Continuing from last week (See Farm Sector Reforms – 5)
To bring any meaningful improvement in the fragile condition of
India's farming community, a comprehensive rural development effort is needed.
The traditional farmer welfare measures like periodic hikes in support prices
for certain crops, farm input subsidies, interest rate subvention have not
yielded the desired results. In view of this, the latest legislative effort I
important and desirable.
However, this may not be sufficient. A sustainable improvement
in Indian farmers' conditions is possible only under a comprehensive rural
development mission. The mission should address the problem with structural
reforms at three levels, viz., 1. Farm Level; 2. Policy Level and 3. Social
Level. All reforms must be pursued "urgently, vigorously,
simultaneously" and in a fully integrated fashion, for having a
meaningfully sustainable impact.
Farm level reforms
At farm level farmers are struggling with a multitude of
problems. The most prominent being:
·
Uneconomical land holdings (fragmented holdings,
unclear land titles) (also see
here)
·
Low productivity
·
Vagaries of nature (frequent droughts &
floods)
·
Poor price realization
·
Poor market access
The measures initiated so far, e.g., higher support prices,
cheaper credit, crop insurance, improved irrigation, cash fertilizer subsidy,
better market access (eNAM, roads etc.) have positive impact on the state of
agriculture in the country. The latest legislative measures that would enable,
contract farming, forward contracts, and higher investment in post-harvest
infrastructure would further support the agriculture sector in India.
In my view, the following steps, besides other measures, if
taken immediately may help in significantly improving the conditions at the
farm level:
·
Enforce land consolidation by linking subsidies
and facilities to a minimum farm size. Village or Block level farm cooperatives
should be encouraged to achieve this objective. Changes in tenancy rules and
allowing large scale leasing by corporates could be misused to exploit of
farmers.
·
Digitize all land titles within 2years. Enforce
time bound Panchayat level resolution of all title disputes preferably through
mediation.
·
Change government procurement system. Government
should provide all inputs and technical guidance to the participating
cooperatives, and take 50% of the crop in lieu of this. The balance crop should
pay for the labor cost and profit. This will ensure three things: (1)
Guaranteed timely supply of quality inputs; (2) No debt burden on farmer in
case of crop failure. The government can take adequate insurance for recovery of
its costs; and (3) Adequate profit to the farmers.
·
The landowners who have never engaged in farming
activity in past two decades should be forced to give away their landholdings
to cooperatives at 50% discount. Anyways these landowners let out their land on
crop sharing basis or nominal lease rental.
·
Make sure not a single drop of river water flows
into the ocean from India. Develop river linking and water distribution grid on
the models of roads.
·
Allow corporates to develop waste and barren
land for farming purposes. For example, many corporates from India and Arab
world may be interested in developing Rajasthan and Gujarat desert and barren
lands for growing dates, palm, aloe etc.
·
Set up a price equalization mechanism through
participation of private corporate sector. Encourage building large scale
storage capacities for farm produce. Assure a regulated return of 10% premium
on bench-mark yields, and allow bonds issued by warehouses as SLR securities
PSL assets.
·
Take factories to farms. Encourage industry to
partner with farm cooperatives to set up food processing units at the farms.
The farmers' cooperative allots land and provides farm produce, whereas the
entrepreneurs contribute capital and undertake marketing and sales
responsibilities. Both share the profit in pre-agreed ratio. This should
maximize profit of both the industrial enterprise as well farmers, and create
ample employment opportunities close to villages.
·
Assist the famers in the water deficient areas
to move away from water intensive crops like Paddy, Sugarcane, Banana etc.
Provide them cash incentive, technical assistance, marketing & sales
assistance and necessary inputs to move to less water intensive cash crops.
Policy level
reforms
The following are some
of my ideas for the policy level reforms. These ideas are based on the insights
gained through numerous interactions with the farmers, organizations and
individuals working in rural areas for welfare of the farmers, local
administrators etc.
Since independence
the government has focused on development of industrial infrastructure in the
country. It has actively participated in the endeavor through a large number of
public sector enterprise; besides offering a myriad tax and other concessions
to the private entrepreneurs. Now, the country has a reasonably strong
industrial base. Many of our industries are globally competitive. We have a
strong set of entrepreneurs and risk takers. It is therefore high time when the
government should reset its priorities and turn its primary focus on
agriculture. To meet this end, the government may consider implementing the
following five policy level measures:
·
Exit
all industrial and banking activities and actively undertake agricultural
activities. It should develop barren lands; develop water bodies and irrigation
facilities; develop and use technology for enhancing productivity; give
employment to landless farmers; take risk with new technologies & crops;
partner with marginal farmers in consolidating their land and do farming on
that land - just the way it undertook industrial activities immediately after
independence.
·
Undertake,
on mission basis, the task to re-skill the underemployed farmers and farm
labor. The farmers and their family members may be trained as dairy workers,
domestic help, nurses, tourist guides, artisans, etc. Expecting construction
sector to absorb all surplus farm labor is a bad idea.
·
Develop
at least 5 very large special agri export zones in rocky and desert areas of
central and western India and undertake export of farm produce as a commercial
activity. These zones may be developed in public, private or joint sector.
Besides, it may acquire farm assets, especially rice farms, overseas to reduce
water intensity of Indian agriculture.
·
Encourage
various states to make bilateral or multilateral agreements for procurement,
processing and trading of farm produce and movement of labor within states.
·
Nationalize
all rivers. Develop a national water grid. Set up a national water regulator,
who shall work out water sharing formula for all states and union territories
every three year and maintain adequate provisions for managing droughts. The
idea should be to ensure that not a drop of river water flows into sea from
India.
It has taken seven
decades for Indian industries to reach a stage where the government may
consider fully exiting the industrial activities. It may take 2-3 decades for
Indian agriculture to reach a stage where the government will be able to exit
farming activities completely.
Please note that I am
also not suggesting nationalization of agriculture sector. I am just saying
that the government should undertake the activity on commercial basis to
provide the sector with much needed escape velocity in terms of capital,
technology, and risk taking capability.
Social reforms
The disproportionate rise in aspirational consumption;
distortion of social customs (especially marriage, death, birth) for the sake
of vanity, ignorance, and misguidance; rise in crime and litigation expenses;
rise in cases of chronic diseases and hence prohibitive healthcare expenses
form an overwhelming part of "farmers' debt". This debt usually has
nothing to do with farming activity. This is in fact true for a large majority
of urban poor and lower middle class people also. To cure this problem on
sustainable basis, it is important that economic reforms are implemented with
social reforms.
The social initiatives like focus on cleanliness, cooking gas
connection to BPL families, medical insurance, etc are commendable,. But what
we need is a social renaissance. Small correction and incremental improvement
might not be enough given the serious nature of the problem, in my view.
I am not a social scientist. I may therefore not be an appropriate
person to suggest the steps that could be taken within the Indian sociological
framework. But this does leaves me at freedom to throw some thoughts that may
not belong to the box. I would suggest the following specific programs at
social level:
(a) The government
should take strong affirmative steps to eradicate social distortions that have
crept in over a period time in our social, religious and cultural events.
To begin with the government should totally nationalize the
religious part of the birth, death and marriage ceremonies. The government
should appoint qualified religious persons (QRP) who can perform these
ceremonies at the designated venues established by government in every Block of
the country. All the expenses like salary of QRP, cost of performing the
rituals, food offered to QRP, cost of feeding upto 20 close relatives of the
person for whom the rituals are being done, etc. should be borne by the
government. Special officers may be appointed to supervise all such ceremonies
and issue certificate (Birth, Death, Marriage) on the spot.
The government should actively discourage profligate spending on
the social part of these events. All expenses on marriage & birth related
parties and social functions relating to death, may be taxed @100%. Meaning, if
anyone wanting to spend Rs10,00,000 on marriage party of his/her child, he/she
shall be required to pay an equivalent amount as tax. This money may be used
exclusively for performing the religious ceremonies stated above.
(b) A dignified birth
and death shall be made fundamental right of every citizen.
In case of birth, the government should assume responsibility of
the child from the conception stage, for upto two children for each parent.
This includes good diet for mother, medical tests, medicine, delivery expenses
and immunization of the child. This should be done on a global standard basis
not the way typical government medical facility is run by the government. In
case of death, the final rights of the deceased should be performed in a dignified
manner, as per his/her religious traditions. This should apply to all unclaimed
and unidentified bodies also.
The insurance companies may be directed to make the claim
payments on the spot when the final rituals are done on 13th, 17th or 40th day
as the case may be, in cases where the deceased's life was insured, either
individually or under some government group scheme. The corporates may be
required to fund this initiative under their CSR obligation.
(c) All regular
visitors to the holy shrine of Mata Vaishno Devi in Jammu, who are more than
50years of age, would vouch that the assigning the administration of the shrine
to an independent Board in 1986
has led to dramatic improvement in the management and infrastructure in and
around the Shrine. No one's religious feelings have been hurt and the number of
pilgrims visiting the holy cave has multiplied exponentially.
The government may consider constituting an autonomous
constitutional body like Election Commission to take over the management and
administration of all places of worship in the country to put an end to rampant
cases of exploitation, mismanagement, money laundering and other disputes,
encroachment of public land, environment degradation, and promote secularism,
brotherhood, tolerance etc.
A separate assembly of religious leaders, holy men for each
religion may be formed. This assembly may be given the task to reevaluate all
Holy Scripture, and find if there is any need to reinterpret the scriptures in
the light of modern day circumstances and realities. The religious leaders
should be requested to weed out the redundancies and misinterpretations, so
that no one manipulates the religious sentiments of the people in the name of
scriptures and divine mandate. The assembly should also frame a code of conduct
for all people responsible for helping people with their religious ceremonies
and duties. For example, the Hindu assembly may want to ban flowing the last
remains of dead people in holy rivers to save them from dying. The ashes may be
used for making bricks that can be used to build places of worships and houses
for the poor. It may also encourage people to use electronic or gas based
cremation, instead of wood pyres. Alternatively, each family member of the
deceased may be required to plant two trees each and take care of it till it
grows to become self-sufficient.
These steps, if taken, may make the life of poor (both rural and
urban) materially comfortable and substantially increase the happiness quotient
of the country, in my view.
These thoughts and suggestions are nothing new. I have been
presenting this to the concerned authorities and to the readers (through this
post) frequently. I promise to keep pressing with this in future also, till I
see some progress on this.
