Need to marry farming with industrial growth

M Rajivlochan
Historian & author of Farmers Suicide: Facts & Possible Policy Interventions

A farmageddon is staring at the Modi government in the aftermath of it passing the latest three laws on farming. While most political parties may be opposing the laws to gain political mileage, the fact remains that a large number of farmers, especially in rice-wheat-producing states like Haryana and Punjab, are truly scared about these three laws. The new laws will bring about a change, and it is sufficient to spook them. That is in the nature of farming communities, across the world, for over 200 years, ever since the onset of the industrial revolution began to marginalise farmers by opening up new avenues for creating wealth and power in society.

The Modi government will have to move fast to regain the trust of farmers. Especially, because the profits that these three laws will unlock for the farmers will flow in only at the end of the harvest season. Till then, it does not matter what the facts on the ground are.

At the root of the problems of farmers is the fact that they are located at the bottom of the value chain. In this location, they suffer most from economic downturns and gain the least from any upswing in the market. You would recall that each year, with every bumper harvest, the price of farm produce comes down ever more, the cost of inputs to farming keeps increasing and the condition of the farmer worsens. That has been the case across the world since the advent of industrialisation.

The wiping out of farmers from farming has often been brutal and harsh. British farmers faced this dilemma in the 19th century. Lenin worried about this when he talked of the irresolvable scissors crisis that haunted farming in Soviet Russia. Stalin simply killed about three million farmers. The American farmer, who had upstaged the Indian farmer as the largest exporter of foodgrains in the world in the 20th century, went into a crisis in the 1920s and was finally wiped out during the depression of 1929-33. The transformation of farming in Europe was overshadowed by the two world wars in Europe that between them killed about 30 million Europeans.

In contrast, the farmer in India has been spared such brutality, thanks to his romanticisation by leaders like Gandhi and a general disinclination in India to use harsh measures against anyone. This resulted in the creation of policies, since Independence, to help farmers. They included laws to take surplus land from landlords, efforts to provide land to the tiller and laws to ensure that tenant farmers were not cheated by landlords. Developmental efforts were initiated in the mid-1950s with the gram sewak and agriculture extension officer as foot soldiers and the block development officer helming the effort to transform farming communities into modern entrepreneurs.

Those were the years when government officers revelled in setting up farmers’cooperatives to use farm machinery, preened themselves on having electrified villages and boasted about the number of farmers whom they had convinced to use modern tools and techniques. Inevitably, the amount of foodgrains produced increased. The APMC Acts that were implemented in the 1950s in some states were designed to ensure that farmers got a fair deal in marketing their crop. That the Acts effectively became millstones around the neck of farmers and ended up forcing the farmer to pay humungous sums of money to middlemen for services not rendered is a different story altogether.

In parts of some states, farmers even became prosperous enough to start controlling political processes. However, the only farmers who prospered were the ones who added a business other than farming to their portfolio. Those who stuck to farming were quickly reduced to subsistence level — as is the case with 80 per cent of the farmers in India. The implementation of the mechanism of a minimum support price since the 1980s worked as a game-changer in protecting farmers against sharp downturns in agricultural prices. But even this mechanism has been of use to only a handful of farmers. Even in Haryana and Punjab, where it has been the most successful, it benefits not more than four out of five farmers while the granaries overflow.

Under the circumstances, the best that farm unions, political parties and others who are concerned about the well-being of farmers can do is to help ease the farmer out of farming. For, I dare say that the farmer has been on ventilator for decades, and now, the plug is about to be pulled. Neither the world, nor India, needs so many farmers. Already, landowners in the US and in most countries of Europe are paid money by the government to not cultivate any land.

It is important to be able to ride the wave of inevitable change, lest one drowns in it. Protests on the streets of India will not change the inevitable drowning. They will only turn the rest of the society hostile to farmers or invite the state in India to use harsh tactics against farmers, such as were used in Europe, the USSR, China and the US.

Marrying farming with industrial growth is the thing for farm unions to do. They would have to certainly find out their own local mechanisms for raising funds for setting up industries, finding industries that are best suited to their locality and the local population, ensure that the locals have a stake in whatever growth that happens. In this respect, a visit to the small town of Baramati in western Maharashtra would be quite instructive to the farm leaders of Haryana and Punjab.

This small town was nestled among dry fields in the rain shadow area of the Western Ghats, receiving about 19 mm of rain each year. Expectedly, everyone was poor. But while the rest of the country was dissing the projects of development in the 1950s and 60s, the farmers in Baramati, led by Appasaheb Pawar, collectively decided to industrialise their agriculture. This resulted in the healthy growth of horticulture, animal husbandry and poultry. Later, a milk federation was set up with the help of Operation Flood, along with cooperative sugar factories. The farmers were well poised to grow when the government liberalised the economy in the 1990s. They went out of their way to invite all sorts of enterprises to their fields. Agriculture soon became just one of the minor activities, even while everyone became prosperous due to the add-on businesses.

In the 1960s the local council had a budget of about Rs 50 lakh, in 1990, the budget was Rs 5 crore and by 2015, it had grown to Rs 224 crore. If Punjab today boasts of clean villages due to wealth imported by NRIs, Baramati is an example of an oversized village generating its own wealth by marrying agriculture to industry in ways that are beneficial to the farmer.