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Issue No.: 573 | March 2015

Union Budget 2015-16 Exploitation of Agriculture

Sharad Joshi
In all my writings on the subject of exploitation of agriculture, I have mentioned only two phases, one the British colonial phase and second, the socialist phase that is the post-1947 phase. The new budget will have to be presented in the context of the new phase of exploitation that may be roughly called the Modi era of exploitation.

The distinguishing features of this era are declining size of agricultural land, increasing importance of 'Rurban' society, increasing domination of land mafia and increasing proportion of younger people in the voters' list which have made the farmers’ political clout relatively less significant. This can be seen from the fact that the Narendra Modi government has taken several decisions that are quite opposed to the interests of the farmers. For example, even though the Bibek Debroy Committee has made a clear case for abolition of the Essential Commodities Act, the Narendra Modi government appears to have revived it and actually brought two important agricultural commodities - potato and onion - under the Essential Commodities Act. Further, the changes it has made to the Land Acquisition and Resettlement and Rehabilitation (LARR) Act exposes the government’s adverse dispositions towards farmers.

In the context of the new budget I would like to bring out five points which I had already mentioned in my earlier submissions.

1. The position of crude oil in the Indian Balance of Payment (BoP)

Fortunately, since Narendra Modi government came to power, the global situation regarding crude oil has completely changed and the crude oil prices are actually going down. Still there is scope for reducing the burden on the BoP due of the dependence on imported crude oil by encouraging production and distribution of bio-fuels - Ethanol and bio-Diesel. That will be helpful for agriculture also.

2. Edible oilseeds and edible oil

Since we are dependent on import of edible oil seeds and edible oil to the extent of more than 40% that also puts a heavy burden on our BoP and the global situation has not changed like in the case of crude oil. In the new budget, specific measures need to be taken for improving the production and supply of edible oil seeds and edible oil if the Finance Minister desires to reduce its impact on the BoP. An improvement in irrigation facilities, particularly in Madhya Pradesh, which is the main supplier of edible oilseeds, will take care of this problem.

3. Rural indebtedness

I have mentioned in my various writings and presentations that rural indebtedness is both, illegal and immoral. All agricultural loans are illegal because under the Contract Act, if a party to the contract frustrates performance of the contract of the other side, then the contract becomes void. The bank loans were given to farmers with the stipulation that the government will not do anything that will actually make it difficult for the farmers to repay the loans. Here, in this case, the Government gave the farmers the loans and through the anti-farmer price-depressing measures, ensured that the farmers would be unable to repay the loans, and, therefore, under the law all the farmers' debts are void.

Secondly they are also immoral for the simple reason that the Government owes to farmers something like three hundred thousand crore of rupees according to the WTO statistics (as established in the report of the Task Force on Agriculture under the previous NDA government) because of the negative subsidies that have been imposed on the farmers in 10 years from 1991 to 2000. Compared with that, the estimate given by the Radhakrishna Committee of total indebtedness of farmers of 1.30 lakh of crore of rupees is insignificant. It is not the farmers who owe money to the Government. In fact, it is the Government which owes more money to the farmers. The amount of agricultural loans written off under the Agricultural Debt Relief and Loan Waiver (DRLW) Scheme is meagre compared to what the government owes to the farmers. Further, electricity bills form the largest single component of agricultural inputs. Therefore, the DRLW which excluded the electricity bills from waiver was both unfair and unjust.

The Finance Minister is requested to re-examine the DRLW Scheme on the basis of observations recently made by Raghuram Rajan, the Governor of RBI.

4. The current situation of the rural loans, particularly in the context of the climate change          and climate frailty

In Maharashtra repeated unseasonal rains and hail-storms have ruined the farmers and I have had the occasion to request the Chief Minister of Maharashtra to re-examine the whole situation of agriculture in Maharashtra in the light of the fact that agriculture in Maharashtra stands totally devastated. The Finance Minister may also consider the idea to launch some scheme like the Marshall Plan which made it possible for the post-II World War European countries to stand on their own feet and be able to compete even with the OECD countries.

5. Land Acquisition Ordinance

As regards the Land Acquisition Ordinance, the Shetkari Sanghatana is quite opposed to the idea of getting anything done through ordinances, particularly if the content of the ordinance goes against the provisions of the Indian Constitution at some time or the other. Under the original Dr. Ambedkar Constitution, the people gave themselves the right of property that is the right to acquire, possess and dispose of property at his will. This right was, unfortunately, nullified by subsequent amendments to the Constitution. The fact stands that right to property was a part of the Indian Constitution and it cannot be summarily disposed-off by mere ordinances. Under the original Constitution the farmers have the right to acquire, maintain and dispose of land property and any amount of compensation cannot take that right away. The correct position would be if a farmer wishes to continue to stay with agriculture despite the adverse situation, the government will have no right to acquire his land for whatever purpose. On the other hand, if a farmer wishes to discontinue agriculture then he should have the right to dispose-off his land to whomever, whenever and at whatever price he chooses. The present ordinance will have the effect of strengthening the position of the government departments to the disadvantage of the farming community.

Judged by the reactions of the present landholders, it would appear that the ordinance would only cause further confusion and would make industrial development even more difficult than at present.

 SHARAD JOSHI, National President, Swatantra Bharat Paksha, founder Shetkari Sanghtana and former Member of Parliament (Rajya Sabha).This is the text of his presentation (in absentia as Mr. Joshi is in poor health) at the Pre-budget meeting of Farmers’ interests group on Agriculture for Union Budget 2015-16, convened on 16.01.2015 by the Ministry of Finance, Government of India.





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