Farm Distress: Myopic Response Will Make it CancerousThere are three ways to tackle a problem. One is to take a short term view and solve the instant issue. The second is to ignore the instant issue and work to identify the real issues and set them right. The third is a combination of both. The government has chosen to apply the first solution in case of the Maharashtra farmers and given an assurance that it will move towards the third solution. But usually governments ignore a problem once the instant issue is solved. Now that the agitating farmers have gone back, the loans might be waived, the electricity bills might be neutralized and a higher minimum support price might be declared. This response is like applying band-aid to an infected wound. None of the real problems that beset the agricultural sector and that allow the situation that leads to such waivers will be addressed.
By Sunil Garodia
The farm sector in India is starved of government investment. The farmers are expected to raise the capital themselves. But small size of holdings and low yield does not make it remunerative for them. Hence most of them lead a subsistence level existence. The need is for the government to build agricultural infrastructure, introduce new technology, educate the farmers (and here one is talking about real education and not the one like krishi darshan on state television) to rid them of long-held but outdated farm practices, make farmers start cooperatives to process their produce at the farm itself (there are many items that need just basic processing to add value), eliminate too many middlemen, invest in farm cold-chains and warehouses. Raising minimum support price can be counter- productive. What is needed is putting in place a mechanism whereby farmers and their cooperatives add value to the produce and reap the benefits themselves instead of allowing middlemen to do so.
Although the farm sector contributes only 15 percent to the economy, it employs nearly 50 percent of the workforce. Since aspirations have been raised sky high, every farmer wishes for a better life for his children and that includes giving them a good education. Since education is costly, meager farm incomes are not sufficient. Hence, farmers borrow both for agriculture and children's education. This situation can only be reversed if farm incomes are brought to a decent level by providing technological, infrastructure and marketing support to farmers. Subsidies can work only up to a point. The real problem will be solved by making farmers earn more through an innovative approach to marketing that eliminates middlemen and by employing the latest methods to improve yield. The problem of small holdings can be overcome partly by starting cooperatives.