Agriculture Towards a Grey Revolution
The message from the Government of India is becoming clear:
farmers get out of agriculture and make way for the contractors
by Devinder Sharma
New Delhi, India
The agricultural reforms that are being introduced in the name of increasing food production and minimising the price risks that farmers continue to be faced with, will in fact culminate in the destruction of the productive capacity of existing farmlands and will most definitely lead to the further marginalisation of farming communities. Encouraging contract farming, future trading in agricultural commodities, land leasing, forming land-sharing companies, allotment of homestead-cum-garden plots, direct procurement of farm commodities and setting up of special purchase centres, as envisaged by the blueprint will drive a majority of the 600 million farmers out of subsistence agriculture.
The consequent increase in migration from the rural areas into urban centres will magnify the implications of all the shocking calculations that have been computed so far. The World Bank had in 1995 estimated that the number of people migrating from the rural to the urban centres in India by the year 2010 would be equal to twice the combined population of the UK, France and Germany. With the fundamental vision of Green Revolution II unfurled, New Delhi seems determined to compound the socio-economic chaos. Migration from rural areas is sure to multiply several times in the years to come, thereby creating an unprecedented political crisis.
In a country where 80 per cent of the farmers own less than two hectares of land, and only 5 percent of farmers have more than four hectares, the biggest challenge is to ensure that agriculture can be made more attractive for these small and marginal farmers. At the same time, within the green revolution areas -- primarily in the Punjab, Haryana, western Uttar Pradesh, parts of Andhra Pradesh, Tamil Nadu and Karnataka -- agriculture faces a severe crisis of sustainability owing to second-generation environmental effects. Intensive farming has destroyed the ability of the land to produce enough food, and the mining of ground water has pushed the water table to a precarious level. The green revolution has already turned sour. As a result, the Punjab and Haryana are fast heading towards desertification -- a process that results in the inability to sustain the production levels achieved at the height of the green revolution.
Although the land holding size is diminishing, the answer does not lie in allowing private companies to move in by way of contract farming that is aimed at reconsolidating operational holdings with a view to increasing productivity. Private companies enter agricultural business with the specific objective of garnering more profits. These companies, if the global experience is any indication, bank upon still more intensive farming practices, draining the soil of nutrients and sucking ground water in a couple of years, and rendering fertile lands almost barren after four to five years of operation. The once fertile and verdant landscape will fast turn grey. Once this threshold is reached, these companies will then simply hand over the barren and unproductive land to the farmers who leased them out and move to devastate another fertile piece of land.
The replenishment of ground water resources should be an essential parameter for any meaningful agricultural reform. Unfortunately, at a time when excessive withdrawals of underground water have already become a major political issue, the cropping pattern continues to play havoc with the irrigation potential. The lessons from the other contract farming models are only too apparent. Sugarcane farmers, who follow a system of cane bonding with the mills (where the quantity of output to be purchased is determined beforehand with the mill), actually were drawing 240 cubic metres of water every year, which is five times more than what wheat and rice requires on an average. Rose cultivation that was introduced in Karnataka a few years back, required 212 inches of groundwater consumption in every hectare. Contract farming will therefore further exploit whatever remains of the ground water resources.
Legal recognition of land leasing offers no protection to farmers. Once the productive capacity of the land has been destroyed what can the farmer be expected to reap thereafter. Knowing this, the government is talking of homestead-cum-garden plots for those who lease out their lands. The objective is simple: to pacify those who question the impact of contract farming on household food security. Agriculture Minister Rajnath Singh on the other hand is not even aware of the basic objective behind his governments support for contract farming. He says that these companies will only be there for helping the farmers in marketing. What he probably does not know is that nowhere in the world are private companies involved with contract farming just to help the farmers find a marketing outlet.
Already contract farming has done irreparable damage to agriculture in countries like the Philippines, Zimbabwe, Argentina and Mexico. Punjabs and Andhra Pradeshs foray into contract farming therefore is a misadventure whose consequences will come back to haunt them in the future. It is actually accentuating the sustainability crisis on the farm front by destroying whatever remains of the farmlands productive capacity with more intensive and destructive farming systems. The resulting monoculture also destroys the agricultural biodiversity in the region thereby affecting sustainability. In simple words, contract farming is the modern version of slash and burn agriculture (jhum cultivation) that the tribals follow in the Northeast of India. There they practise it because of environmental constraints, whereas now private industries have embarked on this trajectory for commercial motive alone.
Other policy initiatives by the Ministry of Agriculture, such as allowing direct procurement of farm commodities, setting up of special markets for private companies to mop up the produce and to set up land share companies, are all directed at the unrestrained entry of multinational corporations into the Indian farm sector. Coupled with the introduction of genetically modified crops, and unlimited credit support for agribusiness companies, the focus is to strengthen the ability of the companies to take over and control the food chain. Significantly, the state governments have opposed the agricultural reforms on these very grounds. This response is, in a sense, similar to what happened two year ago, when the state governments had opposed the govern-ments plan to decentralise the food procurement system, terming it an effort to dismantle the procurement structure.
Agribusiness companies are in reality hostile to farmers, the appearance of synergies between the two notwithstanding. Nowhere in the world have agri-businesses worked in tandem with farmers. Even in North America and Europe, where agriculture is supported and sustained through beneficial government policy, agribusiness companies have managed to push farmers out of agriculture. As a result, today there are only 900,000 farming families left in the United States. In the 15 countries of the European Union, the number of farmers has come down to 7 million. The underlying message is crystal clear: farmers should get out of agriculture. In India, the same prescription will lead to an unforeseen catastrophe.
The plan to have farmers collectively mobilise land resources to facilitate access to modern technology and professional management in the farm sector, a concept being floated in the name of land sharing companies, is aimed at corporate control of the farmland. In India, except for a handful of cases, farmers do not have the ability to pool land resources unless backed by a private company. In other words, land sharing is another name for contract farming. All such experiments will force farmers to shift from staple foods to cash crops like cut flowers, tomatoes, strawberries, melons and so on, which do not meet the food security needs at the macro level. At the same time, the intensive nature of cash crop cultivation, requiring more external inputs, will do more damage to the environment.
The flawed understanding of harsh ground realities leads policy makers to the misguided belief that private companies can provide the much-needed impetus for increasing food production. If private companies could actually do the job on their own, there surely would have been no need for the first green revolution, let alone a second one. If private companies really had the capacity and the inclination to provide farmers with income support and an assured market, there would have been no need to set up the Commission on Agricultural Costs and Prices (CACP) to work out the cost of production for farmers. Likewise, would there have been any need to establish the Food Corporation of India (FCI) to mop up the food surplus? It is a given that private trade has historically been exploiting farmers at the time of harvest by giving them low prices. Unless a change of mindset has taken place unbeknownst, private trade cannot be expected to rescue the farming community out of a sudden and new-found magnanimity of outlook. Their motives become starkly obvious and clear in the context of the sustained lobbying to dismantle the public food procurement system of the government. Without minimum support and a guaranteed floor price, farmers abandoned to the guiles of the market and those who control it through their state-supported monopoly will be forced to enter in distress into contract with the large companies. It does not require any great capacity for prophecy or foreknowledge to predict the outcome.
The current inefficiency in the food procurement system is not the fault of farmers. The inability of the government to extend the purchase centres to areas beyond the Punjab and Haryana, is again not the fault of farmers. Instead of coming to the rescue of farmers by setting up purchase centres in other parts of the country, the government, on the grounds of market-driven efficiencies, has decided to dismantle altogether the system of procurement. Farmers are being forced to face not only the vagaries of the monsoon but also the ruthlessness of an unfair market. Already, among those who opted out of the food procurement system and went in for cash crops are thousands upon thousands who have either chosen the drastic option of committing suicide or are resorting to the pathetic alternative of selling their body organs. For all practical purposes they only have the choice between killing themselves instantly or killing themselves in instalments. The number of people to whom the market offers only such wretched choices, while the shopping malls bulge with brand options for the consuming classes of urban India, is bound to swell in the years to come. And like the governments of Andhra Pradesh and Karnataka, which are planning to send teams of psychiatrists to consul and offer life-affirming advise to despairing farmers, the Ministry of Agriculture in New Delhi will do well to think in terms of setting up plant clinics throughout the country, staffed by faith healers and counsellors instead of agricultural scientists.
But even that thoughtful if pointless gesture is not on the cards. To farmers in such pitiably reduced circumstances, the ministry has contrived the sophisticated alternative of future trading. In a country where only 43 per cent of the rural households have electricity, and where the average land holding size is too low, to expect farmers to engage in future trading is no more than a clever ploy to deprive them of state support and ask them to fend for themselves. Future trading requires a level of understanding of demand, price movements, and market forecasting that is simply beyond the scope of most farmers in their current condition. As many as 60 per cent percent of the farmers are so much beyond the pale of the institutionalised support system that they are dependent on private money-lending sources to meet their credit requirement and most of them cannot identify a spurious pesticide from a genuine one. These are the kind of people the government expects to comprehend all the complicated nuances of future trading.
Like the farmers who shifted to the cultivation of cut flowers to feed the export trade, we are likely to see a new breed of educated traders take over the reins. It is an unfortunate fact that a majority of those who ventured into cut flower farming were not farmers but businessmen. The National Multi-Commodity Exchange (NMCE) that has been set up in New Delhi recently, and which claims to have had a cumulative turnover of Rs 40,000 crore by November, 2003, has, so far, only 214 traders participating in its network covering 48 locations. Sadly for the ministry, farmers are conspicuously absent from future trading.
Future trading or no trading, farmers by the millions in any case are gradually abandoning agriculture in search of menial jobs in urban centres. Agriculture has not only become unremunerative but also unproductive. The process of corporate control of agriculture that will accompany the socio-economic change in the demographic composition of agrarian society, will destroy the ability of the land to sustain harvests. Crop diversification from staple foods to cash crops is not only an environmentally unsound practice but is also economically suicidal. But in the brave new world of corporate remedies, empirical proof is not sufficient to dissuade the studious theoreticians who manage the globe. Perhaps that is the reason why the World Bank has so strenuously been advocating for over a decade now the transition to commercialised agrarian monocultures. And in submitting to the coercive recommendations of the World Bank, the new agricultural reforms on the anvil will push more and more farmers of India to the cities. Migration from rural to urban centres is turning into a deluge that the city cannot withstand. Complementing the socio-economic change in village demographics is the stress on urban employment capacity and the imbalance in the employment profile. Most rural immigrants end up as rickshaw pullers or daily wage labourers.
For the techno-managerial class of India, farmers have become a burden. They are to be displaced from their roots because the market savvy elite of the country finds it too irksome to deal with the burden. The petulance of the affluent is now expressing itself in the pauperisation of the impoverished.
Published in In Motion Magazine February 8, 2004
About the author: Devinder Sharma is a New Delhi-based food and trade policy analyst. Among his works are GATT to WTO: Seeds of Despair and In the Famine Trap. Responses can be emailed to: email@example.com
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