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Resource centre on India's rural distress
 
 

Modi govt wakes up too late to the agrarian crisis -Sayantan Bera
-Livemint.com

A look at the past three budgets shows that the government took note of the crisis only in 2016

On 24 April 2014, about a month before Narendra Modi-led National Democratic Alliance (NDA) formed a new government at the centre, the India Meteorological Department made an ominous forecast.

The four-month-long southwest monsoon which irrigates more than half of India’s farmlands was likely to be deficient. Over the next few months the deficit widened, and was followed by another sub-par monsoon in 2015 with a wider shortfall and 12 states declaring a drought. The event had no parallels in the last three decades.

Modi inherited a robust farm economy growing at 4.2% in 2013-14, with bountiful rain in 2013 and production of foodgrains touching record highs. In the first two years of the NDA government, farm output contracted 0.2% in 2014-15 and grew at an estimated 1.1% pace in 2015-16.

While much of this can be blamed on a truant monsoon and low prices of key farm commodities hurting incomes, was the centre slow to respond to the agrarian crisis?

A look at the three budgets presented by finance minister Arun Jaitley shows that the government took note of the crisis only in 2016. It made a break with the past by focusing on structural reforms: a new crop insurance scheme to cut risks in farming, a first step in creating a national common market for farm produce by launching an electronic trading platform, and more funds to fast-track pending irrigation projects.

This year the Prime Minister also gave a call to double farm incomes by 2022 and tasked an inter-ministerial panel to spell out a road map. In the first one and a half years—through 2014 and 2015—the centre’s focus was limited to the soil health card mission to correct imbalanced use of fertilizers. Narendra Modi’s slogan of “water to every field” and “per drop more crop” moved at a slow pace, until 2016 came with images of parched farms and a growing shortage of drinking water.

Irrigation got a shot in the arm in the budget this year—in addition to Rs.5,717 crore for the Prime Minister’s flagship irrigation scheme, a special long-term fund of Rs.12,517 crore was created to fast-track pending irrigation projects. The budget for crop insurance was raised by over 70% (from Rs.3,185 crore in 2015-16 to Rs.5,500 crore in 2016-17). Taking centre’s cue, states too put in more money for its share in the revamped scheme that offers lower premiums and an exp-anded risk coverage to farmers.

Another under-reported move was the NITI Aayog—the new avatar of India’s erstwhile Planning Commission—drafting a model land leasing law for states to adopt. The draft law aims to ease the market for leasing of agricultural land and help tenant farmers to access facilities like credit, insurance and compensation for crop damage. “The government’s focus on agriculture came late in the day but it has taken important initiatives on insurance, irrigation, and soil fertility whose impact will show in the coming years,” said T. Haque, director of Delhi-based Council for Social Development and former head of Commission for Agricultural Costs and Prices. “For these reforms to be successful, the centre needs to set up a strong monitoring system alongside participatory social audits.”

Haque added that one sector that has escaped attention is agriculture credit. “Farmers are heavily indebted due to repeated crop losses and need immediate relief. Their incomes are so squeezed that they have no capacity to invest.”

But credit is not the only sore point. As many as 12 states declared themselves drought-hit in the past year, and a petition filed in the Supreme Court (SC) by non-profit Swaraj Abhiyan showed the government’s laxity in providing relief.

The centre approved Rs.13,500 crore of financial assistance to states to compensate farmers for crop loss, but the money was released after months of delay. So farmers in drought-hit states like Uttar Pradesh are still waiting for the paltry Rs.2,700 per acre that was due to them six months back.

Delays in releasing payments under the rural jobs guarantee scheme —pending dues of Rs.12,000 crore that were settled only in April—and a delayed implementationof the National Food Security Act took a toll on rural areas fuelling hunger and distress migration.

The NDA government came to power by garnering rural votes in states like Uttar Pradesh, Bihar and Haryana but have reneged on promises like higher support prices for farm produce, said Yogendra Yadav, political scientist and co-founder of Swaraj Abhiyan. “The centre continued with its indifference to drought. What they don’t realize is, ignoring the agrarian crisis will have a high political cost.”

SC cracked the whip this month saying the centre threw social justice out of the window in its handling of the drought situation.

In a series of judgements, it directed the centre to create a rules-based framework of declaring a drought, as several states like Jharkhand, Rajasthan and Gujarat delayed notifying one, or as in the case of Bihar and Haryana, continues to deny the reality of drought. As short-term measures, the court directed the centre to compensate workers under the employment guarantee scheme for delay in wage payments, and provide subsidized foodgrains to all households in drought-hit areas.

In all of this, the seeming resilience of Indian agriculture to deficit rains comes as a redeeming note.

At 252 million tonnes (mt), production of foodgrains dropped by only 5 % in 2014-15—compared with the bumper production of 265 mt the year before—and is estimated to stay at similar levels in 2015-16, despite a widespread drought.