The term ‘vote bank’ is often used in two very different ways. In the first sense, it refers to a large majority, united by some common identity, whose unjustified demands are pandered to by political parties often to the detriment of other smaller groups. The other ‘vote bank’ refers to a neglected minority, whose troubles are met with piecemeal band-aid solutions by a few political parties interested in keeping these cycles of dependency alive.
If farmers are to be seen as a vote bank, they are certainly victims of the second sense of the word, which is paradoxical, since rural India makes up more than half of the electorate. Instead of long-term capital investments in infrastructure, regime after regime has deemed it appropriate to create yet another ad hoc yojna (plan).
Moreover, despite all the sentimental and nostalgic rhetoric, the consumer is still a more powerful vote bank than the farmer, with export bans being imposed at the tip of the hat.
Most experts on either side of the ongoing agricultural reforms’ debate don’t deny that the status quo is inefficient, expensive and leads to unmanageable surpluses. The disagreement is also not about whether the government should continue to spend the money it does but more about how it spends that money.
The debate is about whether infrastructure should precede or be ushered in by reforms. But the need for other, more important structural changes remains undiscussed.
Even as more and more farmers want to quit agriculture, the exit barriers are high. About 86.2 per cent of farmers own just 46.2 per cent of the total operational area, with an average landholding size of less than 1 hectare.
For these families, economies of scale and profitable farming are distant dreams. Cooperative farming may be one solution, but without infrastructural investment, it is utopian. In many states, it is nearly impossible for these farmers to sell their land for non-agricultural purposes. Small farmers must sell whatever little land they have in a market with low demand, and thus fetch dismally low prices.
The value of non-agricultural land can be 30-40 times the value of farmland, due to its relative scarcity. Every now and then, state governments are embroiled in a controversy over land acquisitions for industry and allocation of SEZs (Special Economic Zones) in rural areas.
The drama could be avoided if sale of land was more flexible. This would also disperse the spread of industrialisation and not concentrate it in already overcrowded suburbs and cities.
Genetically modified crops
A recent study concluded that subsidising agricultural research and development was the most successful government subsidy for alleviating poverty.
Yet, the process of approving genetically modified (GM) crops is incredibly slow. This, in turn, has led to the dangerous trend of farmers, frustrated by delays, planting seeds that have not even begun the approval process.
Some arguments against GM crops note that even without the technology, our production is in surplus and our exports are competitive at the global market. But they fail to take into account that these export prices have been artificially lowered through input subsidies. For instance, it takes about 5,000 litres of water to produce 1 kg of rice. If that water is extracted from a fast depleting groundwater table with free electricity, a competitive export price does not seem to be a good trade-off.
Farmers in India often have very little information about market supply and demand, and are at the mercy of the mandi after harvest. Farmers thus tend to stick to less volatile paddy-wheat cycles, rather than grow crops that the country nutritionally requires.
A robust and well-regulated future market for common agricultural goods, coupled with government incentives and requisite infrastructure, could provide farmers with the confidence to diversify their range of crops and prevent overproduction.
Robust identification system
The word “farmer” in India is defined differently in legal, statistical, economic and other contexts. If we are to switch to a more income-based rather than input-based subsidy, it is essential to first make sure that these databases do not exclude more marginalised groups like tenant or women farmers.
The lack of infrastructure, digital in particular, was also an issue when it came to the National Agricultural Market (eNAM), an online trading platform that is much less disruptive.
Rather than making the mandis redundant, eNAM connects mandis all over the country, providing farmers with a larger demand. It would also weaken the mandi cartels.
The response, however, has been underwhelming.
States are unwilling to give up their sources of income through the mandi system. Farmers themselves have been reluctant to abandon the mandis because they are dependent on the ahartiyas for informal credit, among other things.
To ignore these inconvenient dependencies is not the best way to reform. Any successful reform must offer some compensation to those stakeholders who have paid a high price to become beneficiaries of a broken system.
Diven Nagpal is a student of Jadavpur University, Kolkata