Monday, January 30, 2023
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Subsidised to suffer

Subsidy trap is suicidal as it makes governments believe they are doing enough for farmers. It fools farmers & keeps agricultural input industry within licence-quota-subsidy vortex.

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Every budget, every election campaign, every presidential address to Parliament, brings new promises, homilies and subsidies for our farmer. Farming is supposed to be the most subsidised, pampered and protected among all our professions. On the eve of every budget, bankers, brokers, BSE buccaneers and pundits bemoan the government’s lack of resolve to tax the agriculture sector even though it is such a large chunk of our economy.

Yet, ask someone with even a little experience of part-time farming and you wonder why people waste their time farming. Ask me, a part-time farmer of some experience. The best thing about part-time farming, let me tell you, is that it is part time. If you did it for a living, battled the elements, insects, corrupt officials of the agriculture and electricity departments and then the bania in the mandi to go home with a pittance at the end of the harvest, you’d wish you were a peon in a government office instead.

Much of this humiliation, trauma and poverty is caused not because there is not enough subsidy and government support, but because there is so much of it. In short, under the garb of helping the farmer, successive governments have been pauperising him, fattening the politician-bureaucrat-trader network, and picking the pockets of us honest taxpayers.

The principles on which subsidies work are simple. First, pauperise the farmer, and make him beg for subsidies. Then do not allow him to get the market price for his produce, and make him beg for more subsidies and loans. Then make him go down on his knees for loan waivers. Right through this process, much more than salaried taxpayers, or industrialists or traders, it is the farmer who is forced to relate to the powers that be as the mai-baap sarkar. To that extent his life has not changed too much since the Mughal or the British empires. Governments today may not have colonial powers, but they have mastered the art of using the largesse of subsidies to reduce our farming community to serfdom.

Also read: Indian farmers want parity, not charity. Modi govt would do well to not teach them agriculture

If you don’t believe this, please try and get a drip and sprinkler irrigation system installed on your farm, as we did last year. We farm in a semi-arid area where it makes enormous economic and environmental sense to install drip irrigation. Sure enough, the government provides enormous subsidies on this, but then, wait for the surprises. The subsidy pattern is so complicated that even Yashwant Sinha’s pre-budget, three-tier excise structure wo-uld look like a breeze. So complex, in fact, that you wonder how even you or I could unravel it without the help of a chartered accountant. Think of the poor farmer. But he has touts to help him. All the time.

Mine, therefore, simplified the system for me. The Haryana government, he said, gives Rs 10,000 per acre for installing an irrigation system in an orchard, but a lump sum of Rs 8,000, whatever the size of your farm, for regular farming. So you ask for a combination of drip and sprinkler for your orchard, he advised.

“But we don’t have an orchard,” I said, “we just want to grow wheat and vegetables.”

“Doesn’t matter. You say it is an orchard. We will fix the additional deputy commissioner who will come for inspection six months later,” he said.”But we are not bribing anyone. Why can’t we just ask for a regular farming system at the flat Rs 8,000 subsidy?” I asked.

“You can, I suppose,” he said, “but for that you first have to pledge your land to the land mortgage bank and take a loan.”

“But I don’t need a loan,” I pleaded.

“Doesn’t matter. The subsidy is allowed only if you borrow from a land mortgage bank,” he said.

All this while, I kept on pleading that we do not need any subsidy in the first place but was told then there was no way we were going to get any contractor to come and work on our land. The contractor works out of the offices of the agriculture and horticulture departments rather than their own shops. If you have to survive as a farmer, therefore, you have to beg, bleat and bribe for subsidies and lose all your self-respect.

Also read: Farmers’ problem is income, more than prices. Solution lies in setting up factories

From seeds to fertiliser, electricity to pesticides, you are forever in the tout-trader pincer, and all because of the curse called subsidies. The trader sells you the bag of urea as if he was doing you a favour. Because he has no competition and the government invests in subsidies instead of knowledge, he succeeds in pushing on the poor farmer several times more fertiliser than he needs. If he was made to pay a real price, the same farmer would cut his fertiliser use by half. This will save him money, Sinha the price of subsidies and slow down the destruction of the eco-system.

The subsidy trap is suicidal because it makes governments believe they are doing enough for the farmer. It fools the farmers, keeps the entire agricultural input industry still within the licence-quota-subsidy vortex and is in the process destroying our farm economy and the environment.

Just how big a disaster this is causing is evident the moment you visit a farm input shop. Half-literate shop owners push the most dangerous pesticides and unnecessary fertilisers down the farmer’s throat and the farmer is tempted to buy since it all looks so cheap because of the subsidies. He soaks his soil with poison which eventually reaches our kitchens. How many of us realise that the Indian farmer uses three or four times more pesticides than the international norm? Furadon, a strong one, lasts at least 45 days once absorbed by a plant. Yet, our farmers continue to soak their cauliflowers, brinjal and tomato with it even in the week of plucking. We eat some of the most poisonous vegetables and fruits in the world.

Because the farmer gets these inputs cheap, he overuses them. Because the government invests everything in subsidies, it has nothing left for research or expansion many of our premier agriculture universities can hardly pay salaries now. If the government only got out of the way completely and left the farmer to the mercy of the markets, he would perhaps be less miserable. And our foods less poisoned.

It works exactly the same way for electricity. Punjab claims to provide free power to the farmer. Please go and see the quality of the basic power infrastructure tilted poles, hanging wires, exposed fuses, and you’ll know what free power means. Most farmers spend more by way of bribes and repair to get free power than they would pay for reliable, quality power. Also, because power is free, and they don’t know which four or six hours of the day it will be available for, they tend to keep the tubewell motor on round the clock. The result is too much power consumed, too much water pumped out, too such subsidy and therefore too much deficit in the budget.

Fifteen years ago, when economic reform was merely an esoteric phrase, Rajiv Gandhi tried to impress the Americans by telling the US Congress and the Senate that a bulk of the Indian economy was agricultural and that agriculture was all in private hands. A greater lie hasn’t been told. Worse, that lie still survives the winds of change in other sectors of the economy.Our politicians have perfected into a science the craft of using subsidies and patronage to control vast agricultural sections of our society.

Somebody has to tell the farmer he is being looted and raped in the name of state support. What India needs most of all now is not another reformist finance minister but an inspirational kisan leader who could build a constituency among the farmers on the promise of surplus, self-respect and prosperity rather than the state-funded bribery of sops, subsidies and support prices.

Also read: Budget 2020 pays little more than lip service to farmers and agri sector. Just like last year


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