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Intensive care, not painkillers

What the ailing agrarian sector requires is prolonged intensive care by good doctors, reports, Vinod Sharma.

india Updated: Sep 29, 2006 05:21 IST

Humongous. That perhaps is the word to drive home the proportion of agrarian distress the government is seeking to contain through bailout packages for farmers driven to suicide by failed crops and stalking moneylenders.

The statistics are scary, the problem stretching way beyond Special Economic Zones eating into prime agricultural land. Post-Nainital, where Congress chief ministers took stock of rising discontent in the farm sector, Prime Minister Manmohan Singh headed for poll-bound, agriculture-rich Punjab to promise a “debt relief” package.

The same day, Sonia Gandhi held out identical assurances in Andhra Pradesh, her party’s southern citadel that is still plagued by the rural disquiet that dislodged the TDP from power in 2004.

The political leadership, the NDA included, has obviously woken up to the crisis three years too late. The five national sample surveys that quantified farmers’ alienation from their profession — for want of bare income for survival, leave alone profits — were sponsored between 2002-2003 by the Union Agriculture Ministry.

The data revealed that 40 per cent farmers wanted to quit farming for other income avenues, 26 per cent considered it unprofitable and 8 per cent risky. Ask Dr RL Pitale, member, National Commission on Farmers, which is currently giving final touches to its report, and he argues that farmers require higher income, not just sporadic relief or lessons on enhanced production. “All farm sector strategies must factor in their income profiles and indebtedness,” he says.

The mirror Pitale holds images the raw ground reality. Drawing upon the NSSO data, he says 88 per cent of the 89.4 million Indian farmers are in the small and marginal category — determined on the basis of their land holdings measuring 0.1-2 hectare.

The monthly shortfall in the income of these 78.8 million farm households can roughly be pegged at Rs 655 per month or Rs 8,000 per annum. The yearly per capita debt accumulation works out higher — at Rs 12,000 — if one excludes income from livestock and non-farming activities.

In aggregate terms, the small and marginal category farmers’ income-expenditure gap stands at Rs 6,261 crore a month or around Rs 75,000 crore per annum, excluding loans from banks or cooperatives. What they require, insists Pitale, is an income package, not mere relief, to improve their economic condition.

The vicious circle in which a small or marginal farmer is trapped works as follows: Their average outstanding loans are placed at Rs 6,000 and Rs 13,000, respectively. “To meet the bank’s one-year loan repayment cycle, they are forced to borrow from private moneylenders to either repay loan installments or cover the gap in their income and expenditure,” explains Pitale.

That actually is the reason why farmers in Vidarbha, Andhra Pradesh and Karnataka keep killing themselves. Relief packages — minus honestly implemented income-generation programmes, committed procurement, remunerative prices and friendly markets — are but mere painkillers.

What the ailing agrarian sector requires is prolonged intensive care by good doctors. For his part, Pitale prescribes income-generating measures to cover half of the Rs 75,000 crore shortfall in the earnings and expenditure of poor farmers.