The Indian farmer is a tough species. For generations, he has weathered drought, floods, pestilence and adversities of every kind. He has picked himself up after every fall and survived, even if barely. If there is entrepreneurship in the Indian DNA, it comes from the humble farmer.
But after seven decades of state policies that offer ever-rising support prices, subsidies on power, diesel, fertilizer, seeds, insurance and credit, and loan waivers to top it all, he has been reduced to a quivering jelly, a pale shadow of his former hardy self. He is marching to every state capital demanding more from the state, with a victimhood label pinned to his chest. An entrepreneur has been reduced to an angry supplicant.
The Indian politician and an extractive state have debilitated the farmer in the same way they have disabled our entrepreneurs and businesses. But while we began dismantling the licence-quota-permit raj in 1991, we continue to treat farmers as a special category. Thus, we still have APMC (agricultural produce market committee) regulations, export and import duties levied arbitrarily depending on whether domestic prices are up or down, and restrictions of other kinds. The state apparatus is still sitting on the farmer’s chest and pretending to offer him resuscitation instead of allowing his entrepreneurship to flower in a market economy.
It is not that our politicians don’t get this, but they see short-term electoral opportunities in mollycoddling the farmer rather than administering him tough love. So, their preferred solutions are higher minimum support prices (MSPs), more loan waivers, more subsidies. A recent Maharashtra attempt to move in the right direction, by allowing farm produce, including livestock, to be sold outside APMCs was abandoned even after the assembly passed the bill as traders, commission agents and labourers went on strike.
Isn’t it time we agreed on the obvious? That solutions to the farm crisis have to be found outside the farm? If agriculture generates less than 15% of gross domestic product (GDP) and supports the livelihoods of more than three times that number, farmers have to pulled off the farm, not subsidized to remain on it. India’s average farm sizes are simply too small to support viable farming, with 86% of them below two hectares. These farms have little or no surplus to invest in productivity.
This is the message coming not from urban intellectuals, but farmers themselves. When landed castes like the Patidars, Jats, Gujjars, Kapus and Marathas demand job reservations, they are using a megaphone to shout out: “Get us off the farm”.
India needs to abandon its rural political mindset. It must embrace urbanism like there is no tomorrow. The less we focus on rescuing the rural poor with mindless subsidies, the more likely it is that we will actually help them. Take the pressure off the land and the remaining farmers will easily find the wherewithal to invest in productivity and send their surplus progeny to the city to find jobs.
A few ideas to start with: The bulk of the ₹2.4 trillion of food and fertilizer subsidies can be paid out as cash to the urban poor and marginal farmers. The centre can maintain basic buffer stocks, and states should be free to run any MSP or farm support scheme that meets their specific needs. A one-cap-fits-all subsidy regime managed from Delhi is the worst way to help either farmers or consumers. Paying cash will enable poor farmers to lease out their lands and look for jobs.
The message from Ruritania is also decidedly urban. Villages on the periphery of cities are urbanizing fast. According to a World Bank report on Leveraging Urbanization in South Asia, India may be officially 31% urban (2011 census), but 55% of India has “urban-like features”—smaller urban centres concentrated near larger agglomerations. The migrant villager is creating new cities in the search for livelihood. But this natural move is being badly managed, with urban clusters being spread over a very wide area, instead of being spatially packed in smaller areas where commutes and jobs are easier to find.
India’s jobs nirvana lies in sensible and concentrated urban growth. This will generate millions of jobs. Urban accountability and governance thus need immediate attention. If the average big city mayor gets the powers of a CEO, he will soon start solving infrastructure problems and become more important than the state CM. Maybe this is what politicians fear. Their honey pot will be gone once urban areas assert themselves and direct their own futures. To be sure, we need to invest in agriculture, including irrigation, roads and cold chains. But it is important to flag the reality that beyond connectivity and storage, agriculture needs freer markets, and these markets are with urban consumers. Rural and agricultural nirvana depend on an urban nirvana.
R. Jagannathan is editorial director of Swarajya magazine.