It is unfortunate that the Indian State has consistently ignored agriculture in the last fifty-odd years. Most observers also suggest that the share of agriculture in GDP, at some 25 per cent, is far too high. The claim is that agriculture could never really produce the surplus needed for prosperity nor the numbers of jobs required to provide full employment to the growing population. Some people assert that it is only manufacturing that can raise the mass of Indians from poverty, contending that the preponderance of services is also an unfortunate anomaly.
Over time, I have come to disagree with such assertions, for a variety of reasons. Firstly, I think that agriculture is a most precious part of India's heritage. In these days of surplus foodgrain production, Indians may have forgotten that not so long ago, we suffered from food insecurity on a national scale. But we should recall the humiliation of waiting for the American PL-480 program to dump surplus grain classified as only fit for non-human consumption. The ability to produce food is absolutely essential.
Secondly, India has tremendous genetic diversity in its crops, and this is a key factor when you remember catastrophes such as the Irish potato famine; other blights have wiped out entire crops and created enormous human misery. The big agribusiness powers such as the US are vulnerable: for example, there is mile after mile of monoculture corn in the vast American steppes. They could suffer massive crop failure if a resourceful pest mutates just enough.
Thirdly, India is particularly well-endowed with agricultural land and water. Something like 57 per cent of India's land is arable if only it is irrigated: contrast this with 15 per cent of China + Tibet's land mass. I don't know the numbers for America, but just drive out West and see the millions of acres of desolate emptiness, an arid landscape that stretches for hundreds of miles. I wouldn't be surprised if the US also has a relatively small percentage of arable land. Besides, the Indian land mass has a variety of climatic conditions: everything from semi-arid tropics to alpine meadowlands to rain-forest, and India can grow practically everything.
Fourthly, when I travel around India, the areas where there are the greatest ancient monuments are generally the ones where people had created agricultural surpluses and then used these to fund civilisation. An example is the Kaveri delta in Tamil Nadu, with the immense flowering of Tamil culture as seen in the soaring temple towers of the area. Similarly, Vijayanagar, on the Tungabhadra, at its peak the richest and largest city in the world, covering an area of over 500 square kilometres: bigger and much more prosperous than contemporary London and Lisbon, as noted with envy by visiting Europeans. A lot of its prosperity was due to agriculture, and of course trade, too.
If once upon a time India was able to be rich based on its agriculture, what has changed so much that we cannot any more? Of course there is a larger population, and of course imperialists destroyed many of the ancient systems of water conservation, but these can be regenerated.
For all these reasons, I think agriculture is no albatross around India's neck; it is just that India as a nation has not figured out how to make it a competitive advantage. Indians have been seduced by the siren-song of Chinese-style collectivisation. We have experienced a slow strangulation of our economy because of the iron grip of Marxist and Stalinist economists on the levers of power.
This much has been evident for a long time. Something I have been surprised about is the recent revelations of the state of agricultural labour in the US; the appalling state of agricultural labour in China is no surprise to me, but I too have been startled by the extent of their repression as chronicled in The Survey of Chinese Peasants by Chen Guidi and Wu Chentao. It appears that the oppression of the peasantry is a commonplace occurrence in many parts of the world. In comparison, Kerala's peasants are a lot better off, although, admittedly, Bihari and Oriya peasants living in poverty are not in good shape.
A dramatic study by the UCLA on food insecurity (Hunger in California)chronicles the startling fact that 2.9 million people go hungry (or are at risk of having to go hungry) especially in the Central Valley of the state: this is roughly one out of every ten Californians. And the Central Valley is perhaps the most productive agricultural area in the world. These hungry people are agricultural labourers by and large, and low-income, obviously, but there are working urban poor as well in the Los Angeles area and San Mateo county in the San Francisco Bay Area.
This poverty cuts across all ethnicities, but the most affected are Latinos and blacks; food insecurity is lowest in whites and Asians. These numbers mirror national findings. And this is despite the availability of food stamps (coupons to the poor for purchasing food items); between 2001 and 2003, food stamp usage has gone up in 24 states. Since food stamp eligibility is roughly correlated with poverty, this is in effect an indictment of the American system: the most affluent nation in the world, possibly even in the history of the world, has allowed a lot of its people to sink into poverty.
Undocumented aliens form, not surprisingly, a notable portion of these people, because they are afraid that they may jeopardise their ability to live in the US; in fact, even those who are eligible for food stamps may not approach the authorities because of their fear. Their lack of language skills and education are other hurdles, because the application forms for food aid are intimidating and complicated.
This is, frankly, a disgrace in wealthy America. And let it be noted that these are not indigent street people, the definition of 'low income' is someone making as much as twice the Federal Poverty Line; thus a family of four making as much as $37,200 falls into this category. They have to make hard choices: whether to pay for food or for other essentials such as health care or shelter.
The problems of Chinese peasants are equally amazing, especially when we consider the conventional wisdom that a billion Chinese have risen from poverty recently. See a searing review of the Survey of Chinese Peasants in the New Left Review: Dark Side of the Chinese Moon. 'Impoverishment and extortion of 40% of the world's peasants, in a report suppressed by the People's Republic of China authorities,' it says.
The review says the authors go about "documenting mud-hut hamlets where average annual earnings amount to 270 yuan, barely $30 a year; where the toilers depend on giving blood to make a living; where, with a carbootful of onions selling at 2 yuan, less than 25 cents, the peasants who grew them would explain that they could not afford to eat any themselves. And at the same time, the brand new, two-storey houses of the village cadres, their cars, mobile phones, their growing retinues, all needing salaries, bonuses, good meals and office space that must be paid for by taxes extracted directly from the peasantry. They show that, beneath the soaring new skyscrapers, the spreading highways, the luxurious nightclubs and Karaoke bars and the thundering Formula 1 racing track, there lies a foundation of flesh and blood. The 'silver coins' whose jingling lights up the brightly coloured coastal cities are forged from the sweat and toil of hundreds of millions of peasants. This is the dark side of the legendary Chinese Moon.
There are Potemkin facades too: 'In one memorable scene, the Survey of Chinese Peasantsdescribes how officials in Anhui's Nanling County scrambled to prepare for Premier Zhu Rongji's visit in 1998, to inspect the results of his grain-purchase policy. Since prices had plummeted and the county's barns were empty, 1,000 tons of grain had to be trucked in, with lorryloads arriving all through the night. The grain-centre workers were sent packing and local officials took their place, having learnt by heart the details of the State Council's directives and a list of false statistics, ready for any question the Chinese Premier might put. As the television cameras rolled, Zhu struggled to the top of the grain mountain with the help of his bodyguards and postured on its summit, highly satisfied with his policy's success.'
I have provided these examples of the oppression of agricultural labour elsewhere not to suggest that Indian peasants have no problems, but that for some reason, agriculture is devalued in the scheme of things everywhere. Echoing doomsayers like Lester Brown, I suggest that this is a fundamental mistake especially in view of climate change. We have to eat, and that is a pretty fundamental need. Farmers cannot just fade away.
Indian politicians, through malign neglect, have forced agriculture to wither away. But India has the endowment to become the granary of the world, competing with the US. India is today the largest or second largest producer of fruits and vegetables in the world, but a large portion of this produce is lost to pests and spoilage. If only the State invested in mechanisms for value-addition, such as processing, refrigeration, communication, packaging and transport, agriculture would provide a viable, sustainable mechanism for the employment of millions.
Unfortunately, some of the signals are pointing in the opposite direction, towards the further deterioration of the sector. Whenever I travel through Kerala, for instance, I come across acres and acres of fallow paddy fields -- and in my own lifetime, I remember these being gloriously fertile and productive. They have been abandoned for economic reasons, principally edicts that drove up the cost of labour. I am told by readers that similar things have happened in the Kaveri delta as well, as agricultural land has shrunk. This is an unpleasant echo of the fact that much rich farmland has been paved over everywhere by the untrammeled growth of cities and suburbs.
There are a few encouraging signs, though: for instance the initiative by ITC to set up e-chaupals or electronically linked rural collection centres. By disintermediating and simplifying the supply chain, these may enable the farmer to capture more value for himself. We have the example of the Punjab's Green Revolution farmers getting quite prosperous.
The State also needs to stand by its farmers when negotiating with the rest of the world on agricultural subsidies. It has been shown that the entire rich world provides heavy subsidies as well as tariff/non-tariff barriers to support their farmers, for instance at the rate of $7.50 per cow per day in Japan! See an old column of mine on trade barriers. There is no reason for India to cave in and disadvantage its own farmers: thus stiff countervailing anti-dumping duties must be imposed on monstrosities such as the 'butter mountain' or 'wine lake' of Europe if they wish to export said subsidised goods to India.
If proper policy structures are put into place, there is no reason why agriculture cannot be one of the major growth stories for India. Let us disabuse ourselves of the notion that somehow Indian agricultural labourers are especially oppressed, or that the agricultural sector is a drag on the economy. Conventional wisdom is simply wrong on this one.