the number of farmer suicides, which reached a shameful figure of 15,440 in 2012, close to 50 farmer suicides every day of the year, as per the National Crime Records Bureau. The Government admits that since 1995, more than 3,00,000 farmers have committed suicide.
leaving aside our pseudo-intellectual ministers, it’s more important to understand the real problems of agriculture. At the farm level, the usual suspects are the ones that are addressed the least. The acreage in India has been around 140 million hectares, but with the number of farmers increasing, divisions in land have resulted in decrease in productivity and diminishing economies of scale. Then there are the reduced financing options and the killing debt traps. This apart, lack of irrigation, warehousing and cold-storage facilities and almost non-existent technology support from the Government also are critical issues for farmers, pushing them towards destitution.
Every year, like an annual event, vegetables and agri-products find themselves in a comedy circus. On the one hand, our Government boasts of record yields, whereas on the other, this ‘record yield’ fails to reach its customers. Think about it: As per the Government, we’ve had one of the best monsoons this year. The Central Water Commission confirmed in August that our water reserves nationally are now at the highest level in a decade. We’re apparently experiencing a bumper crop year. But such a claim is laughable when one considers the rising prices of fruits and vegetables.
But then, isn’t this the case every timeIJ Each year, onions, tomatoes and other essential food items are upgraded from basic necessities to luxurious items. And the chief culprits for this and the related obscene price-rise are hoarders and black marketeers. However, despite repeated offences by traders and recurring problems with agri-product pricing, not much attention has been paid towards agriculture reforms at the ground level. Unlike in other nations, agricultural reforms in India are still treated as children of a lesser god.
Take for instance, China. After 1994, the Government introduced policies that limited the amount of grains that could be imported (giving a boost to domestic production). This brought domestic farmers to the centre-stage and increased domestic supply of crops. In 1995, the Governor’s Grain Bag Responsibility System was introduced which made local Governors accountable for supply and demand and also for maintaining the prices in their jurisdiction. By the end of 1997, China introduced agricultural industrialisation management strategies for professionalising the flow of produce to the market and morphing the entire agriculture system into a market-oriented system. Next in the line was balancing production in urban and rural areas, wherein urban industries were asked to facilitate agriculture and guide rural farmers for better yields.
Comprehending the need for sustainable development and long-term progress, agriculture reforms included compulsory rural education, financial security, internationalisation of farming and open markets. The Chinese Government has definite and clear-cut policies to check food inflation, price rise and hoarding. All big traders are provided with guidelines to report to the authorities within 24 hours if they decide to increase food prices by four or more per cent. There is imprisonment in case of any breach.
Contrast this with India. The conviction rate under the Essential Commodities Act, 1955, and the Prevention of Black-marketing and Maintenance of Supplies Act, 1980, was only 2.47 per cent in 2009, 3.55 per cent in 2010 and 6.68 per cent in 2011. While unlettered Indian politicians claim that the rise in prices will benefit the Indian farmer — without realising that the Indian farmer is still selling at the minimum price; the so-called ‘benefit’ goes to the hoarder and final retailer — others can’t even make up their mind on whether export bans should be put in place to rein in prices.
In 2011, an onion export ban was lifted in 10 days flat by an Empowered Group of Ministers, led by then Finance Minister Pranab Mukherjee. The situation is quite similar even now. On August 13, Union Minister of State for Consumer Affairs, Food and Public Distribution KV Thomas said, “We would wait for 10 days and if the prices do not come down, would ban exports.” On August 23, just 10 days later, he said, “Currently there is no proposal under consideration to ban the export of onion... Prices of commodities including vegetables like onion and tomatoes are mainly governed by market forces of demand and supply, cost of transportation and storage, weather conditions etc.” But then, where’s the ground-level action against hoarders that should have been undertaken days, if not weeks, agoIJ
Increase in onions prices is just one indicator of the many malaises inflict our agriculture system. For instance, the Agriculture Ministry should immediately take steps to introduce stringent laws against hoarding, publicly arrest hoarders and initiate action against them, and open the market further. After all, we are talking about policies that are not for a few crore farmers but for the entire nation and for the larger good of the economy.
(The author is a management guru and honorary director of IIPM Think Tank)