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Agri Expert Devinder Sharma[/caption]
A day ahead of another round of talks between farmers and the Union government, agriculture expert Devinder Sharma tells The Indian Express how the current protests are being watched across the globe and how India can rebuild its agri economy by using assure price.
What is your take on the three farm laws that the Centre terms as a great reform in the field of agriculture?
These market-driven agricultural reforms have been prevalent in the United States for more than 6 to 7 decades. If the markets were so good I see no reason why American farmers should be saddled with a bankruptcy of USD 425 billion this year. The farm incomes have been on a steep decline, if adjusted for inflation, since the 1960s.
No wonder, despite massive farm subsidy support, the rate of suicide in rural America is 45 per cent higher than the urban areas. The point I want to emphasize is that the so-called ‘market efficiency’ in the US is actually built on massive federal support being provided year after year.
Not many people know that the US comes with a Farm Bill every five years. It makes budgetary provisions for subsidy and investment in agriculture for the next five years. For instance, the Farm Bill 2018, expiring in 2023, makes a provision for providing USD 867 billion in food and agriculture support for the next ten years. And yet, despite these Farm Bills, American farmers have been faced with a 50 per cent drop in net farm incomes since 2013 except for this year when an additional subsidy of USD 32 billion was given for the farm sector.
What about other rich countries?
Before every WTO Ministerial Conference the massive agricultural subsidies being provided by the rich countries become a bone of contention. The richest trading block — the Organization for Economic Cooperation and Development (OECD) — continues too provide mammoth farm subsidies. Despite opposition from the developing countries, these rich countries have not done away with these subsidies because that is what sustains their agriculture, and not markets.
In 2018, OECD countries provided a subsidy support of USD 246 billion, with European countries alone providing USD 100 billion. On the other hand, China has emerged as the biggest farm subsidizer, providing USD 212 billion in 2016.
If all the ‘green box’ subsidies, which in WTO parlance means non-trade distorting subsidies, are withdrawn, a 2007 study had shown that agricultural exports from US, Canada and European Union would drop by 40 per cent. In other words, even the so-called competitiveness of farm exports of the developed countries hinges on subsidy support.
The popular impression we carry, believing that markets have helped in increasing farm incomes in developed countries is, therefore, misleading. If the open markets in agriculture were so good I see no reason why the rich developed countries would have pumped in massive subsidies year after year.
What contribution have corporates made to the US farm sector?
At the time when Richard Nixon was the US President, his Agricultural Secretary Earl Butz had infamously said: “Get big or get out”. The message was loud and clear. So, in the years that followed, small farmers have increasingly quit agriculture. Only 1.5 per cent American population stays in agriculture today. If we bring the same model in India, obviously we will see the same outcome.
Even the Director General of the Washington-based International Food Policy Research Institute had made a similar policy prescription for India, suggesting: “Move up or move out”. It only tells us that the market reforms are built on moving small and marginal farmers out of agriculture. Considering that 86 per cent India farmers are small, owning less than 5 acres, what India needs are measures to make small farming viable.
Let me illustrate. Since the 1970s, 93 per cent of US small dairy farms have closed down, with 50 per cent or almost 35,000 licensed dairies pulling down the shutter since 2003 because milk prices declined, failing to even recover the cost of production. But instead of milk production declining, it has in fact gone up. Small dairy farmers were out, and corporates took over, setting up mega-dairies. The same is happening in the UK and Europe. The shape of things to come is already before us.
What support are farmers getting from our government compared to the US or other developed nations?
On an average, an American farmer gets a subsidy of USD 62,000 every year. Compared with this, an Indian farmer gets a paltry USD 282. If you take a look at the Producer Subsidy Equivalent (PSE) index, it gives you a clear idea as to how the rich country farmers continue to be subsidized. Besides, as I said earlier, there are numerous other ways farming is protected in developed countries, and farmers receive a number of other privileges too. For instance, Swiss farmers receive family allowance and also get rebate on petrol and diesel costs.
In India, we are made to believe that farmers receive huge subsidies and therefore have no reason to complain. This is a fallacy. Except for direct income support of Rs 6,000 per year by way of PM Kisan scheme, what Indian farmers receive are indirect subsidies on fertilizer, pesticides, and other inputs. These are in reality subsidies to the manufacturers, and also to the consumers by helping in keeping food prices low. Indian farmers need a safety net rather than making Indian agriculture completely dependent on the market.
Even when it comes to farm loan waivers, there is a clear-cut bias that prevails. While economists remain quiet when it comes to massive write-offs of bad debts of corporates by nationalized banks, which totals Rs 7.9-lakh crore between 2014 and 2019, a lot of hue and cry is made when bad farm loans are waived. Strangely, a former Chief Economic Advisor had even said that writing-off corporate NPAs leads to economic growth. But when farm loans are waived, they are blamed for credit indiscipline and upsetting the national balance sheet. That clearly shows we have socialism for corporates and capitalism for farmers. See details...
Source: Online/SZK
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