The youth must support the farmers’ movement!
The fight against the farm bills is also a struggle to save several crore jobs!!
The farmers agitation completed one month on December 26, 2020. Despite the biting cold, the resolve of the farmers shows no signs of weakening; on the contrary, their movement continues to strengthen as the days go by. More and more farmers, from as far away as Tamil Nadu, Karnataka and Maharashtra, are joining them, and as their numbers swell, they are gradually tightening their gherao of Delhi. With the rabi bowing season coming to an end, and as the weather becomes more pleasant, tens of thousands of farmers are expected to join the protest in the coming days and weeks.
It is a do or die moment for Indian agriculture. The farmers realise that the very future of Indian agriculture is at stake. Over the past six years, the Modi Government’s pro-corporate anti-farmer neoliberal policies have pushed Indian agriculture into a severe crisis. Now, taking advantage of the pandemic which prevented people from coming out on the streets to protest in a big way, it pushed the three farm laws through the Parliament in a most undemocratic manner. These laws push the neoliberal reforms to the limit – they will greatly accelerate the corporatisation of agriculture, that is, they will greatly facilitate the taking over of Indian agriculture by big Indian corporate houses like Ambani and Adani, and foreign agribusiness corporations like Bayer and Syngenta. In other words, the very survival of Indian peasantry is at stake. The farmers are very aware of this. And so, despite all the efforts of the BJP ecosystem to malign the movement, split it, wear it out by engaging the farmers in prolonged non-serious negotiations, the spirit of the movement continues to be upbeat. It is indeed a historic struggle.
The farmers are fighting not just for the future of Indian farming. They are fighting for all the people of India. Their demands implicitly call upon the government to implement the Directive Principles of the Indian Constitution, which call upon the State to: build an egalitarian society; ensure that there is no concentration of wealth; ensure that all citizens have the right to an adequate means of livelihood that ensures them a decent standard of living; ensure availability of adequate healthcare and nutrition to all citizens without discrimination; and, provide equitable and good quality education for all children.
In this article, we focus on how the demands of the farmers are closely connected to the demands of the youth for adequate means of livelihood that ensure them a decent standard of living. An important reason for the massive unemployment crisis gripping the country during the past few years of the Modi regime is the worsening agrarian crisis. Let us first take a look at the reasons for this crisis.
Neoliberalism and the Agrarian Crisis
Conventional development theory, which says that decline in agricultural employment is a sign of economic progress, is all bunkum. This theory defines development as meaning corporatisation of all sectors, and claims that as development proceeds, the industrial and service sectors will create enough jobs to compensate for the loss of employment due to corporatisation of agriculture. But this did not happen even in the developed capitalist countries of Western Europe. Their ‘industrial revolutions’ too did not create sufficient jobs to provide gainful employment to the millions of peasants who lost their livelihoods due to corporatisation of agriculture in the 19th century; however, this did not cause a huge unemployment crisis there, because Europe exported its surplus population to the Americas. That is not possible for India; to where do we export our people if they are displaced from agriculture? Mahatma Gandhi was absolutely right in emphasising that our development model will need to be different from the West, we will have to focus on developing and creating employment and prosperity in rural areas.
Probably realising this, the development model implemented in India during the early decades after independence, while focussing on development of large scale industry, did not entirely neglect agriculture, because of which agricultural employment clocked a growth rate of 1.47% for the decade 1983 to 1993-94 (compound anual growth rate, or average yearly growth rate) – which is fairly decent, if we compare it to the overall growth rate of employment in the country of 2.04% during this period.
In 1991, the Indian government signed an agreement with the World Bank, an international financial institution controlled by the developed countries, wherein it undertook to implement economic reforms in the economy in return for a huge foreign loan. Two important conditionalities accepted by the Indian government, as a part of this reform package, were:
- allowing the giant agribusiness corporations of the developed countries to enter Indian agriculture; and
- gradually reducing government subsidies for agriculture;
Successive governments that came to power at the Centre since 1991 have assiduously implemented these reforms. They have:
- reduced public investment in agriculture;
- cut subsidies given on major inputs needed for agriculture (such as fertiliser, electricity and irrigation subsidies);
- gradually eliminated output support to agriculture (in the form of public procurement of agricultural produce);
- gradually reduced subsidised credit given to agriculture (by public sector banks); and
- allowed imports of heavily subsidised agricultural produce from the developed countries into India.
This multi-pronged onslaught on Indian agriculture had led to a huge increase in rural indebtedness. The most extensive survey of farm households to date conducted by the NSSO in 2012–13 found 52 percent of the total agricultural households in the country to be in debt. The average debt was Rs 47,000 per agricultural household, in a country where the yearly income from cultivation per household was only Rs 36,972.
Two decades of battering by hostile policies and the worsening debt crisis pushed the hardy Indian peasants into such despair that they began committing suicides in record numbers. The total number of farmer suicides in the country since 1995 crossed the 300,000 mark in 2014.
Modi Govt.: Most Anti-Farmer Govt. Since Independence
During the 2014 Lok Sabha elections, Modi and the BJP promised to take concrete steps to tackle this farm crisis and make farming profitable—and Modi-led BJP stormed to power. However, after coming to power, it has made a complete U-turn on every single promise made by it during the elections, and has in fact accelerated the implementation of the neoliberal agenda for agriculture.
Take for example its important election promise that it would implement the Swaminathan Commission recommendations and give farmers a MSP of 50 percent above the comprehensive cost of production (called C2). For the last two years, the government has been claiming that it has fulfilled its 2014 election promise, implemented the Swaminathan Commission recommendations, and announced MSP for all crops at 50 percent above the cost of production. In doing so, it has resorted to a simple trick: the government has changed the formula for calculating cost of production, effectively lowering it!
The problem facing farmers is not just how profitable is the MSP; the bigger problem is that most farmers do not get this price for their crops (except for some quantity of wheat and rice, that the government procures). In his 2018 budget speech, the FM finally acknowledged this problem and promised to do something about it. Since then, another 2 years have passed; the government has yet to take any steps to ensure that farmers get a decent price for their produce.
On the contrary, the government has reduced its financial allocation for government procurement from farmers. This allocation is made under the budget head ‘food subsidy’. Budget documents show that the Modi Government’s allocation for food subsidy has fallen so sharply that even in absolute terms, the allocation for this in the 2020–21 budget is less than allocation in 2014–15 A. Assuming inflation of 8% every year, this means a reduction of nearly 40% in real terms (Table 1).
Table 1: Budget Allocations for Food Subsidy, 2014 and 2020 (Rs crore)
| 2014–15 A | 2020–21 BE | |
| Food Subsidy | 1,17,671 | 1,15,570 |
The absolute insensitivity of the Modi government towards our farmers is also revealed in its attitude towards another long standing demand of the farmers movement—waiver of farm loans. The Modi Government has repeatedly promised to take steps to double farmers’ incomes in five years. For any policy package aimed at boostiing farmers’ incomes, the first step would necessarily have to be farm loan waiver, so that the farmers can start from a clean slate. It is the worsening debt crisis that is responsible for the suicide wave sweeping our countryside. But the Modi government has outright refused to concede this demand—this waiver would have cost the government at the most Rs 3 lakh crore. It is not that the government does not have money—it has waived/restructured corporate loans several times this amount. This despite the fact that agriculture loan waiver is far more beneficial for the economy and the people as compared to corporate loan waiver: India’s corporate houses provide employment to barely 1 crore people, while agriculture provides employment to more than 20 crore people.
In each of the seven budgets presented by the Modi Government so far, it has announced grandiose schemes for agriculture. But if the fine print is examined, it reveals that most of these schemes are only on paper, the government has made only a niggardly financial allocation for them.
The statistic that best reveals the overall approach of the Modi government towards agriculture is its budgetary spending on agriculture. This year’s budget papers show that the government’s allocation (2020–21 BE) for Ministry of Agriculture and Farmers’ Welfare, together with allocation for related Ministry of Fisheries, Animal Husbandry and Dairying, is a low Rs 1.47 lakh crore. This amount is a mere 4.8 percent of the total budget outlay—for a sector on which nearly 50 percent of the population depend for their livelihoods. The experience of the previous budgets of the Modi Government indicate that even this low allocation could an exaggeration: actual spending may turn out to be much less than that projected in the budget estimates.
The intensification of neoliberal policies in agriculture during the past six years has resulted in a worsening of the agrarian crisis. Agricultural growth rate during the Modi years (2014-20) has fallen to an average of 3.2%, from 3.7% during the previous UPA years (2004-14). There has been no let up in farm suicides. NCRB data show that during the first two years of the Modi government (we do not have figures for subsequent years as the government has been deliberately delaying release of farm suicide data), 24,000 farmers committed suicide.
Why is the Modi Govt. Strangulating Agriculture?
What is the real intention of the Modi Government? This is revealed in document of the NITI Aayog, that says (“Raising Agricultural Productivity and Making Farming Remunerative for Farmers”, 16 December 2015):
“With the corporate sector keen on investing in agribusiness to harness the emerging opportunities indomestic and global markets, time is opportune for reforms that would provide healthy business environment for this sector. Small scale has been a major constraint on the growth of this industry.”
The Modi government’s agenda becomes very clear from this report of the government’s think tank—the government is seeking to replace small scale farming by corporate agriculture. Another official document (interestingly, a report of the National Skill Development Council) of the Modi government specifies the targets to be achieved—the government is seeking to bring down the population engaged in agriculture by 20 percent over the next five years.
Corona Pandemic Reveals this Hidden Agenda of Modi Govt.
This nefarious agenda of the Modi Government lies completely exposed by the agricultural reforms that it has implemented during the corona pandemic.
As we have discussed in another article, taken together, these three bills will in the long run lead to the ruin of small farmers, force them to abandon agriculture, and allow agribusiness corporations to gradually acquire control over their lands and set up huge farms. This was the ultimate aim of the agrarian reforms imposed on India by the developed countries as a part of globalisation – creating conditions for the giant agri-business corporations of the developed countries to take over Indian agriculture. The Modi government is dutifully implementing their dictates.
Additionally, these reforms will destroy the livelihoods of lakhs of small traders who presently buy produce from farmers in the mandis, called arhtiyas. They will also result in a huge increase in the country’s alarming ‘hunger and malnutrition crisis’—as these reform bills will eventually lead to the dismantling of our public distribution system (popularly known as the ration system).
Most importantly, the passage of these three bills by the ‘nationalistic BJP government’ will endanger the food security, and hence the very sovereignty, of our country.
Result: Fall in Agricultural Employment
The implementation of the World Bank dictated neoliberal reforms in agriculture since 1991 has led to a gradual slowing down of employment growth in agriculture – to such an extent that it virtually stagnated in the first decade of this century.
The acceleration of these reforms during the Modi years has pushed agriculture into such severe crisis that employment in agriculture has simply collapsed—agricultural employment in 2017–18 has fallen to even below the 1983 level! Had employment generation in agriculture during the post-reform years continued at the same rate as during the period 1983 to 1993–94 (when CAGR was 1.47 percent), total employment in agriculture would have gone up to 34.75 crore by 2017–18 instead of the present 20.53 crore—an additional 14.2 crore jobs (Table 2)!
Table 2: Agricultural Employment, Pre- and Post-Reform Years (in crore)
| Agricultural Employment | CAGR 1983 to 1993–94 | |
| 1983 | 20.72 | |
| 1993–94 | 24.15 | 1.47 |
| 2009–10 | 24.49 | |
| 2017–18 | 20.53 | 34.75 |
This is probably the least talked about, but most important reason for the unemployment crisis gripping the country. And with the implementation of the latest round of neoliberal reforms – the three farm bills of the Modi Government – this unemployment crisis is going to terribly worsen, as crores of farmers will be forced to abandon agriculture.
Over the last few years, youth have been agitating demanding that the government lift the ban on recruitment in the public sector, and fill the vacant posts in government jobs – which would lead to the creation of several lakh jobs. Had they joined the peasantry in agitating against the neoliberal reforms in agriculture and demanding increased investment and government support for agriculture, it would have led to the creation of several crore jobs.
Let Us Join Hands to Demand Increased Spending on Agriculture
Indian agriculture is in crisis because of the neoliberal economic reforms. Employment generation in agriculture has become negative. To revive growth and stimulate job creation in this vitally important sector, the government needs to make farming profitable by:
- reducing input costs for farmers by increasing subsidies on fertilisers, electricity, water, etc.;
- providing output price support, by taking measures such as increasing crop procurement, and guaranteeing farmers profitable price for their produce;
- increasing public investment in areas like irrigation, enhancing soil fertility, agricultural research, agricultural extension services, crop insurance, etc.; and
- taking immediate steps to tackle the debt crisis gripping Indian farmers by waiving all their debts, including debts to private moneylenders, and ensuring availability of institutional credit to them at subsidised rates.
[In the long run, the government needs to rethink the present external input (mainly chemicals) intensive industrial agricultural model being promoted in the country, and reorient it towards a more environmentally and economically sustainable and small farmer friendly agricultural model.]
This would require the government to increase public investment in all agriculture related sectors. The Modi Government has allocated a mere Rs 1.47 lakh crore for all agriculture related ministries in the 2020–21 budget. Including expenditure on other related heads like food subsidy and fertiliser subsidy, this amount goes up to Rs 3.34 lakh crore. If the government is serious about reviving agriculture, it needs to at least double its investment in agriculture and related areas. This will also reverse the fall in agricultural employment, and lead to the creation of several crore jobs!
Now, the question most readers will ask is, where will the money for this increased investment come from? Let us now discuss this.
Where Will the Money Come from?
The Indian Government claims that it is facing budgetary constraints, and therefore does not only have no money to increase spending on agriculture, it is in fact seeking to reduce its education, health and other subsidies to the poor.
That the Indian Government has no money is a myth, propagated by the government and its intellectual pen-pushers. The reality is that the Modi Government has been doling out massive amounts of subsidies to the rich every year, in the form of tax concessions, loan write-offs, transfer of public wealth and resources for their profiteering at throwaway prices, and so – all of which total several lakh crore rupees every year! It is because of these huge tax concessions / exemptions to the rich that the tax-to-GDP ratio of the Government of India is very low, at just around 17 percent. This figure is half of the the average tax collections of the OECD countries (34.2 percent).
Just to give one simple suggestion of how the Modi Government can raise the necessary resources to fund an increase in its investment on agriculture:
- Impose a 2% Wealth Tax on the richest 1 percent
Yes, that is all that is required!
According to an estimate made by Credit Suisse in 2019, the richest one percent in India own 42.5 percent of the total wealth of the country, which works out to $5361 billion or Rs 380.631 lakh crore. Imposition of a low 2 percent wealth tax on this would earn the government Rs 7.6 lakh crore in revenue. (Incidentally, 2 percent is also the minimum wealth tax proposed by both Warren and Sanders during the USA Presidential elections, rising to 6 / 8 percent for those with fortunes over $1 billion).
Not only would this be enough to finance a doubling of the government spending on all agriculture-related sectors (Rs 3.34 lakh crore), there will be sufficient funds left over finance a huge increase in MNREGA funding, as well as fund an urban employment guarantee programme.
So, not only will this lead to the generation of significant number of jobs for the rural and urban poor, all of whom are badly affected by the lockdown and the resulting collapse of the economy, in the medium term, as agriculture revives, it would also lead to the creation of crores of jobs in agriculture.
Let Us Come Together to Support Farmers Struggle
Let us join hands to support the farmers agitation! It is our struggle too. Let us support them in their struggle against the farm bills. Let us advance the struggle to demand that the government end the implementation of neoliberal policies in agriculture and increase spending in agriculture by imposing a wealth tax on the rich. That would not only make agriculture sustainable and profitable, it would also lead to the creation of crores of jobs in agriculture.
