Saturday, March 21, 2015

MK Venu - Kisaan Virodhi, Narendra Modi? The Land Bill maybe political suicide for the government

If the banks can postpone repayment of loans worth several lakh crore rupees by big industry, the farmers must also be given some relief. For far too long, industry has wrested concessions from the government and public sector banks in the name of " creating growth and employment". All that we have witnessed in the past decade is a long phase of jobless growth.

There are milions of taxi drivers in India's major metros who come from Uttar Pradesh and Bihar and they invariably visit their families in the rural belt during sowing or harvest season. A constant story one hears from them is how agriculture is becoming less profitable with the rising costs of inputs such as urea, electricity and water.

Chandrabhushan Rai drives a private taxi in Mumbai and sends money --  about Rs.6000 per month -- to his family in Balia to help them sustain their monthly expenses which includes a modest private school education for his only son. His has about 5 bighas of land and asserts that agriculture income alone is just about sufficient to meet their food and milk requirements, leaving a very small surplus every month.

Chandrabhushan argues that most agriculture households in UP or Bihar work on less than 5 acres of land and have one person working in the cities to supplement the family income. Without this income it is impossible to sustain the growing family expenses, especially on educating children in private schools and paying for health and social ceremonies such as marraige in the family. 

Chandrabhushan's story may get repeated endlessly by thousands of other private taxi drivers in Delhi and Mumbai who come from agriculture families of UP and Bihar. Chandrabhushan says he had voted for Modi in the hope that there would be some improvement in the lives of small farm households. Especially since Modi had explicitly promised that farmers will get 50% profit margin over and above their cost of inputs. While that promise never got fulfilled, the farmers' situation had worsened because of unseasonal rains and the big fall in prices of agriculture commodities.

This was the one time the small farmer was expecting some relief. The first budget by Arun Jaitley had created a small price stabilisation fund to help farmers deal with the collapse in agri market prices. One is not sure whether that fund, though very small, is even operational today. "Modi made big promises but he has disappointed us," says Chandrabhushan. No wonder the opposition parties are mounting a joint campaign against the BJP with the slogan ," Kisaan Virodhi, Narendra Modi". 

The BJP is fast losing the perception battle on the land ordinance which seeks to acquire land from farmers without consent for private-public partnership projects. The tragedy for Modi is he doesn't have the full support of either his allies or the Sangh Parivar outfits like Bhartiya Kisaan Sangh and Swadeshi Jaagran Manch. The tragedy gets compounded as the Land Ordinance debate comes at a time of the worst farm distress in a decade.

There are newspaper reports that farm families in western Uttar Pradesh are suffering so much that they have begun to withdraw their children from private schools and colleges as they cant pay the fees anymore. The sugar mills in UP are yet to pay the farmers' dues. News reports suggest a crash in the wheat prices in the northern belt, onion prices in Maharashtra.

Cotton prices have also collapsed as China has halved its import of cotton from India. Observers say farmers' suicides, already rampant, will increase further in the coming months. In the middle of such an acute farm crises, the Modi government is engaged in a needless stand off with the opposition on the land acquisition ordinance which has been imposed on the farmers in the name of driving fast industrial development.

A wiser approach for Narendra Modi is not to stand on ego and let a Parliamentary committee look afresh at the land ordinance. In the meantime, he should address the immediate crises faced by the farmers across India. The government must expand the price stabilisation fund for the farmers and bring many more items under the minimum support price regime. The farmers must also be given a one time relief on loan repayment.

If the banks can postpone repayment of loans worth several lakh crore rupees by big industry, the farmers must also be given some relief. For far too long, industry has wrested concessions from the government and public sector banks in the name of " creating growth and employment". All that we have witnessed in the past decade is a long phase of jobless growth. High GDP growth of 8% plus has not ensured stability in the job market.


The BJP's key economic plank was to reverse jobless growth by focusing more on rural employment driven by agriculture-linked small industries and services. We don't see or hear about the execution details of this much touted strategy enunciated by the BJP in its manifesto. We hardly hear anything about a broader agriculture policy framework from the BJP's agriculture minister who has such a low profile that most people find it hard to recall his name. If Modi doesn't act fast he will soon face the most resounding rejection in rural India.