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‘Agriculture needs policy interventions’

In this e-mail interview to Deepak Razdan, he answers questions on rural distress, and the policy rejig he thinks can bring relief to farmers.

Deepak Razdan |

Feroze Varun Gandhi, Lok Sabha MP from Sultanpur, is currently in the news for his book “A Rural Manifesto” which has sparked a debate on rural distress in the country.

Gandhi toured the country for two-and-a-half years to collect information and interact with marginal and small farmers to discover why they had got into indebtedness and were unable to enjoy the fruits of development. His book, he prefaces, is a “tribute to India’s marginal farmer whose daily toil is as much an act of defiance as an article of faith”.

He writes, “I have travelled far and wide, across a multitude of towns, villages and habitations, and everywhere I have heard stories of sorrow, and yet been witness to the generosity and resilience that rural Indians possess.”

A member of the Nehru-Gandhi family, Varun, born on 13 March 1980, is a BSc (Hons) in Political Science from the London School of Economics and Political Science. He represents Sultanpur in the Lok Sabha.

In this e-mail interview to DEEPAK RAZDAN, he answers questions on rural distress, and the policy rejig he thinks can bring relief to farmers. Excerpts:

Q: How will you sum up your findings during your travels in the country to write the book?

A: To sum up the findings of my travels would be in one way to summarise the book itself, which remains a manifestation of my experiences and interactions with people across the Indian rural hinterland.

One of the key findings of the book, which seeks to explore the socio-economic feasibility of an Indian village, is that small and marginal farming remains largely unrewarding ~ rising input prices, unsustainable water usage, inadequate energy access and failure to take any advantage of economies of scale makes farming a difficult proposition each day as landholdings continue to diminish.

To compound matters, quality healthcare and education continue to be out of bounds for most citizens, especially among the rural poor. With farm incomes proving insufficient, we need to improve non-farm incomes for a village to sustain. Besides, we need policy interventions to re-tailor and revive Indian agriculture.

Q: Farmers were on the streets in Maharashtra and Delhi recently. Do you think current policies forced this?

A: We need to realise that most issues confronting our farmers have persisted for decades, if not centuries. Rather than looking to blame the Government, past or present, we need to evaluate issues causing rural distress and rethink our policies from an analytical perspective.

The main demands made by our farmers ~ implementing recommendations of Swaminathan Committee by increasing MSP and debt waiver remain rooted in rural distress.

The rural distress we witness today is a result of a cornucopia of various factors ~ be it increasing cost of cultivation, sustainable access to clean water and energy, inadequate marketing reforms and limited avenues for non-farm income at a village level. Among them, it would be extremely difficult to pick one issue as the single most important factor.

Q: Earlier, indebtedness passed on to next generations, today farmers are committing suicide everywhere. Why?

A: With the average land holding size decreasing and average input prices rising, the cost of cultivation has increased and with it, margins associated with farming have reduced. A farmer now typically earns Rs 2,400 per month per hectare of paddy and about Rs 2,600 per month per hectare of wheat, while farm labourers earn less than Rs 5,000 per month.

Nearly 31.4 per cent of all rural households remain indebted, with average debt of Rs 1.03 lakh. When we consider poorer rural households, their debt levels even exceed the amount of assets owned. The situation is getting increasingly desperate with most farmers wishing that their sons do not take up farming.

Effectively, about 30.5 million peasants quit farming between 2004-05 and 2010-11, seeking employment in the secondary and tertiary sectors. The size of this agricultural workforce is expected to shrink to about 200 million by 2020.

Meanwhile, the average growth in minimum support prices of kharif crops has been about four per cent, compared to the 13 to 15 per cent growth seen between 2010 and 2013. The consequence is farmers committing suicide.

Q: You are suggesting an alternative approach to rural development. What do you think the rural policy rejig should aim at?

A: Non-farm diversification is typically an important pathway for empowering landless labourers and marginal farmers. Our policies should help create sustainable long-term rural non-farm employment options which can aid the rural poor in overcoming barriers to economic prosperity. India’s rural development policies should increasingly focus on developing markets, infrastructure and institutions that can help sectors like livestock and construction grow. While India’s post-independence rural policy has primarily been about flushing people away from agriculture and towards cities, we now need to incentivise job creation at their doorstep.

Q: Do you think the loan waiver schemes breed credit indiscipline and hamper rural credit growth?

A: The current NPA crisis is not because of farmers holding back on repayments. We need to re-tailor our mechanisms for dealing with agricultural distress. Our existing mechanisms have gone to seed across states – Divisional Debt Settlement Forums in Punjab have been stymied by fund and talent shortages. In comparison, Kerala’s State Debt Relief Commission has dealt with both institutional and non-institutional debt, while being empowered to declare an area as distress- affected.

The commission is also able to waive off a percentage of the debts, while declaring a general moratorium on debt repayments. State governments should seek inspiration from the Kerala model, creating well-funded debt relief commissions that can dole out a quick mitigation process – instead of pushing all such action on the burdened and apathetic executive.

Additionally, we should encourage self-help groups, which create a safe avenue for functioning like a small bank, lending money to members. We need to skew our national budget towards agriculture.

Q: You found MGNREGA useful. How can its scope be enlarged?

A: MGNREGA has had a net positive impact on rural economy, by providing meaningful employment to millions of rural families. It has effectively created a labour wage floor in the rural labour market, raising minimum wages and increasing the participation of women in the labour force.

In addition, the scope of MGNREGA could be increased, allowing marginal farmers to be paid for tilling their own fields could reduce their input costs – they can’t afford other agricultural labourers and find it socially awkward to till someone else’s field. Such measures could increase their net income, reducing the scope of rural distress. Small steps like these can make a meaningful contribution to their lot.

Q: In today’s highly inter-connected world, you are suggesting the idea of a village as a single stand-alone socio-economic unit?

A: The book “A Rural Manifesto” explores the feasibility of an Indian village as an independent socio-economic entity, capable of sustaining itself independent of external linkages. As we try to refine our understanding about our future and economy, we cannot ignore our villages.

In fact, about 70 per cent of our population lives in villages even after 70 years of independence, and among them, a significant majority stays dependent on agriculture. The book delves into the lives of a rural Indian citizen by analy zing various aspects of their lives – be it agrarian conditions, provision for healthcare & education, non-farm incomes and labour conditions. It seeks to explore what it means to be a marginal farmer these days, and the role non-farm income plays in supplementing oneself below the poverty line.

Q: What personal anecdotes can you share from your travels across India?

A: The first one comes from the salt pan farmers in the Little Rann of Kutch, an arid landscape where farmers used diesel irrigation pumps to extract brine to conduct salt harvesting. Diesel can typically account for as much as 40 to 50 per cent of their total seasonal revenue.

To improve net incomes by reducing irrigation costs, pilot projects were introduced that utilised solar irrigation pumps. Such a project led to annual savings rising to Rs 70,000 – Rs 90,000, a 150 per cent increase compared to diesel powered pumps. When the season is done, the solar pumps are often used to power local households.

Q: You suggested right to recall in a private Bill. Looking at the cost of elections, it might not find acceptance from any MP?

A: We need to realise that elected representatives have a duty to perform and are to be held accountable to public. If someone is found lacking in carrying out his duties, the electorate should have the option to recall the elected representative. Such measures shall only strengthen our democracy, ensure delivery of promises made and increase accountability of elected representatives.