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Why Rahul is wrong about the Indian farmer

By Rajeev Srinivasan
April 23, 2015 14:28 IST
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Rahul Gandhi accuses the Modi government of being in thrall to corporate fat cats at the expense of farmers and other common folk. But the facts do not bear out this argument.

Indian farmers are relatively better off compared to the really wretched of the earth, the unfortunate landless, often itinerant, labourer, says Rajeev Srinivasan.

The fact that Rahul Gandhi, on reappearing after being AWOL for almost two months, made a speech in Parliament without obvious blunders has apparently electrified both the Congress party and the English language media. They had been waiting for Godot, and, lo! it seems he has come.

The bar is set so low for Rahul that if he doesn't make a fool of himself, it is hailed as though it were the Second Coming of Jesus. That should not be surprising: The Nehru dynasty has that effect on people.

The late Steve Jobs was rumoured to have a 'Reality-Distortion Field' that he carried around with him: Namely, that if you merely were in his vicinity, or listened to him speak, you had no choice but to believe in him, such was the strength of his charisma.

Maybe Rahul has his own reality-distortion field that causes strong men (and presumably women) to go week in the knees. Although it seems odd to speak of Jobs and Rahul in the same paragraph, I grant it may be true. Those dimples, the brisk rolling-up of kurta sleeves, the purposeful lunge at the mike: Maybe all that is charisma.

Be that as it may, the sound-byte that has remained from the Rahul speech is 'suited-booted,' a typical Hindi alliteration, which I take to mean 'snooty upper class.' Rahul accuses the Modi government of being in thrall to corporate fat cats (I just realised that it's also alliterative, and I offer it gratis) at the expense of farmers and other common folk.

The facts do not bear out this argument, as Indian farmers are relatively better off compared to the really wretched of the earth, the unfortunate landless, often itinerant, labourer.

There are three classes of people involved: The large farmer, the small farmer, and the landless labourer. I agree that the last are in really bad shape, as inflation has cut into their meagre earnings, and some of them are even in bonded, virtually slave, conditions.

I am not sure in which class the poor farmer from Rajasthan was who committed suicide by hanging himself from a tree during an Aam Admi Party rally in Delhi on Wednesday, April 22, but he is a vivid symptom of the malaise: Suffering ordinary people, uncaring politicians who use them as cannon fodder.

There is an interesting historical background to the landless, unskilled labourers. There is reason to believe that they are the descendants of prosperous artisans, weavers, and small craftsmen, skilled labour, from an era that ended in the 1770s. Then the British intentionally wiped out small industries, those that had made the Kaveri and Brahmaputra deltas the workshops of the world, along with the Pearl and Yangtze river deltas. Overnight they went from skilled labour to indigent.

These people never recovered, and the independent Indian State has not done enough to rehabilitate them: Basic education and setting up industries which, with their greater productivity, would have got them decent wages, rather than in lower productivity agriculture.

Since Rahul's ancestors are the ones who failed them, it is a little disingenuous of him to ignore them in his rhetorical flourishes. Incidentally, they too do vote.

I say this with full appreciation of the farmer, as most countries go out of the way to support farmers: Food security is visceral. If I were a policy maker, I would plump for intensive agro-industry, with value-addition so that commodities like tomatoes can be turned into packaged foods like ketchup.

The Indian farmer is already the #1 or #2 producer of fruits and vegetables in the world. India could, in fact, feed the world, if half its crop weren't eaten by pests and ruined by spoilage. But the necessary infrastructure -- neglected for 200 years -- is perhaps too much for us to afford at the moment, until there are factories absorbing under-employed agricultural labour and generating surpluses that can be invested in agro-industry.

The people whom Rahul seems to mean are land-owning farmers. While farmers always complain about everything -- the weather, crop failure, minimum floor prices -- they are not quite so badly off. Those who own even relatively small pieces of land have seen its value go up as cities and towns expand. For example, I know from direct experience that in Thiruvananthapuram, the price of small parcels of land for housing is roughly the same as in the San Francisco Bay Area, one of the most pricey in the US. Many small land-holders have sold out, pocketed their earnings, and moved on.

Most small farmers find that their children want to move to cities and join other professions. If they are given fair compensation (often better as an annuity rather than a lump sum they will blow up or mis-invest), and some opportunities for jobs in the industries that come in, they don't seem to mind.

At least in Kerala, the reason small farmers (other than rich plantation owners) have quit farming is that it loses money. Governments (again Congress party governments, with the active support of the Communists) raised the minimum agricultural wage, admittedly with the best of intentions: so that labourers get a fair deal. They added insurance, sick pay, and other safety net items at public expense. So far so good.

Unfortunately, in an example of the law of unintended consequences, all this raised the input costs so much that small farmers started losing money; so they promptly quit planting rice.

The irony would be delicious, if it weren't so bleak: Kerala now imports 86 per cent of its rice, from being a major exporter a century ago; some of the best rice-growing land in the world either lies fallow or has been filled in and paved over for residential purposes; and the agricultural labourers have no jobs. The local labourer is now virtually extinct, along with varieties of valuable plant varieties/germ plasm and other traditional knowledge.

Things may be different for farmers elsewhere in India, I accept. However, they too -- and especially the large farmers -- have benefited from generous financial and other support: No income taxes on agricultural income, free electricity, subsidised fertiliser, and high-yielding crop varieties as part of the Green Revolution (which may not be quite so unmixed a blessing as once believed, but then I digress).

Witness the fact that half of India's white goods -- such as fridges, washing machines -- are now sold to rural consumers, who prospered when crop prices surged. Rural consumers must mean the big farmers, those whose tyranny is legendary: as in the film Ankur, set in rural Andhra.

The only ones in my list that the Nehruvians have helped are big farmers. In fact, the alleged shenanigans of Robert Vadra in cornering large tracts of land would put him, if the allegations are true, squarely in the category of big farmers, fat cats. Small farmers have managed, only because land prices sky-rocketed. The migrant labour they have not helped at all.

It is precisely those landless labourers who would benefit from industrial jobs if they materialised. From both utilitarian and deontological perspectives, it is their interests that need to be protected, thus factories should be welcomed.

What would help small farmers are the very things the Nehruvian State declined to do: Setting up of cold-storage, grain silos, mandis where middlemen could be eliminated. India could also push back against the US farm bill 2014, which gives subsidies of some $20 billion a year for wheat, rice, corn, cotton and soy, and undercuts Indian farmers, leading to their suicides. None of this was done, and the whole push towards FDI in retail was with the fond hope that foreigners would actually do these things.

That brings up the whole issue of infrastructure. There is an attempt to portray the Land Aquisition Bill as all about big factories, 'satanic mills' of yore. But there is also land needed for infrastructure. Roads, railways, ports, airports, SEZs etc, which everybody uses, need land. Again the experience in Kerala is instructive: When it came time to acquire land for Technopark (a large STPI/SEZ), there was not much resistance as the farmers saw that they benefit from the trickle-down effects of the IT park.

It is hard to take at face value the moral indignation that Rahul exhibited. Granted, this time he didn't disgrace himself onstage as he usually does. That does not make him a 'general, leading from the front,' as one gushing journalist tweeted. Neither does it make his argument any better. His obstructionism isn't helping farmers, only preventing the eradication of poverty.

Wait, isn't that garibi hatao, the very thing his family has been mouthing for decades?

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