- Ash Medicines
- Homa Farming
- Agnihotra Kits
(From forthcoming book by the author: RESURGENCE OF THE REAL)
-Dr Vandana Shiva
Humanity stands at an evolutionary cross road.
We can consciously choose the path of Oneness – of our being part of One Planet, One Humanity, living and celebrating our many diversities, interconnected through bonds of compassion, interdependence, and solidarity. Or we can, for a short time, live enslaved by the 1%, afraid to change, clinging to illusions of security, while our real ecological security is undermined, and our real social security, embodied in real relationships, is ruptured and broken through the politics of division, hate and fear.
We will either make peace with the earth, by realising we are part of her, not her masters, owners, conquerors; or the Earth will no longer allow us to exist. We will face extinction as humans, even while we push millions of other species to extinction. We will either make peace with our diversity, or destroy the social fabric that diversity weaves, and with it, destroy the social conditions of our continued existence.
Rushing rapidly on the path to extinction is not an intelligent choice for our species.
When we think of the planet and all of humanity in abstractions, taking the path of Oneness seems impossible. But when we think through the real relationships we have with the earth and each other in the real world, our consciousness expands, and the task of making a radical shift becomes, simultaneously, simple and possible. The Resurgence of the Real has become a precondition for the continued survival and evolution of our species. Living through Illusions is no longer a luxury we can afford.
Illusions of separation, atomisation, fragmentation, makes us feel powerless and isolated.
Seeing interconnectedness makes silos collapse and turn into bridges. Living in and through non separability expands our sense of self. Becoming aware of our relationships enlarges our being, and our potential and power. We become aware that rejuvenating the planet and reclaiming humanity are not two different ends, reached via different paths, because the earth and society are interwoven in one indivisible vibrant colourful fabric of life in autopoetic freedom.
Both the planet, and humanity, face the same threat from the same source – the 1% with one Mechanical Mind is destroying the intelligence of nature and humanity, running One Money Machine based on violence and war, piracy, and enclosure of the commons, creating poverty, dispossession and disposability. The 1% are attempting to recreate one History, to hide the piracy and colonialism, to hide inherited guilt, to continue their piracy of our time, to construct false identities, false claims to innovation, and the false claim to superiority – for their mediocracy and creative deficiency.
The illusion of “innovation” has reached its extreme with the claim of patenting life, which is in fact a claim to creation. Behind every patent on seed, and on a living organism is a loud thumping of chests, as the chant “God Move Over”. This illusion has real effects in the real world. The will to own and conquer nature and society’s common wealth, translates into the will to exterminate. Patents on seeds are pushing species to extinction, pushing farmers to suicide, as the 1% and their pet corporations spread their tentacles across the planet to collect rent and royalties, through the spread of GMOs and poisons. The 1 % are pushing One Industrial Agriculture – which is spreading poison, disease, and contributing to climate instability, transforming our daily bread into our daily poison.
This future is a zero future. It is a future with no Nature or People, no mind, no intelligence, no thought, no seed, no food, no agriculture, no wealth, no diversity, no freedom, no future. For people across diverse cultures, and diverse beings on the planet, it is truly an end of history.
The Dictatorship of the 1% had shaped an economy based on limitless greed, limitless extraction and limitless destruction. Through the construction of the media based Delusion of Democracy, representative democracy has become an instrument of corporate rule, on behalf of the 1%. The out of control money machine in also using cultural technologies of divide and rule – to deepen the politics of fear and hate. These structural relations between economies that kill, democracies that are dying, and cultures of fear and hate, demand that we think and act collectively to seed our future and seed our freedoms through Earth Democracy.
The pattern that is emerging of a world run for profits and power is the pattern this book has attempted to outline
- Big Money makes Bigger Money. 8 men, with Bill Gates leading, control and own as much wealth as 50% of humanity. The money machine is out of control.
- The money machine has destroyed our freedoms, created an illusion of democracy, dividing people while dismantling our hard earned protections for the Earth (Environmental laws) and for people (Human Rights Workers rights). Without these protections and regulations, brutal and extreme inequality and exclusion are inevitable. Disposability of the 99% is built into this system designed by the 1%.
- Destruction of the natural world and its power to sustain life, is the result of both the limitless appetite of the money machine, as well as the environmental deregulation it engineers. An Extreme Anthropocentrism, now centred on the personhood of corporations, is an attempt to not just deny humans their rights, but also dent the Earth her rights. At its core, however, corporate personhood is designed to allow the 1% to hide behind corporations when it comes to their liabilities to the planet.
- For the money machine, everything is a commodity, everything is for sale, everything can be, and must be, owned as property. IPRs are contemporary instruments of monopoly, of rent collection and extortion. Privatisation of all nature’s resources and public goods is necessary for the 1%. Through IPRs and privatisation, Corporations “Tax” people, instead of paying taxes to society. Seed royalties are private corporate taxes levied on farmers, which require the neutralisation of farmers rights to save exchange and breed their own seeds. Pharma royalties on medicines are “taxes” on the unwell. The war on time tested, affordable, indigenous knowledge systems such as Ayurveda, is mandated by the money machine. The digital economy and “war on cash”, allow financial and information technology corporations to impose corporate “taxes” on people’s hard earned and honestly earned money, which has already been taxed by governments.
- The Hyper-industrialisation of agriculture with GMOs and drones, the selling of data on climate and soil, has not only transformed our daily bread into our daily poison, it has also reduced farmers knowledge and collective knowledge of society, to “data “ and sold back as “big data” — the latest commodity for the monopoly X-change of the money machine. Through data mysticism, failed technologies based on the failed mechanical mind are deployed in the form of gene editing, gene drives. Diseases of micronutrient deficiency – created by the industrial monocultures’ blindness to biodiversity, creates the new push for Bio-fortification.
- The poison cartel, controlling our agriculture and food, has created disease epidemics. With the poison cartel also enjoying a monopoly on medicines, as disease epidemics due to poisons in our food grow, so do their profits from patented medicine. Ignoring the ecological roots of disease and ecological approaches to health, the poison cartel profits from monopolies on seed, introduction of toxics in agriculture, and from disease. Sustained death, sustained profit.
- One Ag, One Science, One History, One Economy, is a totalitarian vision. It spells an End of Democracy, End of Freedom. Franklin Roosevelt had cautioned:
- The construction of one history is an exclusion of the diverse histories. The construction of the role of god’s chosen people, is license to kill, to destroy the communities, cultures, even countries. Whether it be “regime change” or reference to the “civilised world”, these are calls for war against those defined conveniently as “barbarians”. The Destruction of our social worlds, the devastation of entire civilisations, is leading to social instability, social conflict, social disintegration. It is spreading fear, hate and violence.
- The Money machine can only operate in partnership with the state , which is now a militarised, corporatised, Surveillance State. The rule of violence is not just threatening our freedoms, it is threatening the very lives of millions.
“The liberty of a democracy is not safe if the people tolerated the growth of private power to a point where it becomes stronger than the democratic state itself. That in its essence is fascism: ownership of government by an individual, by a group, or any controlling private power.”
The rise of corporate power above all other forms of power through the processes unleashed by corporate globalisation and neo liberalism is what Benito Mussolini called Fascism.
“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”
In 1999 , after we, the people, stopped the WTO Ministerial Meeting in Seattle , movements got together and started the World Social Forum in Porto Allegre in Brazil with the vision “Another World is possible”. That is when I first spoke of Earth Democracy – as the alternative to the destructive corporate globalisation.
We can no longer think of ourselves as, atomised, powerless individuals, separate from the Earth, separate from each other. Freedom in, and through, our oneness and interconnectedness, has become a survival imperative. Breaking Free of the the 1 % and the constructs of their Mechanical Mind, The Money Machine, the Delusion of Democracy, is not just possible, it has become necessary. It is an ecological necessity because the world view of separation, combined with an illusion of limitless extraction and exploitation of nature, is pushing us to an ecological precipice.
It is an economic necessity, because a 1 % world must render 99% disposable, extinguishing our diverse creativities, potentials and possibilities. It is a democratic necessity, because the rule of the 1% is a violent dictatorship – it destroys our fundamental freedoms, and the freedoms for all beings to evolve freely in an interrelated world, in an Earth Family. It is a social necessity, because the world of the 1% must destroy our social being, our communities, our commons, through privatisation and the enclosure of all commons, reducing us to consumers, and dividing us on the basis of gender, race, religion. It is a human necessity, because participating in a world of limitless greed, limitless profits limitless violence, limitless power, robs us of our humanity. Greed, and, fear and hate, go hand in hand. Sharing, compassion and love, help each other grow.
The powerful few have divided us, and continue to divide us. Our strength is our Oneness, to which we must awaken. This is where the Resurgence of the Real begins. Real is the earth. Real is our oneness with our Earth. Real are our families, and friends, and communities (not Facebook). Real is the seed that gives rise to seed (not GMO, patented, toxic non renewable seed). Real is the food grown with loving, caring hands, and mindfulness of the beings in the soil (not the fake food industry manufactures, with toxic chemicals and fossil fuels, reaping limitless profits, while our health is destroyed). Since the pharmaceutical industry and the agrochemical industry is the same ball of rubberbands, they then profit from the disease they cause). Real is the intelligence of life. Real is our creativity, the creativity of our bodies and minds, the creativity of our hands, (not the “innovation” of tools based on piracy, and destructive tools to control nature and society for extraction and exploitation).
From the consciousness of Oneness, we become conscious of our power – our Shakti. The same Shakti in the universe, in the planet, in every member of the Earth Community.
From the duty to care, we get the courage to protect and defend.
Over the past four and a half decades of my service to the Earth, my intellectual journey to transcend the mechanical mind, my engagement in creating living economies based on non violence and real creativity, living democracies based on real freedom, and living cultures based on love and compassion, I have always turned to our struggle for freedom from the British Empire and to Gandhi’s teachings, for inspiration to act in times of hopelessness, to open spaces when all spaces are shrinking, to cultivate compassion and solidarity in times of greed, fear and hate, to reclaim our power when we are being told power is the monopoly of the those who derive fake power from money, and money alone.
While the times have changed, the patterns of colonisation stay the same, based on violence, destruction of people’s freedoms and economies, taking what is not yours, collecting unjust rents on what is not yours, creating constructs of divide and rule, and supremacy. And the patterns of liberation and freedom are perennial – truly circular, (unlike the “Zero” of the mechanical mind, which begins and ends with emptiness). These contours of freedom shape the path for the Resurgence of the Real.
Satyagraha is the deepest practice of democracy -the moral duty to not cooperate with unjust and brute law and exploitative and undemocratic processes. This is the first step in breaking free of an enslaving, colonising system. “Satyagraha”-the force of truth- is Gandhi’s word for non cooperation with systems, structures, laws, paradigms, policies that destroy the earth and rob us of our humanity and our freedoms, that crush our potential for compassion and sharing, that atrophy our hearts, our minds, our hands.
Our freedoms are gifts of Civil Disobedience and Satyagraha. In 1848, Henry David Thoreau coined the term ‘civil disobedience’ in his essay on why his commitment to the abolition of slavery led to his refusal to pay poll tax. Higher moral laws compel citizens to disobey lower laws that institutionalise injustice and violence.
“The only obligation which I have a right to assume is to do at any time what I think right. It is truly enough said that a corporation has no conscience; but a corporation of conscientious men is a corporation with a conscience. Law never made men a whit more just; and, by means of their respect for it, even the well-disposed are daily made the agents of injustice” – Thoreau
“One has a moral responsibility to disobey unjust laws” – Martin Luther King Jr.
“As long as the superstition exists that unjust laws must be obeyed, so long will slavery exist” – Mahatma Gandhi
Swaraj – self organisation, self rule, self governance, autopoesis – is the basis of Real Freedom in Nature and Society, beginning at the smallest level, emerging at highest. Resistance by itself does not create freedom from oppression. We need to also sow the seeds of real freedom in our imagination, in our daily lives, through our everyday actions, and our diverse and multiple relationships.
Swadeshi is self making, based on local resources, indigenous knowledge, and community. It allows the expression of our fullest creativity as human beings and as Earth Citizens. In Swadeshi, we are co-creative with nature’s intelligence, creativity, and regenerative potential, and the creativity and intelligence of our fellow human beings. Co-Creativity with nature combines production with conservation. It is not extractive, polluting, degrading to the planet and to human communities. It is the foundation of sustainability. It is the core of economic democracy. It is the source of Real Wealth, of well being and happiness for all.
Real Freedom and Real Wealth creation call for the practice of Satyagraha, Swaraj, Swadeshi in integrity and integration. Resistance without another imagination rooted in the real, combined with constructive action, will not create another world. Sowing the seeds of freedom is not imaginary, it is a real act, an act in which we become one with the Earth, one as community, and one in our hands, hearts and heads.
The violent dictatorships, of today and yore, divide. They divide us from the Earth, and our capacity to create with the Earth, so we are compelled to buy what we need as junk commodities -our food and clothing, our knowledge and information, our friendships and “happiness”.They divide us from each other. They divide us from ourselves, crippling our capacities to think free, be free, live free, our capacity to create and produce. Oneness is our being, our source of power. Our power to resist nonviolently. Our power to co-create, nonviolently.
Often the electoral promises made to farmers at the time of elections fly fast Pic -- www.ezgoair.com
Prime Minister Narendra Modi's promise at a recent election rally that Bhartiya Janata Party (BJP) has been standing with farmers and promises to be with farmers in the future, too, stood in stark contrast against what Harbhajan Singh, a Punjab farmer, who cultivates wheat and rice in 10 acres, told Economic Times a few days back: “Nothing has changed. There is no profit in farming; we are only able to fill our bellies after whole year of hard labour.”
The terrible agrarian crisis is not only confined to Punjab. According to the latest report of the National Crime Record Bureau (NCRB), 12,602 farmers had committed suicide in 2015, an increase of 3 per cent from the toll a year back. Farmers are somehow surviving all odds despite two years of back-to-back drought, which was followed by demonetisation. This is why political parties are bending over backwards to convince farmers how serious they are about helping them emerge out of the clutches of despondency.
Amit Shah, the BJP President, has promised to waive off farm loans for small and marginal farmers within three months if voted into power. Home Minister Rajnath Singh goes a step ahead. He promises to provide loans at zero rate of interest. Uttar Pradesh Chief Minister Akhilesh Yadav, Bahujan Samaj Party (BSP) Supremo Mayawati and the Congress vice-president Rahul Gandhi too have promised to waive off farm loans. Ajit Singh, Rashtriya Lok Dal (RLD) President too has been promising to strike down outstanding farm dues, besides providing a higher price for sugarcane.
Suddenly, it looks as though every political leader has woken up to the terrible agrarian crisis. This happens once in every five years when the beugel for elections is sounded. The promise to stand by farmers is only restricted to the time of elections. State and Parliament elections are times for politicians and political parties to shower promises. With every political leader standing with folded hands in front of the farmers, it looks as if the farmer is the king. Every political party promises to work for his uplift. But once the elections are over, political parties abandon farmers and start working earnestly to aggressively promote corporate interests.
Why is that farmers have not been able to benefit from the largesse leaders promise during elections? How come they are unable to force the government against ignoring them? Political parties are able to show them the door knowing well that farmer is a divided lot. They vote not as farmers but as part of religious and caste configurations and should themselves be blamed for failing to stand up for their cause.
Over the past few decades, political leaders have been successful in breaking through the rank and file of what was once considered to be a powerful kulaklobby. Chaudhary Charan Singh was an undisputed leader of the Kulaks, generally considered to denote the big farmers. Small farmers too had rallied behind, finding Charan Singh to be the right voice. Later, with the emergence of Mahinder Singh Tikait, which led to the formation of Bharti Kisan Union (BKU), Charan Singh lost his dominance. I remember when I wrote this in the Indian Express several decades back, where I used to work as Agriculture Correspondent, Charan Singh was not pleased. He called me up to convey his displeasure.
Meanwhile, Sharad Joshi formed the Shetkari Sanghtana in Maharashtra and at some stage both he and Tikait joined hands. In a way, the ten year period between 1980 and 1990 was the glorious period for farmer movements. And then began the decline. Since then I have only seen the BKU splitting into numerous regional factions, with many of the local leaders aspiring to become MLA/MP. In Punjab alone, there are 22 factions. While many BKU factions claim to be non-political but in reality it remains an open secret that farm unions too are divided on political lines. Major political parties were quick to realize this and wasted no time in forming their own kisanwings.
Farmers are no longer a unified force. They have never voted as kisan and that is why I say farmers have to blame themselves for failing the cause of farmers.
Anyway, returning back to the issue of electoral promises, I find it nauseating to find that every political party unabashedly keeps on repeating the promise of waiving farm loans. I am not sure what percentage of farmers would believe in these claims but the fact remains that the promise of writing off farm loan was made five years earlier in 2012 elections in Punjab and UP. No one is questioning the ruling Samajwadi Party in UP as to why it failed to implement it during its tenure. Similarly, in Punjab, the ruling SAD-BJP Coalition has belatedly promised to waive off farm loans, and that too after being in power for ten years. Deputy Chief Minister Sukhbir Singh Badal had in the beginning accused Aam Aadmi Party (AAM) and the Congress of misguiding the electorate since the state has no resources for doing so. But eventually, promised to strike down farm loans when SADs election manifesto was released.
In UP, Rajnath Singh had himself acknowledged a few weeks back that it wasn’t possible to write off farm loans since the demand will also reverberate throughout the country and that will be financially difficult to do. But as the elections drew nearer, the BJP did a somersault and it too promised to waive farm loans.
Whatever be the claims, the fact remains that both Punjab and UP do not have the financial resources to do the needful. But more surprisingly, at no political rally do I find the BJP top brass trying to convince voters of the genuineness of its promise of doubling farmer’s income in the next five years. Perhaps, the ruling party knows that the voters can’t be taken for a ride anymore. They want concrete promises which at least look deliverable.
Tired of Tall Promises. Orissa Post. Feb 10, 2017
चुनाव आते ही जिंदा होता है कर्ज़ माफ करने का वादा Gaon Connection, Feb 10, 2017http://www.gaonconnection.com/samvad/elections-are-coming-alive-promising-to-forgive-debt
With water crisis expected to accelerate trains ferrying water will become a common site. Pic -- Hindustan Times
From Jan 15 this year, seven tubewells have been put into operation to pump water into the famed Sukhna lake in Chandigarh. Nearly 1-crore litres of groundwater, good enough to meet the daily requirement of 14,000 households or 70,000 people, will be drawn out every day. Sukhna lake will pull out ground water, which normally is required to meet the supply of people living in Sectors 19, 20, 26, 27, 28, 29, 30.
Where the Chandigarh Administration has gone woefully wrong is to do what it normally expects from the people. It failed miserably in protecting, conserving and managing the catchment regions of the lake which fall in the Shivalik hills.
There can be nothing more maddening. The decision to use tubewells to fill the lake, which has an ornamental value, smacks of a complete disregard to the unfolding crisis in groundwater depletion. More so at a time when the Central Ground Water Board (CGWB) points to a four meters decline in ground water levels in cities like Ludhiana, Delhi, Faridabad, Jaipur and Greater Mumbai. Other cities are hardly any better. The sharp decline has happened in a period of 10 years, between 2002 and 2011.
In most cities and towns, the ruthless exploitation of underground water has already reached critical levels. Take the case of the industrial city of Ludhiana in Punjab. Water table is plummeting at the rate of 1.08 metres every year. A World Bank report had already warned of New Delhi turning into a dust brawl. Gurgaon SEZs have been directed to procure water from its own resources. Ahmedabad, Hyderabad, Kolkata, and the list is growing. Meeting the ever multiplying needs of water for domestic, industrial and infrastructure consumption requires extracting underground water from deep aquifers or encroaching from the water needs of other regions.
With 50 per cent of the country’s population, which means more than 60-crore people, expected to be swarming into the urban centres by the year 2030, the monumental task of providing water to every household besides meeting the daily needs of business and industry has been largely given a miss. The task assumes gigantic proportions knowing that much of the water resources have been heavily contaminated, and the rivers and rivulets have virtually turned into nallahs. Recent statement by the National Green Tribunal (NGT) acknowledging that not even a drop of Ganga water has been cleaned and that too despite a massive investment speaks volumes of the threat ahead.
Although the prognosis is far from optimist, but I don’t think the answer lies in increasing the number of trains carrying water to the deficit areas. An atlas compiled by the CGWB – called Aquifer Systems of India – provides a country wide overview and depicts the ground water scenario for each of the 42 major aquifers in the country. While it is known that the demand for ground water for irrigating crops has increased rapidly often surpassing the sustainable levels of supply, not much emphasis has been laid on designing the cropping pattern to correspond with the availability of water.
The search for water has forced farmers to dig deeper and deeper into aquifers. During last few decades, most farmers in Punjab, the food bowl, have shifted from centrifugal pumps to deep submersible pumps. With the groundwater levels declining sharply, satellite images from NASA have shown the withdrawals will turn negative in another 5 to 7 years. And still, no urgency is demonstrated by agricultural scientists and policy makers to force farmers to opt for less water-consuming crops. Western Uttar Pradesh, Haryana, Maharashtra, Andhra Pradesh, Telengana, Kerala, Karnataka, Tamil Nadu and now Madhya Pradesh too are faced with alarming levels of decline.
Cities or villages, what the country needs is a nation-wide Paani Bachao campaign. Otherwise, water conflicts will sooner than later emerge between cities and within cities. A lot has to be learnt from the Jal Biradari being led by Rajender Singh and also from the pioneering research conducted by late Anupam Mishra, published in the form of a path-breaking book Aaj Bhi Khare hain Talaab.
Digging through India's heart. DNA Mumbai. Feb 9, 2017
If the promise of doubling farmers income had shown some signs I am sure farmers wouldn't have dumped vegetables on the National Highway (NH 33) in Chhattisgarh
Moving away from the days of Green Revolution, Finance Minister Arun Jaitley has clearly pointed to the road ahead: from subsistence farming to Corporate agriculture.
When Arun Jaitley said that a model law on contract farming will be circulated among states, and backed it up with a series of marketing reforms including de-listing of perishables like fruits and vegetables from Agriculture Produce Marketing Committee (APMC) to enable farmers to realize a better price, he spelled out a strategy to usher in Corporate Agriculture. Read it in conjunction with the policy framework earlier laid out by the National Skill Development Council (NCDC) which aims to reduce the farming population from the existing 58 per cent to 38 per cent by the year 2022, the shift to Corporate farming become obvious.
Add to it the repeated emphasis on strengthening the network of electronic National Agriculture Market (e-NAM), which the Finance Minister accepted was integral to commodity trading, markets are being proposed as the essential route to double the farming income. Rs 75-lakh is being provided to link the regulated mandis. The Federation of Indian Chambers and Commerce (FICCI) as well as the Confederation of Indian Industry (CII) had been asking for it. Earlier, Punjab had framed a separate Act for contract farming.
Finance Minister Arun Jaitley has presented three budgets. Except for repeating the promise of doubling the farmers’ income in the next five years, I haven’t seen any clear roadmap being laid out. Like the last year, this year too he reiterated his promise without even making a mention of the terrible agrarian crisis that prevails. Only a few weeks back, the National Crime Record Bureau (NCRB) had estimated 12,602 farm suicides for 2015, the latest year under investigation, up by 3 per cent from the previous year.
Hit severely by demonetization, which saw farm incomes plummeting, agriculture has been at the receiving end reeling under two years of back-to-back drought. To simply acknowledge: “This year farmers have shown resilience and agriculture growth is expected at 4.1 per cent,” the Finance Minister very conveniently glossed over the prevailing crisis. Agriculture growth rising to 4.1 per cent is primarily because of an abundant monsoon.
In addition, he announced the farm credit outlay being enhanced to Rs 10-lakh crore. “We will ensure flow of credit to underserved areas, like the northeast.” But what is lesser known is the fact that bulk of the farm credit, for which an interest subvention scheme of 3 per cent is provided if paid back in time, is availed by the agri-business companies. Roughly Rs 8-lakh crore out of the Rs 10-lakh crore will eventually go to the agri-business corporations in the name of farmers. I have been asking the Finance Ministry to categorise the farm loans under two different categories so to remove this illusion as if the entire amount is meant for farmers, but to no effect.
This brings me back to the question how will the farmers’ income double in the next five years. Considering that the average income of a farming household in 17 States of the country, as per the Economic Survey 2016, stands at a meager Rs 20,000 a year, I thought Budget 2017 provided an apt opportunity to provide debt relief to farmers by reducing the interest rates on farm loans, if not out rightly striking a portion of the farm debt. But instead the Finance Minister provided tax relief only to the middle class.
Farmers and farm workers, perhaps the worst hit by demonetization, have been left high and dry. It is generally believed that expanding irrigation and raising crop productivity is the way to enhance farmers’ income. More crop per drop is perfectly fine but to consider it as the way forward to increase farmers income may perhaps be stretching it too far. These are public sector investments that are in any case required. But while the outlay for irrigation is being enhanced, and an additional provision is also made for micro-irrigation, the fact remains that agriculture suffers from income insecurity. If irrigation and high productivity alone could raise farmers’ income I see no reason why Punjab, the food bowl of the country, has lately turned into a suicide hotspot. Punjab has 98 per cent cultivable area under assured irrigation and the crop productivity matches with the best in the world. With 45 quintals per hectare productivity of wheat and 60 quintals/hectare for rice, Punjab tops the global chart. And yet, Punjab is witness to a spate of suicides every week.
Doubling the farmers’ income therefore is the crying need.
De-listing fruits and vegetables and eventually dismantling procurement prices is a pre-requisite for corporate agriculture. After fruits and vegetables, it is generally believed that wheat and rice too will be taken out of the procurement system. Punjab Chief Minister Prakash Singh Badal has on a number of occasions acknowledged how much pressure he is under to dismantle the APMC regulated mandi network. But if the markets were so efficient I see no reason why 94 per cent of India’s farmers, who do not get the benefit of any procurement prices, were economically not doing any better.
According to the Shanta Kumar Committee only 6 per cent farmers get the benefit of MSP. The remaining are dependent on the markets. And if the markets were so efficient I see no reason why farmers would be demanding a hike in MSP along with 50 per cent profit as recommended by National Commission for Farmers.
Arun Jaitley's budget has nothing for farmers. LiveMint, Feb 2, 2017
By Dr Vandana Shiva – The Asian Age, 1 February 2017
In spite of all the knowledge we have of the link between industrially processed junk food and disease, the concentration of economic power in the hands of a small group of unelected, unaccountable individuals, translates into political power to influence governments, laws, policies and shape the future of our food and health and the future of the planet.
Freedom” has become such a contested term. When we, as people, use freedom we refer to people’s freedom to live, earn livelihood, to have access to vital resources like food, water, seed, land, health, education, knowledge, work, creativity, communication, etc.
Large corporations define freedom as “free trade”, which is corporate globalisation. The freedom of corporations and their masked owners is misused to destroy the Earth’s ecological fabric — the fabric of people’s economies and societies. “Free trade” rules are written by corporations to enlarge their freedom to commodify and privatise the last inch of land, the last drop of water, the last seed, the last serving of food, the last byte of information, the last bit of data, knowledge and imagination. In the process, they must destroy the freedom of the earth and the earth family, the freedom of people, their cultures and democracies, by enclosing the commons, commodifying and privatising every aspect of life.
Free trade is doublespeak. It is about an end to truly free trade between independent producers exchanging and selling goods at fair and just prices.
International trade is not an invention of the West, as is often said. In fact, the East India Company was invented in 1600 to usurp the trade of which India was the hub. That is why Columbus was trying to come to India. Before the British rule, India accounted for 27 per cent of the global economy. Britain was a mere 1.8 per cent. Over two centuries of British rule, India had been turned into a land of hunger and poverty.
As Shashi Tharoor points out in An Era of Darkness: “The British proclaimed the virtues of free trade while destroying the free trade Indians had carried on for centuries, if not millennia, by both land and sea.”
In 1716, the first global corporation, the East India Company, signed a Free Trade agreement with Farukhshir, called the Farukhshir Firman. This free trade agreement allowed the East India Company to take over India’s economy and colonise our beautiful land. In 1757, with the deceitful Battle of Plassey in which Robert Clive colluded with Mir Jafar, the British East India Company took over Bengal, going beyond international trade to rule. Today’s rulers — the billionaires — have amassed their billions through rent and royalty collections imposed through the free trade rules of World Trade Organisation and newer agreements.
In 1994, in Marrakesh, Morocco, governments signed the General Agreement on Tariffs and Trade that led to the creation of WTO in 1995. Like the Farukhshir Firman, the WTO agreements are written by corporations, for corporations, to expand their control on resources, production, markets and trade, establish monopolies and destroy both economic and political democracy. The WTO and free trade agreements go way beyond international trade, which takes place outside national borders.
So-called “free trade” agreements invade into our daily lives taking our every-day freedoms away. They are trying to take away farmers’ freedom to save their seeds and exercise seed sovereignty. They attempt to take away our food freedom by dumping toxic food, junk food, GMOs and destroying our local ecological agriculture and food systems, which get priced out of the markets they have served. They even hijack and subvert our democracies. This is why I work for seed freedom, food freedom and earth democracy.
American biotechnology corporation Monsanto wrote the TRIPS agreement of WTO, which is an attempt to claim seeds as Monsanto’s “invention”, and own seeds as “intellectual property” through patents. The aim is to own and control seed and make super profits through the collection of royalties. We have seen the consequences of this illegitimate corporate-defined “property” rights in India with extortion of “royalties” for GMO seeds leading to high seed prices. Approximately 300,000 dead farmers is evidence of the institutionalised genocide.
Cargill wrote the agriculture agreement of WTO. The result has been that India — the largest producer of oilseeds and pulses — has emerged as the biggest importer of both. The edible oils being imported are GMO soya oil and palm oil, both extracted with Hexane through solvent extraction. Both lead to massive deforestation in Argentina, Indonesia and Brazil. We are importing dals from Canada and Mozambique, while our farmers are unable to sell what they have grown.
The junk food industry, including Coke and Pepsi wrote the SPS agreement of WTO. Our Prevention of Food Adulteration Act was dismantled and replaced with the FSSAI, which is being used to shut India’s rich and diverse, small scale, home and cottage industry based food businesses, under pseudo-safety laws. Even Gandhi’s ghani (the indigenous cold press oil mill) in Wardha was served notice under the FSSAI. In spite of all the knowledge we have of the link between industrially processed food or junk food and disease, it is the junk food industry that gets government subsidies, while our artisanal, healthy food systems are banned through laws, or shut down through the Washington inspired “war on cash” also called demonetisation (and the digital economy).
The neo-liberal economic paradigm is an attempt at decolonisation and re-establishment of corporate rule through the use of old instruments of conquest, control, and wealth extraction in new form, accompanied by deregulation.
While the rhetoric of globalisation, neo-liberalism and “free trade” is “less government”, the reality is that from the perspective of people, corporate globalisation — based on enclosures of the commons — requires the creation of a corporate surveillance state, an invasive militarised police state which can violently protect the interests of the one per cent, at the cost of ordinary people.
Deregulation has impacts on our lives, livelihoods and freedoms. Consolidation and spread of corporate power, undermining real economies that nourish and sustain people, is one impact. At a deeper level, one of the most significant shifts was the emergence of financial power over the real economy, and the destruction of the real economies of nature and society. Another major consequence has been the mutation in politics, with representative democracy moving rapidly from “of the people, by the people, for the people” to “of the corporations, by the corporations, for the corporations”. Worse, the concentration of economic power in the hands of a small group of unelected, unaccountable individuals, translates into political power to influence governments, laws, policies and shape the future of our food and health and the future of the planet.
In India, the highest policy making body, Niti Aayog (also serving executive functions), is packed with people whose only expertise is corporate “free trade” and trade liberalisation. The promotion of imports when we don’t need them, the undemocratic undermining of government institutions working according to the Constitution to protect the farmers rights to seed, and people’s rights to affordable and safe medicine, pushing GMOs and hazardous medicines are examples of corporate metrics outweighing real life.
Niti Aayog has become a one-stop-shop for global corporate lobby groups to transform India’s economy into their private (backyard) market. This is systemic corruption of our democracy and a recipe for destruction of people’s economies.
The concentration of economic power and destruction of local economies creates unemployment, displacement and economic insecurity. The insecurities are used by the powerful to divide societies along racial and religious lines. Fragmentation and disintegration of societies is intimately linked to the extractive economic model of wealth accumulation by the few.
In this period of decolonisation, we need a new movement of freedom. That should be our national commitment in 2017, the centenary of Gandhi’s Champaran satyagraha.
In the midst of an enormous natural wealth, the local tribes continue to live in penury. Pics courtesy: Daily Mail
"Ecosystems are the GDP of the poor". I don't know whom to attribute these great words of wisdom but I am sure if you were to pause, think and reflect there can be nothing more true. After all, the communities which have traditionally been protecting the ecosystems, and are often regarded as the custodian of immense biological wealth, remain the unsung heroes, deprived of all the benefits. They continue to live in poverty. In lot many ways therefore I think ecosystems is synonymous with poverty.
It is because of the untiring efforts of these people and communities, mostly living in the hilly terrains and mountains, that people living downstream in the river basins and plains have enjoyed the benefits. This one way transfer of benefits have taken place over the centuries. More importantly, ever since the Scottish economist Adam Smith wrote An Inquiry into the Nature and Cause of the Wealth of Nations, first published in 1776, and popularly known by the title The Wealth of Nations, which subsequently became the guiding spirit behind the emergence of neoliberal economics viewing economic growth from the narrow prism of Gross Domestic Product (GDP), the ecosystems we have known have largely been turned into nothing more than a freely-available raw material to be exploited and extrapolated for economic growth.
There are various definitions for ecosystems. The term ecosystem was coined by Roy Clapham in 1930 and has subsequently been refined and improved upon. According to IUCN, the definition provided by Christopherson in 1997 is quite apt and relevant: "An ecosystem is a natural system consisting of all plants, animals and microorganisms (biotic factors) in an area functioning together with all the non-living (abiotic factors) of the environment." The Convention on Biological Diversity (1992) defines an ecosystem as: "A dynamic complex of plant, animal and microorganism communities and their non-living environment interacting as a functional unit." Over the years, a lot of work has gone into mapping the ecosystems and we have a fairly large understanding of what an ecosystem comprises of.
But unfortunately, Adam Smith did not measure the wealth generated by these ecosystems. Since he did not do so, I find the generation of economists who blindly followed the principles of market economy too failed to look beyond what was prescribed in the textbooks. Much of the severe problems the world faces today -- Greenhouse gas emissions leading to climate change, the melting of ice caps and glaciers and the destruction of the environment (soil, water, oceans and air) -- are the consequences of an ideological economic thinking sans merit. The entire GDP structure that was created, and thrust upon nations as a measure of wealth being generated, was based on a flawed assumption of what actually constitutes wealth.
No wonder, whether we like it or not, neoliberal economics has brought the world dangerously close to a tripping point.
The extent of exploitation of natural resources that has gone on unheeded can be gauged by the way a contract was signed in the early 1990s between the pharmaceutical giant Merck and a public-sector research institute in Costa Rica -- InBio. Merck agreed to provide $ 1 million -- just $ 1 million -- for two years to support 'chemical prospecting' which essentially means scouting the available biodiversity for commercial gains. It agreed to provide a 5% royalty arising from sales of any such products developed from samples of plants, animals and microorganism collected from with Costa Rica. And how much resources Merck was able to access for this meagre fee -- 5 per cent of world's biodiversity !
This earlier example of prospecting biodiversity was followed by numerous exploitative (no less than extortion) contracts/agreements, and have been subject of numerous books/studies that have come out in recent past. These biological resources have been conserved and protected by communities/tribes which have lived in these areas over the centuries. Same is the case with mineral wealth, which exists in areas where abundant forests and tribes exist. But the people who live there, virtually guarding these precious ecosystems, have been deprived of any significant monetary gains for the ecosystem services that are generated. They continue to live in poverty. It is simply because the economic system is so designed.
I have repeatedly said that if you plant a tree, the GDP does not grow. But if you cut down a tree, the GDP grows. If cutting down the trees is wealth generation, then I am sure you will agree there is something fundamentally wrong with the way economic growth is computed. Not many people will stand up and question this inherently flawed model of economic growth for the simple reason they don't want to be seen as illiterate, uneducated and unintelligent. To stretch it further, they don't want to be branded as 'anti-development'. Nevertheless, these sensible voices, howsoever few these may be, have now begun to be heard. The pressure to de-globalise is an outcome of the anger that built up slowly and steadily as inequalities worsened and as the world went deeper and deeper into an environmental crisis, fast heading towards a point of no-return.
Take the case of a 68-year-old Daripalli Ramaiah from Telengana who has been bestowed with the prestigious Padma Shri honour this year. His name does not figure in the list of top 100 billionaires of India. But if I were to put an economic tag to his great achievement, I am sure his name would automatically flash in the list of the powerful people. Popularly called as Chetla Ramaiah (chetla means tree), he has planted over 10 million trees. According to a study, the actual economic value of a fifty year old tree is as follow:
Oxygen $ 7,700
Water recycling $ 10,000
Pollution control $ 17,700
Shelter for animals $ 8,300
Soil conservation $ 8,300
But if you cut down this tree, the market price would be something in the range of $ 1,100. (See this report in Times of India: http://timesofindia.indiatimes.com/home/environment/flora-fauna/A-healthy-tree-worth-Rs-24-lakh-per-year-Report/articleshow/21927419.cms)
On the other hand, if you were to add on all the benefits a 50-year-old tree provides, in other words add on the ecological services provided by a tree, and then multiply it with the number of trees that Chetla Ramaiah has planted, I am sure you will get an astounding estimate of the wealth he has generated. This is just one example to illustrate what has been missed out.
Ehrilch and Ehrilch (1981) had coined the term 'ecosystem services'. Although it was way back in 1977 that a paper in Science was published examining the link between ecological and economic systems, entitled: 'How Much are Nature's Services Worth?', attempts to ascribe a monetary value to these resources began later. Earlier estimates pointed to a value of $ 33 trillion a year, revised to $ 125 trillion/year and are still being re-calculated as more clarity is emerging on the services and the methodologies to measure them. The Millennium Ecosystem Assessment (MA, 2005) provided the first international effort to quantify the ecosystem services and subsequently 'The Economics of Ecosystems and Biodiversity (TEEB), based at the United Nations Environment Programme (UNEP), created an Ecosystem Service Value Database based on 1500 global peer reviewed publications. This is being systematically reviewed and improved upon. Ecosystem services are broadly classified in four categories -- provisioning, regulatory, support and cultural.
I find this entire effort to monetize the ecosystem services, which had remained unaccounted so far to be of immense value in development planning. While a number of studies are currently underway in numerous institutes/universities, the discipline of ecosystem services has still get its due recognition. I am hoping that once the economic values of ecosystem services are perfected, and accepted, it will help planners make decisions which will not be swayed by the outlandish development values that are tossed around. The value of ecosystem services that a hill provides for instance is taken as nil or is simply considered as free of cost. While all kinds of services are paid for, services rendered by ecosystems are considered free of cost. The destruction a development project brings about is generally considered as inevitable, which unfortunately is based on economics that does not make any attempt to integrate the economics of ecosystem services thereby failing to ascertain the real cost-benefit ratio.
It was primarily with this underlying objective, the Chandigarh-based trust Dialogue Highway, in collaboration with the Department of Environment Studies, Panjab University, had organised the 2nd International Dialogue on Himalayan Ecology (Jan 28-29, 2017) on the theme: "The Economics of Himalayan Ecosystems." Distinguished experts from across the country had made presentations based on the outcome of research undertake to ascribe economic values to the ecosystem services provided by the Himalayas. I am sure the effort will go a long way in mainstreaming the subject of ecosystem services in policy planning. I plan to undertake a similar exercise for the Western Ghats in the months to come.
As environmentalist Anil Joshi remarked: "Ecology is the permanent economy" I hope the economists try to take a fresh look to make radical corrections in the economic understanding they have been made to believe in all these years. Ecology cannot be sacrificed in the name of economic growth. Any sensible growth model has to be based on the amount of 'real' wealth nations have created, which should be so worked out so as to provide an indicator of the measure of sustainable growth that the nations have focused on, and achieved. Becoming carbon neutral is one such indicator. Eventually, the challenge will be on how to compute the Gross Environment Product -- a radical shift needed for the questionable GDP measure -- based on the valuation of ecosystem services, and in the process ensuring that ecosystems are no longer associated with poverty. This will first require discarding the basic economic assumption that growth automatically trickles down. It doesn't.
Then only we can achieve Sabka saath, Sabka Vikas.
Participants at the 2nd International Dialogue on Himalayan Ecology, Chandigarh, Jan 28-29, 2017.
Kole wetlands, a Ramsar site, extends into three districts in Kerala. I was able to take out time out recently along with my friends from Thanal in Thiruvanthapuram to make a short visit to the paddy wetlands in Thrissur district. paddy wetlands are completely different from the kind of paddy farms we see in the intensively cultivated areas of Punjab and elsewhere. Usha write a lovely diary piece on our visit. I am sharing it, taking it from the Thanal website."It was not a planned visit to the Thrissur Kole lands recently. It happened because of an important meeting that took place in Thrissur where Devinder Sharma, the well known writer and expert on food and trade policy, joined to deliberate about Ecosystem Services of agriculture land in India. Sridhar, R from Thanal also participated in this meeting . There were discussions on wetland paddy cultivation and its importance to water and biodiversity protection . Many other values of wetland paddy fields like recreational value , tourism , etc were discussed . But many of the paddy fields in India are irrigated and very exploitative in nature like in Punjab and Andhra Pradesh. Here paddy has a negative ecosystem service value. Sridhar said that it was an interesting session . It is very difficult to encompass the diversity of Indian agriculture and hence its ecosystem value.
So on 8th we thought of taking Devinder Sharma to the Kole wetlands in Thrissur district. Raju S, an ornithologist and programme coordinator in Thanal took us to Manakkody which is close to the town . He is a regular visitor to Kole lands and studies the dynamics of Kole wetlands and paddy cultivation. He focus on birds and its relation to agriculture and he had interesting story to share with us. Kole lands are a very productive wetland ecosystem where farmers take one or two crops of paddy and cultivate fish in between . Even before green revolution this region used to yield well without much intense farming . One of the main activity was to de water the wetlands and do sowing. Then take a good harvest. All those have changed in the last 30-40 years . Traditional seeds were replaced and it resulted in changes in the farming practices also. Most of the area is now under a single variety called Jyothi, a popular high yielding variety from Kerala Agriculture University.Farmers were still there when we reached the field. Dewatering was still going on .
All the water is discharged in to a canal and is stored there. Women were seen doing weeding operation. We talked to some farmers standing near the shed which shelters ‘Petti and para’ , the dewatering equipment, which was introduced long back during British period. It used to be run on diesel and on electricity. Earlier farmers used wheel to dewater and they used to sing while doing this work. Those Songs also got lost during this transition. Do not know whether that had an impact on the production. ... To Read more, click on this link: http://thanal.co.in/article/view/visit-to-kole-lands-of-thrissur-kerala-52609238
Deep in the forests of Vazhachal-Sholayar in the Western Ghats, I met Maya. She is a tribal belonging to the Kadar tribe. Faced with extinction, there are only about 1400 Kadar in the world, of which about 850 live in the tribal settlements in Thrissur district in Kerala (about 150-200 kms from Kochi in Kerala) They depend on forest resources for their sustenance. Home to hornbills, elephants and over 200 animal species, the Vazhachal-Sholayar forests are rich in resources for the Kadar tribes to bank upon. Since the Kadar tribes have not been traditionally into agriculture, the maintenance and conservation of forest resources is vital to them. Maya, along with a few more, had camped on the big rocks on the banks of a rivulet. To learn more about them, Usha Soolapani and Sridhar R from Thanal in Thiruvanthapuram and I decided to walk up the rocks to meet some of them camping there. With just bare necessities, which includes a few aluminum utensils, a few clothes and a couple of bed sheets, Maya has been camping here for about two months. A frail puppy was tied outside the makeshift tent. The condition of the tent can be seen in the accompanying picture.
Usha and Sridhar did the talking being able to converse in Malayalam as well as Tamil. Maya told us that the entire family gets out into the forests to search and collect some tubers which are used in cosmetics, along with honey and a couple of minor produce. Sridhar Radhakrishnan tells me this tuber plant is called Manjakoova in Malayalam. It is an Yellow Arrowroot. She gets about Rs 100/kg for the cut and dried root tubers. You can see a picture of it in her hand.
It is heartening to know that WWF-India had earlier initiated a dialogue with the Forest Department to set up a simple honey filtration unit for the Kadar communities. A benefit sharing mechanism from honey sale through the Forest Development Agency was also worked out. I am not aware of how this mechanism works. Since the Kadar have immense knowledge about ethnobotany I see an immense potential of documenting the traditional knowledge of some of the lesser known properties of the plant species found abundantly in these forests. It will be good to know of the benefits in monetary terms, if any.
When they move to inside of the evergreen forest they put their essentials on a machan so that it escapes the eyes of wild animals. I asked Maya if she was content with her living conditions. She said yes and when I suggested why doesn't she move to the nearby town she flatly refused. She told us that she and her family were very happy with what they are doing. But perhaps the next generations will look at it differently. Her four children are in a school for tribal. I only hope the next generation helps improve the lifestyle, and helps strengthen the bonding with nature, using modern technology and expertise while at the same time making an economic transformation. But I only hope the next generation does not push for a complete abandon of the tribal culture.
I am back from a two-day workshop held at the Kerala Agricultural University. Why I am keen to share the outcome of this workshop is because of the tremendous implications it is expected to have in formulating a mechanism to provide an assured income to farmers every month.
Take for instance the hit farmers have received by way of a severe drop in incomes, mostly in the range of 50 to 70 per cent, from notebandi. While farmers are suffering silently, the impact demonetisation will have on the livelihood security of small farmers will last for several months, if not years. Comparatively, the income of employees in the government and the private sector are not impacted just because they get an assured monthly salary package. Come what may they keep on getting the monthly salary.
Nothing wrong. But if employees can get an assured monthly salary package, why can’t we put in a mechanism whereby farmers too get an assured monthly income, a kind of a take home income package every month? After all, they produce food for the country, and the final price of their produce is fixed by the government. This is exactly what we, a group of ten economists and researchers, were trying to figure out at the recent workshop in Kerala.
It isn’t as easy as many of us think. Ever since I started demanding a Farmers Income Commission which works out the assured monthly income a farmer must get, there have been a lot of questions by policy makers. While most people agree on the need to provide farmers with an income package, what remains unanswered is how to do it? I have been asked this question time and again.
The Kerala workshop was second in the series of attempts I have made to ascertain a mechanism or a formula by which a minimum income for farmers can be assured. It was in the month of November last year that I brought a team of researchers, economists and key leaders from NGOs together for a three day brainstorming session at Hyderabad. The good news for farmers is that the Hyderabad workshop came out with very positive outcomes. We were able to broadly identify the contours under which a farmer’s income can be calculated and have made some projections. I am hoping by the end of March we will be able to provide a definite framework for working out the farmer’s income.
The Kerala workshop was an effort to value the ecosystem service farmers provide. The concept of ecosystem services is relatively new and includes the monetization of ecological services of natural resources. While the monetary calculations have been broadly worked out for forests, wetlands and even rivers, the Kerala workshop for the first time has been able to provide an economic value to the kind of ecosystem services farmers provide when they take to cultivation. Payments for these ecosystem services have been denied to farmers so far.
Before we go any further, let’s first look at the prevailing levels of farm incomes. Economic Survey 2016 tells us that the average income a farmer gets from farming activities, including what he keeps for his family consumption at home, in 17 states of India is Rs 20,000 a year, the government has promised to double farmers’ income in the next five years. This is much below the poverty line, and by all standards is not even a living income – an income on which a farm family can survive.
But we are told increasing productivity and bringing down the cost of production is what the government intends to do. Expanding irrigation is a necessary input for raising productivity, too has often been emphasized. Everywhere I go I find the ministers, policy makers and economists repeating this.
I am not denying that crop productivity is low in several parts of the country. But productivity alone is not the factor that has brought India into the grip of a terrible agrarian crisis. If crop productivity alone was the factor, I see no reason why Punjab farmers should be committing suicide. In 2015, as many as 449 farmers have committed suicide in Punjab, the food bowl of the country. This is getting worse with a new gory trend I am witnessing in Punjab. Indebted farmers are killing their children before killing themselves. Their argument has been that even the children will not be able to get out of the debt cycle.
Punjab has 98 per cent assured irrigation. This is the best any country can think of. Even such a high percentage under irrigation has not been able to stem the suicide tide. With assured irrigation, and a wheat productivity level of 45 quintals/hectare, which is equal to that in the US; and a productivity level of 60 quintals/hectare for paddy, almost matching with the paddy productivity levels in China; I find no reason why Punjab farmers should be ending their lives.
My argument has been that farmers are dying because they have been denied their legitimate income. The Minimum Support Price (MSP) they receive for wheat and paddy has been deliberately kept low. In the past 4 years, the average annual increase in MSP has remained in the bracket of 3.25 to 5.0 per cent on an average. This is not even able to offset the inflation increase.
Farmers are therefore being penalized to grow food. They are being deliberately paid less to keep food inflation low. In other words farmers are being knowingly kept impoverished. Let’s be clear. While crop insurance is a necessity, the Pradhan Mantri Fasal Bima Yojna cannot be game changer unless more farmers get the price for out which they genuinely deserve.
For nearly four decades now, I have heard economists repeat the same prescription year after year – use technology to raise productivity, reduce cost of production, go for crop diversification, improve irrigation efficiency – per drop more crop and shift to electronic trading to bypass the hoard of middlemen who squeeze farmers income. Listening to all these suggestions most people genuinely believe that the agrarian crisis is primarily the doing of farmers. Because they have not adopted latest technology, new crop varieties, do not know how to use bank credit, and are therefore not able to reduce the cost of production as a result of which their outstanding debt keeps on mounting.
Doubling the farm income by raising crop productivity is the policy thrust. This is where the entire prescription being doled out for improving farm incomes goes wrong. Agricultural economists had so far blamed farmers. But I wonder whether it is farmers who have failed or is it the economists and policy makers who have failed farmers. #
किसानों के लिए भी तय हो एक आय Gaon Connection. Jan 14, 2016http://www.gaonconnection.com/samvad/a-fixed-income-for-farmers
Despite cash crunch hitting where it hurts most, farmers have taken the demonetisation hit silently.
On the New Year eve, when Prime Minister Narendra Modi tried to assuage the severe pain left behind by the devastation caused to agriculture by demonetisation, he was in a way acknowledging how courageously farmers had faced the blow. Despite cash crunch hitting where it hurts the most – bumper crops discarded, and farm incomes dropping by 50 to 70 per cent on an average -- farmers have rather taken to the hit quietly.
But that’s the way it has always been. A day after the Prime Minister’s address, the National Crime Record Bureau (NCRB) released its annual report. According to its latest estimates, 12,602 farmers had committed suicide in 2015, an increase of 2 per cent over the death toll recorded in 2014. Between 1995 and 2015, a period of 21 years, more than 3.18 lakh farmers have committed suicide. With mounting indebtedness, poverty, increasing health expenses and other farming-related issues shown as the primary reasons, but without causing any uproar or political unrest, farmers have instead taken it quietly to the gallows.
After two years of back-to-back drought, when farmers were expecting a normal monsoon to help them to emerge out of the cycle of distress they had quietly borne, demonetization struck. Call it a shock therapy or a surgical strike but the blow it inflicted on the livelihood security of millions of farmers has been crippling. Pictures of farmers dumping tomato/potato onto the streets; feeding the unharvested crop to cattle; farmers giving vegetables free to the consumers; dairy workers waiting for their daily wages; farm workers sitting idle and so on are still afresh in our memory. But I have always maintained that in many ways the damage cash crunch has caused to agriculture is much more severe than the cumulative impact of the two consecutive years of drought.
The repackaging of some of the existing schemes and shown as fresh sops the government now promises to launch in 2017 to soften the blow of demonetization will certainly not be enough. Converting Kisan Credit Card into RuPay card, Providing Rs 6,000 to pregnant women, doubling the NABARD support to cooperative banks and societies, and the enhancement of existing benefits already existing under rural housing may sound to be extending an olive branch to dispel the rural anger but as has been widely reported these schemes were already in operation but not implemented in right earnest. A fact check provided by Business Standard (Jan 1, 2017) has very clearly shown how exiting schemes are being recycled.
Take for instance rural housing. It is claimed “the number of houses being built for poor under the Pradhan Mantri Awas Yojna in rural areas is being increased by 33 per cent.” An investigation by Down to Earth magazine has shown that against a target of 30 million rural housing units by 2020, only 32 housing units have been constructed so far and that too in just one state. The subsidy provision to add additional floor or a puccahouse too is nothing new.
Writing off the interest for two months on cooperative loans taken by farmers too is no benefit. After Nov 8, cooperative banks have practically remained inoperative as a result of which farmers have not been able to pay back loans. Some analysts have shown that the interest write-off comes to less than Rs 1,000 on a loan of Rs 1 lakh. I don’t know how the interest write-off for two months is being seen as a financial relief for the beleaguered farmers. The outstanding loans drawn from nationalized banks remain untouched. Home Minister Rajnath Singh has made it abundantly clear when he told a political gathering in Uttar Pradesh that a loan waiver is not possible because of the huge financial implications.
The indifference towards agriculture stems from the existing policy bias. Successive governments have been making efforts to translocate farm workers to the urban centres. The National Skill Development Council projects the percentage of farmers to be reduced from the existing 56 per cent to 38 per cent by the year 2022. It actually targeted to bring down the farm population down to 18 per cent initially, but later revised its estimates. Former RBI Governor Raghuram Rajan has been on record saying that the biggest reform will be when farmer are pushed out of agriculture to provide cheap labour for the industry. Deputy Chairman of the NITI Ayog too has been reiterating this time and again. This follows a dictat from the World Bank way back in 1996 wanting 400 million people to be moved out of rural areas by the year 2015. Accordingly, pushing farmers out of agriculture is the only way to move people out of poverty. The underlying idea is to move people out of rural areas into the cities where they will be employed as dehari mazdoor.
While agriculture gets an empty promise to double farm incomes in the next five years, Minister for Urban Development, M Venkaiah Naidu, has shown where the thrust of the economic policies are. He says the plan is create 22 more cities of the size of Bangalore. In addition, the landscape of 3,041 existing cities will have to be transformed to make them more livable. He says this is important to achieve economic growth. The entire effort therefore has been to create economic conditions that forces farmers to abandon farming and migrate to the cities. To say that agriculture sector has failed to keep pace with the economic growth the country has witnessed in the last 15 years is a clever ploy to cover up the deliberate efforts to keep farmers impoverished.
At a time when MNREGA budget exceeds the budgetary provisions made for agriculture, employing 56 per cent of the population, I am not expecting Budget 2017 to shift the focus to turn farming economically viable. Although the Prime Minister has time and again said that his government is for the farmers, a slew of measures that have been spelled out to make farming viable like providing soil health cards and neem-coated urea fertilizer are useful inputs but farming needs more public sector investments and enhancing income support. Budget 2017 cannot be expected to provide all the economic solutions but can certainly be indicative of a policy thrust towards reviving the rural economy. This will require financial support for setting up rural infrastructure, including more resources for a net work of regulated mandis and rural godown. According to Commission for Agricultural Costs and Prices (CACP), there exists only 7,000 regulated mandis in the country at present against the requirement of 42,000 mandis. This will help providing an assurance against distress sale by farmers.
Providing urban amenities in the rural areas, as opined by former President Abdul Kalam, now stands forgotten. Facilities like educational institutes, colleges, hospitals, along with agri-based industries in the villages and at the block level will create opportunities within the rural areas drastically reducing the migration to urban areas.
Although Finance Minister Arun Jaitley had listed Farm Incomes to be his top priority in the first full Budget he delivered in 2015, but nothing concrete has been recommended so far. My suggestion would be turn the CACP into a ‘Commission for Farmers Income & Welfare’ (CFI) with the mandate to work out mechanisms to provide a monthly assured income to farmers. As per the Economic Survey 2016, the average annual income of farming household in 17 States is a mere Rs 20,000. The effort should be to ensure what the farmers get is in accordance with the minimum living standards laid out under the 7th Pay Commission. #
After Demonetisation, How about a Surgical Strike on India's Meagre Farming Incomes? The Wire. Jan 6, 2017. https://thewire.in/97577/farming-rural-economy-demonetisation/
The New Year opens up on a rather depressing note. A day after the partying was over, the National Crime Record Bureau (NCRB) released its latest report on farmer suicides. Accordingly, the trend shows a steep rise with 12,602 farmers committing suicide in 2015, the latest year for which data has been collected. On an average one farmer, ended his own life every 41 minutes somewhere in India.
Compiling the farm suicides figures released officially so far, between 1995 and 2015, a period of 21 years, a total of 3,18,528 farmers have committed suicide.
This is nothing but a serial death dance being enacted on the farm. Call it by any name, the unending saga of farmer suicides is certainly an outcome of the faulty economic policies being promulgated all these years whereby farmers have been deliberately kept impoverished. Agriculture has been systematically rendered economically unviable as a result of which farmers
have been pushed into a vicious cycle of indebtedness. Even in Punjab, the food bowl of the country, while farm incomes have remained static, farm indebtedness has multiplied 22 times in the past decade.
True to what a former Prime Minister Charan Singh had once said: “A farmer is born in debt and dies in debt” the appalling distress levels have only worsened. Even the latest NCRB data shows mounting indebtedness and farm-related issues to be the primary reason of farmer suicides. The
other two main causes – poverty and illness, too can be clubbed in the same category. Both are related directly to declining incomes. Several studies have shown health expenses to be a major drag pushing farmers into poverty. And how deeply the farmers are buried under indebtedness
becomes evident from a study done by the Chandigarh-based Centre for Research on Rural and Industrial Development (CRRID). Accordingly, 96 per cent of the rural households in Punjab have incomes lower than the expenses. In all, 98 per cent of the rural families remain indebted.
With 4,291 suicides recorded, Maharashtra tops the chart. This is a little higher from the 4,004 farm suicides reported a year earlier, in 2014. For two consecutive years – 2014 and 2015 – Maharasthtra has been holding the dubious distinction with a third of the total farm suicides reported in the country actually happening within its borders. In addition, Karnataka, Telengana, Madhya Pradesh, Chhattisgarh, Andhra Pradesh and Tamil Nadu are the states with a large number of farm suicides. Nearly 87 per cent suicides, a total of 11,026 suicides, have been collated from these seven states. If we look at the country’s map, these states are closely knit geographically and form a big farm suicide block extending from central
India to the coastal regions. No farmer suicides have been reported from Bihar, Jharkhand, West
Bengal, Himachal Pradesh, Uttarakhand, and Jammu & Kashmir, Nagaland, Mizoram and Goa. But Bihar has reported 7 suicides among farm workers, 604 in Tamil Nadu, 21 in Jharkhand, and 709 in Madhya Pradesh. If I were to include both cultivators/farmers in one category, the death toll of 12,602 persons who died on the farm in 2015 is 2 per cent higher than the toll of 12,360 reported a year earlier, in 2014. This confusion of segregating farmers and agricultural workers separately
happened last year because the government wanted to show a decline in suicide numbers.
Adding the death toll in both the categories – 5,650 farmers and 6,710 agricultural workers, the total for 2014 came to 12,360, which was 5 per cent higher than the farmer suicides that happened in 2013. In other words, farm suicides have been on an upswing despite the valiant efforts to
downplay the tragedy. For instance, the latest NCRB data shows 100 farmers committing suicide in Punjab in 2015. In addition, 24 agricultural workers have ended their lives. The total farm suicides recorded in Punjab therefore comes to 124. This is far less than the 449 farm suicides that the
Punjab government has officially acknowledged. The effort to downplay suicides emerges from a trend that Chhattisgarh started in 2011 when it began showing zero farm suicides, four in 2012 and again zero in 2013. In the latest data, 954 farm suicides have been recorded in Chhattisgarh.
Nevertheless, despite trying to scale down the number of farmer suicides to paint a rosy picture for the farm sector, the terrible agrarian crisis that prevails is loud and clear. To understand the relationship suicides has with the crisis that prevails on the farm, I have asked a number of farmers who survived the suicide attempt as to why they ever thought of committing suicide in the first instance. While psychologists and sociologists may do a better job, what I gather is that those who wanted to end their own lives actually took the extreme step so as to leave behind a strong political message.
They did not resort to protests or violence and instead took their own lives simply to shake up an indifferent administration to shift focus urgently and reating economic hardship that forces farmers to move out of agriculture,so as to provide cheaper work force for infrastructure, construction and real estate projects. The projections being made by the National Skill Development Council makes this abundantly clear. In the next five years, by 2022, it aims to reduce the work force in agriculture from the existing 57 per cent to 38 per cent.
This process has to be reversed. Pushing people out of agriculture to migrate to urban cities is not the way forward. The challenge lies in making farming economically viable and sustainable. But since 1995, successive governments led by Prime Ministers – P V Narasimha Rao, H D Deve
Gowda, Inder Kumar Gujral, Atal Bihari Vajpayee and Manmohan Singh – have failed to provide any succor to the dilapidated farming sector. Although Prime Minister Narendra Modi too has claimed that his government is devoted to the cause of the poor as well as the farmers, it remains to be seen whether he will be able to revive agriculture, and bring a smile on the face of farmers. Let us hope 2017 turns out to be the dream year for farmers. #
As the year 2016 passes into history, I am sure it will be remembered by farmers and farm workers as a particularly bad year for agriculture. It was only in the mid of the year when monsoon showered its blessings bringing respite to the drought-affected regions. But no sooner had the monsoon rains withdrawn and it was time to sow the winter rabi crops, the unnatural hazard of Notebandi (Demonetisation) struck.
For farmers and farm workers, 2016 was a year of living dangerously.
It came as a heavy blow. In many ways the blow is so severe for farming communities across the country that even after withstanding the fury of the two years of back-to-back drought, the pain left behind by this shock therapy will take at least a year or two to lessen. The bitter harvest has resulted in farm incomes falling by as much as 50 to 70 per cent within a span of 50 days, and the disastrous implications it will leave behind on the livelihood security of millions of small farmers, agricultural workers and the poor will be too difficult even to be spelled out.
I wonder if the government will announce relief to farmers, farm workers and the unorganized labour force in the coming budget. After all, if there can be a flood relief, and a drought relief to mitigate the impact, how about providing a Notebandirelief when the impact has not been any less severe than the natural calamities.
Take a look. Just as the year comes to an end, the first plucking of tur dal is in the market. This early crop has arrived in Gulbarga in Karnataka, Kurnool in Andhra Pradesh, and Indore in Madhya Pradesh. Prices have crashed, much below the minimum support price (MSP). Against the MSP of Rs 5050 per quintal, wholesale prices are ruling between Rs 3,666 per quintal in Andhra Pradesh and Rs 4,570 per quintal in Karnataka. Prices are expected to further slump when the harvest from Maharashtra, Gujarat and Madhya Pradesh starts to pour in.
It was essentially the high retail prices that prevailed during the past two years, reaching a peak of Rs 200 per Kg earlier this year, coupled with the jump in MSP, from Rs 4,625 per quintal to Rs 5,050 per quintal that farmers shifted to tur or Arhar expecting a higher income. A record 4.3 million tonnes of tur harvest was expected this year, quite a significant increase from 2.46 million tonnes produced last year.
The story of tur is the same as that of moong. Against the MSP of Rs 5,225 per quintal, an increase over Rs 4,850 per quintal that was given last year, reports showed prices crashing after the crop started hitting the mandis since September. Across the country, farmers have been forced to sell the crop at prices much lower than the MSP announced.
Notebandihas certainly added to farmer’s woes. And the agricultural markets have still not been able to recover.
Take the case of the APMC market in Navi Mumbai. A CNBC TV report shows the situation to be continuously distressing. 50 days after the Nov 8 withdrawal of the Rs 500 and Rs 1000 currency notes, prices for farmers have dipped by 50 to 60 per cent. Considering that roughly eight to ten tonnes of vegetables are getting wasted in the Navi Mumbai mandi, it becomes obvious that many farmers are returning empty handed. Wholesale traders are blaming the retail trade for not being able to buy their normal requirements due to the cash crunch. Whatever be the reason, it is the farmer who is left to bear the brunt.
Navi Mumbai is no exception. Even in the APMC market in Azadpur, New Delhi, farmers are being forced to sell at a distress price. Not only for vegetables, even prices of flowers have crashed in far away Indore, in Madhya Pradesh. An IndiaSpendreport quoted a farmer saying: “Four days before and even after Notebandi, I was selling sevanti (chrysanthemum) flowers at between Rs 30 and Rs 40 a kg; now sell between Rs 4 and Rs 6 a kg.” Farmers cultivating flowers had lost roughly 50 to 80 per cent of their income post Notebandi.
The story is no different for cotton, soybean, basmati rice and for all winter vegetables like tomato, potato, cabbage, cauliflower, matar, palak and gajar. However, that Notebandi has struck a deadly blow to farmers is still being refuted by the spokespersons of the ruling party. In fact, I have been saying for quite some time that the impact of Notebandion farmers has been much more severe than the cumulative impact of two consecutive years of drought. A spokesperson had the timidity to ask me on a TV show the other day for empirical evidence. I wonder if any of the spokespersons can provide an empirical study for any of the claims they have been making after Notebandi was unleashed in the country.
Nevertheless, New Delhi-based author Ashim Choudhury was able to bring out the grave tragedy that had befallen farmers. I call it a tragedy for the simple reason that it is for no fault of theirs that they are left to bear the consequences of a man-made crisis. Many mainline economists and fund managers see this as a ‘short-term’ crisis. It may be ‘short term’ for them since they see their businesses returning back to normalcy soon but imagine how the families of small farmers, petty traders and landless workers must be coping when the little cash they manage every day to somehow manage their livelihood security too is drained away.
In an emotive but realistic piece expressing the plight and agony the farmers must be undergoing after being at the receiving end of the shock therapy, Ashim Choudhury sums it up brilliantly in what he wrote a month after Notebandi:
"I bumped into a wayside vegetable market in New Delhi .. and guess what. A ten rupee note could buy me a kilo of potatoes, a kilo of beans, a kilo of cabbage and 3 stacks of palak.“I should have been happy buying such dirt cheap veggies .. but I was weeping for the farmer. “What price would he have got? Rs 2 a kilo for potatoes … after months of watering and labour? “So he needs to grow 7 kilos of potatoes to buy a packet of beedis or a single stick of a Gold Flake cigarette? “Small farmers have always got a raw deal but demonetization has kicked them even harder, Mr Narendra Modi. “I love cheap vegetables but I don’t want to see the farmer selling himself so cheap.“Jai Jawan …Mar Kisan !”
It’s time to say goodbye to 2016. Let’s hope the New Year brings in much joy and happiness. #
A Kisan Parliament in session in Chandigarh
Enough is enough. Farmers have to take to the stage themselves if they want farming to be at the centre of the country’s economic radar screen. Because they failed to build a political constituency all these years, political parties across the spectrum have treated farmers and agriculture only for two purposes – vote bank and land bank.
Is this possible? Will it be ever possible to bring back the pride with which farming was treated in the past? Will farming be treated as not only a mainstay of the economy, as it is generally referred to, but as an engine of economic growth?
I have never been in doubt. But this is possible only when the farmers themselves wake up; are able to come together, organize, get unified, in a manner that they are able to influence politics. Making the politicians (and the political parties) take them seriously is certainly the next step. But to achieve that, the first and foremost is the ability to come together, to forgo their political leanings and ideologies and to realise that they need to make 'Farmers First' as their unflinching motoo, objective and purpose.
On Wednesday, when the Rajewal faction of Bharti Kisan Union organized a Kisan Parliament in Chandigarh, ahead of the forthcoming Punjab elections, I am sure hundreds of farmers who had assembled to watch the proceedings of Kisan Parliament, probably held for the first time in the country, must have gone back empowered, realizing they too can make a difference. The best way perhaps is to make a direct intervention in the raging political discourse. And this is possible only if farmers stand up and confront the political leaders making it loud and clear that they can no longer be treated simply as door mats as the political parties have done so far. Kisan Parliament is only a small beginning. There are a number of other initiatives that are simultaneously required before farmers acquire a political voice.
Acting as the Speaker of this Kisan Parliament, like they do it in Lok Sabha, I had the onerous responsibility to ensure that not only decency and decorum is maintained but the leaders do not get into a meaningless glib talk avoiding the real issues as they normally do in State Assemblies. I did have to raise my voice a couple of times but then that has now become an operational hazard while conducting any political debate. But it also provided me an opportunity to explain and elaborate the questions for the benefit of the audience as well as to add a punch here and there to make the question more pointed. The questions were posed by the BKU president, Balbir Singh Rajewal, on behalf of the farming community.
The purpose behind this unique effort was to give an issue-based orientation to the ensuing elections (Punjab elections are expected to be held in February), as in the past the political parties had been fighting the elections by making false promises to farmers. After the elections are over, farmers are forgotten, and so are the promises. The farmer’s Parliament was also aimed at appraising the political parties of the expectations and demands of Punjab farmers. Moving away from the time when farmers were only expected to present memorandums to political leadership detailing out their demands, it was so heartening to see farmers directly confronting the leaders and seeking a definite roadmap and time schedule for what all they accepted.
Three major political parties fighting the forthcoming elections – Bhartiya Janata Party (BJP), Aam Aadmi Party (AAP) and the Congress (Cong) -- were represented by Harjit Singh Grewal, Kanwar Sandhu and Kuljit Singh Nagra, respectively. The ruling party – the Shiromani Akali Dal (SAD) was conspicuous by its absence. Perhaps the SAD didn’t want to face the angry farmers, let down by state policies in the past ten years of its rule.
Most of the questions were focused on the plight of farming; on the terrible agrarian crisis that prevails. These questions were a reflection of the neglect and apathy with which farming has been treated all these years. If Punjab, the food bowl of the country, is in such a pitiable condition, the fate of the rest of the country can be imagined. Despite very high crop productivity, perhaps the highest in the world as far as wheat and rice are concerned Punjab has turned into a suicide hotspot. There is hardly a day when newspapers do not report of farmers committing suicide in some part of the state.
Nevertheless, the question whether political parties will ensure a monthly assured income of Rs 18,000 for all farm hands evoked a very positive response from all the panelists. They also committed to thwart any effort being made to dismantle the procurement operations and render the mechanism of providing minimum support price (MSP) to farmers ineffective. AAP party even promised to provide the gap between MSP plus 50 per cent profit from its own resources as envisaged by the Swaminathan Committee.
Writing-off the mounting debt the farmers were faced with was another contentious issue. While the political representatives were at ease trading charges against each other, the BJP member was non-committal stating that the ruling SAD Coalition, with which BJP is a partner, had made it abundantly clear that it was not possible to waive outstanding farm loans. Both the Congress and the AAP however promised to do so. When asked whether the promise to waive-off farm loans is only confined to cooperative bank loans or all loans, AAP and Congress promised to write-off loans drawn from the nationalized banks too. They even spelled out a time frame, with AAP making it clear that it will first ascertain whether the loans were used only for the purpose for which they were taken. Only those outstanding loans will be struck.
The three-hour question answer session has at least made the political parties understand that the farmers’ anger was primarily centred on the failing farm economy. Economic security is what the farmers need and any effort to avoid addressing this particular fundamental cause, after the party comes into power, will be politically suicidal. At the same time, the announcement by BKU that such sessions will be organized at each political constituency inviting the party representatives will certainly go a long way in making political parties accountable. There is also a proposal to put board outside each village where farmers’ demands are spelled out. In a way, what is planned by BKU is something that I expect all farmers’ organizations to replicate. In Uttar Pradesh also, which goes to elections along with Punjab, farmer unions too need to evolve a mechanism to directly confront the political leadership.
It is high time farmers now take the centre stage in deciding the political discourse. When I say centre stage I don’t mean or suggest they should be thinking of contesting elections for entering the Vidhan Sabha or the Lok Sabha but to make effort to directly influence the electoral process. This is possible only if the farm leadership moves away from the usual practice of doing the rounds of political party offices to present memorandums but get into a direct mode of communication so as to bring forth what they expect, and also get assurances what will be delivered.
It’s time farmers learn to assert themselves. After all it is farmers who comprise the biggest electoral constituency. #
The Single Pass Round Bale System allows producers to harvest and bale in one pass requiring less equipment, time and manpower. Pic-https://www.deere.com
The desperation is clear. “Do you want to wait till people start dying? People are gasping for breath,” a fuming Supreme Court had asked the Central Pollution Control Board. This was in mid-November. The Apex court has been listening to a petition seeking action against burning of paddy straw by farmers, particularly in Punjab.
With sowing of rabicrops now almost complete, the burning of paddy stubbles has ended. And after high pollution had choked Delhi for a number of days following Diwali, life in the National Capital Region is also back to normal.
This has become an annual ritual. For the past 10 years or so I have seen the nation suddenly waking up to the scourge of paddy straw burning, particularly in Punjab, with satellite images from NASA being used to shift blame to farmers for adding to the already high pollution levels in New Delhi. Soon after the harvest of paddy, farmers have been resorting to burning the paddy stubbles in a bid to clear the crop field making way for the sowing of the next winter crop, primarily wheat. The window available before the next sowing is so short that farmers find putting the crop residues to fire as the best available option.
An estimated 20 million tonnes of paddy straw is burnt. And as the National Green Tribunal (NGT) had observed: “It is conceded that 70 per cent of the land covered by agricultural activity was put on fire by the farmers of Punjab who burnt farm residue,” further adding that stubble burning shoots up the carbon dioxide levels in the air by 70 per cent. “The concentration of carbon monoxide and nitrogen dioxide rises by 7 per cent and 2.1 per cent respectively, triggering respiratory and heart problems. Also, it was stated that soil loses a significant amount of nitrogen, phosphorous, potassium and sulphur, the total loss of nutrients being estimated at 1.5 lakh tones per annum.
Coming down heavily against the governments of Delhi, Uttar Pradesh, Haryana, Rajasthan and Punjab for its failure to take immediate steps to stop crop residues burning, the NGT has now even asked Punjab government to withdraw incentives, including grant of free power, to farmers who were caught burning paddy stubbles after the harvest. Earlier, it had directed state governments to launch criminal proceedings against farmers, impose a fine and a jail term of six months for those farmers who are caught burning the paddy stubbles.
I always thought it was rather unfair to lodge an FIR and impose a fine against farmers for burning the stubbles. The problem of paddy straw burning has actually been created by the combine harvesters and the blame is being very conveniently shifted to farmers. Earlier when farmers and farm workers would manually harvest paddy, there was hardly an instance of stubble burning. But with the advent of combine harvesters, the burning of crop residues has increased in direct proportion to the area being harvested by combines. It is therefore a problem created by a technology and going by the polluter pays principle it is the technology provider who should be actually asked to come up with a technological solution.
In case the technology provider in unable to do so, then the technology provide should be directed to pay for the resulting pollution, which in this case is the cost for environmental pollution resulting from stubble burning.
Combine machines cut the spike of the paddy plant leaving the stem intact. Since cattle do not feed on paddy straw, farmers find it difficult to replough as the stubble doesn't decompose. Farmers have no time to remove the stubble from the fields due to paucity of time since they have to prepare the land for wheat sowing. Moreover, it involves costs, something around Rs 5,000 per acre extra, which the governments are reluctant to pay. At a time when the average income per acre in Punjab does not exceed Rs 3,400 it is futile to expect farmers to incur double the cost for clearing the fields.
All the solutions being advocated to stop the stubble burning are very expensive, involve a number of machines, and are time consuming. In fact it is shocking to see the kind of solutions being put forward by the state governments before the National Green Tribunal. Desperate to suggest a remedial measure so as to avoid the court’s wrath, I find the suggested technological interventions to be bordering stupidity. Most of the solutions being suggested are simply based on what some progressive entrepreneurs are proposing. Since every disaster is a business opportunity, I find a number of meaningless but expensive solutions being forwarded.
The most common technological intervention being proposed is to promote the use of a Happy Seeder machine. Since the machine costs around Rs 1.20 lakh, it is proposed to enhance the subsidy component to 90 per cent, from the existing 50 per cent. While the Happy Seeder manufacturers will certainly laugh all the way to the bank, the fact remains that nine out of ten farmers using Happy Seeder machines actually burn the stubble before using the machine. Happy seeder machine, which actually is meant for zero tillage, will certainly not be helpful as the stubble collects at its base making it difficult for the machine to operate.
I find it amusing to find the Punjab government for instance drawing up a Rs 6,600-crore plan to use a set of machines to get rid of the problem. In addition to Happy Seeder machine, it involves using Straw Reaper, Chopper, Reverse plough, a Baler and a Rotavator. This is a prohibitively expensive proposition and would end up only draining the exchequer. Moreover, Rotavator also needs the use of a heavy duty tractor, exceeding 60 HP, which not many farmers have.
The easiest of the solution lies in directing the combine-harvesters to come up with a modification that allows it simultaneously to cut the paddy straw from the base of the plant. The combine harvesters can either come with a baler machine attached or incorporate the baler in the machine itself that cuts the paddy straw from the base of the plant and converts it into bales. The combine harvester should thereby provide grain and at the same time turn the straw into bales which can then be sold by farmers. The machine will help turn paddy straw into an economic option for the farmer.
If you are thinking this kind of technological solution will require more time for the combine harvesters to make for a technological improvement, let me tell you a leading manufacturer of combine harvesters – Canada’s John Deere has in partnership with the US-based Hillco Technologies – already developed a next generation machine for harvesting corn wherein the corn stems are baled in one simple step. The Hillco Single Pass Round Bale system which allows the combine harvester to harvest and bale in one pass is what is required for paddy harvest and bale. I am sure the combine manufacturers will be able to provide this amendment for the next paddy harvesting season. #
For more details: John Deere and Hillco Technologies Introduces Single Pass Round Bale System. https://www.deere.com/en_US/corporate/our_company/news_and_media/press_releases/2014/agriculture/2014aug21_hillco_bale_system.page
A typical wheat harvesting scene in Punjab -- Forbes India pic
Speaking from the ramparts of the Red Fort in New Delhi, India’s first Prime Minister, Jawaharlal Nehru, had stated: “It is very humiliating for any country to import food. So everything else can wait but not agriculture.”
The year was 1955.
More than 65 years after Jawaharlal Nehru made known the humiliation he must have undergone while importing food, India is on a fast track to go back in history, to return to the days when the country’s food needs were being met from imports. Finance Minister Arun Jaitley’s announcement in the Lok Sabha on Dec 8, 2016 to scrap the existing 10 per cent import duty on wheat, despite the claims of a bumper crop, opens up the flood gates to cheaper imports.
Importing food is importing unemployment. Allowing cheaper imports at zero per cent duty will certainly hit the farming community which is already reeling under distress. It is always the livelihood of small and marginal farmers which is the first to be sacrificed when imports flow in. More so, the decision to import is coming at a time when wheat sowing is nearing completion, and all indicators point to a favourable crop season ahead, the decision will certainly hit farmers hard.It was on Sept 23 that the government had reduced the import duty from 25 per cent to 10 per cent. Moreover, I don't see why should the government be discriminating against agriculture. It has already announced its intention to raise import duties for steel and textiles to save the domestic industry. Why shouldn't agriculture too be protected?
Just two months later, on Dec 8, the government brought the import duty to zero. There is nothing significantly drastic that happened in these two months that the import duty should have been scrapped. The trade had already contracted for 35 lakh tonnes of wheat to be imported from Australia and Ukraine, of which roughly 20 lakh tonnes has already arrived. These consignments were contracted when the import duty was 10 per cent. I therefore see no reason why the import duty had to be completely scrapped.
Even if the wheat production was about 86-87 million tonnes against the government’s claim of 93.50 million tonnes, a shortfall of about 6 million tones, I see no justification in allowing imports considering that the total requirement of wheat for domestic consumption has been pegged at about 87 million tones. Why should there be a cause to worry when domestic production matched domestic consumption, is a question to be asked?
The answer is simple. Bowing before the powerful import lobby, which eyes huge profits at a time when international wheat prices are low, the government has opened up the borders. The international prices of wheat are ruling between $210 and $235 a tonne, which comes to be much cheaper than the prevailing prices in India. The trade therefore sees an enormous opportunity to take advantage of this beneficial market situation and the government has very kindly obliged them. Even if the retail prices of wheat have hardened and increased to Rs 21.50 per kg, I still don’t see any economic rationale in resorting to imports so as to bring down the market prices.
Another reason being cited is the precarious food stocks situation. As of Dec 1, wheat stocks with the Food Corporation of India (FCI) stood at 16.50 million tones. This is the lowest in the past nine years, since 2007. Although wheat stocks appear much less when compared with 26.88 million tonnes that existed last year, it is still enough to meet the buffer requirements till April 2017 after which the new crop comes in. But what I find intriguing is that for the past few years, especially when the FCI stocks exceeded 81 million tonnes a couple of years back, all out efforts have been to reduce food procurement.
Soon after it came to power in 2014, Food Ministry had warned State governments like Madhya Pradesh, Chhattisgarh and Rajasthan, not to provide any bonus to wheat growers over and above the Minimum Support Price (MSP). If they do so, the state will be responsible for the entire procurement operations it undertakes. As a result states have stopped giving bonus to wheat farmers. A higher price becomes an incentive for wheat farmers to produce bumper harvests, which in turn meant more procurement. In other words, the government itself wanted wheat procurement to come down. FCI is also being directed to move away from procurement and market intervention operations and instead go for future trading so as to realize a better price for its stocks. Punjab and Haryana has been continuously under pressure to dismantle food procurement operations.
In the World Trade organization (WTO) negotiations, India has always taken an appreciable stand for protecting its 600 million farmers. But back home, domestic policies are for more autonomous liberalization which means opening up to imports. To achieve this, successive governments have systematically squeezed public investments in agriculture and have been denying a fair and remunerative price thereby keeping farming impoverished. The government has already conveyed to the Supreme Court its inability to provide farmers with 50 per cent profit over the cost of production.
In recent months, import duty on potato has been brought down from 30 to 10 per cent, on import of crude palm oil from 12.5 to 7.5 per cent and refined palm oil from 20 to 15 per cent and for wheat from 25 to 10 and finally to zero per cent. I see an import surge in pulses, edible oils, wheat, apple, rubber, coconut, silk, fish and a horde of fruit products and juices. India already imports 60 per cent of its edible oil requirements worth approximately Rs 70,000-crore. This is the outcome of slashing import duties over the years despite warning from the Ministry of Agriculture as well as the Commission for Agricultural Costs and Prices (CACP).
Although imports are justified in the name of taming consumer prices, what is not being realized is that it is the small and marginal farmers who are forced to abandon agriculture.
Seen in the light of recent decision to encourage farmers in Mozambique, Uganda, Ethiopia, Myanmar and even as far as Brazil to produce pulses to be exported to India, the decision to open up for wheat imports is not at all surprising. After destroying the Yellow Revolution – oilseeds revolution that led to India becoming almost self-sufficient in edible oils in 1993-94, any effort to reduce domestic ability to grow wheat would be the beginning of the end of Green Revolution. For a country as large as India, it will be politically suicidal to revert back to the days of ‘ship-to-mouth’ existence when food came directly from the ships into the hungry mouths. India cannot be allowed to once again stand with a begging bowl in the international market. #
From an ANI news feed.
At a time when Indian economy is faced with a slowdown, it is the farming sector that stands crippled. Suffering from a back-to-back drought for two years in a row, demonetization has struck a much severe blow.
I am sure it will be sometimes before a clearer picture emerges. But all efforts to paint a bright picture for agriculture is now beginning to fall apart. While the serpentine queues in the urban areas show no signs of ending even after a month of demonetization, the picture in rural areas is too bleak. With bank branches not getting adequate cash, I know of villages where farmers had to return empty handed even after 7 days of standing in queues. What makes it worse is the fact, as Prof Ram Kumar of Tata Institute of Social Studies (TISS) points, nearly 81 per cent of the villages do not have access to bank branches.
Nevertheless, despite the claim by the Ministry of Agriculture of a higher sowing of rabi crops when compared with the area sown in the previous year, reality checks show that the area under wheat sowing is being deliberately compared with the sowings accomplished in 2015, which was a drought year. When you compare 17.4 million hectares by wheat sowing achieved by Dec 4 with the corresponding figures of 21.3 million hectares in 2013 and 20.9 million hectares in 2014, it shows the shortfall.
While, the difficulties farmers encountered in undertaking sowing operations has been much written about, it is the severe blow the farmers have suffered as the market prices crashed post demonetization. Even a month after, mandis in several parts of the country are partially operating. With demand subdued, prices have fallen across board. Only a day before, farmers in Paththal town in Raigarh district of Chhattisgarh dumped tomato on the national highway to express their discontent at the slump in prices. With trucks failing to arrive this year, the rich tomato pocket of Chhattisgarh saw prices fall to 50 paise kg. A few days earlier, farmers distributed potatoes free of cost outside the Uttar Pradesh Vidhan Sabha in Lucknow, dumping nearly 1,000 sacks of potatoes in protest against the suffering unleashed by an unprecedented cash crunch.
Market prices of soybean, cotton, basmati crashed. Vegetable and fruit growers have been hit the hardest with prices slumping to as low as 45 to 50 per cent. Cauliflower was selling at Rs 1/kg in Bihar; tomato was selling at Rs 1/kg in Andhra Pradesh; nearly 3 lakh tonnes of potato seed kept by farmers in cold storages in Punjab found no buyer; dairy farmers unable to buy feed for their cattle; tea gardens in Bengal closing down and many such reports have been pouring in from all over the country. With the government backing away from immediate succor, it is the arhtiyas (money lenders) that came to farmer rescue at many places especially with the cooperative banks/societies becoming non-functional.
Considering that 2016-17 witnessed a normal monsoon except in Karnataka, parts of Telengana/Andhra Pradesh and Tamil Nadu, I was expecting some kind of a revival in the farm economy. Knowing that farmers are not being paid a remunerative price over the years, it is only the rain gods that farmers rely on for bailing them out of a dire situation. This year, the rain gods didn’t disappoint. But the shock therapy imposed through demonetization has given such a big shock, the impact of which will be felt by farmers for quite long in future.#
Demonetisation. not drought, behind farming Community woes. New Indian Express, Dec 11, 2016.
Growing unemployment in rural India -- Pic YourArticleLibrary.com
On Tuesday, Nov 1, 2016, Haryana launched an ambitious scheme for post-graduate unemployed youth. Celebrating the golden jubilee of its foundation day, Haryana government announced an honorarium of Rs 9,000 per month for them if they put in 100 hours of work.
This is an excellent social security initiative. Growing unemployment is turning into a major socio-economic crisis and State government will have to come up with innovative ideas and plans to gainfully engage the younger generation. An estimated 30,000 post-graduate unemployed youth in Haryana will benefit from this scheme.
Coming two months after the Central Government revised the minimum wage for non-farm workers by 42 per cent, from the existing Rs 246 to Rs 351 a day, bringing it to a minimum of Rs 9,100 for a month, I think the policy makers and planners are getting to understand that every household needs a minimum living wage. At a time when inequality is widening at a phenomenal rate, and with the rich becoming rich and the poor being driven to the wall, any effort to provide gainful employment to the poor and marginalized has to be appreciated.
But the problem is that the policy makers’ vision remains by and large limited to the urban society. Their gaze is restricted and therefore they are unable to see beyond the expanse of the cities and towns. Whether it is the unemployment allowance for the youth or the rise in wages for the non-farm workers, you will observe the beneficiaries of the State’s largesse are invariably from the urban areas. The estimated 70 per cent majority population, which lives in the rural areas, is somehow left to fend for itself. Such a restricted economic thinking has steadily widened the gulf between the rural and urban areas.
Let me explain. The Haryana Agricultural University (HAU) has in a study worked out the net income of farming household cultivating wheat at Rs 4,799 per acre. Since wheat is sown in October and harvested in April, it is primarily a six-month crop. The net return from cultivating wheat therefore comes to Rs 800 per month from an acre. Considering that majority farmers have a land holding not exceeding three acres, their net income would be around Rs 2,400 per month. Surely these farmers and their family members put in more than 100 hours a month in the farm operations, and many of these farming households do have educated unemployed youth who fall back upon agriculture in the absence of job opportunities.
What it means in reality is that the farmers are not gainfully employed. If only agriculture was a remunerative profession it would have attracted a huge population of youth who are otherwise going from pillar to post in the cities searching for menial jobs. If only the policy makers had thought of ensuring a monthly average income of Rs 9,000 per hectare (which is roughly 2.5 acres) for a rural household I am sure the demographics would have changed for the better, and the pressure to create daily wage employment in cities would have lessened. Haryana has set aside Rs 324-crore for providing unemployment honorarium to 30,000 post-graduate unemployed. How about putting aside twice the amount, an additional Rs 648-crore, to help 60,000 educated but unemployed youth engaged in farming?
After all, if Haryana can make a budgetary provision for Rs 1,700-crore for the year long celebrations to mark the golden jubilee of its creation, I don’t see any reason for a financial constraint if it were to make a foray by reaching out to the rural unemployed. I am not saying that this amount will suffice to address the huge problem of unemployment and under-employment in the rural areas. But it will certainly mark a beginning. Wouldn’t this be in true sense Sabka Saath, Sabka Vikas that the Prime Minister has been strongly advocating?
The HAU study has in fact worked out the levels of net return from wheat cultivation for 11 districts. The Rs 800 per acre net return that I quoted earlier is the average for the state. The districts of Panipat, Rohtak, Karnal are faring much worse. In Panipat, the average monthly income per acre comes to a paltry Rs 223; in Rohtak Rs 291; and Rs 612 in Karnal. The better performing districts are Jhajjar (Rs 1620); Mahendragarh (Rs 1473) and Bhiwani (Rs 1070). However, going by the minimum income levels that should provide an economic security for a family, I don’t think even the best performing districts will be able to bail out a farming family from the trap of mounting indebtedness.
The continuing caste based reservation demanded by Jats in Haryana, Uttar Pradesh and Rajasthan, is primarily a pointer to the agrarian distress that prevails. In Haryana we have seen the destruction caused by the Jat agitation recently which was rather unfortunate. But the basic point that should be understood is that the dominant caste groups engaged in farming, and which includes Marathasin Maharashtra and Gurjar in Rajasthan, are enraged because over the past few decades’ agriculture has turned into a losing proposition. This is primarily because agriculture has been deliberately turned uneconomical so as to keep the economic reforms alive. As I have said time and again farmers are being knowingly kept impoverished.
This is corroborated also by the first-ever socio economic survey for rural India, released in 2015. Accordingly, the highest incomes of an earning member in 75 per cent of the rural households do not exceed Rs 5,000 a month. For 51 per cent households, manual labour including MNREGA is necessary for survival. That a progressive state like Haryana also falls in this category brings out the serious flaws in policy planning. I am therefore hoping that the Chief Minister, Manohar Lal Khattar, will make an effort to correct the prevailing bias against agriculture in policy planning. All he needs is to revive and overhaul the Haryana State Farmers Commission with a distinct mandate to come out with economic proposals to make farming attracting. It’s time to move beyond the usual clichés of raising productivity and lowering the cost of cultivation. Bringing income parity with other sectors of the society – bureaucrats, defense personnel, teachers, professors and government servants – is the crying need of the times. #
पीजी छात्रों की तरह ही खेती में लगे शिक्षित बेरोज़गारों के लिए भी भत्ता निर्धारित करे हरियाणा सरकार. Gaon Connection, Nov 4, 2016. http://www.gaonconnection.com/samvad/proven-hollow-with-all-development-for-all-claims
If like rich defaulters, farmers debt too was 'written-off' (and not waived), more than 50 per cent of farmer lives could have been saved
Family members of the farmers who had committed suicide in Bathinda District in Punjab -- Daily Mail pic
Wrapped in a blanket, many of you have been queuing up before bank as early as 4 am. Some have even lined up as early as 2 am, and waited endlessly standing for getting just Rs 2,000 of your own money back. I am aware that in the villages people had to walk quite a stretch and stand in the queues again and again for a couple of days.
I have been flooded with phone calls from villages across the country. People have called me to share their dismay, their anger, and their frustration. Some of course have been seeking advice, wanting to know how the scrapping of Rs 500 and Rs 2,000 notes will impact farming, and some were eager to know how demonetization will help the economy. But hearing the stories of agony and cries for help – wanting me to raise their voice for asking the governments to direct APMC to start trading, to find out where they can go and sell their potato, onion, and even paddy. Many told me, and sometimes burst out crying, telling me how they are unable to sow the rabi crop.
The pain and agony rural India is undergoing has largely failed to find space in the media, both print as well as electronic. I was appalled when I heard a senior economist say on a TV channel that farmers had no reason to complain since they have sold their paddy in the market for which they have got their minimum support price (MSP). It only shows how ill-informed they are. Only 6 per cent farmers in India get the benefit of MSP. What is not being realized is the distress sale that much of the remaining 94 per cent farmers have to undergo, and that too year after year.
Nevertheless, I want to draw your attention to another important issue that is being talked about in the media but will not be pursued for long. On Tuesday, while millions of people were standing in serpentine queues all across the country, a newspaper reported that the State Bank of India (SBI) had written-off Rs 7,016-crore of 63 willful defaulters. This includes Rs 1,201-crore of Vijay Mallya of Kingfischer Airlines, who has been on the run for quite some time now. An article in Business Standard (Feb 24, 2016) defines willful defaulters as: “truant borrowers – corporate and individuals – who, despite having the capability to repay money, do not cough up money. They are alleged to be doing it willfully. For lending banks, getting money from them is often a long legal battle.”In simple words, these are habitual offenders. They knowingly draw money from the bank with the clear objective of not repaying it back. And what shocks me is that the SBI has actually written-off the outstanding loans of these habitual offenders. I am sure you will agree the banks should have found a way by now to put them behind bars.
Instead, what baffles me is the explanation given by Finance Minister Arun Jaitley in Parliament on Wednesday. According to a report in Hindustan Times (Nov 17) Finance Minister asked opposition members in Rajya Sabha not to go by the literal meaning of write-off. “There is a little bit of malapropism involved in this. Don’t go by the literal meaning. Write-off does not mean loan waiver. Loan still remains. You still continue to pursue.”
The SBI chairperson Arundhati Bhattacharya later tried to downplay the entire saga of writing-off the loans of 63 willful defaulters. These loans are not waived off but have been put under a separate head called Accounts Under Collection. Accordingly, the bank will continue to follow up with the recovery process.
I find this explanation to be a very simple cover-up being provided to protect the willful defaulters. If the banks have failed to recover all these years the outstanding loan with interest from these defaulters, I wonder what special recovery mechanism they have now to get the money back. What is still worse is that this cover up is being enacted at a time when the entire nation is standing in long lines hoping that the black money will be unearthed.
This ‘write-off’ business is a privilege extended only to the rich borrowers. As if this is not enough, the government also tries to protect their identity. If you recall, the government had earlier refused to divulge the names of 57 borrowers who owed Rs 85,000-crore to the banks. “Who are these people who have borrowed money and are not paying back? Why this fact that the person has borrowed money and not paying back be not known to the public”, asked a bench headed by Chief Justice of India T S Thakur.
Let us make an effort to understand why I think ‘write-offs’ is a privilege for the rich. There is hardly a day when newspapers do not carry reports of farmers committing suicide in one part of the country or the other. In the past 20 years, an estimated 3.20 lakh farmers have ended their own lives. A majority of these suicides are because of the outstanding loans that farmers are unable to repay. I know of farmers who took their own life for inability pay back an outstanding loan of as low an amount as Rs 1.5 lakh. The other day a Punjab farmer tied up his 5-year old son to his chest and then jumped into a canal. He owed Rs 10 lakh to banks and the reason why he took his son along in the journey to death was because he felt even his son would not be able to repay the loan throughout his life.
On the contrary, I don’t find any rich defaulter committing suicide. They either run away from the country or are clubbed into the category of ‘willful’ defaulters or even defaulters which provides them immunity. These defaulters are first put under a separate head Accounts Under Collection, and after some time the performing assets in bank books become non-performing assets and are eventually written-off. Between 2012-15, Rs 1.14 lakh crore of non-performing assets (which is another name for rich defaulters) have been written-off. The Public accounts Committee informed Parliament in July 2015, that another Rs 6- lakh crore of NPAs have piled up.
This makes me wonder why the outstanding loans of farmers and for that matter the aam aadmiare not put under a separate head of Accounts Under Collection. Let the banks continue with their effort to recover the basic loan amount, but like the way SBI did to 63 defaulters farmers should also be told that their loan has been ‘written-off’. I am sure this step alone could have saved the lives of 50 per cent of the 3.2 lakh farmers who have committed suicide in the past 20 years.
Secondly, I see no reason why the names of defaulting farmers along with their picture be pasted on the notice boars in tehsil headquarters. They seem like petty criminals. And it is primarily because of the humiliation that defaulting farmers have to undergo that they commit suicide. If the names of rich defaulters are to be kept secret I don’t understand why the name of defaulting farmers should be made public. #
Long queues before banks -- Hindustan Times pic
While millions have been literally driven out of their homes, offices, shops and farms to queue up for exchanging the outlawed currency notes or getting their hard earned money from the banks, the demonetization exercise is possibly aimed at saving the banking system from a near collapse.
What appears to be an assault on black money is essentially a collateral advantage. There is no example that I know where black money has been unearthed using demonetization. This was of course known.
How important are the banks when it comes to maintaining economic balance? Well, if you have not forgotten, the collapse of Lehman Brothers, a global bank in the US considered too big to fail, triggered the financial crisis, which ultimately led to the global economic meltdown of 2008-09. I can therefore see the desperation to rescue the Indian banking system from an unmanageable credit crunch which can lead to financial downturn.
“A combination of negative interest rates (adjusted for inflation) and a boom in real estate and gold induced savers to increase investments in property and gold and cut down on their exposure to bank deposits and equity markets. This choked the flow of funds to banks and the capital market, making it tough for firms to raise capital,” Devendra Patil, head economist at India Ratings, was quoted as saying (Business Standard, May 31, 2014).
This was in 2014. Two years later, in 2016, the situation had only worsened with the bad loans in Indian banks continuously rising to a panicking level. With weak bank assets of Public Sector banks rising in a year, from 4-lakh crore in Mar 2015 to Rs 7.10-lakh crore in Mar 2016, which is 11.3 per cent of the loan book, the international rating agency CRISIL had downgraded rating of the debt instruments of eight PSU banks. Rising bad debts and declining profits had multiplied the risks in the banking sector. “In the face of mounting potential losses, an early clearance of the proposed Insolvency and Bankruptcy Bill will also play an important role to protect bank assets,” the former RBI Governor Raghuram Rajan had said.
Weak corporates with lower debt-servicing capacity had further worsened the situation. In another report, India Ratings had identified 240 of the 500 largest corporate borrowers reeling under stress as a result of which they may not be able to pay back loans taken from the banks. Accordingly, while Rs 5-lakh crore of debt falls under the stressed category, another Rs 6.7-lakh crore is under the ‘elevated risk of refinancing’ (ERR) for the financial year 2017. Knowing that the net bank debt of the top borrowers is roughly about 25-30 per cent of the total bank advances, the banks certainly are over-stressed.
India Ratings had concluded that for the overleveraged corporates, Rs 3.65-lakh crore debt is either in default or on the verge of default. An estimated Rs 7.04-lakh crore of equity infusion is required to defuse the precarious situation. Even such a huge amount will address only 4 to 6 per cent of the total outstanding debt (Indian Express, April 16, 2015).
But all that the government had promised by way of equity capital support under the ‘Indradhanush’ revamp plan was Rs 70,000-crore in the next four years. In addition, banks are expected to further raise Rs 1.1-lakh core from the markets to meet their capital requirement in line with global risk norms Basel III. Considering the piling of non-performing assets (NPAs), growing corporate debt restructuring, and the expected equity infusion to restore the health of the banking sector, the policy makers opted for the difficult route of demonetization. They couldn’t afford to allow the banking sector to go bankrupt, a gigantic mistake that happened with Lehman Brothers.
Before I take you to the implications, let’s also look at the burgeoning bank NPAs. The 27 PSU banks had written-off a whopping Rs 1.14 lakh crore in the past three years (2012-15). The Public Accounts Committee (PAC) subsequently informed Parliament on July 21, 2015 that banks had in addition accumulated Rs 6-lakh crore of NPAs.
Protecting bank assets has therefore become the top priority. To save the banks from a virtual collapse, the only option left was the draw from the household savings. According to a report in Business Standard (May 31, 2014), households are India’s biggest contributor of savings, accounting for nearly three-fourth of all savings (72.7 per cent) in 2012-13. But the problem is that two-third of the household savings is invested in physical assets like property and gold thereby depriving the financial markets of required capital. It was therefore important to divert household savings to capital formation, and this could be done only by a decree.
Household savings by the end of financial year 2013 stood at Rs 22,124.14 billion.
Stating that he understood the inconvenience being faced by people due to demonetization, Prime Minister Narendra Modi said: “My decision is a little harsh. When I was young, poor people used to ask for kadak chai (strong tea) but it spoils the mood of the rich.” The tough decision to demonetize the bigger currency notes, forming 86 per cent of the total currency in circulation, therefore seems primarily aimed at drawing out the household savings. As I said earlier, the impact it will have on eradicating black money is in reality a collateral advantage. This surely is welcome. But it appears as if demonetisation has been done to launch an unfettered assault on black money. It is the other way around. Fortunately, the thrust on removing black money provides a strong political advantage. This has been largely welcomed. It has of course to be followed up with a series of tough measures, including a tab on benamiproperties that the Prime Minister has rightly announced.
In lot many ways it is like killing two birds with one stone.
It seems a benchmark for household savings has now been set. Keeping the upper limit of Rs 2.5 lakh that can be deposited in a bank account without attracting any income tax scrutiny in reality sends a very powerful message. In future, it becomes abundantly clear for ordinary people that they should not keep more than Rs 2.5 lakh cash in their homes. Even now, in the first three days after demonetization was announced on Nov 8, the State Bank of India chief told a news channel that banks have received deposits of Rs 3-lakh crore. By Nov 24, when exemptions expire to use the old currency notes expire, the government expects bank deposits to exceed Rs 10-lakh crore. This would not only meet their ‘Indradhanush’ target of raising Rs 1.1-lakh crore from the market but would also provide enough capital to infuse equity as the means to deleverage over-stressed corporate, primarily in productive sectors like infrastructure, oil and gas, minerals and mining, and telecommunication etc. At the same time, it will helps banks to clean up the balance sheets.
As is being feared, the nationalized banks, saddled with capital after this exercise, will find it easy to reduce the lending rates. In other words, peoples’ savings will be used to provide cheaper loans to the corporate, which will use it for debt-servicing. I don’t understand why should this be the only route to ensure financial viability of investments when the government already has given huge tax concessions to the tune of Rs 42-lakh crore in the past 12 years (between 2004 and 2016). If only these taxes, good enough to wipe out poverty for 96 years, were collected there would have been no financial crisis in the first instance.
A week before demonetization, a RBI report showed how Rs 17 trillion returns from the exports done from India in the past 44 years is not reflected in the financial books. It is feared that this huge amount is parked in tax havens. Moreover, the monthly outward remittances in the first four months of 2015 had increased to $769 million. This makes me wonder if the financial position of the corporate is so attractive why cheap public finance should be made available to them on a platter. Why can’t the government instead ensure fiscal discipline? Why can’t the banks be made more responsible and accountable?
The poor as well as the middle class is being made to cough out its household savings, not all of which is black money, and that too at a low interest rate. Again, it serves two purposes. First, the household savings are coming in cheaper for the bold and the beautiful, the rich class that Prime Minister says is taking sleeping pills. At the same time, discouraging household savings will force people to save less and spend more on consumer goods. This will eventually raise demand. The more the people incur on consumerism, mostly unwanted, the more will be the contribution to GDP. This will keep the economic growth high. #
Pic: Hindustan Times An interesting study by #IndiaSpend tells us that New Delhi's air quality prior to Diwali, October 30, was better this year than what it was in 2015. The morning after Diwali, Delhi's air quality worsened 29 times. This conclusively proves that stubble burning in Punjab and Haryana was not responsible for choking Delhi. In any case, the peak period of stubble burning was prior to Diwali when air quality was rated better than last year. If stubble burning was the reason, the air quality before Diwali too should have deteriorated. So far, more than 60 per cent of wheat sowing is complete, so Delhi people cannot simply pass on the blame to farmers. Delhi didn't turn into a 'Gas Chamber' overnight but has been a 'Gas Chamber' for more than 15 years now. Stubble burning lasts for about 15-20 days. Is Delhi's air quality clean for the remaining days of the year? Come on, lets accept it. People of Delhi are responsible for the worsening pollution. They must take the blame and do something to solve a problem which is primarily their creation. This is not to justify stubble burning. But what needs to be understood is that stubble burning is a problem created by Combine-Harvesters. It is a problem created by a technology. Going by the Polluter Pays principle they should be asked to clean up. With the application of Combines increasing over the years, the problem of stubble burning is multiplying. Combine machines cut the spike of the paddy plant leaving the stem intact. Since cattle do not feed on paddy straw, farmers find it difficult to replough as the stubble doesn't decompose. Farmers have no time to remove the stubble from the fields due to paucity of time since they have to prepare the land for wheat sowing. Moreover, it involves costs, something around Rs 5,000 per acre extra, which the Govts are reluctant to pay.
There is no perfect solutions for stubble burning. All the solutions being advocated to stop the stubble burning are very expensive, involve a number of machines, and are time consuming. Happy seeder machine, which actually is meant for zero tillage, is not helpful as the stubble collects making it difficult for the machine to operate. Farmers using Happy Seeder machines to do wheat sowing actually burn the stubble in most cases before using the machine. Using Straw reaper, Chopper, Reverse plough, Rotavator, is a very expensive option, requiring more time. It also needs the use of a heavy duty tractor, exceeding 60 HP.Penalising farmers by imposing a penalty is not correct. NGT must review its decision in the light of the difficulties the farmers are encountering.My suggestion: 1) Provide an incentive of Rs 5,000 per acre to the farmers for taking care of the stubble. 2) Govt can impose fine for stubble burning only after it meets the additional cost a farmer would incur. 3) Direct the Combine-Harvester manufacturers to make a technology intervention/improvement which enables bundling of the straw like a Baler does. In fact, it must be made compulsory for the Combines to have a Baler attached. 4)Propagate a technology developed by the National Institute for Organic Farming which makes use of the straw for compost. Punjab soils need organic matter desperately and the effort should be to add as much organic content in the soil as possible.