Farmer Crisis on Devalued Outputs: Insights from India
This story is credited to Al Jazeera's Inside Story: Why is Indian farmers' plight being ignored?
Photo: An affected farmer in India telling his story to Al Jazeera
Debt crisis amongst farmers happens in countries in transition from food shortage to food production. In particular, suicide rate amongst Indian farmers reaches the highest point at 14 people per minute due to inability to pay off debts, leading Indian government to adapt shock therapy by writing off farmers' debts. That is, according experts, jeopardizing financial system and decreasing taxation necessary for social infrastructure. It appears as what I would sat as a paradox of food price where on one hand the urban people pay for expensive food while the rural poor suffer from cheap price products.
Photo: Indian farmers littering their cheap products on street to protest for state attention.
The problem has implications of development inconsistency between limited food innovation which can turn perishable horticultural products to unperishable bulk commodities. Another implication lays on disconnection between urban demand of food and weak local agriculture economy which cannot supply urban market due to poor infrastructure. Besides, another main implication is monopolization of private giant enterprises over government performance, which simply means that state policy is influenced by private interest--let say fertilizer company.
Even if implementation of policy is proper, I would like to show impression on Indian government's effort in breaking down middlemen-barriers and diversifying markets to ensure that larger amount of money runs into farmer's account
I may dare to give two suggestions from agriculture-based-economy. One suggestion is that state's central bank has a greatest role in determining what sectors to encourage and de-courage in gradual manners. Agricultural productivity enterprises need to enhance, so does food mass industry.
AJ did a great job bring three quests on discussion table. They include Gopal Krishna Agarwal, a spokeperson of Economic Affairs (Government body), Mohan Guruswamy, Chairman of Centre for Policy Alternativesa, and farmer activist Vijoo Krishnana.
Photo: AJ's Inside Story. Presenter Hazem Sika, published on 5/16/2017
The AJ asks the first question on what the Indian government needs to do to the crisis in addition to writing off debts for farmers. The farmer union acknowledges that releasing debts is only a temporary solution in time of crisis which has to be replaced with a better long-term solution by creating ‘proper and fair’ price for farmers’ product which right now goes even below the cost of product. Farmers deserve to receive Minimum Support Price (MSP) which equals cost of production plus 50 %, according to recommendation of Swaminathan Committee, which works on farmers’ problems. However, things are still on rough way to go.
Gopal Krishna Agarwal, BJP Spokesperson for Economic Affairs, appreciates the recommendation from the Committee, yet first thing frist, the government has to do with farmers’ current frustration and depression which increase suicide rate amongst them due to unpaid debts. Resolving mechanisms, according to Gopal, include cheaper farmer insurance and loss assessment. The loss assessment aims at getting farmers away from potential loss of income to middlemen and other sorts of intermediate leakages of capitals. Instead, the government promotes direct flow of capital right into farmer’s account.
National Agricultural Market is believed to link small farmers in rural areas with more geographically-diverse markets such in urban Delhi. This is understood as indoor-to-outdoor market transformation. To achieve such the market diversification, India government believes that electronic market connecting seller and buyer around India and rural-urban infrastructure development will push farmers to higher incomes. Yet it appears a big conflict of interests, asking how to guarantee middlemen’s acceptable interest.
With regard to rural-urban livings, a million-dollar question is asked how to maintain decent food prices between producers and consumers. It is easier to understand that we, on one hand, secure the producers’ side by seeking ways to increase prices for them, yet on another hand, we insecure the consumers who face possible higher food prices.
In response to this, Mohan Guruswamy, Chairman of Centre for Policy Alternatives, gives an alternative towards an innovation which changes perishable horticultural products (i.e. crops and fresh vegetable) into bulk commodities (i.e. cereal and frozen foods) which are imperishable and easy to control in terms of price. India now turns itself from food shortage toward larger producer, which creates changes in food consumptions patterns. However, investments in food and farming industry are still in need. Personally speaking, Indians are changing from eating fresh banana to earing cheaper dried banana.
India government now is standing in the middle of something more than food crisis but huge price crisis. The crisis appears as a paradox of nothing between high-price consumers in urban and low-price producer in the rural. What could it happen to say people on one side keep saying their food is extremely expensive whereas on the other side farmers are crying for higher price. That is really a paradox of no food. The answer lies on the fact that 60 % of rural populations are sustainable farmers with no or little surplus, and they could not access directly to urban market. In general, mechanisms by the government is to break barriers between rural and urban market cycle.
Standing for farmer union, Vijoo Krishnana gives voices against the government’s mechanisms which he claims as failure. For examples, government insurance scheme does not benefit farmers but multinational insurance companies. Also the state’s Rural Employment Guarantee Scheme also failed. However, I did not receive great insights on how they fail, calling for more explanation. That results in undesirably high suicide rate up to 14 people per minute.
With acknowledgement to the problem, Indian government calls for multiple solutions in turning perishable products into bulk commodities so that it fulfills urban high food demand. Incapability to improve infrastructure and lack of comprehensive supply chain still remain concerns for the government.
Surprisingly, how is it possible that India with fast-growing economy cannot afford good infrastructure for farmers? According to Economic Affairs representative, sophisticated infrastructure like cool storage demand grant investments and money. Private sectors are still hesitated to inject their money on big projects in agricultural industries. The government supports private investors by providing what they call ‘soil health cards’ helping filter what kinds of soil appropriate for them to invest on. Yet the soil health card is reported by Farmer Union as failure due to absent participation from private fertilizer companies.
Linking his argument with agricultural infrastructure, policy analyst Mohan Guruswamy points out imbalances between trading terms between rural and urban areas. The central state subsidizes the urban economies so much—it is cheap for everything, for instance. In reality, Indian rural people buy a car with international price, but the urban buy food at the very cheapest price. That leads to the fact that people got trapped into datedness. Eventually the government decided to write off loan for bankrupt farmers and jeopardized the banking system.
His recommendation is to stop giving loan waivers and turn to make a start by promoting rural investments which allow people to pay off loan by themselves. That will recover financial credits as benefits for rural infrastructure development.
As final conclusion, current state policy aims at developing agricultural development in a big picture of innovation on bulk commodities and private investment enhancement. Moreover, India is a new path of dragging affected farmers of land-based agriculture (i.e. vegetable) to other sectors such as ago-industry and animal husbandry.
