No one is interested in farmer welfare

The farmers in Maharashtra are protesting against the BJP government. News reports suggest that there are approximately 30,000 of them on streets in Suburban Mumbai, ready to enter the city by Sunday evening. They are demanding a complete loan waiver, better minimum support price as recommended by the Swaminthan Committee report, no “forceful” acquisition of farm land in name of development and in a few cases transfer of forest land that the farmers have been tilling for many decades now. The news reports can be read here, here and here. In case you want to read a melodramatic, fiction style version of the protest, you can read it on The Wire. Though the protests started much earlier, the media gave it attention only after the protesters landed at the gates of Mumbai.

We gave you a sickle and a hammer for 21st century farming.
What else do you need?

Now that we know what the farmers want, we should also know who is organising the protest march. The farming community in India is too fragmented and diversified to have same concerns and hence is not unified. The present movement is being organised under the umbrella of the Akhil Bhartiya Kisan Sabhi (ABKS), the peasant front of the Communist Party of India (Marxist). The same CPI(M), which was handed a resounding defeat in Tripura last week. The protesting farmers can be seen with the CPI(M) flags and caps, marching ahead towards Mumbai. The CPI(M) and its extended arms in trade unions have all the right to protest, take out processions and give speeches. We thankfully, live in a democracy and not some Communist dictatorship.

If there are genuine concerns about the agrarian situation in India and a union is using democratic means to highlight the concerns, then no one should have the problem. But then there are problems. What the protesters are demanding is nothing new. A blanket waiver of farm loans has been demanded and handed over in the past. The UPA government in 2008, did that. It awarded a loan waiver of ₹60,000 crore to small and marginal farmers. But guess what, within a few years the farmers were demanding yet another loan waiver and the governments started handing them out. The loan waiver had clearly not helped the farmers much.

The problem of farmers is not loans or their waiver by the government. Their problem can be summed up in just one word, “inefficiency”. And no one is willing to talk about it. Neither the union or state governments nor the self-appointed saviour of farmers, the CPI(M). The inefficiency that is pulling the farmers and the country down can be measured by comparing the agricultural sectors of India and China. Despite having less arable land, China produced far more per unit of land than India does. Irrigation, transportation, storage, pricing, etc. are all making farming an unviable occupation. If the system is kept inefficient the farmers will keep protesting and the governments will keep waiving the loans off.  

The agrarian distress has become a political tool to create hysteria. The CPI(M) and others of their strip use it to highlight how Capitalism is killing the farmers and hence generate support among the poor and the so called intellectuals. The others use it to either pull the opposition down or to appear magnanimous by announcing ruinous loan waivers. Not a single political party has ever come up with a comprehensive plan to improve the farm sector in India. And surprisingly the things that can fix the problems do not require out of this world innovation.

Here are a few things that can bring efficiency in the farming sector and relieve the farmers from their economic stress.

Irrigation is the most crucial aspect of farming. Farmers spend money on sinking tube wells and then on pumping water out of it. A vast majority of the farmers depend on ground water and monsoon for irrigation. Both are unreliable. The water table on one hand is depleting at alarming levels and the Monsoon is not getting stronger. The alternate is finding frugal solutions. For millennia, the Indians have been using water harvesting to meet their domestic and agricultural needs. Revive the ponds, lakes, tanks, reservoirs that were used to store rain water and to recharge the ground water.

Cooperatives – India has witnessed success stories in cooperative movement. Amul being a highly successful model. Since the vast majority of farmers are marginal farmers with small land holdings, their produce can easily be pooled into a cooperative and they can be paid the right price without having to travel to the mandis with their meagre crop and non-existent bargaining power.

Middlemen – Remove them. Too many fruit and vegetable markets in India are controlled by middlemen who decide on prices and what to be bought. The eye watering prices of onions are not a result of a poor crop, but that of hoarding by the middlemen. The farmers should be given direct access to the markets where they can openly sell their products, to whoever they want to.

Logistics – The concept of farm logistics is non-existent in India. The Food Corporation of India does a shoddy job at storing and distributing its stock of food grains. It is time that it is privatised with a clear tariff structure. Thousands of tonnes of grains is wasted every year thanks to the lack of infrastructure.

Minimum Support Price (MP) – Phase it out. There is no point incentivising farmers to produce a certain type of crop. The market forces are strong enough to create the demand. Many farmers grow certain crops in hope of getting the MSP. The government ends up with a huge stock, which eventually gets wasted. On top of that not all farmers get to sell their crops to the government. Once the MSP is phased out, the farmers will grow what they think will fetch them the right price.

Information – This point is linked to the cooperative framework, where farmers will be given information on what the different crops can fetch them. For example, growing celery or lettuce might be a better proposition, in some geographies, than growing tomatoes.

Value addition – The farming communities can be trained to add value to their products by processing them. Tomatoes can be sundried, squashed, pulped or turned into ketchup. Processing fruits and vegetable not only increases their shelf life but also fetches more money per unit. And one doesn’t really need capital intensive manufacturing plants for such jobs.

Land acquisition – This is probably the toughest part to handle. Various governments have tried many different approaches to handle this monster of a task. Nothing seems to have pleased everyone. Nothing probably will. The most common grievance of farmers, whose land gets acquired, is that what do they do with the money when their livelihood is being taken away. This is true. The unskilled farmers do not have an option to seek employment in the organised sector. The compensation, no matter how large, eventually runs out and they end up working on other peoples’ farms. A way to ensure regular income to the farmers can be to put part of their compensation into an annuity scheme. This will ensure a regular monthly income and leave them with some cash to use.

Skill them – We have to be honest with ourselves. Farming is no longer a sector people want to be in. It is far too labour intensive in India and gives pathetic returns. The time has come when children of farmers should be given the option of training in other trades where they can seek employment if they so wish to.

There are many other ways that can drastically change the way Indian farmers live and earn their livelihood. Sadly no one is willing to push for those changes. The CPI(M) is happy mobilising 30,000 farmers to Mumbai for a loan waiver but will never ever seek technological changes for the farmers. For if the farmers cease to be poor their politics of poverty will become irrelevant. The others are not interested in improving the lives of the farmers because they are too fragmented on caste lines to be counted as a voting block.

Unless the government has a vision to improve the lives of farmers by using technology and market access, the farmers will be used by both the CPI(M) and the others as political tools. Their lives will not improve, food wastage will continue and they will keep protesting.

Bengal on its way to become Kashmir

There are many ways to remain relevant in politics. One way is to make realistic promises before elections and working hard to fulfil them once the electorate handover their trust to you by electing you. But come on, that happens only in Bollywood. So the second way is to make exaggerated promises, offer bribes in form of television sets, laptops, smartphones and so on and win the election. However there is a third way, a time tested one at that. In here you identify the block of voters who can be manipulated, nurture them by offering irrelevant but perceived goodies like a stipend for their religious leaders, land grants for their schools and turning a blind eye to crime emanating from the places they live in. You become so dependent on them for your political relevance that there comes a time when, what seemed like patronising looks more like appeasement but it actually is giving up control.

When fire engulfs your turf.
Picture Courtesy - India Today

This is what has happened in West Bengal. The government of Ms Mamata Banerjee has lost control over a large territory in the state. West Bengal was never a peaceful state. With the first street battles of Naxal bari, culminating into a three decade long stagnation supervised by the Communist Party of India (Marxist), yes the same Marx, whose ideology killed millions in Soviet Russia and Maoist China, the state has always been a den of violence. But that discussion is for another day. To get a sense of the level of anarchy prevailing in the state, Indian Affair conducted a simple Google search for “West Bengal blast 2015”. The search yielded a NDTV link siting at least seven instances of blasts where people have been killed or injured. Read the reports here, here, here, here, here, here and here. To top this all was, the now forgotten, Burdwan blast where two women, members of an Islamist terror organisation, were killed. The house was owned by a Trinamool Congress leader, Hasan Chowdhury.

If these seven instances of blasts were not enough there were at least three instances of the police seizing arms cache, read the reports here, here and here. If bomb blasts and illegal arms turning up like soft serve ice cream every now and then is not losing control over territory then what else is? Perhaps it will take something more drastic for Ms Banarjee to see in, which drain her state is drowning. So here is more. As fresh as today, a report from India Today claims 80,000 bigha (32,000 acres) of farm land is being used for poppy cultivation in the district of Malda. The district administration is scared for their lives and do not venture into these pockets and obviously Ms Banerjee has no problems with this small poppy garden in her backyard.

Not many news shops covered Malda in early days of January when an estimated mob of 2.5 lakh people marched the streets, ran a riot, burnt down a police station, set police vehicles on fire and pelted stones at policemen fleeing the scene. Ms Banerjee was at least swift to take action this time. She ordered immediate refurbishment of the police station and ensured no traces of the arson and riot were left behind. She really is the Maa in “Maa Maati Manush”, saving her kids from harm’s way.

West Bengal shares an international border with Bangladesh, a very porous one at that. Forget flinging rice sacks across the fence, cattle and women are trafficked with ease, sometimes one can’t tell one from the other. Then there is the case of fake currency smuggling. Any sensible person heading a sensitive state like West Bengal will do their best to ensure law and order and reclaiming the lost territory. But Ms Banerjee has a different plan. Perhaps she wants to gift India another Kashmir. A border state with worsening law and order situation, large swathes of territory ceded to criminals, smugglers and terrorists. A bomb blast a month, madarsas doubling up as terrorist hideouts. And a flourishing mini Afghanistan in a poppy garden.

West Bengal is slipping away under the supervision of Ms Banerjee and she is not bothered. The bigger question, however is, who else can stop this?

Lets strike

The country is gearing up for a two day general strike on 20^th and 21^st February. The strike is supported by 11 trade unions across the country including Centre of Indian Trade Unions (CITU), Indian National Trade Union Congress (INTUC) and Bhartiya Mazdoor Sangh (BMS). Interestingly the three unions, CITU, INTUC and BMS are affiliated to Communist Party of India (Marxist), the Congress (main party in the ruling coalition) and the Bhartiya Janta Party (the main opposition party in the federal parliament) respectively. These are fairly large organizations and have close to 22 million members between them. Such large numbers give their patron parties a large pool of people who can be mobilized in an organized manner to send a message to the opponents. In this case the opponent seems to be the establishment, the ruling parties in general. All 11 trade unions have more or less agreed on a common agenda for the two day strike action.

Their main demands are, containing price rise, creation of more jobs, enforcement of labour laws, social security for everyone, minimum wage of INR 10,000, stop divestment of Public Sector Undertakings (PSU) and transfer of all contract workers into permanent positions. What the unions are demanding is job guarantee and increase in salary. They are not the only ones who want that. Given a chance we all would like to have a permanent job from which no one can fire us. This seems to be a fair demand by the unions. The unions are implying that companies should not be able to hire and fire workers at will and that all employees should be on permanent rolls of the companies so that they can get the benefits like health insurance and pension. This too is a fair demand. Why should some people be deprived of employee benefits? But the unions are silent on what the workers are willing to do in return of the benefits they are seeking.

The present labour laws of India make it extremely difficult for companies to lay off workers during difficult times like an economic recession or due to financial problems of an individual organisation. That is one of the main reasons why companies put so much emphasis on hiring contract labour. This makes it easy for the company to downsize during tough times. However such an arrangement is bad for both the companies hiring contract labour and the people who are on contract rolls. The company does not see them as reliable resource and hence does not invest in skill enhancing training for them. Some companies have started using automation as a means to avoid labour issues, after all machines never go on strike. Such developments lead to growth without increase in employment levels (this is true for lot of Indian states). Worldwide it is established that labour laws, which discriminates against either the employee or the employer lead to decline of industrial output in the long run. Greece and Italy are prime examples of how protecting the labour force can be a major reason for financial crisis.

Kolkata, the strike capital of India

The unions are also demanding more job creation and a stop to divestment of PSUs. But there is a basic flaw in this demand which the unions are conveniently ignoring. Post independence India adopted a Soviet style economy with heavy industries under state control. All natural resources too were controlled by the government. A small section of business was left for the private sector, which too was taken away during the nationalization spree by Indira Gandhi and the socialist government following the 1977 movement. However, no significant growth occurred post ’77 and India slipped towards the Hindu rate of growth, eventually facing bankruptcy in early 90s. Kolkata was once the most industrialized city of India, drawing entrepreneurs from all across India. It was what Istanbul was to Europe, a trade hub and gateway. Thirty years of socialist rule successfully pulled it down to being the least attractive metros in India.

It is not just in India, worldwide experiences show that nationalization and state monopoly of business leads to poor service standards and death of innovation (Venezuela and Argentina). It stops the incentive to be creative and stifles the entrepreneurial spirit of people.

Instead of the impractical demands, the unions should take a pragmatic look at the problems faced by the labour force in India. If they want the share of the wealth, they should contribute equally towards creation of the wealth. What the unions should demand is equal opportunity employment, health insurance, training opportunities and family welfare (day care and schools). In return they should agree to flexibility in labour laws, productivity linked appraisals and acting in benefit of the labour force not to become an arm of political parties. The unions should demand a consultation process of labour law reforms before the government unilaterally decides the fate of millions of workers across the country. The unions should demand to bring the unorganized sector under the umbrella of organized industry so that the people engaged there can reap the benefits and contribute their share towards the growth. Hammer and sickle lost their importance in the twentieth century, it is time for the unions to talk to the government and businesses as partners in growth not as a victim and tormentor.