Vol. XLI No. 14 April 02, 2017

BJP Govt Drags India towards Contract Farming

P Krishnaprasad

THIS article is an attempt mainly to assess the direction of the Union Budget for 2017-18, whether it will help the peasantry to come out of the present systemic crisis and end rising peasant suicides. This is important especially in the context of substantial increase in the rate of peasant suicides in the over two years of the NDA government. The Union Budget for 2017-18, placed in Parliament by Finance Minister Arun Jaitley on February 1, did not even attempt to evaluate the deep crisis in Indian agriculture, making it irrelevant of pondering concrete suggestions in the budget to overcome the farm crisis. It actually contains concrete suggestions to strengthen the neo-liberal reforms which are the root cause of the agrarian crisis.

Forgotten Promise on Market Price of Agro Produces

The issues of farmers are discussed in the paragraph numbers 20-30 in the budget speech. The Economic Survey of 2016 states that the agriculture sector had faced negative growth. The substantial decline in the Monsoon and widespread drought affecting more than 300 districts are reasons of concern for further deterioration in agriculture. Instead of getting prepared to address the severe forthcoming drought, the budget speech is an attempt to artificially portray a glowing picture regarding agriculture which is unrealistic.

The Para 21 refers to the focus given in the previous budget on making the income of framers double within five years. The BJP manifesto in the 2014 Lok Sabha election had promised to increase minimum support price for all agriculture products to 50 per cent above cost of production. One may recall that it was the major recommendation of the MS Swaminathan Commission for farmers in 2006. However, even in its third budget, the Modi government could not accomplish the promise.  

As per the assessment of state governments, the cost of production of Arhar/Tur per quintal has been Rs 5,722 in Andhra Pradesh, Rs 6,841 in Thelangana and Rs 5,100 in Karnataka. However, the MSP announced by the Modi government is only Rs 5,050, which is below the cost of production. Since no adequate procurement system prevails, the farmers are getting only around or below Rs 4,500.

The NDA dispensation has reduced the import duty on wheat from 25 to 10 per cent and then to zero per cent by November 2016 due to which farmers are unable to realise even the minimum support price of Rs 1,625. The farmers got price of anything between Rs 1,329 and Rs 1,431 while selling a quintal of wheat. The objective situation is that whether it is paddy, milk, vegetables or cash crops, farmers are denied even the cost of production for their products.

No Liberation for Peasantry from Debt Trap

The Para 22 of the budget speech proclaims enhancing the agriculture credit to the level of RS 10 lakh. Mainly rich farmers, capitalist farmers and large scale agro business companies are taking the advantage of this credit. Everybody knows the higher income groups in cities and towns use the agriculture credit to avail vehicle and housing loan at cheap interest rate.

On an average around 68 per cent of peasant households all over the country are under debt trap as per many of the official surveys. No institutional credit is available for poor and marginal farm households. Hence, they are compelled to depend on private money lenders. To prevent the very appalling trend of peasant suicides amongst the petty producers, they need to be assisted by the government to come out of their present debt trap. The peasant and agriculture worker organisations independently and collectively are undertaking number of campaigns and agitations in this regard and the November 24 rally of the AIKS in New Delhi was attended by thousands of farmers from all over the country. States like Maharashtra and Madhya Pradesh which top in cases of peasant suicide are under the BJP rule.  However, the Union Budget for 2017-18 did not carry any meaningful announcement to make the poor and middle peasantry liberated from debt trap.  

The basic reason for the crisis faced by peasant households is that agriculture is becoming economically unviable for petty producers since the cost of production and expenditure for day-to-day life are enhancing while the income from sales of agriculture produces is going down. This circumstance pushes the peasant households towards debt trap. The neo-liberal reforms that curtail or remove the import tariff eliminate the protection in the domestic markets for agriculture produces. The capitalist driven agrarian crisis has compelled lakhs of rural people including women to leave their natural habitat, migrate to cities and urban centres to seek day-to-day employment and livelihood. The disastrous policies of capitalism compel the peasantry to take shelter in suicides and death since they have no hope to sustain their lives. The BJP dispensation did not stop and reverse the neo-liberal reform initiated by the erstwhile Congress government that trapped the peasantry under debt, but further intensify the same.

Cooperative Institutions and Insurance Sector

Paras 23 and 24 refer to cooperative institutions and insurance, respectively. Around 40 per cent of the farmer households depend on cooperative sector for credit.  However, our experience is that the Modi government had stifled the cooperative institutions in the wake of demonetisation. The Pradhan Mantri Fasal Bima Yojana failed to ensure timely and adequate compensation to farmers who faced crop loss due to climatic changes, natural calamities and crop disease last year. The basic fact is that the Finance Minister was surprisingly successful to transfer more than double the estimated budget amount in this account to aid the coffers of the big corporate insurance houses.

Soil and Water Conservation

Para 25, 26 and 27 of the budget speech explains the steps to protect soil and enhance water conservation and irrigation. The budget did not evaluate the benefit of budget allocations made in this sector in the past. The rich-capitalist farmers used to reap the benefit of the allocations in this sector. The poor and middle farmers are always out of reach of such projects and allocations. Global warming and climatic changes and the resultant degradation of nature and environment have started creating havoc to farmers and peasants all over the country. However, the BJP-led government has no vision of addressing this serious issue ensuring massive involvement of the peasantry and the people. The government has no willingness to link the MNREGA with agriculture too.

Market Reforms for Protecting Interests of Corporate Forces

The dangerous proposals as far as the peasantry is concerned have been explained in paras 28, 29 and 30. Like poison varnished with sugar, the Finance Minister has placed these pro-corporate proposals in a way as if it is going to benefit the peasantry. In the previous budget, there was proposal for establishing Electronic Market Platform to link all Agriculture Produce Market Committees in the name of avoiding middlemen and realising better price for farmers produces. The budget proposes to extend that from 250 to 585 markets this year. There is proposal to support each market with Rs 75 lakh to develop cleaning, grading and packing facilities. In the name of assisting farmers, the government intends to help corporate agri-business and agro-processing companies by facilitating direct procurement of agro produces through e-markets.

The proposal in Para 29 has exposed the double standard of the Finance Minister. The proposal suggests de-notifying the perishable goods from the APMC so that the farmers will get opportunity to sell goods outside the market and realise better price. No more evidence is required to understand that e-markets are designed to facilitate the interests of the corporate forces.

India Being Dragged towards Contract Farming

Para 30 contains the most dangerous proposal of market reforms detrimental to the peasantry.  The government openly proposes to circulate a model law of contract farming to all state governments for adoption. The proposal has been put forward with the stated intention of facilitating integration of fruits and vegetable farmers with the agro processing industries. The arguments in favor are realisation of better price and avoiding the danger of post harvesting wastage of products. Contract farming and e- marketing without ensuring remunerative support price by the government are detrimental to the peasantry. Multinational and transnational corporate companies establishing their dominance over Indian agriculture sector will never help to save the peasants from debt trap and suicide tendencies. Converting Indian farmers as the contract agents of corporate forces could not be claimed as an act of nationalism.

Direction of Modi Govt

The BJP formed a government with absolute majority for the first time in 2014. In 2014-15, the BJP-led government tried hard in vain to impose a law to forcibly acquire agriculture land without the consent of the farmers. It has no intention to ensure land reform and grant land to landless by eliminating landlords. In 2015-16, it has opened the doors of the country to facilitate 100 per cent Foreign Direct Investment in agriculture and retail marketing. In 2016-17, the e-marketing reform has been introduced to support large-scale agro processing companies to facilitate direct procurement of agro products avoiding middlemen. In the Union Budget 2017-18, it has announced the Model Contract Farming Act, first in our country that will transform the farmers as the agents of monopoly agro processing companies. The mainstream media did not discuss any of these serious developments. Such consistent proposals elucidate the direction to which the BJP is leading the country and its people. The BJP and the Modi government expose themselves as the committed agents of corporate forces and as enemies of the peasantry. The ruling classes of India through this budget states categorically that they prefer the profit they could earn by joining hands with international finance capital than protecting the interests of the people and the country.

Joint Struggle of Workers, Peasants

The Kisan Sabha was in the forefront to expose the anti-farmer policies of the Modi government. It worked together with many left and democratic peasant and agriculture worker organisations at the national level and developed united struggles that forced the government to withdraw the infamous Land Acquisition Ordinance. The united platform of the peasantry, the Bhoomi Adhikar Andolan (BAA), has been emerged through this process. The decision of the Central Kisan Committee to help the BAA to form its chapter in all states and expand to district and village levels and develop consistent united struggles all over the country as in the trade union sector based on burning policy issues is highly relevant in the context of the outright anti-farmer proposals in the Union Budget for 2017-18. The Kisan Sabha had emerged as a force of struggle to reckon with. The challenge today is to develop countrywide united struggles of worker-peasant alliance against the imperialist economic policies imposed on the people by the Modi government.