When the government is charged with pursuing anti-farmer policies by its own agriculture minister, the indictment needs to be taken seriously. This charge, moreover, has not been made in any political forum, but in a letter addressed directly to Prime Minister Manmohan Singh. To lend weight to the allegation, Sharad Pawar has laced his missive with concrete instances of recent retrograde policy measures and actions that may have hurt the farmers. The minister’s outburst was seemingly triggered by the decision from a group of ministers not to allow the export of cotton beyond 13 million bales in the current year — to disallow, it appears, the possibility that fibre prices will recover. In some places they have dropped below the minimum support price (MSP). Other issues raised by the minister to underscore the government’s anti-farmer mindset include the food ministry’s negative outlook towards sugar exports, and the continuation of the ban on the export of milk products like skimmed milk powder and casein. Indeed, Mr Pawar’s assertion that capping cotton exports amounts to farmers subsidising the textile mills is completely justifiable. So is the argument that the delay in exporting sugar at a time when the international market is moderating has led to heavy losses in export earnings that could otherwise have been used to clear the mounting arrears in cane price. The validity of these arguments has, in a way, been endorsed by the Commission for Agricultural Costs and Prices, which has held that ban on exports is tantamount to taxing the farmers. It has even argued that the farmers should be compensated for it by hiking the MSP.
Farmers’ organisations have long argued that margins in agriculture have been artificially squeezed by state policy; in many cases, farmers find it difficult to recover their production costs. Remember, the National Sample Survey Organisation (NSSO) had reported way back in the mid-2000s that nearly 40 per cent of the farmers wanted to give up farming since it was not a profitable occupation. Farmers invariably lose — regardless of whether farm production rises or falls. While higher supply tends to pull down prices, lower supply often elicits government intervention — export restrictions, curbs on trade, and the liberalisation of imports, all to benefit consumers at the cost of producers. Seldom has the government stepped in to stem a price fall. The official apathy towards the recent crash in potato prices is a case in point.
Government policies have, thus, consistently ignored farmers’ concerns. They even contravene the government’s own “National Policy for Farmers” (as distinct from the national policy for agriculture), pronounced in 2007. It called categorically for improving the economic viability of farming by substantially increasing the net income of the producers. In fact Mr Pawar’s argument that only a free market and trade regime can ensure remunerative prices to the farmers is in line with the stated objectives of this policy and, therefore, merits close attention.