Government’s malignant view on agriculture

Economic Survey 2016, Union Budget 2016-17 and very recent speeches of Prime Minister of Narendra Modi at Gangtok, Bargarh and Barielli should clarify that agriculture is on top priority, and is under the lens of policy makers. No one can claim that they do not know, or agriculture is their least priority.

However, therein lies the problem. The question is why a government which is focussed on liberalisation, fiscal consolidation and economic reforms is showing so much interest in agriculture. Does it mean government has become conscious of large number of farmer suicides, or oncoming global economic slowdown has forced it to look at the fundamentals of Indian economy? It is increasingly apparent, not before this week, that this concern is probably a realisation that reforms cannot happen without a fundamental transformation in Indian economy, turning it upside down. One cannot confuse this revolution and the epistemology behind the word revolution. It is not about overthrowing the super structure, but it is probably to cut the roots.

Chief Economic Adviser, Arvind Subramaniam, in his Economic Survey 2016-17 declares this approach boldly and in many places in the document. I quote one, “It is equally true that economic dynamism and long-run growth requires small firms becoming big and efficient (page 46, Vol I)”. There are many such aphorisms that give us an insight into the direction of policy makers thinking. The document goes on to say, boldy, “India’s WTO obligations could predominantly be based on this domestic shift away from border protection to domestic support.” Would this mean, India would see a lowering of import duties? Revenue to the government from import duties is increasing despite a drop in oil prices, indicating more and more dependence on imports.

Finance Minister also tried to convey forcefully convey a message of transformation and the commitment of government to change the economy. In the budget, allocations show a shift from the previous budgets. Interest subsidy for short term loans to farmers was not in Ministry of Agriculture budget before. This year it has been included. Out of a total budget of Rs.35,983 crores, interest subsidy has Rs.15,000 crores, crop insurance Rs.5,500 crores, Rastriya Krishi Vikas Yojana Rs.5,400 crores and Krishi Unnati Yojana Rs.6,949 crores. These four scheme total Rs.32,850 crores. Thus, the number of schemes have been reduced. As Economic Survey says in agriculture the priority of the government seems to bring out ‘more results from less allocations’.

Prime Minister has also been talking of decentralisation and has been exhorting States to take more role in agriculture. This is not to be confused with devolution of powers. It is probably a move to shift the burden of agriculture. Even while GST is being rolled, which reduces elbow room for States, this kind of burden shift would only mean ‘kicking’ focus lights away.

There is a method and strategy behind the recent focus on agriculture is apparent. Other steps such as increasing attention of the government towards genetically-modified crops with a fallacious argument that it will increase productivity, establishment of Unified National Agricultural Market and banking reforms do give a strong indication of a strategy, which would like to cut Indian agriculture at its roots. In his budget speech, Arun Jaitley says, “To increase the incomes of farmers, it is imperative that we create a National agricultural market, which will have the incidental benefit of moderating price rises.” This statement clarifies that the focus of the government is more on ‘moderating price rises’, than enabling ‘remunerative prices’ through NAM. Per drop more crop, investments in rural infrastructure, more yields from less land and other such schemes are essentially geared to bring about structural changes. It could mean change in ownership, operations and scale.

All the three principal policymakers, with the recent addition of NITI Ayog, have brought ‘solutions’ to imaginary problems and do not address core reasons behind agricultural crisis. Corruption, governance failure, inadequate knowledge in the extension system, non-regulation of agricultural input suppliers, water scarcity, multiple impacts of natural phenomenons and a myriad other problems have not been referred and addressed by Economic Survey 2016, Union Budget 2016-17 and Prime Minister’s speeches.

With a higher than expected contribution to GDP by the agriculture sector, government allocations did not rise more than 2 percent of total government expenditure. The inability of the government to spend these miserly allocations has been slammed time and again by the Parliamentary Standing Committee. The ball of blame is kicked among different agencies, with no agency being made accountable.

This government has not responded to drought, drought related impacts on rural populace, farmers suicides, malnutrition, climate change, repetitive natural calamities, declining rural and farm incomes and serious migration from homes, livelihoods and regions. This budget is being dubbed by a few business media as pro-farmer, pro-poor and pro-rural, probably taking cue from Prime Minister. However, a comprehensive view and a defragmented budget allocations do not give scope for such a conclusion. Proponents of such labelling need to develop arguments. It may not be like searching a needle in the haystack, but it would be more passing of a rose garland as that of jasmine.

 

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