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LATEST NEWS UPDATES | Putative farmer-friendly policy killing rural prosperity, hurting farmers-TK Arun </title>
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Rural India has been denied access to globalisation, penalising farmers and farm labour. For the farmer, the government's policy is best described as Dhritarashtra's embrace.
After the Mahabharata war was over, the old king met his nephews, the victorious Pandavas, and..."/>
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Rural India has been denied access to globalisation, penalising farmers and farm labour. For the farmer, the government's policy is best described as Dhritarashtra's embrace.
After the Mahabharata war was over, the old king met his nephews, the victorious Pandavas, and..." />
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<h1 class="cat-box-title">Putative farmer-friendly policy killing rural prosperity, hurting farmers-TK Arun</h1>
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Published on</span><span class="text-date"> Apr 19, 2012</span>
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<br /><div align="justify">Rural India has been denied access to globalisation, penalising farmers and farm labour. For the farmer, the government's policy is best described as Dhritarashtra's embrace.<br /><br />After the Mahabharata war was over, the old king met his nephews, the victorious Pandavas, and embraced them, one by one, in a gesture of forgiving and affection.<br /><br />When, Bhima's turn came, the loving embrace was so tight that it crushed a metal dummy of the second Pandava that Krishna had wisely thrust into the encircling arms of the blind king in place of the prince himself. New Delhi's affection for the farmer might be less feigned than Dhritarashtra's for the killer of his 100 sons, but its loving embrace hurts no less.<br /><br />India banned cotton exports on March 5 and sort of lifted the ban a week later. The price of cotton crashed, the cotton farmers of Gujarat cried foul, every hair on hirsute Mr Narendra Modi's frame stood up in a frisson of ecstasy and excitement as he vented articulate fury on the treacherous Congress for sacrificing the farmers' interest to please the textile lobby.<br /><br />In panic, the Congress-led central government asked the Cotton Corporation of India to procure cotton from the farmers at nearly twice the support price fixed by the Commission on Agricultural Costs and Prices.<br /><br />Now, CCI bosses are trying to figure out whether the CBI would beat the CAG to their door, demanding an explanation for such profligate procurement.<br /><br />This little episode highlights one method in which India's policymakers go about killing farmers softly: export restrictions, denying farmers access to the rising demand for food and industrial farm produce across the world. India bans export of wheat, rice, potato, onion, you name it, at the least provocation.<br /><br />This makes India an unreliable supplier, ruling out steady, long-term supply contracts, planned investment inproducing the contracted supply, additional output and related incomes.<br /><br />Why are Indian farmers so competitive in the export market, so much so that Indian policymakers have to ban exports to protect domestic supplies? Subsidy, is the short answer.<br /><br />India subsidises fertilisers, canal water for irrigation, diesel and power for pumping water from wells and tubewells, and, in these days of allowing work under the employment guarantee scheme to be performed on private farms, some bit of labour as well.<br />Steep input subsidies make the final produce cheap, regardless of efficiency in farming and productivity. These subsidies add up toalmost 2% of GDP and the value added in agriculture is now a shade less than 14% of GDP, subsidy accounts for some 14% of the value of agricultural output.<br /><br />This huge subsidy bill comes at the expense of investment. Public investment in agriculture has been low and dwindling for a long time. Surface water management, building dams and canals in plain language, is now development blasphemy, but unless India harnesses a whole lot more of the monsoon's annual bounty, the country will soon sleepwalk into a full-blown water crisis.<br /><br />Groundwater depletion is alarmingly close to 90% in many regions. Very often, farmers commit suicide because they borrow money at high interest rates to sink tubewells, only to find these wells running dry in a couple of seasons, leaving them with onerous debt burdens and the shame of not being able to bear them.<br /><br />To understand that subsidy is a form of smothering the farmer, just imagine what would happen if the government were to spend 2,00,000 crore every year as farm-related investment, rather than as subsidy. Yes, removal of subsidy would see prices go up in the short run, but greater investment would boost yields and output, reducing prices thereafter and also boost farmer incomes.<br /><br />The restrictions on farmers' right to sell his produce is the third biggest example of murderous affection for the farmer. Wherever the Agricultural Produce Marketing Committee Act is in force, farmers can sell what they produce only to a set of middlemen, who beat down their price and reap the benefit of superior prices in urban centres. The APMC Act is anti-farmer and anti-consumer, and must go.<br /><br />If this is the soft part of keeping the farmer unconnected from the market for his produce, the hard, infrastructure part comprises missing rural roads and rural power. Without a good, motorable road network, no organised procurement of farm produce can take place.<br /><br />Amul succeeded in Gujarat only because Gujarat already had an excellent network of rural roads. Absent rural power means absent rural industry. Agro-processing industry is the key to not just physically proximate price discovery for farm produce but also structural diversification of the rural economy.<br /><br />Power subsidies and patronage of theft, seen as tokens of state love, bankrupt state utilities and abort rural electrification.<br /><br />Could we please stop loving our farmers to death? There are no Krishnas armed with handy dummies around. <br /></div>
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<br><a href="http://economictimes.indiatimes.com/opinion/columnists/t-k-arun/putative-farmer-friendly-policy-killing-rural-prosperity-hurting-farmers/articleshow/12725235.cms" class="re" target="_blank">The Economic Times, 19 April, 2012, http://economictimes.indiatimes.com/opinion/columnists/t-k-arun/putative-farmer-friendly-policy-killing-rural-prosperity-hurting-farmers/articleshow/12725235.cms</a><div class="clear"></div>
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LATEST NEWS UPDATES | Putative farmer-friendly policy killing rural prosperity, hurting farmers-TK Arun </title>
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Rural India has been denied access to globalisation, penalising farmers and farm labour. For the farmer, the government's policy is best described as Dhritarashtra's embrace.
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Rural India has been denied access to globalisation, penalising farmers and farm labour. For the farmer, the government's policy is best described as Dhritarashtra's embrace.
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<h1 class="cat-box-title">Putative farmer-friendly policy killing rural prosperity, hurting farmers-TK Arun</h1>
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Published on</span><span class="text-date"> Apr 19, 2012</span>
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<br /><div align="justify">Rural India has been denied access to globalisation, penalising farmers and farm labour. For the farmer, the government's policy is best described as Dhritarashtra's embrace.<br /><br />After the Mahabharata war was over, the old king met his nephews, the victorious Pandavas, and embraced them, one by one, in a gesture of forgiving and affection.<br /><br />When, Bhima's turn came, the loving embrace was so tight that it crushed a metal dummy of the second Pandava that Krishna had wisely thrust into the encircling arms of the blind king in place of the prince himself. New Delhi's affection for the farmer might be less feigned than Dhritarashtra's for the killer of his 100 sons, but its loving embrace hurts no less.<br /><br />India banned cotton exports on March 5 and sort of lifted the ban a week later. The price of cotton crashed, the cotton farmers of Gujarat cried foul, every hair on hirsute Mr Narendra Modi's frame stood up in a frisson of ecstasy and excitement as he vented articulate fury on the treacherous Congress for sacrificing the farmers' interest to please the textile lobby.<br /><br />In panic, the Congress-led central government asked the Cotton Corporation of India to procure cotton from the farmers at nearly twice the support price fixed by the Commission on Agricultural Costs and Prices.<br /><br />Now, CCI bosses are trying to figure out whether the CBI would beat the CAG to their door, demanding an explanation for such profligate procurement.<br /><br />This little episode highlights one method in which India's policymakers go about killing farmers softly: export restrictions, denying farmers access to the rising demand for food and industrial farm produce across the world. India bans export of wheat, rice, potato, onion, you name it, at the least provocation.<br /><br />This makes India an unreliable supplier, ruling out steady, long-term supply contracts, planned investment inproducing the contracted supply, additional output and related incomes.<br /><br />Why are Indian farmers so competitive in the export market, so much so that Indian policymakers have to ban exports to protect domestic supplies? Subsidy, is the short answer.<br /><br />India subsidises fertilisers, canal water for irrigation, diesel and power for pumping water from wells and tubewells, and, in these days of allowing work under the employment guarantee scheme to be performed on private farms, some bit of labour as well.<br />Steep input subsidies make the final produce cheap, regardless of efficiency in farming and productivity. These subsidies add up toalmost 2% of GDP and the value added in agriculture is now a shade less than 14% of GDP, subsidy accounts for some 14% of the value of agricultural output.<br /><br />This huge subsidy bill comes at the expense of investment. Public investment in agriculture has been low and dwindling for a long time. Surface water management, building dams and canals in plain language, is now development blasphemy, but unless India harnesses a whole lot more of the monsoon's annual bounty, the country will soon sleepwalk into a full-blown water crisis.<br /><br />Groundwater depletion is alarmingly close to 90% in many regions. Very often, farmers commit suicide because they borrow money at high interest rates to sink tubewells, only to find these wells running dry in a couple of seasons, leaving them with onerous debt burdens and the shame of not being able to bear them.<br /><br />To understand that subsidy is a form of smothering the farmer, just imagine what would happen if the government were to spend 2,00,000 crore every year as farm-related investment, rather than as subsidy. Yes, removal of subsidy would see prices go up in the short run, but greater investment would boost yields and output, reducing prices thereafter and also boost farmer incomes.<br /><br />The restrictions on farmers' right to sell his produce is the third biggest example of murderous affection for the farmer. Wherever the Agricultural Produce Marketing Committee Act is in force, farmers can sell what they produce only to a set of middlemen, who beat down their price and reap the benefit of superior prices in urban centres. The APMC Act is anti-farmer and anti-consumer, and must go.<br /><br />If this is the soft part of keeping the farmer unconnected from the market for his produce, the hard, infrastructure part comprises missing rural roads and rural power. Without a good, motorable road network, no organised procurement of farm produce can take place.<br /><br />Amul succeeded in Gujarat only because Gujarat already had an excellent network of rural roads. Absent rural power means absent rural industry. Agro-processing industry is the key to not just physically proximate price discovery for farm produce but also structural diversification of the rural economy.<br /><br />Power subsidies and patronage of theft, seen as tokens of state love, bankrupt state utilities and abort rural electrification.<br /><br />Could we please stop loving our farmers to death? There are no Krishnas armed with handy dummies around. <br /></div>
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<br><a href="http://economictimes.indiatimes.com/opinion/columnists/t-k-arun/putative-farmer-friendly-policy-killing-rural-prosperity-hurting-farmers/articleshow/12725235.cms" class="re" target="_blank">The Economic Times, 19 April, 2012, http://economictimes.indiatimes.com/opinion/columnists/t-k-arun/putative-farmer-friendly-policy-killing-rural-prosperity-hurting-farmers/articleshow/12725235.cms</a><div class="clear"></div>
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LATEST NEWS UPDATES | Putative farmer-friendly policy killing rural prosperity, hurting farmers-TK Arun </title>
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Rural India has been denied access to globalisation, penalising farmers and farm labour. For the farmer, the government's policy is best described as Dhritarashtra's embrace.
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<h1 class="cat-box-title">Putative farmer-friendly policy killing rural prosperity, hurting farmers-TK Arun</h1>
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Published on</span><span class="text-date"> Apr 19, 2012</span>
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<br /><div align="justify">Rural India has been denied access to globalisation, penalising farmers and farm labour. For the farmer, the government's policy is best described as Dhritarashtra's embrace.<br /><br />After the Mahabharata war was over, the old king met his nephews, the victorious Pandavas, and embraced them, one by one, in a gesture of forgiving and affection.<br /><br />When, Bhima's turn came, the loving embrace was so tight that it crushed a metal dummy of the second Pandava that Krishna had wisely thrust into the encircling arms of the blind king in place of the prince himself. New Delhi's affection for the farmer might be less feigned than Dhritarashtra's for the killer of his 100 sons, but its loving embrace hurts no less.<br /><br />India banned cotton exports on March 5 and sort of lifted the ban a week later. The price of cotton crashed, the cotton farmers of Gujarat cried foul, every hair on hirsute Mr Narendra Modi's frame stood up in a frisson of ecstasy and excitement as he vented articulate fury on the treacherous Congress for sacrificing the farmers' interest to please the textile lobby.<br /><br />In panic, the Congress-led central government asked the Cotton Corporation of India to procure cotton from the farmers at nearly twice the support price fixed by the Commission on Agricultural Costs and Prices.<br /><br />Now, CCI bosses are trying to figure out whether the CBI would beat the CAG to their door, demanding an explanation for such profligate procurement.<br /><br />This little episode highlights one method in which India's policymakers go about killing farmers softly: export restrictions, denying farmers access to the rising demand for food and industrial farm produce across the world. India bans export of wheat, rice, potato, onion, you name it, at the least provocation.<br /><br />This makes India an unreliable supplier, ruling out steady, long-term supply contracts, planned investment inproducing the contracted supply, additional output and related incomes.<br /><br />Why are Indian farmers so competitive in the export market, so much so that Indian policymakers have to ban exports to protect domestic supplies? Subsidy, is the short answer.<br /><br />India subsidises fertilisers, canal water for irrigation, diesel and power for pumping water from wells and tubewells, and, in these days of allowing work under the employment guarantee scheme to be performed on private farms, some bit of labour as well.<br />Steep input subsidies make the final produce cheap, regardless of efficiency in farming and productivity. These subsidies add up toalmost 2% of GDP and the value added in agriculture is now a shade less than 14% of GDP, subsidy accounts for some 14% of the value of agricultural output.<br /><br />This huge subsidy bill comes at the expense of investment. Public investment in agriculture has been low and dwindling for a long time. Surface water management, building dams and canals in plain language, is now development blasphemy, but unless India harnesses a whole lot more of the monsoon's annual bounty, the country will soon sleepwalk into a full-blown water crisis.<br /><br />Groundwater depletion is alarmingly close to 90% in many regions. Very often, farmers commit suicide because they borrow money at high interest rates to sink tubewells, only to find these wells running dry in a couple of seasons, leaving them with onerous debt burdens and the shame of not being able to bear them.<br /><br />To understand that subsidy is a form of smothering the farmer, just imagine what would happen if the government were to spend 2,00,000 crore every year as farm-related investment, rather than as subsidy. Yes, removal of subsidy would see prices go up in the short run, but greater investment would boost yields and output, reducing prices thereafter and also boost farmer incomes.<br /><br />The restrictions on farmers' right to sell his produce is the third biggest example of murderous affection for the farmer. Wherever the Agricultural Produce Marketing Committee Act is in force, farmers can sell what they produce only to a set of middlemen, who beat down their price and reap the benefit of superior prices in urban centres. The APMC Act is anti-farmer and anti-consumer, and must go.<br /><br />If this is the soft part of keeping the farmer unconnected from the market for his produce, the hard, infrastructure part comprises missing rural roads and rural power. Without a good, motorable road network, no organised procurement of farm produce can take place.<br /><br />Amul succeeded in Gujarat only because Gujarat already had an excellent network of rural roads. Absent rural power means absent rural industry. Agro-processing industry is the key to not just physically proximate price discovery for farm produce but also structural diversification of the rural economy.<br /><br />Power subsidies and patronage of theft, seen as tokens of state love, bankrupt state utilities and abort rural electrification.<br /><br />Could we please stop loving our farmers to death? There are no Krishnas armed with handy dummies around. <br /></div>
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<br><a href="http://economictimes.indiatimes.com/opinion/columnists/t-k-arun/putative-farmer-friendly-policy-killing-rural-prosperity-hurting-farmers/articleshow/12725235.cms" class="re" target="_blank">The Economic Times, 19 April, 2012, http://economictimes.indiatimes.com/opinion/columnists/t-k-arun/putative-farmer-friendly-policy-killing-rural-prosperity-hurting-farmers/articleshow/12725235.cms</a><div class="clear"></div>
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Published on Apr 19, 2012
Modified on Apr 19, 2012
Rural India has been denied access to globalisation, penalising farmers and farm labour. For the farmer, the government's policy is best described as Dhritarashtra's embrace.
After the Mahabharata war was over, the old king met his nephews, the victorious Pandavas, and embraced them, one by one, in a gesture of forgiving and affection.
When, Bhima's turn came, the loving embrace was so tight that it crushed a metal dummy of the second Pandava that Krishna had wisely thrust into the encircling arms of the blind king in place of the prince himself. New Delhi's affection for the farmer might be less feigned than Dhritarashtra's for the killer of his 100 sons, but its loving embrace hurts no less.
India banned cotton exports on March 5 and sort of lifted the ban a week later. The price of cotton crashed, the cotton farmers of Gujarat cried foul, every hair on hirsute Mr Narendra Modi's frame stood up in a frisson of ecstasy and excitement as he vented articulate fury on the treacherous Congress for sacrificing the farmers' interest to please the textile lobby.
In panic, the Congress-led central government asked the Cotton Corporation of India to procure cotton from the farmers at nearly twice the support price fixed by the Commission on Agricultural Costs and Prices.
Now, CCI bosses are trying to figure out whether the CBI would beat the CAG to their door, demanding an explanation for such profligate procurement.
This little episode highlights one method in which India's policymakers go about killing farmers softly: export restrictions, denying farmers access to the rising demand for food and industrial farm produce across the world. India bans export of wheat, rice, potato, onion, you name it, at the least provocation.
This makes India an unreliable supplier, ruling out steady, long-term supply contracts, planned investment inproducing the contracted supply, additional output and related incomes.
Why are Indian farmers so competitive in the export market, so much so that Indian policymakers have to ban exports to protect domestic supplies? Subsidy, is the short answer.
India subsidises fertilisers, canal water for irrigation, diesel and power for pumping water from wells and tubewells, and, in these days of allowing work under the employment guarantee scheme to be performed on private farms, some bit of labour as well. Steep input subsidies make the final produce cheap, regardless of efficiency in farming and productivity. These subsidies add up toalmost 2% of GDP and the value added in agriculture is now a shade less than 14% of GDP, subsidy accounts for some 14% of the value of agricultural output.
This huge subsidy bill comes at the expense of investment. Public investment in agriculture has been low and dwindling for a long time. Surface water management, building dams and canals in plain language, is now development blasphemy, but unless India harnesses a whole lot more of the monsoon's annual bounty, the country will soon sleepwalk into a full-blown water crisis.
Groundwater depletion is alarmingly close to 90% in many regions. Very often, farmers commit suicide because they borrow money at high interest rates to sink tubewells, only to find these wells running dry in a couple of seasons, leaving them with onerous debt burdens and the shame of not being able to bear them.
To understand that subsidy is a form of smothering the farmer, just imagine what would happen if the government were to spend 2,00,000 crore every year as farm-related investment, rather than as subsidy. Yes, removal of subsidy would see prices go up in the short run, but greater investment would boost yields and output, reducing prices thereafter and also boost farmer incomes.
The restrictions on farmers' right to sell his produce is the third biggest example of murderous affection for the farmer. Wherever the Agricultural Produce Marketing Committee Act is in force, farmers can sell what they produce only to a set of middlemen, who beat down their price and reap the benefit of superior prices in urban centres. The APMC Act is anti-farmer and anti-consumer, and must go.
If this is the soft part of keeping the farmer unconnected from the market for his produce, the hard, infrastructure part comprises missing rural roads and rural power. Without a good, motorable road network, no organised procurement of farm produce can take place.
Amul succeeded in Gujarat only because Gujarat already had an excellent network of rural roads. Absent rural power means absent rural industry. Agro-processing industry is the key to not just physically proximate price discovery for farm produce but also structural diversification of the rural economy.
Power subsidies and patronage of theft, seen as tokens of state love, bankrupt state utilities and abort rural electrification.
Could we please stop loving our farmers to death? There are no Krishnas armed with handy dummies around.
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