Farmer harmer

Published: Monday 30 June 2008

Down to Earth
The United Progressive Alliance (upa) government completed four years on May 22. Four years in government is a significant achievement for any coalition, more so if the coalition is in minority in the Lok Sabha and its principal party--the Indian National Congress--has less than a fourth of the members of Parliament's lower house.

The government has completed four years of its tenure and there are many question marks over its performance. Inflation has assumed grave proportions. People's resentment against the government for its inability to check prices, particularly that of food items, has manifested in the Congress' defeat in recent assembly elections.

The government often tries to absolve culpability for inflation by saying that it's part of a global phenomenon. That's a flimsy excuse.Isn't the government of a country responsible for securing its people against the pernicious effects of the global economy?

The government also says that its grain procurement has been good this year. So what took it four years to manage a good procurement? The fact is that the government did not take the necessary steps to strengthen the public distribution system (pds) and this resulted in speculators, private operators and profiteers making hay. Instead of making the system accessible to everyone in the country, the government has aimed at targeted distribution, leaving a majority outside the pale of pds.

A linked issue is that of the government's encouragement of future trading in agricultural commodities. In spite of a standing committee of Parliament recommending against future trading in 25 agricultural commodities, the government has stopped such trading in only four commodities.

Oil prices have a major role in escalating inflation. Speculators have taken advantage of the uncertainty in international markets caused by the aggressive attitude of the us government. International oil companies have increased their profits 10-12 times. The profits of private companies in the country have also increased. The rise in oil prices has nothing to do with an increase in production costs. But instead of realizing this, the government is bent on increasing prices, driving inflation further up.

Agriculture policy is one area where the upa government has failed to distinguish itself from its predecessor. The government's response to the grave state of Indian agriculture--manifested severely in farmers' suicides--has, at best, been half-baked. It has been tardy in acting on most recommendations of the M S Swaminathan-headed Farmers' Commission. Crop insurance could have reduced the vulnerability of the farmers against the vagaries of the market to an extent, but the government hasn't given a go-ahead to crop insurance schemes. It has also been reluctant in reducing interest on farm loans to 4 per cent.

The farmer today faces a dual burden rising production costs and un-remunerative prices. His only recourse is to borrow for the next crop. Several studies have shown that indebtedness is the main cause of farmers' suicides. The loan waiver scheme announced by the government in this 2008-2009 budget does not cover marginal farmers in rainfed areas. The government which is often quick to ascribe price rise to a rise in msps of wheat and paddy does not display similar alacrity in recognizing that most farmers in the country are net food buyers--not sellers.

Retail, the largest employer in the country, after agriculture has also felt the impact of the government's policies. Corporates have gained from government policies. Multinational players like Walmart look set to enter the Indian market, jeopardizing many livelihoods.

Down to Earth
The government should have done well to have paid heed to the Arjun Sengupta Committee Report of 2007. The report on the unorganized sector has startling facts 78 per cent of people in this aspiring economic superpower earn less than Rs 20 a day.

Nilotpal Basu is a central committee member of the CPI (M) and a Rajya Sabha Member. This is an abridged version of an article published on May 28 in the party's Bengali daily, Ganashakti

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