Implement the Forest Rights Act and other solutions to prevent millions of farmer suicides

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First they came for the socialists, and I did not speak out—
     Because I was not a socialist.

Then they came for the trade unionists, and I did not speak out—
     Because I was not a trade unionist.

Then they came for the Jews, and I did not speak out—
     Because I was not a Jew.

Then they came for me—and there was no one left to speak for me.

- Martin Niemoller

What is it and why is it important to us? (TL;DR)

The farmers of our country have been ruthlessly exploited by political parties in the country as a means to gather votes. Promises of the implementation of the Forest Rights Act (an act which allows for land up to four hectares to be granted to families who have traditionally cultivated those plots. Having the land in their names would make these families eligible for institutional credit from banks.) The Forest Rights Act, 2006 aims to recognize community forest resource rights of over 85.6 million acres of India’s forests, hence empowering 200 million farmers across 170000 villages. However, only 3% of this potential has been realized since then. This issue has been one of the major and the most suppressed causes of farmer suicides in India since the last decade. In the following paragraphs, I have included the steps that the Government needs to take in order to uplift the conditions of the farmers of our country. By signing this petition, you would be playing your small part in the world's largest democracy: speaking up for those who need your support the most. And this time, its the farmers of the country who require your help.

 

You may continue reading further to understand in detail what it is that we demand.

Introduction

Since the 1990s, the agricultural sector in India has declined catastrophically. This decline has manifested itself in several forms: high suicide rates, large scale distress migration to urban areas, and a large number of farmers living below the poverty line. There have reportedly been 2,96,438 farmer suicides between 1995 and 2015, and over 12,000 suicides in the agricultural sector every year since 2013. The 2011 Census revealed that the urban population had grown more than the rural population for the first time post-independence, indicative of a large amount of agricultural workers abandoning or even losing their livelihood and migrating to urban areas in a desperate search for daily-wage work.

The agrarian crisis has not been as much of a concern for the past governments than a talking point for election campaigns. As thousands of helpless farmers took their lives across the country, governments promised reform during their campaigns, only to neglect their own manifesto after they ascended their throne. The 2004 UPA regime owed much of its election success to Indian farmers. It even set up the National Commission on Farmers headed by MS Swaminathan to address this crisis; and although the commission made comprehensive recommendations, both the 2004 and 2009 UPA regimes failed to act upon them. To further outrage, recommendations made by the Swaminathan Commission formed much of the BJP manifesto for the 2014 elections, and farmers, once again, rallied behind them in hope for reform—only to face repeated neglect and policies such as demonetization that crippled the sector even further.

To provide solutions to the agrarian crisis, we need to understand the economics of the current agrarian distress, and in order to do this, we need to know the reasons behind it. We will be approaching this problem by examining a cause-and-effect relationship.

What caused this rural distress?

The agrarian crisis in India has been compounded by a number of factors: unfavourable change in market scenarios, disproportionate rise in input costs, dismal growth, unchecked urbanisation, increasing population pressure on a stagnant land size, unstable and unfair market prices, and, more recently, poorly planned policies such as demonetisation.

The negative effect of changing market scenarios can be traced back to the liberalisation of the Indian economy in the 1990s. Liberalisation and deregulation led to the rise in input prices for farmers along with decreasing subsidies for important commodities such as fuel and fertilisers. In addition, public investment in important sectors such as irrigation has been reduced and liberalised imports, duty-free in some cases, has cut down on farmer margins even further.

In contrast to these rising input prices, the agriculture sector has grown at a dismal rate (~1.5%), much lower than the GDP growth rate the Indian economy has enjoyed in recent years. As a result, farmer incomes have grown at a rate lower than the inflation rate, causing a major decline in real income.

Another major problem affecting farmer margins is land. The loss of cultivable land due to unchecked urbanisation combined with mounting population pressure on stagnant or declining agricultural area is a central cause behind the crisis. Since the mid-90s, there has been rampant industrialisation and urbanisation of land purchased from poor farmers by corporates and Governments; Twenty lakh hectares of agricultural land has reportedly been acquired for non-agricultural purposes. As a result, agricultural land area is almost stagnant or decreasing. The net sown area increased slightly from 141.3 million hectare in 2000–01 to 141.9 million hectare in 2008–9 and then fell to 141 million hectare in 2014–15. Rising population pressure on the limited land has caused land holdings to shrink in the past decades to an average of 1.15 ha. Small and marginal land holdings (smaller than 2 ha) account for 72% of all land holdings. This has resulted in a decreasing income per capita for farmers and prevents them from taking advantage of economies of scale. While fixed costs remain the same or increase, shrinking land holdings translate to smaller margins.

In addition to a disproportionate rise in input costs and decreasing margins, farmers have also faced unfair market prices for crops. While unstable prices are characteristic of the agricultural sector due to changing climate and harvest, especially in recent years, the government has failed to protect farmer interests and has caused farmers to face unfair prices during both good and bad seasons. During bad harvest seasons, instead of allowing for price inflation, the government releases stored stock and imports crops to inflate domestic supply and protect the urban population. During good harvest seasons, the increased supply has resulted in unreasonably low prices which the government has failed to adjust using price floors or the appropriate utilisation of Minimum Support Price (MSP). The Swaminathan Commission’s recommendations included those such as the MSP being 150% of costs, however, more than a decade later, margins under the BJP government have only worsened. Already meagre margins for farmers are further marred by the lack of a marketing structure and thus the involvement of middlemen taking advantage of the rural agricultural population for their own profits.

These factors have made agriculture unprofitable for most of the rural population, especially for small and marginal farmers. This has forced them, over the years, to borrow in desperation from informal sources of credit, and has buried the agricultural population in debt. The Government has neglected the agricultural population and has taken poor policy decisions which have adversely affected the sector. More recently, GST and demonetisation were major blows to an already struggling sector primarily dependent on cash.

The government introduced its demonetisation policy in hopes of making India ‘cashless’. This move destroyed the rural markets (where traders lacked facilities as basic as bank accounts) and the lack of cash halted all the transactions, which resulted in a lot of crops going to waste. The sudden imposition of the GST (Goods and Service tax) on agricultural goods confused the farmers and added to their cultivation costs. Also, the fear of cow vigilantes has hit the dairy industry hard. All of this has been contributing to the rural distress for a long time and the government needs to take necessary actions to prevent farmer’s suicides. 

What is the FRA and why is it important?

On March 6, 2018, some 40000 farmers embarked on a 180 km march from Nashik to Mumbai to protest for the implementation of the FRA (Forest Rights Act). The FRA allows for land up to four hectares to be granted to families who have traditionally cultivated those plots. Having the land in their names would make these families eligible for institutional credit from banks. Even farm loan waivers only apply to those who have taken credit from cooperative and nationalized banks. 

The Forest Rights Act, 2006 aims to recognize community forest resource rights of over 85.6 million acres of India’s forests, hence empowering 200 million farmers across 170000 villages. However, only 3% of this potential has been realized since then.

What was the result of the march?

The government provided a partial amnesty package of Rs 30000 crores and partially amended the MSP (MSP or Minimum Support Price is the price at which the government promises to buy the crops from the farmers. It acts as an incentive for the farmers and reduces their risks. As of June 2018, the government has set the MSP at 1.5 times the production costs). Even after these aids, the farmers did not witness a satisfactory price rise and demanded the government for more loan waivers, irrigation facilities and land rights. All of this is expected to cost the government another Rs 10000 crores.

The extent of these ‘lifesaving loan-waivers’ (How effective are they?):

Agricultural loan waivers fail to benefit the poorest of the farmers in rural India because they only cover the loans issued by cooperative and nationalised banks. Since these poor farmers rarely own land (they work on other people’s land by paying rent) or own a very small amount of it, they are not considered creditworthy. Hence, these farmers have to approach local moneylenders who charge exceptionally high rates. And when their crops fail, the government cannot pay off these local money lenders, which leads to suicides among farmers. Thus, the loan-waivers are not really effective because they fail to reach the people who need it the most: farmers who owe money to local moneylenders.

Are loan waivers a permanent solution?

No, loan waivers are a temporary solution. They allow the farmers to free up the existing loans and become eligible for a new loan. These loan waivers are not a permanent solution because the incomes of the farmers are not increasing. The cost of production of agricultural crops is rising while the market price is constantly decreasing. Neither water is available in sufficient quantity nor do the farmers have access to the technology which would help them increase their efficiency. This has led the farmers to resort to growing cash crops. Hence, agricultural productivity has decreased. Apart from this, the uncertainty of the monsoon rains and the prices in the global markets have contributed to the agricultural distress.

The agrarian reform agenda has been all about the prices since the 1970s. Structural reforms in the farming society have been ignored. I believe that the debt waivers will not solve the agrarian crisis. The government must support the farmers in developing new irrigation and farming technologies and make sure that all of this innovation must be available to all the farmers in the country. Trade reforms are necessary to help the farmers make a decent living out of their produce, but it is my firm belief that the most crucial move in solving the current agrarian crisis in India would be providing farmer education to all.

How will farmer education help solve the agrarian crisis?

From my experience of living and studying with a farming community in Australia for 40 days, what I understood was that farming education is extremely important to be a successful farmer. Students at Toowoomba Grammar School (and other schools across Australia too) were provided with the opportunity to take up “Agricultural Science” as a subject and study about the various types of soils, harvesting methods, crops and their water requirements, and all other skills and knowledge that one requires to run an efficient and profitable farm. Another popular subject taken up with Agricultural Science was Economics. It was only then when I realized that economics holds the key to profitable farming. Economics enables the farmers to understand why and how the price of products increases or decreases over time. Now, why is this important to the farmer? Well, with the knowledge of economics, farmers can predict if the price of the crop they will be growing this season will increase or decrease by the time they would harvest it. Or, they could analyze the past trends and conclude that the crop they will be growing would survive this season. But, most importantly, with the knowledge of economics, the farmers would realize that they hold the power to set the price of the crop they are selling. They can lower or increase the price of the crop in the market by adjusting the supply of the crop, or can grow crops which have a higher demand and lower supply to utilize the benefits of the producer surplus.

Hence, farming education can have a deep impact not only on the farmers but also on those who want to pursue farming in the future. Short-term educational courses lasting 2-4 weeks should be organised for the farmers, by the government or the NGOs in India to educate them about the basics of economics and give them knowledge about Agricultural Science. Bringing about a small change in our curriculum can save India’s farming future and make sure that the farmers of tomorrow are well prepared for any situation they face. This would also reduce the burden of the farmers off the government’s shoulders and thus, the government would be able to focus on other sectors and ensure the development of the country.

What can be done to improve the situation?

Increasing Incomes:

With reference to the 2011 census, the average income of a farmer was approximately 6000 Rupees. The NDA government has a target of doubling the agricultural income in India by 2022. To achieve this target, the government needs to improve technologies and work on agricultural diversification in favour of high-value commodities. The data from the 2011 census suggests that the urban population increased much more than the rural population for the first time in 90 years. This means that farmers are failing to earn a proper living and are moving to urban areas to find jobs and earn wages. This can be a direct result of the loss in confidence of the farmers in the government.

Generating Employment Opportunities:

A study by the Situation Assessment of India reported that more than 40% of the farmers would quit their jobs if alternative jobs were available. The most common reason cited by them is that agriculture has become too crowded and does not provide an opportunity to earn a regular income. Thus, farmers are migrating to urban areas in search of jobs providing them with daily wages. By 2020, people aged 15-34 years will make up 34% of the country’s population and 70% of this youth will be living in rural area. The government needs to provide incentives to the youth to take advantage of their energy and enthusiasm and transform local economies and rural agriculture. The agriculture industry needs to be expanded and should not be limited to farming. The government must introduce jobs in agro-advisory, agro-processing, agricultural and rural transport, etc.  Positions for Agricultural Science teachers should be opened and camps where they would educate the farmers should be organised. Micro and Small-and-Medium enterprises linked to farming should be encouraged to provide job opportunities to the rural population.

Reducing Risks in Agriculture:

The risks in production as well as those in the price fluctuations, have been increasing. The climate has been quite unpredictable since the last few years due to global warming. Unseasonal rains and hailstorms have been destroying farmers’ crops in the last few years. This has led to people considering farming ‘risky’. To reduce these risks, the NDA government launched the National Agricultural Insurance Scheme. This scheme does cover some production losses but the compensation is insufficient and it does not cover the risk of low prices. I believe that the government should consider launching a scheme that covers both, the production and the price risks, to reduce the risks related to farming.

Developing Agricultural Infrastructure:

Agricultural infrastructure such as cold storage, agricultural markets, warehouses and agricultural industries helps the farmers become independent and eradicate the middlemen between the farmers and the consumers. Due to the lack of proper agricultural infrastructure, the supply-chains of the rural agricultural industry are unorganised and fragmented.

Since it is very impractical for the government to construct all of this infrastructure in a limited amount of time, I believe that the government should promote public-private partnerships (PPPs) in the agricultural industry for the faster development of agricultural infrastructure. To make the agricultural sector available to the private companies, the government must encourage foreign direct investment (FDI), provide duty exemptions and focus on priority sector lending.

Conclusion:

The actions that the government can take have been listed below:

·        Implementation of the FRA (Forest Rights Act)

·        Structural reforms in the farming society

·        Development of new irrigation and farming technologies

·        Availability of new technologies to all the farmers in the country

·        Trade reforms

·        Farmer education

·        Introduction of “Agricultural Science” as a subject, which should be taught along with Economics

·        Short-term educational courses for the farmers

·        Agricultural diversification in favour of high-value commodities

·        Provision of incentives for the youth to take up farming

·        Introduction of jobs in agro-advisory, agro-processing, agricultural and rural transport, etc.

·        Encouragement for Micro and Small-and-Medium enterprises linked to farming

·        Launch of an insurance scheme for farmers that covers both, the production and the price risks

·        Promotion of public-private partnerships in agricultural industries

·        Encouragement for foreign direct investment (FDI) in agriculture

·        Provisions for duty exemptions on certain crops

·        Focus on priority sector lending