The Deepening Furrows
Poorly designed policies are largely to blame for farm distress.
Successive governments have transformed an unevenly prosperous rural society to one which is evenly distressed. Small and marginal farmers now feel worse off than the landless. Most suicides have taken place in the families of such farmers, especially those with no source of non-farm income. For the sense of desperation that now pervades rural India, all political parties are to blame.
Politicians disconnected with reality often take for granted that the policies prepared by bureaucrats will guarantee targeted objectives.
Yet, in the farm sector, a policy based on pure logic may not succeed — too many unpredictable facets of behavioural economics and climatic circumstance are involved. Even regional diversity is not accounted for when policies are designed. A more federal system could help solve that. Moreover, the implications of the fine print of a policy could be highly detrimental to its working. For instance, welfare objectives remain unmet when the fine print is written without consulting those implementing the programme and those affected by it.
MGNREGA and the farm loan waiver were not the benevolent acts they were made out to be. Whatever the data might say, farmers feel that one of the main reasons for farming becoming non-remunerative is increasing labour costs, pushed up by MGNREGA. On an average, labour accounts for 40 per cent of total farm input costs. During harvesting and sowing seasons, labour requirements shoot up and the cost doubles. Increased wages also fuelled food inflation. I will not claim yet that a badly designed MGNREGA was responsible for the unravelling of UPA 2, but the possibility must be considered. The UPA seemed to calculate that poverty could be reduced by increasing rural wages. But the wage gains were negated by high inflation. Similarly, the hefty minimum support price increases could not offset higher farm input expenses. With a little tweaking, MGNREGA could be the great programme it was supposed to be. If 100 days of labour had been reserved for the 250 days of the lean season, it would have doubled the employment generated, without more investment.
Lately, there has been talk of another farm loan waiver to alleviate distress. But it is not the solution we need. Only farmers who defaulted on institutional credit gained from the last farm loan waiver. The benefits of loan waivers and MSPs do not trickle down to millions of marginal farmers and those surviving in rain-fed areas. Now that it is apparent industrialisation will not create the millions of anticipated jobs soon enough, the only way to help those abandoned on the margins is to help them be meaningfully self-employed. The biggest challenge is to design support programmes where small and marginal farmers are not left out. A strategy based on dole-outs of food or governmentwork, or on the use of force, is bound to fail. So-called populist programmes do not necessarily deliver the promised benefits. Short-term measures tend to become long-term fixtures and restrict progress. Government announcements of ad hoc compensation for crop loss won’t solve the problems either; they will only address the consequences of a deep malaise. A government that is seen to be merely reacting to political jibes or a crisis will always lose out.
After its first anniversary, the BJP will showcase its soil health cards, kisan channel, crop insurance proposals and land acquisition bill as pro-farmer initiatives. But look closely and its seems apparent that these will not translate into the intended outcomes. It will take much more to deliver real benefits and check the perception that welfare programmes and farmers are being abandoned. The BJP cannot afford to proceed with farm policies without listening to critical inputs from farmers. After all, the farmer cannot survive on lip service and political posturing.
