Where is the solution?

Indian peasantry has become synonymous with debt and Indian agriculture is in deep crisis. Many states – Andhra Pradesh, Maharashtra, Karnataka, Kerala and Punjab – have witnessed peasant suicides in the last decade. Every suicide is a tale of utter helplessness in the face of chronic indebtedness; the peasant has been forced by extreme deprivation to borrow from one season to another without any hope of being able to repay the debt. That this pattern would manifest in Punjab was least expected because we have been fed with reports of farm prosperity in this frontline state of the green revolution.

Forty years after the green revolution, the average income of a Punjab farm family (in what is believed to be agriculturally the most prosperous state!) hovers around a mere Rs.3,200 a month. With the rising cost of living in the countryside as well, indebtedness has grown to phenomenal levels. A recent study of the Punjab Agricultural University showed as many as 89 per cent of Punjab farm households reeling under debt. Debt per farm family today stands at a staggering Rs 1.78 lakh. In other words, for every hectare of land holding, the outstanding debt is Rs 50,140. Despite producing the country’s 22 per cent of wheat, 12 per cent of rice and 13 per cent of cotton, agriculture in the state is in serious crisis that has pushed 90 per cent of the farm households under debt, amounting to Rs 26,000 crore.

What went wrong with the green revolution? What happened to the rural prosperity that was talked about? Why are more and more Punjab farmers abandoning agriculture? The facts of the case – the green revolution and its impact on Punjab’s agriculture need to be understood to realize the contradictions in the Indian state’s policy for agriculture.

It is a fact that agriculture developed very fast in the state, with all the features of capitalist farming in the '70s-'80s – mechanisation, increased use of fertilizers and pesticides, production of a marketable surplus and trebling of yields and switch over to cash crops. It is a lesser known fact that the Punjab’s agro-climate was least suited to rice – agriculture in the state was more dependent on canal irrigation (which covered about 20-30% of the land) and rainfall for the rest; rice growing needs many times more water than that.

Till the Green Revolution, the peasants in the state used to grow maize, sugar cane and some pulses, and if any rice was grown, it was to meet the consumption needs of the peasant’s family. When rice began to be officially promoted, irrigation input became critical and the scramble for water began. The new paradigm of agricultural operations called for application of large scale farming machinery and pump-sets for drawing the water through tube-wells. An indiscriminate and non-regulated drawing of water from the ground has today left the groundwater in parts of the state totally depleted while in others, there is severe water-logging because of rice cultivation.

At the same time, the pump-sets drawing water from the tube-wells demanded electric power which became more and more expensive; many were converted to diesel pump-sets, but this did not make it any cheaper. The peasant had to increase the horsepower of the pump set to irrigate the same acreage, due to the steady depletion of the water table.

The growth rate of agriculture in the state registered at 10 percent in 1980s has come down to a mere 1.2 per cent in this decade. Facts show convincingly that agriculture is stagnant in the state. More and more peasants are abandoning agriculture – and this is true of even middle and large acreage holding farmers.

Plight of Cotton Growers in Maharashtra

In 2007, at the outset of the 11th Five Year Plan, Maharashtra was ranked among the top 5 states of India in terms of economic growth. However, while its targeted economic growth rate of 8% for the Eleventh Plan period (2007-12), expected to be led by the Services Sector, made it one of the highest in India, the state's agricultural sector, once vibrant, was faltering. Foodgrain production had dropped by an alarming 7.5% over the past decade. The experience of the Vidarbha region in just the previous plan period (2002-03 to 2006-07) is a stark reflection of the crisis in agriculture.

The Vidarbha region grows about 75% of the cotton produced in Maharashtra. About 150 cotton farmers, who had shifted from jowar in the hope of prosperity through cotton, ended their lives in one year alone, in 2006. The two years prior to that saw inadequate rainfall. The irrigation scenario was serious and water resources had dried up. The peasants had borrowed over two seasons and were in deep debt.

The state government’s official policy of cotton procurement tightened the noose around the debt-ridden peasants, making them vulnerable to an unregulated open market and private usurers. The State Cotton Marketing Federation had been set up to support the cotton producers. However, in 2003-04 fiscal year, the state government had discontinued the policy of sole procurement by the Federation, so that it had to compete with private traders.

The Federation got itself mired in losses due to rampant malpractices by private traders in grading the cotton and a drop in price of domestic cotton due to a huge influx of cotton imports. This led to defaults in the payment of dues by the Federation to the peasants. Without cash, the peasants were forced to take loans from the banks and institutions for the ensuing agricultural season. Thus, for many of them, a shift from food crops like jowar to cash crops was suicidal. In comparison with jowar, cotton crops require much more fertilizers and chemical inputs, necessitating higher cash requirements.

Capitalist Orientation of Economy

These are two, out of many, glaring case studies of the destruction of agriculture and ruination and loss of livelihood for the peasantry across the country. Capitalist agriculture, like capitalist growth in other sectors of the economy, has resulted in the most uneven and lopsided development of the sector. It led to consolidation of holdings, increased mechanisation and switch to capital intensive higher yielding varieties of cereals and some oilseeds. This began in Punjab, Haryana and Western Uttar Pradesh and spread wider in the 1980s to Maharashtra, Tamilnadu and Andhra Pradesh. It opened up the path for production for a marketable surplus even on small holdings relying on irrigation; at the same time, rural financial services were expanded, application of various inputs was aggressively pushed and notwithstanding the size of their holdings, a large majority of peasants were sucked into this capitalist framework.

The Indian bourgeoisie saw in the Green Revolution the possibility for expansion of the market for industrial products. The objective of the technological revolution was not to uplift the producers across the entire sector but to achieve the aims of the bourgeoisie for becoming increasingly self-reliant in food crops and second, expanding the home market for industrial products and services. The corporations selling fertiliser, pesticide, pumpsets, tractors and other inputs for agriculture got a huge impetus and expanded rapidly in the '70s and '80s. Thereafter, companies engaged in food processing and post-harvesting grew rapidly, expanding the space for export of agricultural commodities and products. All this has not led to all round prosperity in agriculture or raised the economic status of the producers, rather it has destroyed the natural endowments that could sustain agriculture. It has pushed large sections of the peasantry into deprivation and rendered them extremely vulnerable to a situation over which they have no control at all.

Beginning about 1996-97, all factors turned unfavourable for sustained growth of agricultural output. A downward trend of international prices of agricultural commodities post 1997-98 transmitted to domestic prices resulting in deterioration in income of peasants. This led to slowdown in expansion of agriculture. Liberalization of imports led to large imports of farm products resulting in the decline of  gross output of the agricultural sector of the country.

During the decades of the '70s and '80s agriculture was made a priority sector for lending by banks, leading to an expansion of rural banks and their branches. However, post 1991, banks, tightened their lending norms to reduce their non performing assets (loans on which there were repayment defaults) which led to fall in their total lending to agricultural sector below the specified norms. The National Commission on Agriculture has pointed out that fall of concessional lending facilities during the 1990s has accelerated the crisis in agriculture.

Government’s expenditure and investment in the agricultural sector have drastically declined over the last two decades. The expenditure of the government in the sector, covering crop husbandry, irrigation, flood control, village industry, energy and transport declined from an average of 14.5% of total budget outlay in 1986-90 to 6 per cent in 1995-2000. There has been poor progress of irrigation; decline in supply of electricity to agriculture.

To sum up, the development of capitalism in agriculture was rapid over two decades but very uneven. This "growth" came at the cost of sustainability and security of livelihood of the peasantry because the Indian bourgeoisie did not pursue it with the long term perspective of developing the sector and of ensuring the prosperity of the producers. But this is the way capitalism grows – one sector at the expense of another, and destruction of both natural and human resources.

Today, when agriculture has been brought to this state of crisis, the Congress Party, in its manifesto for the 2009 General Elections, promised to make farming a profitable venture! This means more of capitalist agriculture, which is in conformity with the overall vision of the bourgeoisie, and further exploitation of the resources of this country – natural and human – for the benefit of Indian and foreign finance capital. The entire focus of the bourgeoisie in addressing the stagnancy in agriculture is in putting the land to growing and producing what brings the maximum profits.

What is required to get agriculture out of the crisis in our country is a fundamental reorientation of the economy that would put the peasants’ well-being at the centre and address the issue of adequate food that will meet the nutritional needs of the working people, through sustainable agriculture. These require measures such as state procurement of the produce of the peasant at guaranteed and remunerative prices, supply of agricultural inputs at affordable prices, nationalization of wholesale internal trade and foreign trade in agricultural commodities, the establishment of a universal public distribution system, ensuring the security of tenure of agricultural land accompanied by state support to voluntary collectivization and many more. However, such measures are not in the agenda of the bourgeoisie. Only when workers and peasants of India wield political power can the peasants realise their interests, in an economy that serves the working people.