Look beyond waivers for kisan 2 0

Look beyond waivers for kisan 2 0

Agri policy must set market mechanisms free to work effectively. When Lal Bahadur Shastri first shouted ‘Jai Jawan, Jai Kisan’ at Delhi's Ram Lila Maidan in 1965, he fleshed out a cardinal (मौलिक) truth about India's political imaginary: the idea of the brave soldier and the hardworking farmer as bulwarks (बांध/ मजबूत दीवार) of the nation. BJP, in the past three years, has adroitly (दक्षतापूर्वक) managed to hook its political messaging to the martial constituency with its uncompromising nationalist rhetoric and chest-thumping machismo (मर्दानगी) . The question is whether growing kisan unrest from Madhya Pradesh to Rajasthan will prove to be an unexpected political googly as we head towards 2019.
After all, the imagery of the hardpressed exploited farmer running the engines of the nation ¬ deified from the beginning of the republic in films like Mother India and Do Bigha Zamin ¬ remains an unshakeable shibboleth (सिद्धांत) of the Indian political imagination. So, will the kisan agitations prove to be an effective political lever for a desperate opposition looking for evocative handles to block BJP's electoral juggernaut or will this crisis taper off?
At the political level, BJP has, of course, been acutely focussed on the power of the farmer vote. Prime Minister Narendra Modi publicly declared his government's intent to double farmers' income by 2022 and BJP's 2014 manifesto promised to ‘ensure a minimum of 50% profits over the costs of production’ in agriculture. Yet, at the policy level, it has been confounded by the fact that the toolkit that our governments have traditionally used for managing agriculture is outdated and faulty. It is essentially trying to fix the wrong questions with the wrong answers.
The irony of MP's predicament is instructive. Chief minister Shivraj Singh Chouhan farcically (विनोदपूर्ण) went on a fast after his own police fired at farmers but agriculture is the one thing he has focussed consistently on since taking power in 2005. As the agricultural economist Ashok Gulati and his colleagues point out, the state's agricultural GDP grew at a staggering (चौंका देने वाला) 14.2% over the past five years and over thrice the national average over the last decade. “This is unprecedented in the annals of India's agricultural history. Even Punjab did not grow at this rate during the green revolution period.” Yet, despite this, average earnings of agricultural households in MP continue to lag far behind the national average. This is basically because while farmers have been producing more, their input costs ¬ water, diesel, fertilisers, etc ¬ have increased substantially (काफी हद तक) while prices for their products went down. A TOI analysis shows that between 2004-05 and 2014-15 in MP, the cost per hectare of fertilisers and seeds for wheat doubled while irrigation costs also increased substantially. This is of piece with the national agriculture story where after two years of drought, Indian farmers finally delivered a good crop for most commodities but saw their net margins going down ¬ in many cases into the red. That greater farm production in 2016-17 would lead to a glut in the market, prices would collapse and farmer incomes would consequently go down is Economics 101. Yet, the problem is that most of our policies have been fixated on giving farmers a minimum support price (MSP) and not enough on creating conditions for market mechanisms to play out effectively. Government fixes MSP for 23 commodities but official procurement is limited to only two ¬ wheat and rice ¬ and that too in only a few states. It is estimated that over 90% of India's farmers do not get the MSP price and are dependent on markets, which are circumscribed by arbitrary government over-regulation and the shortage of godowns and mandis.
A good example of policy as a problem is the case of pulses farmers. After a bumper harvest, in February 2017, the India Pulses and Grain Association petitioned the Union commerce secretary to remove an old 2006 export ban since market prices in India had slipped below MSP. Tur dal was being sold at the time between Rs 35,000 and Rs 47,000 per tonne in MP, Karnataka and Maharashtra, against the MSP of Rs 50,500. Yet, inexplicably (बेवजह) , the ban remains in place, along with limits on stocks, making it impossible for farmers to even recover their costs. Artificially choking the market and not letting it play out is a recipe for disaster. Second, farmer loan waivers only push the can further down the road. They don't solve the problem. After BJP came good on its UP loan waiver poll promise, Maharashtra caved in to a similar demand and Haryana, Karnataka and Tamil Nadu are all facing the same music. In Punjab, Congress came to power promising exactly this.
States simply don't have the money for such largesse (दरियादिली) . The combined debt-tostate GDP ratio of all states taken together hit an alarming 3.6% in 2015-16, breaching the mandated 3% ceiling under fiscal prudence rules. It will go through the roof with new waivers. A similar waiver by UPA in 2008 had no discernible long-term impact on improving agriculture. As TV pictures of the kisan agitations show, the blue jeans and T-shirt clad farmers of 2017 are very different from the downtrodden peasants of our collective national imagination. They ask why only big corporates should get loan waivers. It is a fair question. Yet, instead of temporary sops each year, government must do a fundamental rethink and address this Kisan 2.0 with a new deal on market pricing and a comprehensive deregulation of policy instead of old mai-baap sarkar type solutions that are past their use-by date.