Farms and jobs: Not much to feel good about
Sumitra Behera is one of the teeming millions languishing in the countryside. An unknown Indian, somehow surviving against all odds, she recently figured in the news when she decided to sell her one-month-old baby for a mere ten rupees. It did not shock the nation. No one was outraged, none of the newspapers decided to comment editorially on what was clearly a symbol of national disgrace. Not even one distinguished Member of Parliament, including those who swear in the name of one-third reservation for women, stood up to draw the nation´s attention to the shame reflected in Sumitra's desperation.
Instead, at that very moment the media was gloating over an egregious ´feel good´ factor, a pointer to the historic peak of USD 100 billion in foreign exchange reserves. There was jubilation all around, with corporate chieftains leading the cheer. Meanwhile, news reports said that in the month of December 2003, three other families grappling with hunger in Angul, Puri and Keonjhar in Orissa had reportedly sold their children. The sale of children and body organs is not only restricted to western Orissa or for that matter to neighbouring Jharkand and Bihar. West Bengal is actually the largest 'supplier' of girls, Andhra Pradesh comes next. The rest of the country does no better. You just have to peel off the media façade.
Take Madhya Pradesh. Jai Lal, a landless agricultural worker of Bandali village in Sheopur district in the heartland of India, returned to share the good news with his wife – that he had finally managed to get a petty job with a shopkeeper – she had succumbed to hunger. A week later, graves were dug for his two children, both unable to continue with the prolonged fight against hunger. Call it by any name, acute hunger and malnutrition forces unlucky parents to either sell off their children or to silently dig graves for them. Those who survive, undergo the ordeal of being sex workers; they are also exploited as labourers, drug peddlers and for their organs. Despite all talk and programmes, hunger has withstood the best and worst of times, only to emerge as robustly sustainable.
November 2003. 7.5 million people applied for a mere 38,000 vacancies in the Indian Railways. Thousands of those who applied for the post of ´gang man´, one of the 'lowly' jobs in the railways, were post-graduates; many even had management degrees. That the number of applicants had in fact exceeded the total population of Switzerland, was twice the population of Ireland, and was certainly a third more than the populations of Norway, Finland and New Zealand, should not come across as mere trivia. What followed was even more worrying – 56 dead in the riots that followed, and the 38,000 who eventually got the job left more than 7.45 million of those who were applicants still waiting.
Notwithstanding the exuberance over the ´unprecedented´ growth of the software industry, the fact remains that the famed IT industry of India has only created 0.5 million jobs. In the name of software exports, the IT industry continues to milk the state exchequer by way of tax exemptions and ´incentive for improving efficiency´, a sophisticated term for the much-abused subsidy. At the same time, the telecom sector continues to be a recipient of the government´s largesse. The government doled out a Christmas bonanza of INR 9600 million in 2003 to a handful of telecom majors, essentially to compensate them for the preference it has shown to one company; a year earlier, the government had passed on a benefit of INR 7000 million to a telecom giant, thereby angering others.
The mainline economy
No wonder, the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) are excited at the rising foreign exchange reserves. They surely have enough reasons to ´feel good´. For the rest of the country, there is hardly anything bright and shining on the horizon. The paradox of plenty – acute and widespread hunger amidst overflowing foodstocks – exists at a time when the country is poised towards a high-growth trajectory. At the beginning of the millennium in 2001, India boasted of a food surplus of 65 million tonnes while 320 million went to bed empty stomach. Strange are the ways of the political masters, that while the country incurred INR 62,000 million to keep the foodgrains stacked in the open, it had no money to distribute it to the needy. Mainline economists in fact have even suggested food exports as a viable way out. And some parliamentarians talked of throwing the food into the sea to make way for the next harvest.
Policymakers, planners and economists have been telling us that even if poverty increases in the short term, this is a price that has to be paid for long-term stability and growth. Hunger is the outcome of increasing poverty and deprivation, and so should not be a cause for fear, they protest. And yet, with every passing year and month, India has been sinking deeper into a quagmire of deprivation and despair. At the national level, more than 135 million people have no access to basic health facilities; 226 million lack access to safe drinking water; about half of India´s adult population is illiterate; and about 70 percent of its population lacks basic sanitation facilities. India has the world´s largest population of diseased and disabled which continues to multiply. With nearly 52 percent of the population earning less than two US dollars a day, the economic models of growth have only succeeded to extend the poverty line to bring in every year a sizeable percentage of the population within its deadly grip.
It is widely accepted that one of the surest ways to remove poverty is to make agriculture more profitable, and, of course, productive. With nearly 70 percent of the country´s population directly or indirectly involved with farming, agriculture should have received the top priority in policy planning. Instead, all efforts are directed at depriving agriculture of its due share thereby aiming at further marginalisation of farming communities. At a time when agricultural subsidies are being gradually withdrawn under pressure from the World Bank/IMF, the government is also toying with the idea of dismantling food procurement system so as to push the gullible farmers to face the vagaries of the markets.
The minimum support price that is provided for a select number of staple crops is therefore being projected to have reached the ´maximum´ limits as a result of which agricultural commodities are priced out in the international market. The support price for wheat and rice has therefore been frozen at 2003 levels. The statutory minimum price for sugarcane, linked to a certain percentage of sugar recovery, too is being lowered so that the powerful sugar industry can pocket more profits.
There is no economic rationale for freezing farm support prices. The government has been misled to believe that the higher procurement prices are the culprit when it comes to farm commodity exports. The international prices for agricultural commodities are low because of the huge agricultural subsidies that North America, European Union and the other OECD countries provide to their agriculture. The more the subsidies over there, more is the price slump in the international market. Artificially low global prices therefore are not the real criteria to measure the competitiveness of Indian agriculture produce.
The competitiveness of Indian agriculture has to be seen in the context of its cost of cultivation. This too is being wrongly measured, compared to the subsidised prices that Western farmers are being given. The flaw is clearly evident. Let us work out the cost of producing one kilo of wheat in North America with that of in India. Even with the huge farm size that North America is known for, the cost of production is several times more than what the Indian farmer on average manages. There is therefore no justification in depriving Indian farmers of their legitimate source of income. Not paying the farmers a higher price does have a negative impact on the rural economy, which eventually ends up in more food insecurity.
In reality, the government has been seeking refuge under the garb of 'increasing fiscal deficit' so as to deprive the farmers a higher crop price. Last year, New Delhi's Ministry of Agriculture had proposed a hike of INR 30 per quintal increase for wheat price. The Finance Ministry had turned down the proposal saying that the price hike will bring an additional burden of INR 3000 million on the state exchequer. Ironically, fiscal deficit has never been the consideration when the government doles out massive funds for the telecom industry, the IT industry or the new sunrise industry — biotechnology.
Agriculture, the mainstay of the Indian economy, which essentially is responsible for the higher economic trajectory, is incongruously the most neglected. This downgrading of agriculture has resulted in increased joblessness and thereby more food insecurity. The negative terms of trade against agriculture have to be turned around if the country is to emerge from the hunger and poverty trap. It is time the 600 million farmers too begin to ´feel good´, and the resulting domino effect will be truly 'shining'.