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India's New Farm Policy

Devinder Sharma
July 2000

The mere mention of the name of Dan Glickman is sure to raise eyebrows. And, rightly so. After all, how can one expect an average Indian citizen and more so a farmer to know about the Agriculture Secretary of the United States? But sitting far away in the sprawling office of the US Department of Agriculture in Washington DC, Dan Glickman must be relaxed and "satisfied" after reading the draft of the National Agriculture Policy of India.

The National Agriculture Policy, tabled in the monsoon session of Parliament by the Indian Agriculture Minister, Nitish Kumar, is certainly a dream come true for the American Agriculture Secretary. For over a decade now, the American government, either through its deft manipulation of the World Trade Organisation (WTO) or simply through its arm-twisting diplomacy, had wanted the world's second biggest agriculture economy to forgo its unwritten but inherently applicable policy of self-reliance in agriculture. It had all along wanted the Indian government to shift the emphasis from food self-sufficiency to food dependency, from sustainable agriculture to corporate agriculture, from the famine-avoidance strategy so assiduously built over the ages to head towards a market-oriented agriculture thereby acerbating the process of marginalisation of the farming community.

For Dan Glickman, a steady and fast-track opening of the Indian market for its agricultural commodities and products was absolutely essential. With the phasing out of the quantitative restrictions and trade barriers in agriculture, which restricted the flow of cheap and subsidised foodgrains, set to be completed by April 2001, all eyes were fixed on bringing in certain structural changes in Indian farming that protected the economic interest of the American farmers. What happens in the process to the very survival of the 550 million Indian farmers, 80 per cent falling in the category of small and marginal, is certainly of no interest to the American government, and for some strange reasons to the successive Indian governments as well.

The National Agriculture Policy, the first after Independence, comes at a time when there exists clear and disturbing signs of a declining trend in foodgrain productivity, fast emerging barriers to sustainability of agriculture, depleting underground water resources, and the ever-growing indebtedness in farming. In the recent past, hundreds of farmers have committed suicide in various parts of the country, including the frontline agricultural states of Punjab and Haryana.

The alarm bells have been ringing for quite some time. For nearly a decade, agricultural production had stagnated. The spectacular yield growth recorded in the post-Green Revolution years in Punjab and Haryana have receded into history. Among the multiplicity of problems confronting agriculture, rapid fragmentation of land holdings is keeping pace with increasing population. In 1976-77, the average size of the holdings was estimated at two hectares, and in 1980-81, it came down to 1.8 hectares. Today, it stands at a mere 0.2 hectares. The total number of land holdings in 1981 were around 89 million, today these have crossed 100 million.

Basking in the afterglow of the Green Revolution, farming and agriculture have ceased to attract serious attention. In 1995-96, foodgrain production slumped to minus 3.60 per cent, in 1997-98 to minus 3.70 per cent, the worst-ever since the heady days of Green Revolution. The downward spiral in food production continues through the southern regions of the country. Tamil nadu, another Green Revolution area, is under tremendous strain from intensive cultivation. In Karnataka, the negative trend in yield levels of all food crops, barring cotton and sugarcane, are all too apparent. Farming in Karnataka can be clearly separated in two distinct classes, the "creamy layer" of corporate agriculture occupying the fertile and irrigated areas and the remaining low productive tracts at the mercy of rains, constituting the tiny and small land holdings.

For millions of farmers languishing in the drylands, constituting more than 70 per cent of the cultivable lands, it continues to be a futile struggle. Despite emphasis on dryland farming during the past several decades, the scenario still remains grim. The undulating topography and the irregular rainfall pattern have combined to aggravate the situation. That the drylands produce about 42 per cent of the country's food shows that the future of farming lies in these areas. Nearly 83 per cent of sorghum, 81 per cent of pulses and 90 per cent of oilseeds grown in the country come from these areas. With every passing year the gap between the farmer's yields in irrigated areas and in the dry farming region is widening. One year of drought is enough to push a farmer into a deep well of poverty for another 2 to 3 years. Fifty years after Independence, life for millions of people somehow surviving in the drylands continues to be worse than before.

As if this is not enough, the number of landless in the rural areas too is multiplying over the past few decades, at an estimated rate of 2 million a year. The negative terms of trade for agriculture and the declining public sector investments in farming are indices of the sluggishness in this sector. Still worse, the compound growth rate in foodgrain production at 1.7 per cent between 1991 and 1996, is lower than the annual population growth of 1.9 per cent, thereby indicating that the country has once again slipped into the Malthusian trap of hunger and famine.

At a time when food production struggles to barely keep pace with the burgeoning population growth, farmers are being asked to diversify, produce crops that are suitable for export and to compete in the international market. With promise of cheap food available off the shelf in the global market, the focus has shifted from agriculture to industry, trade and commerce, from the small and marginal farmers to the agri-processing companies, which alone can bring in investments and add value to produce.

We have been told, time and again, by the Confederation of the Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI), the principal authors of the new agriculture policy, that the agri-business industry aims to reduce the huge losses in fruits and vegetable crops. Studies (sponsored by the FICCI and CII) have shown that nearly 40 per cent of our fruits and vegetable production is lost in post-harvest handling. Obviously, you will think that the industry is planning to come to the rescue of Indian farmers. But in reality, it is keen to seek all kinds of financial and infrastructure support from the government and that too in the interest of the American farmers. To give you an example, it is a known fact more than 30 per cent of India's orange crop rots for want of a suitable market. In India, three private companies have recently entered the Rs 1000-million orange juice market, supplying "fresh" orange juice in tatra-packs. Ironically, these units do not use the Indian oranges. The juice concentrate is imported from California in America !!

And still, cultivation of staple food is being replaced by cash crops, tomatoes in place of wheat, durum wheat (for bakery purposes) replaces wheat as a staple diet in Punjab and Haryana, flowers in place of rice, and so on. In the coastal areas, private enterprise is taking away the fish catch depriving the local communities of a livelihood and the only nutrition source. In Kerala, vast tracts of forests and paddy fields have been converted into rubber, coffee and coconut plantations. The structural transformation is not only peculiar to Kerala. It is happening in almost all the states. Commercial crops are eating into the fertile land tracts meant for growing essential foodgrains. The diversion of good agricultural land, which in any case is limited, to commercial farming and even industries, is further restricting the ability to grow enough foodgrains. As if this is not enough, "contract farming" will now be encouraged thereby facilitating the process of industrial exploitation of agriculture.

With Nitish Kumar keen to legalise the process of corporatisation of agriculture, he is sure to strike a death-blow to Indian agriculture. To say that all this is aimed at "boosting investments levels" and conferring an annual growth rate "in excess of four percent" is merely a statement for the galleries. In reality, private investments and that too in an "environmentally non-degrading and socially acceptable" norms is not possible. However, what the Agriculture Minister further states and, which is very true is that the "policy is compatible with the imperatives of economic liberalisation and globalisation". This is an oblique reference to Dan Glickman's policy of opening up the Indian agriculture sector that I earlier referred to.

The US is presently overflowing with foodgrain stocks and soyabean, much of which is genetically engineered and rejected by consumers in the European countries. At the same time, the multi-billion biotechnology industry in America, which is a major financier of the Presidential elections around the corner, is looking for a market for its transgenic crops and animal products. By saying that "special attention will be given to the development of new varieties through adoption of biotechnology, particularly genetic modification, while addressing the bio-safety concerns," India has opened up its floodgates to import of the technology as well as the genetically-engineered agricultural commodities. And this is where Dan Glickman's political fate hinges.

Also, it is a known fact that America is going to emerge as the world's biggest food producer by the year 2010. The US Office for Technology Assessment calculates that with the help of biotechnology, the total production of corn, soyabean and wheat in America will increase by 21 per cent, 68 per cent and 35 per cent by the year 2000. And while the US has been on the forefront asking countries to do away with agriculture subsidies, its own subisidies to the farming community have gone up by 700 per cent since 1996. In the past two months, Dan Glickman has announced a financial support of US $ 1500 million to its farmers, whereas Nitish Kumar is even afraid of making an indirect reference of any agriculture subsidy in the policy document.

And all that the BJP-led coalition has promised the Indian farmers in wake of the assault through the WTO, is to make available resources for "pledge financing", which essentially involves farmers depositing their produce in bonded warehouses instead of selling it immediately after harvest. At the same time, the government is keen to dispense with the minimum price support for agricultural commodities thereby leaving farmers at the mercy of the private trade. Such a policy will play havoc with Indian agriculture. After all, what has not been understood is that any tinkering with the agriculture sector that encourages farmers to abandon their land and move on to cities in search of a livelihood is sure to lead the country into a dark abyss. In any case, the number of people migrating from rural to urban centres in India by the year 2010 has been estimated to be twice the combined population of Britain, France and Germany. This in itself is a nightmarish scenario.

Strangely, the National Agriculture Policy fails to make agriculture an attractive proposition. All that it aims is at how to let the private sector milk the farming systems dry. The "rainbow revolution" is in fact a recipe for disaster. With the foundations of India's food self-sufficiency destroyed, it will be left to a few million American and European farmers to feed a billion-strong India. And this is exactly what Dan Glickman dreams of.

(Devinder Sharma is a food and trade policy analyst)

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