How India's richest 1% owning billions is responsible for farmers' deaths

The monetary loss to farmers — close to a staggering $440 billion — is mind-boggling.

 |  5-minute read |   25-01-2018
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A recent Oxfam survey said one percent Indians bag 73 per cent of the country's wealth. It is in line with the World Inequality Report 2018 published at the end of December 2017. The latter had said that India’s top 10 per cent owned 55 per cent of its wealth in 2016. Income inequality has always been present, but the recent spurt of glaring economic disparity started since deregulation began and the markets opened up in the ‘80s and ‘90s.

The “liberalisation” model altered the unequal access to opportunities for wealth creation and the “super rich” were just better positioned to take advantage of the windfall. The benefits at the top of the pyramid never really trickled down to the lower rungs.

Without comparing the avowed economic and fiscal policies of different political dispensations from then to the present, it can be said that formulated policies failed to cater to the needs of India’s poorest.

farmers-green_012518044329.jpgIt can be said that formulated policies failed to cater to the needs of India’s poorest. Photo: PTI

In other words, policies and monetary support aimed at increasing the incomes of the poor were limited and the results showed.

Farming is the area that needs to be put under the microscope. While the manufacturing and services industries grew, real growth in agriculture remained a pipe dream. The farming sector's contribution to the GDP decreased from around 50 per cent in the ‘50s to less than 18 per cent in 2016.

As far as agricultural productivity is concerned, we are not doing too badly. Our food grain production is increasing every year, despite the vagaries of weather. We are among the leaders in rice, wheat, pulses, sugarcane et al. We lead in milk production and make the top three slots regularly in producing fruits and vegetables.

Agriculture remains the principal source of livelihood for more than 58 per cent of India’s population. However, even as the economy is growing at a pace of 6-7 per cent — reaching 8 per cent in the recent past — the growth in agriculture remains stagnated at around 4 per cent. The sector provides employment for many, but in real terms their income is plummeting — so much so the workforce has started to move away from agriculture. A FICCI study says that between 2004-05 and 2011-12, there has been a net reduction of 30.57 million people from the agricultural labour force. It is no longer a feasible profession.

The government wants to double farmers’ incomes. It is a good idea that would take a lot of doing. While schemes like National Food Security Mission, Prime Minister Krishi Sinchai Yojana, Pradhan Mantri Fasal Bima Yojana and soil health cards are positive moves, they will not be enough. The government's focus on supporting grains and staples like sugarcane and potatoes means that the farmer would have little interest in diversifying. And unless the farmer gets a normal profit over and above his production cost, he cannot sell or survive.

Will you ever see a factory selling its produce at say half of its input cost simply because there is no market? That is exactly what the farmer is facing today.

Neither the farmer nor the buyer benefits, so who does? The middleman. Have you paid Rs 80 for a kilo of onions? Probably, yes. Has any farmer ever earned even Rs 60 for a kilo of onions, taking away transportation and storage costs? Never ever.

The middlemen earn the big bucks and the government was at least right when it floated the idea of connecting the buyer and the farmer through e-mandis. So far, 400 of such e-mandis proposed have not yet materialised. For a country of our size and the volume of agricultural produce generated, nothing less than a couple of thousands of such e-mandis would help. The day we have these numbers up and operating, there would probably be no need to write this piece.

Till then, the dispensation needs to look at ways to ease farmers’ distress. Few radical steps may help such as opening up agricultural produce to foreign direct investment (FDI) with multi-brand retail.

With due respect to all antagonists, there are a few moves that no government will be able to implement overnight. We need cold chain storage facilities at a gargantuan scale. We need to ensure that the farmer does not have to lug his produce around mandis and undersell it, or send it to middlemen.

We need to ensure that crop diversity is maintained. Any negotiation regarding produce prices needs to happen before the crop is harvested for it to be beneficial to the farmer. Only when multinational chains operate will India's agricultural produce be able to make its presence felt in the global marketplace.

When onions, potatoes or tomatoes are not dumped in the open, they will generate both profit and income. The guidelines for determining fair price shall probably remain with the government and that will be a necessity until the time the farmers of the country begin earning sufficiently to get on with their own price negotiations.

Investing on cold chains is another aspect that retailers would look into, which would give the government some breathing space. With India's socio-economic profile, the government can only invest so much. India has around six and a half thousand cold storage facilities that can store only about 10 per cent of the total perishable produce.

Chew on some numbers and you’ll discern that almost half of the fruit and vegetable produce is wasted. The approximate monetary loss — close to a staggering $440 billion — is mind-boggling.

Also read: Why Karni Sena can attack schoolchildren and get away with it


Arindam De Arindam De @arindamde01

The writer is journalist working with India Today.

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