Farmers In Andhra Pradesh Are Left With
No Option But To Go On A 'Crop Holiday'
By Devinder Sharma
17 September, 2011
Ground Reality
There is something terribly going wrong with agriculture.While nearly 40,000 farmers in Punjab, Haryana, Himachal Pradesh and Jammu& Kashmir have defaulted on repayment to the State Bank of India alone tothe tune of Rs 600-crore, hundreds of farmers in the rice bowl of AndhraPradesh, comprising the fertile and irrigated East Godawari and West Godwaridistricts, have refused to cultivate paddy this year, declaring a ‘crop holiday’.
What may appear to be two completely disconnected eventshappening in two different geographical regions of the country is in reality awake up call. Whether it is the northeast or the more productive northwestregions; whether it is Punjab, Andhra Pradesh,Tamil Nadu or Odisha; agriculture continues to be in the throes of what appearsto be a perpetual crisis for survival. What is not realised is that it is actuallya crisis of sustainability and economic viability.
It all began from the fertile konaseema region of EastGodawari district in Andhra Pradesh where a small farmer Suryabhagwan owningsix-acres of land voluntarily announced that he would prefer to work as a‘coolie’ than to undertake paddy cultivation. Already under heavy debt andknowing that another season of paddy cultivation will only add to hisindebtedness, his call for a ‘crop holiday’ soon reverberated. Within a fewweeks, the idea of a ‘crop holiday’ in the ongoing kharif season spread like wildfire and more than 1 lakh hectares inthe two irrigated districts today lies barren.
Andhra Pradesh is a paddy growing area. While production hasbeen steadily on an upswing over the years, adequate market infrastructure forprocurement has not been created. The result is that despite a very highproduction capacity there is little space for storage. When Chandrababu Naiduwas the chief minister, I remember one of his statements asking farmers not toproduce more rice in kharif season ashe has no place to stock the surplus grain. I am therefore not surprised tolearn that from the previous rabi season(2010-2011) alone, an estimated 50 lakh tonnes lying with farmers, is still tobe purchased.
Much of the unsold stocks of paddy are stored with farmersin the two districts of East Godawari and West Godawari.Suryabhagwan therefore is absolutely right in deciding not to grow another cropof rice in kharif and be saddled withthe additional harvest. This brings me to another popular thinking, beingpromoted by economists, policy makers and the private trade, that thegovernment needs to withdraw from procurement and allow the private players toprocure the grains. If the Andhra Pradesh government was to withdraw from paddyprocurement, and knowing how private trade exploits the gullible farmers, Iwouldn’t be surprised to find more and more seasons of ‘crop holidays’.
Like in Andhra Pradesh, the Ministry of Food and Agricultureannounces procurement price for 25 crops every year but effectively procuresonly wheat and rice. Unlike Punjab and Haryana where the State agencies procureover 90 per cent of the grains flowing into the mandis, the Food Corporation of India has in other States outsourcedits procurement operations. Such an arrangement has allowed farmers to beexploited by the private trade, and more often than not forces them intodistress sale. Minimum Support Price (MSP) thereby loses its significance andfarming becomes unviable. It is primarily because the farmer is unable to get aremunerative price for his produce that more than 40 per cent of the farmers,as per a NSSO survey, want to quit agriculture if given a choice.
Even in the frontline agricultural states of Punjab and Haryana, where massive quantities of chemicalfertilisers, pesticides and ground water are used, farming has become economicallyunviable. Despite abundant irrigation and subsidised loan to farmers, if nearly40,000 farmers have defaulted on repayment to just one bank -- State Bank ofIndia – to the tune of Rs 570 crore (HP and J&K have defaulted by Rs 30crore only), it clearly is an indication that agriculture in the GreenRevolution belt has lost its sheen. Farmers in Punjaband Haryana have certainly not opted for a ‘crop holiday’ but by defaulting thebanks they too have made a powerful statement. What is still worse is that suchan acute economic crisis is happening in a state that has always beenconsidered to be the harbinger of rural prosperity.
Interestingly, the subsidised loan was being provided at aneffective rate of 4 per cent despite the rate of interest for agriculture being7 per cent. The State bank is now holding 400 compromise camps for farmerswhere a final settlement can be made. I am told the situation in other statesis no different. The non-performing assets of the banks from agriculture arepiling up. This is happening at a time when a recent NABARD study shows thatbanks are in reality charging 14 per cent interest (against the subsidised 7per cent) by clubbing their extraneous expenses also as amount to be recoveredfrom farmers.
The warning is loud and clear. The terrible agrarian crisissweeping the country is the outcome of a continuous neglect and apathy. Overthe years, agriculture has been deliberately pushed the downhill path. Whilethe economic and scientific prescription to bail out the farming communityinvariably hinges on to providing improved and sophisticated technology, it isthe declining incomes that is hitting the farm sector. The tragedy is thatinstead of providing more incomes into the hands of farmers, what is beingoffered is more credit which further adds on to farm indebtedness. No wonder,two-third of MNREGA workers are actually land owners. Clearly an indicationthat small farmers are unable to survive solely on agriculture.
Setting up yet another high-level committee is not theanswer. What is needed is to provide farmers with an assured monthly take-homepackage. At a time when the monthly wages of government employees after the 6thpay commission have gone up by 150 per cent, monthly income of legislators andparliamentarians has risen by 200 to 400 per cent, education and healthexpenses have gone through the roof, and even the BPL families are getting thebenefit of health insurance and PDS, it is only the farming community that hasremained at the receiving end. What the farmers need desperately is a FarmersIncome Guarantee Act that determines the monthly income package a farm familymust receive.
Devinder Sharma is a food and agriculture policy analyst. His writings focus on the links between biotechnology, intellectual property rights, food trade and poverty. His blog is Ground Reality
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