Emancipaion of small and marginal farmers in India

1

Plight of small and marginal farmers in India A way-out for their resurrection

The plight of small and marginal farmers are not unknown in academic, social and

government circles. Everyone has a view and a solution on the subject. A host of

NGOs operating in India is spending millions on their initiatives to find lasting

solutions for the uplift of farmers. The government has its own theory that is

shrouded with political connotations, mainly to garner votes from farm sector. Yet all

these initiatives have not really touched the core of the problems relating to small

and marginal farmers in India; symptomatic of missing the wood for the trees. That is

why sadly, farmer’s suicides are continuing unabatedly!

On the other side, there are farmers with large land holdings conducting agriculture

profitable. They are in command of all the factors of production like land, labour,

enterprise and capital! These farmers are powerful and many are into politics. They

influence in making the policies on agriculture and are a suspect, in keeping these

poor farmers in their present status. They also enjoy Income Tax exemption; a law

that does not differentiate between farmers who have large and small holdings of

land.

My research reveals that a different paradigm is required to be put in place to

resuscitate small and marginal farmers. Their issues arise predominantly from:

1. Fragmented lands can neither absorb technology nor mechanisation.

2. They are in perpetual debt that inhibits supplies of good quality inputs.

3. Farm labourers are becoming scarce and come with poor productivity.

4. Lack of storage prohibits safe keeping from parasites and price protection.

5. Middlemen deny the worth of farmer’s meagre produce.

6. Bureaucratic ineptitude compound their problems.

Small and marginal farmers have not been able to come out of this syndrome that

compels them to migrate, especially the younger generation to fetch a living, deserting

their old ones. Some have taken to MGNREGA, a Government scheme that provides

2

assured wages for 100 days to work for them. This system has created a serious

deficit of labour in villages, where some farmers are able to conduct cultivation with

some resources.

Central and State Governments provide help and assistance to these farmers

through consistent budgetary allocations every year, besides providing ad-hoc relief

when either floods or droughts strike. However, the delivery mechanism is slothful

and ridden with corruption, syphoning bulk of the provisions. This is yet another

reason for the farmers’ abysmal state. Ironically the beneficiaries are some

Government staff. A despicable state!

Logically the Government must disengage itself from the agriculture sector. Instead,

turn its attention towards many enabling activities like building roads, connecting

rivers, build canals, create an intelligent network from these canals, dig rivulets to

ensure all lands gets irrigated. Then, provide continuous power supply, simplify and

speed up the process of land registration/transfer, simplify legal system, bring digital

technology of internet browsing facility and the like. Money spent on all of these

enabling features will benefit the farming communities into a robust system where

the entire sector will benefit more than its present programmes. In addition, it will

build capital assets and avoid revenue expenditure (loss) through largesse. This will

also create more jobs and consequently arrest migration from villages to cities and

towns. This way the farm sector will begin to boost the GDP growth and generate

employment in a significant manner.

The other worrisome factors that encumber farmers are unpredictable weather,

depleting water resources, adulterated seeds, inefficient power supply and lack of

availability of the farm labour and mounting farm debts. It is may surprise everyone

that farmer is charged a steep interest for the bank loans provided to them at 11.75%

p.a (NABARD scheme)!! Can farmers afford to pay interest on such heavy loans they

are offered to them? All these collapses the farmer. Their disillusionment drives them

to extreme poverty. The plight of farmers with large land holdings, up to 10 acres of

lands are not very different.

3

Many authors and theorists including business managers of repute, say that “In our

opinion, the real problem in agriculture is the absence of a holistic framework,

incorporating technology, risk mitigation, institutions, policies and technical training”,

say the authors of their book titled ‘What India can do differently in agriculture’, in

para 4.3. The authors have not identified the vehicle and the methods through which

these can be done. However, these ideas can form a part of the curriculum of

agriculture schools in the country and not applied to small and marginal farmers

whose minds are pre-occupied with finding their next meal.

Dr Ramesh Chand’s (Full-time member of Niti Ayog) book on Doubling Farmer’s

Income, Rationale, Strategy, Prospects and Action Plan Document, in its opening

para, describes the strategy adopted by our planners achieved 45% increase in per

person food production that has made India not only food sufficient at an aggregate

level, but also a net food exporting country. That’s is very well but the next para says

that the planners did not strategize explicitly to recognise the need to raise farmer’s

income and did no mention of any direct measures to promote farmer’s welfare. In

my opinion these reflect the output of well to do farmers and not small and marginal

farmers. If we do not pay attention to the uplift of small and marginal farmer’s needs,

the efforts of doubling farmer’s income will be that much difficult.

In the same book, Professor Ramesh Chandra quotes NSSO Data on consumption

and expenditure for the year 2011-12, mentioning that one-fifth of the rural household

with self-employment in agriculture as their principal occupation were having income

less than the poverty line! Only in the year 2016, did Government thing seriously that

farmer’s welfare is essential to avoid agrarian crises. This was the basis for the

PM to announce that by the year 2022-23, farmer’s income must double and that

work on this must commence. It is difficult to measure and say that the goal is

achieved, even if great strides are made. But if we are able to demonstrate that all

villages that have small and marginal farmers have been enabled in the method

suggested herein by 2022-23, the goal can be said to have achieved. For instance, a

full round the year employment in itself will demonstrate that the farmer’s income

would more than double. In the article, it can be seen that there is a confusion in

4

what is the meaning of doubling farmer’s income? At the end of 2033, one hopes that

there is no confusion in the assessment and it becomes a political rhetoric.

Today, most students go to study agriculture because they may not get admission in

any other curriculum. There is no future studying this subject and hence this

situation. Only banks offer jobs for agricultural graduates. Present Agriculture

Universities teach students only good agricultural theories and an apology of

practical training, with which their education remains incomplete. So how will

students passing out get to work in the agricultural environment? That is one reason

that 19000 students graduating from Agriculture Universities do not work in

Agriculture, even if they are passionate. ICAR and many such R & D institutions

create new varieties of crops, seeds; tissue cultures with excellent credibility but all

are a bundle of wasteful efforts if these cannot be applied real-time farms. R & D is

done on the University’s farms with ideal conditions that may not be so in real fields

of farmers. This is corroborated by data showing that new varieties of researched

seeds had varying yields in different parts of the country.

An eminent Agronomist in the country, Mr KPP Nair once said a long time ago that

the difference between the Chinese and Indian scientist in agriculture is, while in

China, the scientists go to the villages and hand hold farmers in teaching their

findings. In India, the scientists sitting from the comfort of their offices, direct their

subordinates in the field to communicate to the farmers. With poor work culture, these

experiments never get translated except for farmers holding large land tracts of

lands. The exponential growth China has achieved in agriculture is well known.

The subject of agriculture should be taught in the schools in addition to the present

curriculum. After class 8, when students usually branch off to either science or arts

or commerce streams, agriculture could be one additional stream. This may create a

strong preference and students can go up to the college levels in Universities and

get employed in rural India. In fact, such students must be trained for ‘skill

development, assessment of risk and its mitigation techniques, building institutions

incorporating technology’ from the beginning. Endowed with these skills they can

enter agriculture just as they would do with any industry. The future generation will

5

immensely benefit if adopted sooner. Working in agriculture industry will be sought

after employment. This could promote more employment in villages.

Economist Prabhat Patnaik observes in Outlook Magazine: “Our share of cultivators

has fallen since 1951. A whole set of people who might have been independent

peasants has been pushed into the ranks of agricultural labour. They have no rights,

no security of income; they are subject to the worst kind of drudgery because it is all

manual work. They cannot organise. It’s just in a miserable and painful state of

existence.”

Since the stagnant rural economy offers meagre opportunities for employment, a

large segment of these households is footloose, circular distress migrants, that Jan

Breman, labour anthropologist has evocatively described ‘hunters and gatherers of

work’. To stay alive, they will go to any corner of the country, to do any work, with

any remuneration, on any terms. How true, as we see these migrants from lands far

away, with different languages and cultures reside by road-side to seek work! It is

indeed pathetic and painful to see such fellow Indians who once fed us, suffer from

penury, now. Their children loiter and have lost the opportunity to be educated.

Admittedly only large farmers are finding this vocation sustainable and emerge as

real producers of food grains in the country. They produce whatever is best suited for

them. They are an influential lot and often seen to be behind making / amending

policies on agriculture. Many are politically connected and consequently are the

biggest beneficiaries from this vocation. These class of farmers in our country,

conduct profitable agribusiness. They have innovatively done value addition and

successfully tapped opportunities for exports. They are the most preferred ones to

do contract farming by large corporate who in turn make big profits in agri-business.

They have large financial resource and can organise local labour easily. They also

benefit from Government’s largess in terms of the waiver of Income Tax, subsidy

benefit and take loans even though they may strictly not need one but wait for a loan

waiver!

6

Also, there seems no system to communicate with farmers to produce what is

needed in the country. For instance, if there is the shortage of pulses, there is no

mechanism available to communicate with farmers to grow pulses. Even if there is

one, is it possible to get farmers to grow pulses to fulfil the demand? The minimum

support price announced by the Government barely covers the cost of production.

This is because the Government compute costs on the ideal situation and the costs

for farmers are higher due to a variety of uncontrollable factors. Very sophisticated

measure are employed to calculate the MSP but in reality, small farmers do not have

sufficient resources to grow crops in the stipulated manner. Hence there is a

perpetual demand to secure higher MSP. Many who may not have grown pulses

before, will hesitate to take the risk. In addition, the fear of middlemen playing havoc,

because government engage them to buy from farmers. These systems and

practices weigh heavily on the minds of poor farmers. They Organising skills is yet to

develop to tackle such eventualities. Finally, the Government is left with no other

alternative but to import. There appears no organised system to guide and

operationalise the means of food production in India.

In recent times, when Government resorted to buy pluses from Mozambique,

farmers in Karnataka staged a protest that their pluses were left unsold in the market

and that importing will further ruin their chances of selling their stocks!

With generally poor administrative machinery, one wonders if the statistical

information provided by the Government is authentic. It is thus clear that the

Management of the affairs of agriculture needs refurbishment to get around the

issues eluding the right answers.

A progressive step the Government took in the year 2000, was to incorporate clause IXA

of the Company’s Act, Ref Sec 465(1) to enable registration of Farm Producer

Company (FPC). Essentially this was to overcome the convoluted problems relating

to the functioning of the cooperative society system in the agriculture industry that was

initiated soon after independence. As a relief, FPC gives a structural form to enable

farmers to create a corporate type of enterprise so that farmers can form into such

7

form, in their villages. They would have a Management Committee. This committee

would undertake jobs like negotiating with banks for loans for individual farmers

negotiate with fertiliser and other input suppliers, machinery suppliers and the like,

so that good and cheaper cost will accrue to farmers. To undertake such measures,

the committee must be endowed with skill, leadership and managerial proficiency to

steer the issues of farmers successfully. Unfortunately, in reality, the lack of these

qualities and cooperation amongst themselves has made these FPC, a mere

signboard in villages. Slowly it became to be politicised. They were more interested

in seeking to fund from NGOs. These led to a lack of vision to produce a common

good that was intended. So it remains in an indeterminate state. There are some that

are working but they merely work as enabling institution for farmers. These FPC are

formed by those farmers who have means to cultivate and thus small and marginal

farmers are very few and derive no uplift from these institutions.

Many corporate like ITC, Mahindra, Birla, Reliance, HLL, Rallies, Godrej, and Pepsi

to name a few have got into the agricultural business, since many years ago. All of

them have gained considerably from agriculture that signifies that wealth can be

created from agriculture. However, they are done with large land owners only. They

resort to contract farming and even in these types, there are many who have

misgivings of the system and are in legal skirmishes. Instead, the same group of

corporate without an exploitative mind, can form an FPCs and install a professional

team to do agriculture on the farmers’ lands and derive benefits for all constituents.

However, this has not happened so far in the country.

Observers and writer on agriculture subjects level criticism against corporate

farming, alleging collisions with international agriculture companies, like Monsanto /

Cargill and the like. This may not be true entirely. The problem stems from a

misconception. Farmers feel that it is fertilisers that produce good crops and

varieties. Without judicious use, they felt that using a larger proportion of this will get

them more yields and with that greed, they indiscriminately use fertilisers and ruin the

soil fertility that makes their land unusable.

8

Fertilisers are like elixirs for the human body. When human food deficiency takes

place these elixirs help rejunuvation of the health of the body. Similarly, fertiliser play

a similar role. If we do not keep the soil health clear, do not give sufficient water, the

crop is bound to show a sign of ill-health and does not yield or yields far less than

anticipated. Like the human body, fertilisers should be used judiciously to rejuvenate the

crops. By applying more, with greed the crops get destroyed instead of being

protected. This misunderstanding creates the problem. That is the same with

the application of pesticides.

In Andhra Pradesh, under the aegis of the then Chief Minister, Chandrababu Naidu,

it was agreed to let BHC Agro India Private Limited conduct agricultural on lands

belonging to farmers. Around 200 acres of lands belonging to small and marginal

farmer’s lands were given to this company. The company had a tie up with an Israel

Company for the supply of drip irrigation. The land-owner farmers were asked to

leave the village. A few were however engaged as labour but for a low wage. They

were treated shabbily and poorly and exploited them. BHC Agro operated with a

huge budget and spent money like water in pesticides and high-value fertiliser. They

had no systematic plan for growing crops and did not engage any agricultural

personnel but carried on with whatever manpower they had. This resulted in a total

failure of the project and ultimately, had to be wound up. The farmers felt cheated at

the end of the experiment. These details are in public domain. This is the result of a

good model but improperly executed. The Chief Minister had farsighted mind as he

had a very similar idea, that the bureaucrats bungled and the experiment failed

miserably; a pity indeed. If it was executed with precision, by now a big agricultural

revolution would have flourished in Andhra Pradesh and spread elsewhere!

Having virtually exhausted all avenues to resurrect small and marginal farmers, the

way ahead can be summarised as follows:

Agriculture in India needs to be well structured and planned in a new paradigm. This

is essential to grow the crops that are required in various places in the country for

consumption. They must work like and industry and just like how industries are

9

structured and apply business management means to get the best out of their

produce, agriculture can also do the same and reap the benefits.

Individual farmers are too tired and worn out, confused at the array of rural

interventions by NGOs and exploiters. Skill development, training and professional

jargons do not enter farmers’ minds. They need hand holding, encouragement and

assurance. Individually farmers cannot do agriculture and make a living.

Based on these I have been looking to connect with farmers and take this idea to

their doorstep to explain this concept. I was fortunate to do this in a village in

Tiruchirapalli District of Tamil Nadu.

In this village, farmers had left cultivating their lands due to the condition that was not

conducive for cultivation to make a sustained living. Water deficiency and soil

runaways were the main issues. Water levels in bore wells have depleted. Ran-fed

farming used to be practised but with insufficient rains continuously, farmers began

to migrate, leaving their families back. Some were doing unviable farming but were

living on animal grazing and selling them, even though farming lay in their hearts.

With friends around, we explained the advantages of land pooling. We were able to

create an interest in 43 families with around 134 acres of lands, who were prepared

to experiment this idea. They gave their consent to be members of a Farmer

Producer Company, as shareholders. The modus operandi are planned as under:

1. We have conducted a socio-economic survey of the village and have sought

the consent of all the landowners to pool their lands. We have explained to

them that their lands will retain the ownership and in no way will be

encumbered. We have explained the advantages in remaining together for

long and not sell off their holdings for any reason.

2. We have explained to them about our team that will work on a plan to cultivate

and market with the necessary investments required.

3. We have assured them that they will be employed for wages throughout the

year and will be treated with dignity. We have also assured them that their

10

cattle will be looked after and food for them as well as for the farmers will be

grown on these very lands.

4. We have explained to them that the profits that we will make will be distributed

amongst them after keeping a reserve for the future. We have explained to

them that these profits will not be taken away by anyone other than existing

member farmers and is meant to be used for farmer’s welfare only.

5. We have explained to them that should anyone wish to sell their land, they

would provide a right of refusal to the existing holders before selling to any

outsider. The new buyer will need to be members of the company in the place

of the seller so as to not disturb the contiguity of the lands.

6. A dispute resolving mechanism will be in place with independent persons to

look into and resolve any issues that may arise during the course of this

journey.

Based on the above understanding we propose to register a Producer Company

under clause IX-A of the Company’s Act, Ref Sec 465(1). Currently, this process is

under way. Under this provision of the Law, only thos who own land or cattle etc., as

provided, can become members. The persons connected in this proposal are as

under:

1. Raghavan - Retired as Director with Indian Oil Corporation (IBP Unit) and with

over 4 decades of work experience in corporate world. He is the Originator of

the idea and concept of farmer emancipation. Others below have joined him

to assist his mission and also are as passionate.

2. Thangapandian: An engineer who has worked for many years in electronic

Industry has finally settled in his village doing enormous social work and who

introduced me to the village.

3. Senguttava: A farmer who resonates my passion and has been looking for the

right way to help these farmers.

11

4. Ravishankar, CEO of an HR Company in Chennai. Has over 35 years of

corporate experience.

5. Ramesh - Marketing professional in MNC, with over 35 years of corporate

experience.

6. Raja Vel - A Chartered Accountant, with over 30 years of corporate

experience.

7. Venkatramani Govindan – An Agricultural Professional, associated with M.S.

Swaminathan Foundation for over 25 years and Agriculture Correspondent in

The Hindu for over 25 years. He is the driver of technology in this project.

8. Dr Nageswaran - an Agricultural professional who has worked with

Venkatramani in M.S. Swaminathan foundation and he will manage the

operations on a full employment basis. Has vast hands-on experience.

In addition to the above, a few farmers who are well-versed with agriculture will also

be a part of the core Management Team who will be associated with the project

execution.

Based on the above a Business Plan, a Financial Plan and a Technical Plan have

been assembled. The project is viable from the end of the first year with a surplus.

The project cost is $300,000.

We are now looking for a Grant or a loan for commencing the operation of the

project. While we have not yet begun this project, word has spread around and

another village nearby at Achanayakampatti is ready to fall in line with this concept.

We have assured them that we shall take their village as well only after we have

successfully demonstrated this concept and have made gains for the farmers after

one year of operation.

March 23rd 2017; Chennai

12