Farmers need their dues, not doles from the treasury
That farm loan waivers are politically essential for 2019, but are neither sufficient nor curative for the current agrarian distress is a no brainer. The legendary farmer leader, Sharad Joshi, argued that farmers are no economic offenders and hence mafi (pardon) is an unethical coinage. He argued for Karjamukti (freedom from indebtedness) because the Indian State with its devious laws has inflicted chronic bankruptcy, suicides and forced migration on the farmer. Hence farmers have huge dues from the government. This really makes a case for return of ill-gotten wealth to farmers.
The five major Nehruvian socialist instruments of farmer exploitation include: (a) The land ceiling acts forcing farmers to part with long-acquired assets without compensation; (b) The draconian Essential Commodities Act depressing farm produce prices and breeding systemic corruption; (c) The APMC monopoly creating an anti-farmer nexus of political thugs, traders, agents and head loaders; (d) The Foreign Trade Regulation Act manipulating exports and imports to depress domestic farm prices at will; and (e) the Land Acquisition Act. There are more laws on beef ban and on wild animals’ protection causing untold loss and suffering for countless farmers.
The shield to anti-farmer laws afforded by the Schedule IX is an illiberal legacy of the Constitution makers, including Jawaharlal Nehru and BR Ambedkar, eroding farmers’ assets, unleashing systemically biased markets and unremunerative prices, preventing exit from farm and also entry of non-farmers to farming and, hence, any serious investment. The resulting loss to farmers, as the Government of India officially told the World Trade Organization in 1992, was a huge 72% vis-à-vis border prices — a Jizia on farmers. The aggregate negative subsidy (about 6-7% now) continues till this date. The 1991 reforms also bypassed farmers. Narendra Modi and the Rashtriya Swayamsevak Sangh (RSS) evaded these basic reforms and flip flopped on empty slogans like the 50% profit minimum support prices (MSPs), doubling of incomes and crop insurance. Demonetisation has also hurt farm incomes. The ban on the GM technology — supported by the National Democratic Alliance government— has deepened the Manmohan Singh-Jayram Ramesh-imposed damage. The question now is: Are the BJP, Congress, socialist ragtag parties, including the green/ swadeshi brigades, willing to undo this cause of farmer distress beyond waivers? All of them did and are contributing to this exploitation under various pretexts including high food prices.
And there are complex issues within waivers. Often farm loan waivers help only some farmers (usually under Rs 1-2 lakh loan limit) and for barely a year or two. Besides, private lending continues to sap farmers. Farmers beyond a holding size and term loans are excluded. In fact, the bigger the farm size and investment, the bigger is the loss. The one time settlement (OTS) for bigger than exemptible loans is also flawed since these farmers cannot raise money for settlement. The farm credit system actually calls for a forensic audit since many banks — especially cooperative banks — impose penalties and interests flouting Reserve Bank of India rules. Farmers need credit like any business but cannot pay back as farming is unremunerative. There are also the unpaid power bills. It is not a paradox that Shetkari Sanghatana is against any freebies and we hold that free power means poor quality and irregular supply, which is most detrimental to farmers. That free power gives a cover for leakages and corruption is another matter. The poor quality power to farms is actually a leftover surplus at night (otherwise a waste if not used), hence deserves no payment at all.
Most economists lose no time to state that the farm loan waivers are detrimental to the credit system; but they hardly denounce governments targeting food prices as anti-inflationary measures or hefty hikes by needless pay commissions. The RBI also hardly ever audits farm loans of any bank or imposes penalties against erring bankers. So are they, like political parties, in collusion with the anti-farmer State?
The Shetkari Sanghatana — not a boat club gathering of 134 groups demanding loan waivers — has argued for a paradigm shift from loan waivers to real Karjamukti, because the socialist State has intentionally and systematically caused farm bankruptcy. The landlocked farmer is not a free citizen of India. The five draconian laws and schedule IX must be tossed into the dustbin of socialist history. Free the land markets and align farm produce trade with WTO framework, and replace food procurement and public distribution with direct cash transfers for the poor. We call for infrastructure investment from public and private sources. Farmers should enjoy access to any technology, including GM, in markets. Any waiver must be embedded in liberal reforms of agrarian political economy. The farmer must be free to pursue or to quit farming like a free citizen. Above all, farmers should get their due from the economy rather than as doles from treasury. This is all what Joshi asked for — a Marshall Plan for farmers.
Shyam Ashtekar is member of Shetkari Sanghatana
The views expressed are personal