Farmer

As India steps onto the ladder of globalization, the divide between urban and rural India is continuously increasing. While the rich are laughing their ways to the bank, villages are crumbling under tremendous economic pressure. While many IT companies are competing to set up shop in its buzzing cities, villages are creeping in underemployment. Even as India fills its coffers with foreign exchange, local farmers are committing suicides. One India is shining, the other is moving deeper into the clutches of Maoist extremism.

Economic reforms have failed to move are expected and wanted. Along with an economic growth rate of 9.5% and a per-capita rise of 7%, comes the deadly inflation following close on heels at 6.9%. In real senses, while the urban IT workers are accumulating more and more wealth, it is not penetrating to the rural poor, and in fact receding from them. That is, the real earnings of almost all sections of wage earners, agricultural workers, women workers and casual workers of all kinds have fallen since 2000. The real economy remains stagnant, with a mere realignment of wealth from the poor to the rich, increasing economic imbalances and putting more pressure on society.

The per-capita income of the farming community increased ... a meager 12% in the last 42 years.

Unhappiness and dissatisfaction is evident over ‘India Shining’. Governments are tumbling and parties coming to power on the promise of distributing the new found wealth. Finance minister visions of completely eliminating poverty by 2040. Do any of those politicians actually have to solution to cure our poverty, or is all the rhetoric to remove poverty a mere gimmick to attract voters. Do they put their efforts to not just accumulate wealth by creating special laws to promote exports, but also a means to percolate that wealth across the country.

The problem needs to be analyzed not in terms of RBI issued paper currency, but in real value terms which explain most macro-economic phenomenon. Let us consider the cost of a basket of items, incl. a person’s daily meals, a liter of petrol, etc. be taken as a unit. During inflation the cost of this unit rises. Now, what is happening to India is, with rising export receipts, Indian exporters and IT workers are earning more. The earnings trickle into the market, shooting up demand and prices equally. The price in rupees of the economic unit increases. Inflation rises. While all this ensues in urban India, the poor farmers continue to earn the same for their primary goods, but are now faced with stiffer prices. While the average rise in salaries of 7% is un-uniformly distributed, an inflation of around 7% affects uniformly across rich and poor. The purchasing power or the real wealth has not grown, but merely relocated. If it is flowing to the urban India, it is obviously slowing from the poor.

Most of India lives in villages, mostly employed in farming. According to recent census, 70% of livelihoods are dependent on farming. The figures were even higher at 80% in 1965. When we talk of the deprived class, it is mostly this community that we speak of. Let us analyze the macro-economics of their situation.

Do them a favour; Drag them out of farming.

Let us consider the value of farm product consumption of an average human being to be 100 units of economic value. Across the sections, be it rich or poor, food requirement remains same, and they each require and consume this same value. 100% population consumes 100 units each of farm product. As the amount of import/export are insignificant in terms of the whole demand, especially so in primary sector, the demand and supply match perfectly. So, the 100 units of farm product for 100% population have to be grown by 70% involved in farming production. The average farm value they would thus manage to generate is 140 units (=100*100/80). I repeat, only 140 units of farm production. Of this, they would themselves consume 100 units, leaving only 40 units to satisfy their other wants, insufficient even to comfortably clothe themselves. Leave education, even shelter can’t be afforded. If they need a new hut or have to repair their house, loans are the only option, for which they have no means to repair. An already deficit earning, burdened by un-repayable loans, drive them to suicides.

Nationalize Agriculture.

Let us analyze, how much have, the lives of farmers, changed since independence. In 1965, 80% were involved into agriculture. Now, 70% of households are still involved. So, the per-capita income of the farming community increased from 125 units (=100*100/80) to 140, a meager 12% in the last 42 years, inspite of a strong and resurgent India. During the same period, Indian economy has shredded its over-dependence on agriculture and moved closer to manufacturing and services. There has been an influx of goods & modern gadgets in to the market. Those who had a radio in the 60%, now want a color tv. But with an annual 0.27% growth, they can’t even afford a second-hand black & white tv.

India needs forced movement of people away from agriculture. As agriculture is a primary necessity, it can’t push out everyone, and India needs to also safeguard it. The best way to go is to Nationalize Agriculture. Being a huge player, it can not only buffer the uncertainties in monsoons and national calamities, but also leverage high-end technology to improve and safeguard production. As for the farmers pushed out, they would slowly get deployed into secondary and tertiary industries. The completely unskilled can join construction or other labour intensive jobs. As India progresses along the path of development, the economic value of agricultural sector remains same, and the sector stagnates. But, the total value of secondary and tertiary sectors can continue to increase, by creating more economic opportunities and serving them. These sectors in the long run can continue to provide everyone livelihoods and scope for growth.

There are 70 crore farmers! What to do with them? Do them a favour; drag them out of farming before they kill themselves. And, they are literally killing themselves instead of a painful and prolonged death. It is difficult to move such a huge population. China frequently does. But, we are a democracy. Then, China wins, and India loses. China wins better lives for its people, but India actually loses human lives, not just the thousands that die in battles, but tens of crores of farmers.