Tag Archives: agrarian

Agrarian crisis in Punjab: A need for urgent corrective political action

Gone are the days when Punjab had earned the title of “India’s bread basket.” The state was viewed as the most dynamic and progressive state of the country, particularly on account of its success in the agrarian sector during the green revolution. Of all the states of India, Punjab’s agricultural growth rate was the highest during the 1960s to the middle of the 1980s which was the first phase of the green revolution.

Today’s Punjab is the story of farmers’ suicide, youth unrest and the story of a dying civilisation. The Badal government has put the whole community of Punjabis to slow death. Farmers and the youth are the worst victims of this crisis. 15 farmers have committed suicide in the State within a span of 45 days.

Over the past decade, the state has experienced deceleration of its economy and has slipped in the ranking of the prosperous states in the country. The crisis in agriculture has manifested itself in the form of stagnating productivity, rising cost of production, decelerating income, shrinking employment, escalating indebtedness and ecological imbalance.

One of the main consequences of this agrarian distress has been that the marginal and small farmers, who find it increasingly hard to sustain on farming, are getting pushed out from agricultural sector. These farmers are not being fully absorbed outside this sector due to the unfavourable nature and structure of the industrial sector in the state. As many as 6,550 industrial units have been declared sick and 18,770 units have shut down or migrated out of Punjab since 2007.

Thus, a large chunk of ‘reserve army of labour’ is prevalent in the economy. It is estimated that about 75 lakh persons are unemployed in Punjab and the numbers are adding up each day. The picture is grimmer in rural areas. The situation has worsened to the extent that young farmers have become the victims of suicides. The attitude of the state administration is also pushing the people to the extreme. Villagers fear seeking help from State officials since they are often accused of causing the suicide, which is a crime under the Indian Penal Code.

Agrigarian crisis in punjab

Need for corrective political action:

It is a life and death question for Punjab now, particularly, for its farmers and youth. Punjab is a land famous for realising the dream of Jai Jawan, Jai Kishan. Now, both are dying, one is the victim of drugs and another of political apathy. Can’t we stop our great civilisation? We can and answer lies in corrective political action.

What is required is an agriculture model tailored to the needs of market and that should be the government’s answer to the crisis. The government should be clear on which direction to go keeping in mind the requirement of all sections of the farmers of the state. The then Congress government in Punjab had launched a plan to introduce 1936 formula once advocated by the well known farmers’ leader Sir Chotu Ram.

This formula envisaged waiver of loans if farmers have paid as much interest as the principal amount. The formula, which became an act, is not applied any more. To develop farming sector and to increase the farming efficiency, it was recommended to enhance the accessibility of small and marginal farmers to formal agricultural credit. It was also suggested that loan for the livestock should be enhanced.

Thus, by providing more credit for the purpose of livestock would definitely enhance farmers’ income and ultimately would reduce poverty. The then Government of India advised the financial institutions to double the supply of agricultural credit in three years, from 2004 to 2007. In the subsequent annual budgets, government of India had announced targets for credit to agriculture to ensure adequate credit flow to the sector.

To mitigate the distress of farming community, in general, and small and marginal farmers, in particular, and to declog the institutional credit channels and make farmers eligible for fresh credit, the debt waiver and debt relief scheme, 2008 was announced in the Union Budget for 2008-09. The then government had implemented a package for revival of Short-term Rural Cooperative Credit Structure in the country.

The revival package aimed at reviving/strengthening the Short-term Rural Cooperative Credit Structure (CCS) and to make it a well-managed and vibrant medium to serve the credit needs of rural India, especially the small and marginal farmers. Therefore, the 11th plan period was a period of action for the focus on increasing the flow of agricultural credit. This period saw an increase in the flow of credit to agriculture from 2,54,657 Crore (2007-08) to 4,46 ,779 crores (2010-11).

There are many kinds of unconventional risks emerging in the agrarian economy of Punjab, which if not estimated and addressed properly may pose a severe challenge to its sustainability and hence food productivity as well as the farm incomes. This risk may further endanger the food security position of the nation and may increase the vulnerability of the poor in the country.

The decline in groundwater has resulted into an increased consumption of power by the agricultural sector. The cost of cultivation has increased. Intoxication of ground water is another problem. Therefore, water harvesting management and construction of water embankments need serious attention of the Government. The ambiguous path of development has not created debt free farmers.

On the contrary debts of farmers have been multiplying. Institutionalized credit system had failed to address the issues of rural indebtedness. This is the reason why moneylenders have transformed themselves into a form of sharecroppers or absentee owners. Many a time the agreement that the farmers entered into with the money lending class is either in the oral form or in the written form, which has no legal sanctity. This has aggravated the problem, particularly the families of deceased- the state would not recognize the loan taken from the moneylenders except the institutions.

Lack of access to credit is a severe constraint for many farmers in Punjab. The shortage of credit availability or capital constraint faced by the farmers is one of the major problems in the adoption of modern technologies and efficiency improvement in the agriculture sector. There are several irritating and bureaucratic hassles in obtaining an institutional credit.

Studies have found that a farmer on an average has to incur Rs 4016 for obtaining a loan from a commercial bank, which amounts to about 5 per cent of his total loan. Therefore, it is high time to address these inadequacies of the institutional sources. The farming sector development could be achieved by scheduling an adequate policy framework for more efficient performance of rural financial market.

To conclude, Punjab state is a major agricultural state, which is important from national food security point of view as well.

However, there has been a recent slowdown in agricultural growth and large-scale degradation of soil and water degradation has been witnessed. It is significant to note that even though farmers are migrating from agriculture, alternative sources of income are not available because of dying industrialisation in the State. The gradual withdrawal of the state from active participation in development activities has resulted in sharp decline in public investment in agricultural infrastructure and research.

Also Read – AGRARIAN CRISIS IN PUNJAB- Need for Corrective Political Action

Clearly, suicide is not an individual act. The problem of suicides in farming community needs, therefore, to be tackled in a holistic way. Compensation after death is not a solution rather can act as a trigger to encourage more suicides. The solution lies in preventive measures like financial help to the farmers who are in need of it. Remedies have to be found not only in terms of short term or immediate solutions to suicides, but also long term solutions to end the agrarian crisis itself.

While immediate measures could include relief, mainly financial relief, to the families of suicide victims, and attempts at their rehabilitation, the long-term measures to ‘nip the evil in the bud’ should comprise of attempts at rural industrialization. This could be done on the lines of how and what has been undertaken in East Asian countries especially in Taiwan. Farmers’ cooperatives, sans middlemen, to produce, process and market output on the farm gates can be a way out. This would not only provide the agricultural sector with a much-needed diversification from the wheat-paddy rotation, but also prove to be remunerative in terms of incomes and employment.

Also Read – What youth of Punjab Want?

Crop insurance programmes need to be strengthened, especially in cash crops like cotton, where the yield and price variability are relatively high. Innovative loan settlement mechanisms need to be developed in the case of crop failure so that the farmers can cope with falling incomes and tide over financial crises. Regulation of non-institutional lenders is necessary to prevent them from charging exploitative rates of interest from farmers and pushing them into a debt trap. Majority of the farmers in Punjab are small farmers and, therefore, the technology promoted in agriculture should be the one that is better able to safeguard the interests of these small farmers.

State government, apart from supporting and extending cooperation, must become innovative to articulate policies in the fast globalizing world to prod farmers’ organizations to initiate those activities, which integrate the processing and marketing activities on the farm gates. This also underlines that the state and state-run financial institutions would have to alter their system of lending-loans and would have to be made adequate, timely, cheap and commensurate with demand. The red tape and additional costs involved, which makes institutional loans so unattractive, would also have to be cut drastically.

Agrarian distress and its manifestation in the form of suicides have to be dealt with in all seriousness, beginning from soothing broken-both mentally and financially-families to longer term remedies of correcting the crisis itself. There can be no short cuts, only patient, persistent efforts by learning, adapting, adopting and implementing.

(The author is a Supreme Court advocate and National Media Panellist, The Indian National Congress )