Volume 2, No. 3, March 2001

On the one hand droughts and floods, on the other hand the crisis in agricultural commodities, is killing India’s rural population, which comprise 70% of its total. Except for a small class of rural elite, who earn through large-scale/intensive agriculture and have added income through trade, usury, contracts, political connections, etc., the bulk of the 65 crore people dependent on agriculture, are facing a severe crisis.

Never, since 1947, has the state of Indian agriculture been in such a state of devastation. Never before have farmers, in such large numbers, committed suicide. Deadly pesticides, promoted and pushed by the vultures of international capital and their Indian agents, have begun to devour their very user, while becoming increasingly ineffective on resistant strains of pests. Barely a day passes by, without a report of suicide from India’s interiors. Unfortunately, the TV culture of frolic and dance, numbs the sensitivity of the urban middle class, to the agony and trauma of an indebted farmer, whose crop fails, or is forced to sell it at highly depressed rates.

It is a horrifying scenario : An already heavily indebted farmer, spends enormous amounts on expensive inputs like fertilisers, pesticides, electricity and water charges, labour, etc. If there is a bumper crop, prices crash, and he is not even able to recover costs. If the crop fails, he looses it all. With the moneylender/bank breathing down his neck, he is forced to meet, at least, part of the debt cost, rather than feed his children. With no hope of the situation changing, he swallows the deadly poison.

From the backward regions of Andhra Pradesh (See February issue) to the most developed areas of Punjab, suicides have become a daily occurance. After last year’s kharif crop, in just 18 villages of Punjab, 33 farmers committed suicide. The MASR (Movement Against State Repression) claims that, in the last decade, roughly 400 farmers committed suicide. In Rajasthan, according to the National Criminal Record Bureau, in just the one year of 1997, 700 peasants committed suicide. In A.P. there have been over 800 suicides in the last two years. But even these would be under-statements, as the governments invariably denies the suicides, and blames it on ‘natural causes.’ They would rather let people die, than take remedial measures.

With agricultural commodities already submerged by a flood of imports, the Indian farmer views April 1, 2001, with increasing alarm. On that day, the balance of the quota restrictions on imports will be removed. This will sound the death-knell to a large number of agricultural products. This is the result of the weak-kneed Vajpayee government, who, on December 31, ’99, pledged to the Americans to remove all QRs (Quantitative Restrictions), even two years before the date stipulated by the WTO. To prove his servility, the Prime Minister ordered the removal of QRs on 714 items by April 1, 2000, and the removal on the balance (715) on April 1, 2001.

But, before coming to the present WTO/World Bank dictated agricultural policies, let us briefly look at the historical development of the agrarian economy, to get a deeper insight into today’s state of utter chaos.

The post-1947 Indian agrarian economy has passed through three phases — the PL-480 phase upto 1965; the Green Revolution phase upto the late 1980s; and the present phase of economic reforms. 180 years of colonial rule had destroyed the countryside, with the British rack-renting the peasantry; and allowing even existing irrigation works to go to ruin, let alone building anything new. The new comprador-feudal government was faced not only with rising peasant movements all over the country — Tebhaga, Telangana, etc — but also the spectre of communism, which had swept one-third of the world.

Radical change was aborted at birth, with the promised land reforms not being implemented. Agricultural ruin and agrarian discontent were met, instead, by a two pronged policy.

The first was tackled, to some extent, by reducing pre-1947 levels of taxation on the peasantry and putting some government funds into irrigation schemes and other rural developmental projects. The second was a series of US-sponsored aid projects, particularly the PL-480, to ward off the rural discontent. The latter projects were specifically used by the CIA to infiltrate the country on a large scale with PL-480 funds being used for its covert operations. These projects were conducted through the US State Department’s ‘Agricultural Mission’ in India and the Ford Foundation’s Community Development Programmes in the countryside, while the acute shortage of foodgrains was met by the PL-480 grain loans.

But, by the mid-1960s, though some irrigation projects came up, helping the landlords and a section of rich peasants to grow, scarcity became acute. In 1965, 66, 67 the country witnessed severe droughts, famines and food riots. What is more, the world wide uproar against PL-480’s subversive utilisation of funds, put an end to these foodgrains. Simultaneously, scientific advance in the West, had led to the introduction of new, high yielding seed varieties. US agri-business now sought to replace foodgrain exports with that of exports of inputs. By doing so, they would, infact, be able thereby to grab wider markets for their goods. And so, was ushered in, the World Bank sponsored ‘Green Revolution’. It had the goal of meeting the food scarcity needs of the country through the induction of US agri-business inputs.

In the first decade of the green revolution, till the late 1970s, there was an increase in foodgrain production giving sizable surpluses to the better-off farmers. But, by the late 1970s, the surpluses gradually reduced; and from the 1980s the rate of growth in yields also began to decline. This process can be vividly seen in a number of articles that appeared on this issue as early as the mid-1980s, like ‘From Prosperity to Retrogression’ (EPW June 21-28, 1986], ‘Farewell to Green Revolution’ (Frontier, Autumn Special Issue, 1986), etc. This was also reflected in the rise of the powerful farmers/peasant movements since the early 1980s .... beginning with the Narayanaswamy Naidu movement in Tamil Nadu, the Shetkari Sangathan in Maharashtra, Nanjundaswamy movement in Karnataka, BKU in Punjab, Tikait’s movement in UP, etc. These movements were directed against the state, demanding a reduction in cost of inputs, and a remunerative price for their produce. While many of the leaders capitulated, some of the concessions achieved — like low electricity and water charges, subsidy on fertilisers, an MSP (Minimum Support Price) on some agricultural commodities, etc — was a result of these movements.

However, the agrarian crisis only deepened inspite of these concessions, and took a quantum leap in the 1990s. This has now been aggravated ten-fold by the WTO/World Bank dictated ‘economic reforms.’

The reasons for the collapse of the ‘Green Revolution’ were basically two :

First, the ‘modern’ production methods of the ‘Green Revolution’ were super-imposed on the existing semi-feudal relations, and was not the product of the smashing of the old relations by the new. So growth was warped and disjointed. The necessary infrastructure and capital that the HYV varieties required did not exist, except for certain pockets. Extensive irrigation, water management, soil conservation etc., was all ignored but production was pushed artificially. Instead of systematic irrigation systems, the World Bank promoted the sinking of lakhs of tubewells by individual farmers as the main source for water. In fact, government expenditure on irrigation dropped, and expenditure was directed towards employment generation schemes out of fear that the idle youth may join the Naxalite movement that had broken out about the same time. Though seed loans (even grants) were provided initially by the banks to encourage peasants to switch to HYV varieties, they did not break the monopoly of the moneylender, who re-appeared in new and varied forms. The final result of this disjointed and anarchic growth, was a drastic fall of the water table, soil degradation, de-forestation, etc., resulting in a fall in yields. So, while the average yield rate of rice has grown at a rate of 1.1% a year in the nineties, it was 3% in the eighties; for wheat the growth was 1.6% during the last decade compared to 3% in the previous.

Second, the Green Revolution was primarily geared to extending the market of the imperialist-comprador combine, and not the betterment of people’s lives. So, with time, the cost of inputs grew at a much faster rate than the price of the output, slowly sapping the farmer’s surplus. In addition, like a drug addict, after being addicted to the HYV varieties, the soil/crop required a continuously increasing dosage of fertilisers and pesticides to maintain yields. A declining surplus transformed into increasing losses. In other words, a sizable amount of the fruits of his labour was being sucked away : by the imperialists-compradors through charging exorbitant prices for their inputs; by the government through increased charges; and by the trader, by being forced to sell the produce cheap.

Squeezed from all sides, the worst hit were the small and middle farmers, who resorted to HYV varieties (taking heavy loans), with the hope of not generating a surplus, but merely to meet the growing food requirements of the increasing numbers that had to be fed from the small fragments of land. The bulk of the suicides are from this section.

So, we find that by the end 1970s, stagnant yields, rising cost and increased quantity of inputs, and the lack of remunerative price of outputs, brought the ‘Green Revolution’ to a state of crisis. This intensified in the 1980s, even though some concessions were extracted by the militant farmers’ movements. And, into this crisis-ridden situation was introduced the ‘economic reforms.’

The damage to Indian agriculture is occurring and will deepen as a result of : (a) a forced opening up of the Indian market to agricultural imports; (b) a further reduction in the already abysmally low investment in agriculture; (c) the wrecking of what little ‘food security’ approach in agricultural production has existed since the seventies, and (d) the dismantling of public sector procurement and price support operations and public distribution.

While points (c) and (d) will be taken up in the next two parts of this article, here we shall first see the phenomenal growth of imports and then show the massive drop in government expenditure in agriculture, before coming to the specific policies dictated by the World Bank.

The following table gives an indication of the massive growth in food imports which is swamping the agrarian economy :

The existing crisis due to imports will get further aggravated after April 1, 2001, when all quantitative restrictions are removed. In addition, the WTO recently threatened that they will vigorously challenge any country that seeks to replace QRs with high tariff walls as an equivalent method of protection. The flood of imports is a direct result of the WTO dictated policies.

Over the last two decades public investment in Indian agriculture has virtually halved. It dropped from Rs. 1,796 crores in 1980/81 (80/81 prices) to roughly Rs. 900 crores (80/81 prices) in 1998/99. As a percentage of GDP in agriculture it fell from 4.2% in 1980-81, to 1.85% in 1996-97 and further to 1.45% in 1998-99. An example of this drop is the fall in the Agricultural Ministry’s expenditure on foodgrain development from Rs. 82 crores in 1990-91 to Rs. 32 crores in 2000-2001.

It is said that private investment has taken the place of public investment in agriculture. This may be true to some extent in the earlier period of the ‘Green Revolution’ when the surplus was significant and re-investment seemed a profitable proposition. The major investment would have been in pumpsets/tubewells, tractors and other agricultural equipment. But, later, with the surplus falling drastically (due to reasons already explained), even the little generated was more likely to find non-agricultural usage where returns would be higher. This overall drop in investment in agriculture is shown by the fact that the share of agriculture in gross domestic capital formation has slid from 14.5% in 1980-81 to just 6.4% in 1998/99.

This is getting reduced even further due to the present policies of the government. As a result soil erosion and degradation, lack of afforestation, collapse of water sources and reduction in the water table, etc., are increasing. In this crisis state the government is squeezing the agriculturist/peasant even more by : handing over seed, fertiliser, etc distribution totally to the unscrupulous trader; dismantling FCI and the MSP (Minimum Support Price) mechanism thereby forcing the agriculturist to sell his produce at depressed rates to the private dealers; winding up concessional loans and; most important, increasing the pressure on land by neglecting handicrafts, reducing IRDP expenditures, and retrenching lakhs of workers/employees.

Of late, there is a leap in people becoming more dependent on their small plots of land due to lack of employment opportunities. Let alone new occupations, existing ones are being wound up. The massive retrenchment in the private and public sector, the destruction of the handicrafts, and the reduction in the government’s rural employment generation schemes — have all resulted in increasing numbers being forced to depend on the land for their survival. With the small plots already divided up into minute holdings, these extra mouths to feed, is proving disastrous.

Not only from the urban areas, but even in the rural areas, we find that non-agricultural employment has actually reduced. Whereas, of the total rural workforce, 75.5% worked in agriculture in 1990-91, in just three years, by 1993-94, the figure rose to 78.4%. Thus, in just these three years, there were roughly 1.4 crore more people dependent purely on agriculture — i.e., from within the rural population alone. The situation has been particularly aggravated by the reduction to half, of the Centre’s expenditure on rural employment schemes — from Rs. 5432 crores in 1995/96 to Rs. 2,665 crore in 2000-01 (if one considers inflation during this period the fall would be even more drastic). As a result of this, employment generation fell from 1,242 million mandays in 1995/96 to 793 million mandays in 1998/99.... and continues to drop.

These disastrous conditions have resulted in the percentage of the rural population below the poverty line, having increased from 35.4% in 1990/91 to 42.6% in 1998 (Estimates by SP Gupta — member of the Planning Commission).

And, into this situation of crisis is being introduced the latest set of ‘economic reforms’ under the directions of the World Bank. Vajpayee and his ilk says it is a panacea for the present ills, when, in fact, the cause for the disease is being put forward as the solution. It is like administering a dangerous live virus to the patient, and proclaiming loudly ‘all is well, the patient will soon recover.’

Soon after Vajpayee took power the World Bank issued its directives. It stated :

Fully in line with these directives the government, last year, announced its much trumpeted National Agricultural Policy (NAP), the first ever since 1947. The 15-page document promised to usher in a ‘rainbow revolution’ and to make India the largest exporter of agricultural products. Some other important aspects of the NAP are :

(1) The agricultural sector to develop at 4% per year. When in fact its growth rate has dropped from 3.5% annually in the 1980s to a mere 1.5% in the 1990s, such statements are obviously only for propaganda purposes. In fact, the aggregate production of foodgrains increased by only 26 million tonnes (mt) in the 1990s, compared to 52 mt in the 1980s. So, all talk of a 4% growth is mere kite-flying, and fools no one.

(2) A major aspect of this new policy is to promote private participation "through contract farming and land leasing arrangements to allow accelerated technology transfer, capital inflows and assured markets for crop production, especially oil seeds, cotton and horticultural crops .... Lease markets will be developed for increasing the size of holdings, and legal provisions will be made for giving private land on lease for cultivation and agro-business."

This amounts to nothing but opening out agriculture to foreign agri-business, either by capturing vast fertile lands or by turning farmers into agents of TNC, to produce on their behalf.

This clause appears as if it may have been dictated word for word by Monsanto, which is aggressively pushing its Genetic Engineered (GE) seeds in India, and conducting research on the same through its Indian agent, MAHYCO.

This has been followed up by a high profile campaign for GE foods, which have been banned in the EU countries. In fact, even at the very 88th Indian Science Congress held earlier this year in Delhi, promotion of GE foods was made the central theme. Vajpayee, who inaugurated the meeting, sounded more like an agent of the US GE industry, rather than the PM of India, when he said "formation of Genome Valley, unshackling governance of research and higher education from bureaucratic controls, enhancing farm research investment to 2% of GDP," was the government’s goal.

Inspite of vehement opposition to GE foods and Monsanto-MAHYCO operations in India, it is obvious that the government is all set to push through the ‘Gene Revolution’ in India. In fact, it has recently been shown that GE foods worth $4.5 million has sneaked into the country as ‘aid’ for the cyclone-affected in Orissa.

(4) Extension of market facilities to counter fluctuations in prices and calamities. But, everyone knows that by throwing open agriculture to the vagaries of the market, price fluctuations have devastated lakhs of peasants.

In addition to the above policies, the Central Agricultural Reforms Committee proposed that, within three years, all food subsidies should be removed, minimum remunerative prices should be maintained and food imports should be increased to substitute food scarcity.

Besides, a Task Force on the WTO and agriculture, under the chairmanship of that arch World Bank agent, Sharad Joshi, is now working on a road map for transition to a market-based and globally integrated agricultural economy for India. The framework for such a policy is : removal of inter-state restrictions and integration of national markets; allowing entry of the large private sector companies into grain management; systematic encouragement of food processing industries so that the farmer can move up the value chain; and freeing imports and exports, along with a carefully worked out system of tariffs and other support measures that can meet WTO standards.

All these policies are perfectly in line with the World Bank’s recommendations. Also, the process for dismantling the FCI has begun with it hesitating to intervene in rice/wheat purchases in last year’s kharif purchases, under the pretext of excess stock. Though, after militant agitations by the farmers, it was forced to intervene, it did so with hesitation, and only to the minimum possible. Simultaneously, there has been a blitzkrieg of articles in the media against the FCI. Obviously it is on its way out.

So, the swadeshi-mouthing BJP-led government is all set to fully implement all the open instructions of the World Bank, and the secret dictates of companies like Monsanto. In fact, at a BJP National Executive meeting held in early January this year, a resolution was adopted to extend reforms to the agricultural sector. The resolutions suggested : limiting the role of the FCI and taking the first step towards involving the private sector in procurement of grain and distribution; decentralising PDS operations by involving the private sector in procurement.... The resolution appears to be a direct reproduction from the World Bank Bhagawat Gita. The Congress(I), which is making much noise, in order to increase its vote-share amongst the rural populace, has, infact, been a party to all these policies. In states where it is in power, like Karnataka and Rajasthan, it aggressively pushes these same ‘economic reforms’ in agriculture.

To reverse such policies, means a reversal of the entire globalisation process in India and an open confrontation with the imperialists, particularly the US. None of the parliamentary trash are prepared for such confrontation; the bulk, in fact, act as agents for one or the other imperialist lobby. Their battles are only over the spoils, to appease one lobby or the other, and gather the crumbs for themselves. If at all these policies are to be effectively fought, it requires a broad-based militant anti-imperialist movement, involving all sections of the affected masses. Its target must not only be the TNC-World Bank-IMF gangsters, but, more particularly, their agents within the country. (to be continued)

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