Monday, June 16, 2008

Reforms with a human face?

Prime Minister Manmohan Singh’s recent announcement of a special package for Vidarbha farmers to stop them from taking their lives due to indebtedness did not seem to have reached them. Farmers continue to kill themselves in these parts. The government has been finding these suicides embarrassing at a time when India is being celebrated by Western commentators for its high economic growth. Why are farmers committing suicide? This question has been answered differently by different people. Psychoanalysts, economists and sociologists have tried to fathom the reasons behind the suicidal mindset in rural areas, but the truth is that those who are trapped in this circle of despair can’t find even a straw of hope to cope with the crisis. They feel they can never earn enough to repay their debts. What has contributed to this suffering? One of the major reasons is the growing pauperisation of the agriculture sector over the last 15 years of economic reforms. Government statistics would show that the state of agriculture was the best during the 1980s before the reforms were initiated. There was a perceptible drop in the number of people living below the ‘poverty line’ and there were no reports of people killing themselves. The state then was seen as more sensitive to the problems of the poor. After economic reforms were initiated in 1991, the first reports of suicides began to trickle in from Andhra Pradesh. The Congress then performed so miserably in the by-elections that the then chief minister, Vijayabhaskar Reddy, squarely held PV Narasimha Rao and his economic policies responsible for the electoral discomfiture.
Since then nothing much has happened in the agriculture sector. Any grassroots study would show that the growth rate in the agriculture sector is the lowest. In this sector, capital formation has been falling due to low investible surplus. Although the land under cultivation has been relatively high, but productivity is so low that it does not inspire confidence. There is need for a sharp increase in agricultural productivity and a coherent safety net for the farmers, but government resolve has been abysmally short. Indeed, about 40 million hectares of arable land, enough to feed 400 million people, has not been utilised even when there are reports of famine-like situations in some parts. Agronomists, like YK Alagh, point out that there has been no increase in cultivable area under agriculture for more than 10 years.
The misery of the agriculture sector is largely due to adverse terms of trade against the farming community. The price they get for their produce is far less than the money they have spent on buying inputs like diesel, power, seeds and pesticide. It is a difficult life for the farmers, including landless farmers. Grief-stricken villages in Maharashtra and Andhra Pradesh have been putting up banners suggesting their entire villages are up for sale. Why shouldn’t such unproductive regions be allotted for the SEZs, with hefty compensation packages and alternative fertile land for farmers? Such a move could end suicides at least in some areas, as it would give them the funds to end their indebtedness. For many farmers agriculture has become a pain and they are selling off their land to private developers to build SEZs. Their motive is to handle cash, missing all these years due to low remuneration, etc. It is a kind of ‘distress sale’ that the government can do without. The government should remember that no nation can prosper unless farmers’ issues are handled with sensitivity and practical vision, while increasing agricultural productivity. Prime Minister Manmohan Singh, who swears by late Rajiv Gandhi, should take a re-look at the economic policies during his tenure in the 1980s that increased agricultural productivity and brought down poverty. Or else, liberalised reforms will lack both human face and the face of humanity.

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