How to solve farmers crisis in India
We should know the history of this agitation before we think about it’s solutions.
History: After independence, India was a food deficient state and it used to purchase many food items including wheat and rice from outside which was a costly affair with heavy burden on countries finances.
Indira Gandhi after two successive draught years, realised that unless India becomes food sufficient country, the problem won’t be sorted out. She along with few agriculture scientists started green revolution in 1966.
Her government gave subsidies to farmers for purchasing quality seeds, fertiliser, tracters and in many other agriculture related fields like electricity and water.
Within few years states, specifically Punjab, Haryana and Uttar Pradesh multiplied their food production many a times.
India became self sufficient in agriculture field within few years.
Successive governments purchased these food items from farmers at minimum support price for ration and mid day meal schemes. This supported the farmers and It was still much cheaper than purchasing food products from international market.
Present scenario: Today, we are food surplus country and can sell these food items in international markets. Government has sufficient food reserves for many years in FCI stores. No new store facilities have been built by FCI in last few years as there was no need for them, in view of sufficient reserves for needs of our country.
Government over the years have also become reluctant to purchase more food products every year because they have plenty of reserves even though they might deny it and are actually purchasing it in good quantities this year. The long term scenario has made farmers apprehensive.
International market: World Trade organization (WTO) made agriculture business part of its agenda since GATT agreements in 1994. Indian government signed WTO agreement in which the developing country like India were given some concessions to compete at international level.
In order to sort out trade distortions between nations WTO made certain provisions necessary for a level playing field between developed, developing and least developed countries.
These provisions included subsidy cuts by developed countries upto only 5 percent.
India, a developing country also cannot give more than 10 percent direct subsidy to farmers for a level playing international field. (no restrictions were imposed on least developed countries)
These provisions were necessary otherwise there will be trade distortion. Trade distortion occurs if, developed countries give lot of subsidies and lower the prices of agriculture products. The least developing countries on the other hand cannot give any subsidy. So, their products can’t compete in international market.
In India there is a problem of MSP also. The farmers benefited from this MSP policy since many years (specifically in Punjab Haryana and Uttar Pradesh) but in open international trade neither government nor the private parties can carry a sustainable business by selling agriculture products if they purchase it at MSP. It will not be sufficiently profitable.
The bills: Government therefore came with these bills to introduce private parties into food purchase market. The bills are primarily related to marketing in private facilities and finally in international market.
The positive of these bills is opening new market for farmers giving them more opportunities. It will in long run also give access to international markets.
The negative is, there is no safety net for farmers. There is neither assurance of minimum purchase price (different from MSP) by the agribusiness companies nor sufficient safeguards in contact farming.They cannot even appeal directly in court or any commission. They can go to SDM who is a government official.
The problem: Farmers realised they will be at mercy of big corporates and started agitating. Farmers from Punjab, Haryana and Western Uttar Pradesh were at forefront because they were the most affected by no guarantee of Minimum support price or MSP (At least 60 -70 percent of their products are purchased at MSP in these states). The farmers in other part of country never or had less benefit of MSP. The national average of MSP purchase is therefore only 6-8 percent of total purchase.
The farmers in India are well aware that in long run government is going to reduce purchasing from government facilities because of sufficient reserves. The government however promises regular purchase at MSP.
The agitation continues with government trying every trick in their armoury to convince farmers.
In reality the farmers are sceptical and are seeking a safety net for themselves….
I propose following solutions to this impasse without disputing the stands of either government or the farmers.
Farmers crisis and solutions:
1.Farmers should form co-operatives of wheat, rice and pulses so that they themselves become the sellers in the pattern of milk and egg co-operatives. This will prevent any exploitation by private parties in long run. This is the most important long term solution.
2.Farmers must be assured minimum purchase price ( MPP) for their every product in private facilities. Just like every private company is allowed maximum selling price because farmers are producers here. The MPP must be fixed by a agriculture commission. This will act as safety net for farmers. This is different from MSP in the sense that private parties cannot purchase below this minimum purchase price (MPP).
3.The government meanwhile must ensure through a new law that it will continue to purchase at least 8-10 percent of national farm products directly from farmers and never from private players for national needs and storage. This will be second safety net.
4.In contact farming, government should become the guarantor for any loss to private party, if such loss of farm product occurs due to natural causes. The government will provide this in the form of farm insurances. This will ensure that farmers enter contact farming and don’t suffer loss of both finance or land. This will be third safety net.
- Freedom to appeal in any court in dispute or establishing an agriculture court or commission. Fourth safety net.
- Finally the provisions of unrestricted storage by a private party must be scrapped. It should be allowed only for government stocks( FCI) and not for private parties. The government should fix limits of food storage by private parties. Due permission should be taken before any new storage facilities are opened so that the country and government is well aware of how much agriculture products are stored by private company. Permission to open such storage facilities should be given only by agriculture commission with farmers as members. This will prevent black marketing and price rise for the common public.
- These laws should become functional after 2 years so that farmers could form functional cooperatives by then.
- Farmers should form their own political party because they constitute 60-70 percent population. This will in long run allow them to take active part in making policy decisions.
As far as scraping the laws are concerned the good sense must prevail in those who have it…both parties will have to give up egos and come on table…..
And for lesser mortals like us….. don’t let politics come between understanding issues and resolving them……any more suggestions will be welcome.