Agrarian Distress in India: A Short Reading List

The underlying issues of the farmer's long march—rural distress, debt burden, farmer suicides and the efficacy of the Forest Rights Act—need to be continually interrogated.

 

More than 35,000 farmers marched to Mumbai from Nashik last week demanding loan waivers as well as the implementation of the Forest Rights Act (FRA). The FRA allows for land up to four hectares to be granted to families who have traditionally cultivated those plots. Having the land in their names would make these families eligible for institutional credit from banks. Even farm loan waivers only apply to those who have taken credit from cooperative and nationalised banks. While the Maharashtra government accepted most of the demands of the protesting farmers, the larger underlying issues of the agitation—rural distress, debt burden  farmer suicides and the efficacy of the FRA—need to be continually interrogated.

 

1. Why is the 20182019 Budget unlikely to revive the rural economy?

Economic indicators relating to rural economy suggest that rural distress has worsened under the four years of the present government. Himanshu (2018) examines how stagnant real incomes for farmers and declining wages, along with slowdown in the non-farm sector, have contributed to a rural economy that is under extreme stress.

One of the important indicators of the neglect of structural issues and the lack of seriousness of the government in responding to agrarian distress has been the decline in agricultural investment during the tenure of the present government. After years of stagnation, investment in agriculture witnessed a reversal of the trend with investment in agriculture rising at 10% in real terms between 2004–05 and 2012–13. As against this, real investment in agriculture has declined at 2.3% per annum between 2013–14 and 2016–17. Similar is the case of credit to agriculture that was increasing at 21% per annum in nominal terms between 2004–05 and 2014–15, rising from Rs. 1,25,309 crore in 2004–05 to Rs.8,45,328 crore by 2014–15. However, the growth in agricultural credit slowed down to 12.3% between 2014–15 and 2016–17, rising only to Rs. 10,65,756 crore in 2016–17.

 

2. Can the growing rural unrest be addressed by loan waivers?

 

A 2018 editorial discusses the need to go beyond the singular focus on “prices” and address fundamental structural reforms in the farm reform agenda. 

The uncomfortable truth facing the government today is that farm incomes have been unviable for a long time now. This has to do with rising input costs and falling output prices, inequitable access to water resources and technological inputs, increasing and intensive cultivation of cash crops and a corresponding decline in productivity.

 

3. Will loan waivers mitigate dwindling farmer's incomes and rural indebtedness?

According to a 2017 editorial, while waivers do promise some relief to farmers, they are no panacea for rural indebtedness:

Agricultural loan waivers and subsidies do not benefit the poorest in rural India. In fact, loan waivers do little to relieve the indebtedness of the most vulnerable farmers who are either landless or possess smallholdings. These farmers are not considered creditworthy, have no access to institutional credit and are entirely dependent on usurious moneylenders. Loan waivers do not alleviate agrarian crises that have deep structural roots in India’s economy, including uneven access to subsidies, skewed land ownership patterns, and a degeneration of government-supported agricultural extension programmes.

 

4. What are the possible consequences of waivers on rural credit institutions?

Nilakantha Rath (2008) states that writing off agricultural loans is not new in our country and that in the system of organisation and operation of rural credit institutions, the not-too-distant consequence of the waiver of loans has been and will be the demise of the people’s own credit institutions.

 

5. How should we understand the huge gap between the promise and the performance of the Forest Rights Act (FRA)?

Kundan Kumar (2017) writes:

The Forest Rights Act, 2006 has the potential to democratise forest governance by recognising community forest resource rights over an estimated 85.6 million acres of India’s forests, thereby empowering over 200 million forest dwellers in over 1,70,000 villages. However, only 3% of this potential area has been realised.

The data in the article shows that Maharashtra stands out as the state with the highest achievement in recognising Community Forest Resource Rights (CFR) but even Maharashtra has only achieved 18% of its potential. Similarly, Odisha, another well-feted state, has achieved barely 6% of its CFR potential. On the whole, the revolutionary potential of FRA remains largely untapped.

 

6. Who is responsible for the lack of implementation of the FRA? 

Geetanjoy Sahu, Tushar Dash and Sanghamitra Dubey (2017) write about the various dilutions, contradictory policies and litigations challenging the constitutional validity of the Forest Rights Act. They reveal the range and depth of opposition: from the forest bureaucracy on the one hand to  non-state actors, ranging from power and mining companies to wildlife conservation groups, on the other.

 

Read More: 

Review of Rural Affairs|  2012-2018

What Does the Rural Economy Need? Analysis of the Promises for Rural India | Amit Basole

Rural Push in Budget 2016-17: Rhetoric versus Reality | Himanshu

Agricultural Oddities | T C A Ranganathan

Agriculture: Absence of a Big Push | S Mahendra Dev

The Loan Waiver Scheme | EPW Research Foundation

Indebtedness among Farmers and Agricultural Labourers in Rural Punjab | Gian Singh, Anupama, Gurinder Kaur, Rupinder Kaur, Sukhvir Kaur

Doubling Farmers' Incomes by 2022: What Would It Take? | S Chandrasekhar, Nirupam Mehrotra

Lives in Debt: Narratives of Agrarian Distress and Farmer Suicides | Ajay Dandekar, Sreedeep Bhattacharya

Growth in Indian Agriculture: Responding to Policy Initiatives since 2004-05 | Bipin K Deokar, S L Shetty

 

 

 

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