Business Daily from THE HINDU group of publications
Wednesday, Aug 23, 2006
Agri-Biz & Commodities - Insight
Columns - Down to Earth
A `lip-package' for farmers?
THE PRIME MINISTER, Dr Manmohan Singh, listening to farmers at a village in Maharashtra... The government needs to work towards ensuring more remunerative prices to improve the plight of the farmers.
"When I visited Vidarbha, the plight of the farmers there made a deep impact on me. The agricultural crisis that is forcing them to take the desperate step of committing suicide needs to be resolved. We need to think about how we can provide a decent livelihood to them?" These are not quotes from the travelogue of foreign tourists visiting India; but of the Prime Minister. Surely, it cannot be that he had not known of the farmers' plight.
After the Maharashtra visit, the Prime Minister announced a relief package for the suicide-affected districts. But soon after the announcement, the number of suicides per day rose 50 per cent. Farmers all over the country, particularly those from Vidarbha and other regions with high incidence of suicides, were hoping that the Prime Minister, in his Independence Day speech, would try and explain what had gone wrong with his package and announce a prescription. But they were left disappointed.
The Prime Minister included the project-displaced persons and the slum-dwellers in the same category as the farmers and concluded, "globalisation certainly has its benefits; but it can also hurt the common man." This must have been music to the Left allies of the United Progressive Alliance.
The whole country has been talking about the India-Bharat divide, at least since the 1978 onion price agitation. For the first time, the Prime Minister has accepted publicly the duality of the economy.
Not quite consistent with the employment philosophy of the UPA, Dr Manmohan Singh prescribes for this duality growth that generates the necessary wealth. This can then finance the welfare of the marginalised groups and ensure that the growth generates employment and a bright future for the youth. This assertion of the remote reality of economic growth will be ridiculed by the Left as a new version of the percolation theory.
New Deal for Rural India
What did the Prime Minister hold out for the farmers? He repeated the virtues of the National Rural Employment Guarantee Scheme, the Bharat Nirman Programme, the Rural Health Scheme and the Sarva Shiksha Abhiyan. He even mentioned the promise of a `New Deal' for Rural India, made two years ago on a similar occasion. He did not think he owed the nation an explanation about what happened to the New Deal and why its announcement was followed by two years of suicides by thousands of farmers.
He once again talked of the near-doubling of agricultural credit and of having made short-term loans available at 7 per cent. If a Prime Minister says so, there must be some truth to it. However, it remains that Dr K. G. Karmarkar of Nabard declared at about the same time the Prime Minister was speaking that "the cooperative banks appeared to be reluctant to lend to the agriculture sector at the subsidised rate of 7 per cent.
Lending to the farm sector by cooperative banks has come down in the recent past. This is reflected in the slowdown in the farm finance availed of by the cooperative banks from Nabard."
The quantum of the finance through cooperative banks has fallen from Rs 1,737 crore in 2003-04 to Rs 1,244 crore in 2004-05. In the case of the Land Development Banks, the refinance was Rs 2,544 crore in 2003-04, Rs 2,710 crore in 2004-05 and Rs 2,082 crore in 2005-06.
"In many cases, the banks are not eligible for the finance because they are not in a position to lend; they may not be able to recover the money and may default on repayments", said a senior Nabard official.
More remunerative prices
The Prime Minister admitted that much needs to be done to improve the lot of the farmers, especially in the rain-fed and dryland areas. He reiterated what the farmers had been demanding for the last 30 years, adding that the government needs to work towards ensuring more remunerative prices to give them relief from debt .
What has the Prime Minister to announce by way of measures for debt relief?
"We have recently constituted an expert group to look into the problem of agricultural indebtedness", announced the Prime Minister. The group was, in fact, appointed barely three days before Independence Day to enable the Prime Minister make the announcement.
Conflict of interest
The Prime Minister promised the farmers more remunerative prices. However, he did it in such a way as to provoke a conflict of interest between the farmers and the consumers.
"Better livelihood for the farmers will result in higher prices of their produce, but don't worry, the government will hold the prices in check." So, the next time there is inflation, the government may blame the farmers, even if they continue to commit suicide under the crushing burden of debt.
(The author, founder of Shetkari Sanghatana, is a Member of the Rajya Sabha. He can be reached at email@example.com)
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