When the American Civil War ended in 1865, cotton production in the United States resumed, leading to a decline in demand for Indian cotton. Adoption of cotton by farmers under the Bombay presidency plummeted, claims increased as lenders refused to extend credit to farmers or charged usurious rates. This sparked riots across India, with the Deccan Revolt of 1875 in Supa, a village near Pune. Angry peasants attacked loan sharks and burned houses. The revolt affected more than 30 villages. Police stations in the villages quickly forced the peasants into submission, but the countryside continued to fester for months. The Bombay Presidency established the Deccan Riots Commission in 1878, the report of which is compelling reading. He says: “The constantly recurring petty debts for food and other necessities, for seed, for oxen, for government appraisal…do more to inflate the indebtedness of a riot than an occasional marriage. ” To reduce the debt burden on farmers, he recommended the abolition of imprisonment for debt, the exemption of small residential neighborhoods for sale from debt collection, as well as clauses to prevent legal proceedings from being abusive to extort huge sums from debtors. It seems that the condition of the peasants has hardly changed in India.
In post-independence India, farmer-friendly programs are not new. In 1989, the government of Janata Dal launched an Agricultural Loan Cancellation Scheme which waived loans up to 10,000 rupees. By 1992, it had benefited 44 million farmers at a cost of Rs 6,000 crores. In 2008, the Agricultural Debt Waiver and Debt Relief scheme benefited over 36.9 million small/marginal farmers, as well as 5.97 million large farmers, for Rs 71 600 crore. Similar measures have been taken at the state level. Tamil Nadu recently waived loans for small and marginal farmers, while the outgoing government of Uttar Pradesh waived Rs 50,000 crore crop loans from state cooperative banks. So, the decision of the new UP government to waive loans for needy farmers is welcome. But that’s not enough – these waivers need to be extended to small, marginal farmers across the country. India’s 121 million farms include 99 million small/marginal farmers, with a land share of only 44% and a farming population share of 87%. With multiple crops, these farmers account for 70% of all vegetables and 52% of grain production. With the increase in seed applications, given the intensification of cropping patterns, farmers also face increased seed costs. Arhar prices tripled from 27 rupees/kg in 2004 to 73 rupees/kg in 2013. Cotton increased fivefold from 396 rupees/kg to 1,860 rupees/kg, with the switch to Bt cotton. Maize, struggling with poor harvests, saw a jump from Rs 20/kg to Rs 99/kg. Even staple crops like paddy, soybeans and sugar cane have seen huge jumps. Long gone are the days when farmers gave seeds as a family heirloom to their sons.
Fertilizer prices have also increased. The cost of human labor, often a substitute for agricultural machinery, has risen dramatically. Hiring a laborer costs at least Rs 20/hour, excluding tariffs when NREGA is prevalent, up from Rs 6-9/hour earlier. Pet rental rates have also increased. The cost of plant protection with pesticides has exploded — five times more for the arhar (from Rs 281/hectare in 2004-05 to Rs 1,138/hectare in 2012-13). Understandably, cultivation costs have increased significantly from Rs 20,607 per hectare for paddy in 2004-05 to Rs 47,644.5 per hectare in 2012-13. Our farmers do not realize the market value of their crops. A 1972 study in Kolkata found that only 2% of the end use price of an orange reached the farmer – with the marketing channels consuming most of the value. In more robust regulatory environments, where the market chain is shorter, the price gap is much smaller. A Madurai farmer would mainly get 95% of the end use price. Agents typically account for 41% of business margins in Jammu, Amritsar and Delhi. Mechanization, by making farm equipment rentals cheaper, is the way forward. India’s agricultural equipment policy is to be marketed, with a “made in India” emphasis on manufacturing agricultural equipment and implements that are now imported. Grants can be re-routed to secure lower collateral requirements, longer moratoriums and payback periods, resulting in lower interest rates. Companies that focus on CSR in agriculture can be encouraged to invest in capacity building and skills development initiatives.
The Indian Council of Agricultural Research should establish standardized standards for agricultural equipment and tools. Any price cartel issues, as seen in subsidized marketplaces, can be resolved with an open list of manufacturers and their equipment prices on a central portal, available for state and county level access. panchayat. A credit guarantee fund to strengthen credit outflows in the machinery sector should also be designed for this sector. Our agricultural policy should encourage integrated pest management, an approach that emphasizes the combination of biological, chemical, mechanical and physical means to control pests, with a long-term goal of eliminating or reducing significant of the need for pesticides. Kenya has piloted a ‘push-pull’ system, called ‘vutu sukumu’, with farmers mixing maize with pulses and planting a variety of grasses on the edges of farms. The system has been very effective — the legumes release natural chemicals that drive away pests; grass borders attract predators with natural chemical odors. The combination was also successful against striga (also called witchweed). In Vietnam, millions of rice farmers in the Mekong Delta have adopted an “early no-spray rule,” limiting insecticide applications during the first 40 days of planting rice.
India’s tax experts have a penchant for decrying all tax concessions for poor farmers, while overlooking those offered to industry. Let the facts speak for themselves. According to the RBI, between 2000 and 2013, over Rs 1 lakh crore of business loans were written off, 95% of them being large loans; in comparison, the recent SBI settlement scheme for tractors and agricultural equipment (a 40% discount on such loans) for loans of up to Rs 25 lakhs each is expected to cost Rs 6,000 crores. India’s NAPs are not due to the absence of a credit culture among farmers; more than 50 percent of the NPAs are those granted to medium and large enterprises. Critics should consider the historicity of agricultural loan waivers in India before blaming them for destroying an embryonic culture of credit. In my travels through this hinterland, the consequences of exploitation have long been marked in distended bellies and orphaned children. Without corrective actions, the fate of our farmers will remain uncertain and Hobbesian.