CPM's parameters for Kerala, WB differ

The CPI(M)'s critique of Planning Commission's Approach Paper to Eleventh Plan, sent to Prime Minister Manmohan Singh last Saturday, shows up anomalies between the way the party looks at Kerala and West Bengal, although both states are run by the Left Front.

On the issue of the uniform rate of VAT, the central leadership of the CPI(M) endorses the Kerala government, which recently imposed 20 per cent tax on luxury items instead of 12.5 per cent VAT as agreed to by other states.

But the Left leadership is against contract farming, which is being promoted by the Buddhadeb Bhattacharya government in West Bengal.

The CPI(M)'s backing to Kerala government comes before the meeting of Empowered Group of state finance ministers at Thiruvananthapuram on August 19 to discuss the "deviations" from VAT regime by some states.

Referring to the agrarian crisis, the Left note says that if the problem is merely of increasing agricultural growth, corporate agriculture and contract farming, as endorsed in the Approach Paper, should make sense.

But, if the problem is one of protecting and promoting peasant agriculture, then unbridled entry of corporate players and promotion of contract farming could have a further adverse impact on the peasantry.

"If contract farming is to be undertaken, the contract cannot be between peasants and the corporates alone; the State must insert itself as a party to the contract to ensure that the interests of the peasants are properly defended," says the CPI(M).

But Buddhadeb is doing just the opposite, and to very good effect. Pepsi is a household name in the rural areas of several districts in West Bengal, including Hooghly, Burdwan, Birbhum and Howrah, thanks to Fritolay, sister concern of Pepsico India, which has changed the fortunes of potato growers in these areas.

Two years ago, Fritolay had entered into a contract with farmers through cooperative societies to procure potatoes from them. The company gave them seeds and technical inputs and fixed the price of the produce well in advance.

Thousands of farmers now swear by Pepsico. The government had little role in all this, except for the fact that it had allowed private players to enter into contract farming.

As for the CPI(M)'s stipulation about the need for the State to be a party to the contract, the above-mentioned farmers are sure to differ. They sold their produce to Fritolay in the first year when market rate of potato procurement was lower than the rate fixed by the company.

In the next season, however, many of them walked out of the agreement and sold the produce in the market, which offered a price higher than what the company had fixed.

Experts argue that contract farming had exposed farmers to the mechanics of the market, which farmers in Kerala are yet to experience. But the CPI(M) apparently does not endorse this for Kerala.