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LATEST NEWS UPDATES | Farmer displacement will increase poverty by PSM Rao

Farmer displacement will increase poverty by PSM Rao

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published Published on Nov 16, 2010   modified Modified on Nov 16, 2010

Some people feel agriculture in India provides employment much beyond its capacity — that is, the number of people working on the farm is many times the actual requirement.

Prime Minister Manmohan Singh is among the proponents of this view. In his interaction with a group of editors last month, Singh said, “The only way we can raise our heads above poverty is for more people to be taken out of agriculture.”

This group, which believes a faster industrialisation of India alone can address its persistent poverty, appears to be exceedingly fascinated by the situation in industrialised countries, particularly the US.

True, in the US, only 1.4% of the labour force is in agriculture. Just 22 lakh persons (less than 1% of its population of about 307 million) are in the farming profession, as per the US agricultural census of 2007. Similarly, farming contributes only 0.8% to the American GDP.

Yet, farming gets enormous support in that country. A recent report of the OECD brought to focus the increasing support or subsidy to its members in agriculture. Last year’s support was of the order of $253 billion, as measured by the producers support estimate. If other payments on the items like research, marketing, budget payment to consumers etc. are taken into account the total subsidy bill would go to about $375 billion.

The rich countries’ subsidies last year were higher than the previous year although World Trade Organisation (WTO) norms seek a drastic cut year after year. Their total subsidies were equal to 22% of the farmers’ gross receipts. The US is among the biggest subsidisers among the rich nations. It is understood to have paid some $245 billion during 1995-2008. The WTO too recently snubbed America for the trade-distorting subsidies.

Incidentally, the US’s share in world agriculture is as high as 20%, which means its policies cannot keep the world agricultural trade unaffected.

In fact, the population dependent on agriculture in the developed world is very small compared with that of the other countries. The employment in agriculture as a proportion of total employment in most of the OECD countries is in single digit as can be seen from the compilation of the World Development Report 2008.

Although OECD comprises 33 countries, their combined population is only 1.19 billion. A third of that is in the US (307 million) and therefore the US example of those who fascinated with it cannot be disparaged so easily.

But, Indian population is three times as large as that of the US whereas India occupies the geographical space equal to a third that of the US; and, more interestingly, the Indian population almost equals the aggregate population of all the OECD countries put together.

So, comparing the Indian condition with that of the US and other rich countries is simply senseless.

By a rough calculation, without a recourse to the official statistics that are often criticised for being unrealistic and biased, the total population directly dependent on agriculture in the rich countries is some 3 to 4% and translates to around 30 to 40 million whereas Indian population dependent on agriculture is about 600 million, 20 times more than the combined agriculturally active population in the developed world.

This, however, is not to ignore that close to 30% employment is provided by farm-related services and industries in the developed countries.

The land available per capita for farming in India is too low compared with countries like the US. For instance, the average holding of the US is 418 acres where as in India it is just 1.23 acres; 15.8 crore acres of farm land in India is distributed over 12.9 crore holdings. More pertinently, small-holder farmers dominate Indian agriculture.

As per the official data, 64.77% of the holdings belong to the marginal farmers with less than one hectare ownership; 18.52% belong to the small farmers, those with one to two hectares’ range; 10.93% belong to the semi medium farmers with two to four hectares holdings. That means 94.22% of the holdings belong to those with less than 4 hectares of land.

And the bulk of employment in the country is seen to be existing in the primary sector. Although there may be errors in the statistics this fact cannot be disputed with.

If the prime minister’s plan is given a practical shape some 20 crore persons have to be taken out of agriculture. But where will we accommodate them? In other sectors? But that is just not possible. The reforms and the growth associated with it did not yield jobs. The benefits have not trickled down to the poor. There has been no improvement in the unemployment scenario either.
 
Government sector employment, which has been accounting for the bulk of the organised sector employment has been dwindling as the number of employment aspirants rises.

Notably, as many as 12 lakh persons applied for just 638 Group IV posts notified by the Andhra Pradesh government in 2008, for which a test was conducted in 2,894 centres across the state on October 3, 2010.

Now, the hint from the Prime Minister to displace farmers and perhaps to consolidate holdings to make them economically viable will only increase the ranks of unemployed outside agriculture. The advocates of displacement should know that even farmers are not very keen to continue with their vocation since it doesn’t provide any returns beyond bare subsistence.

They will gladly leave for a better opportunity elsewhere; and will be happier if they are engaged in any employment giving them wages a little above subsistence levels.

And if such rapid industrialisation is at all possible, it should precede the removal of people from farming.

The US example doesn’t hold good for India.

In the US, even agriculture is industrialised; not only the holding size large but people required is very low: one worker per 740 acres was found sufficient due to the large-scale mechanisation there.

The data are of 1990 and the present scenario must be different with one person handling several hundreds more of acres.
In fact they want to further encourage the still larger holdings as they are interested only in the bulk production. Their subsidies too go to benefit the large farmers most. But that is another story.

In India, we need to focus not only on mass production to meet the food needs of the population but also production by masses.After all, the agriculture here is not only the food provider to the nation as a whole but the livelihood issue of the majority of population.

We have already seen the anomalies in the sector like rotting food grains and hunger coexisting. Excepting the statistical jugglery no other scheme has been successful in reducing the poverty levels in India.

More than 70% are poor as per various estimates not acceptable to the government. The simple logic to accept the truth is that the organised employment, where some social security and regular wages can be expected, is not more than seven to eight per cent of the workforce. After giving provision for the self-employed and the rich 70% languish in poverty.

In the background the government needs to work out a strategy, if it is genuinely interested in the development of the country and the welfare of its people, to protect the agriculture, the food and employment giver of the nation.

The small farming here should be seen as a beautiful opportunity, not an ugly thing to loath and therefore needs all the protection.
The government which always laments on the ‘heavy food subsidies’ could spend `70,000 crore to conduct the just concluded commonwealth games. If the government has the will, it has the capacity.

DNA, 16 November, 2010, http://www.dnaindia.com/money/comment_farmer-displacement-will-increase-poverty_1467234


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