However, after bank nationalization, the state transferred the responsibility of agricultural loans from itself to the banking set- up. But clear guidelines were issued neither by the Governemtn of India or the RBI, as a consequence of which the banks started charging compound rates of interest, feigning ignorance about the basic difference in the nature of agriculture and commerce/industry. They banks ignored the specific provisions with regard to taccavi and other state laws. In fact, the Government of India amended the Banking Regulation Act in 1984, and introduced a new section (section 23A) according to which the terms of credit could not be called to question in any court of law. Dr Sharma wonders why there has been no protest or PIL or questioning in parliament on this issue. On the contrary, when farmers find it difficult to repay the loans, the government of the day announces a Loan waiver, and makes it appear to the world at large that a largesse has been extended to the farming community. Imagine the counterfactual…if government was willing to give farmers loans – both for land improvement, and Agri-inputs at 4% per annum, the state of our rural economy would have been so different. In fact even now when we expect our farmers to compete with farmers elsewhere in the world, we have to acknowledge that both US and EU ensure that farm credit is available at less than 5%.
Again, whereas the farmer has to purchase everything -seeds, fertilizers, diesel, farm equipment on cash, when he produces cash crops like sugar cane, the payment is often held up by the mill owners for several months. During this period, the farmer has to raise credit from the ‘sahukar’ who charges an interest of 5-10% per month (compoundable) which works put to over 100% per annum. He feels that the KCC , in its present avatar, is not the solution. He strongly commends the governments of Karnataka and Chattisgarh for subsidizing agricultural credit over 4%. It is time other state governments followed this exemplar.
In the next two chapters, he shows the main reason why the share of agriculture GDP is declining . The main reason is the highly depressed support price of agricultural produce that is worked out on the basis of depressed valuation of the hired as well as the family labour of the farmer. the contrived deprivation is to the extent of two-third to three-fourth of the due entitlement, which gets reflected in depressed prices, which in turn is responsible for the reduced share of agriculture and allied sectors. His assessment is that the average annual expropriation from each village is to the tune of at least one crore rupees. This is where the gauntlet has to be taken. A systematic study, with a strong empirical basis may have to be conducted in fifty to hundred select districts of the country to make a robust assessment. Perhaps the National centre for Agriculture Policy may take this task.
Dr Sharma also make the point that rather than positing the interests of farmers against the agricultural wage workers, it is important that the agricultural work itself is treated as a specialized task. Many farmers have reported that there is a crisis of agricultural workers on account of the success of NREGA – but this should be taken as a positive sign. In fact this is where the reviewer finds that Dr Sharma is refusing to accept that the state can do anything positive. It is true that when he began the meta- narrative, the sector was at the margins. But democratic polity has self correcting devices, and when the state formulates policies, mid course correction is always possible. The purpose of debate and discussion is not to castigate the policy makers all the time, but to advise them, to caution them and give them alternate ideas for implementation. This is where the NGO activists tend to loose their bearings. Whatever good is done is seen by them as a concession wrested out of an activist agenda – the failures are referred back to the state.
Let us take two recent examples where the state took a pro-active role in making governance more people- centric. The RTI act was introduced and implemented in the country, not just because a few activists wanted it, but because governemtn itself felt that this would bring about a transparency in ties functioning. The RTI Act has already ensured several changes in the way governments conduct themselves. True, many state governments have adopted a very ambivalent attitude towards the Act, but in general the media, the Trade Unions and the employees originations have been able to get several issues sorted out. Likewise, the NREGA. It must be accepted that the political commitment to NREGA is the main reason for its impact …within the first two years of its implementation, it has brought about such a change in the villagers self assessment about ’empowerment’ and ‘entitlement’. Therefore while it is true that there are political forces in the country which are working towards making ‘markets’ the dominant instrument of life everywhere, democratic politics is keeping many of these in check. The contest of ideas has always been very interesting – and as in any contest, it is difficult to say which side is going to emerge as the final winner, if at all.
Having said this, and also having stated that while the author has been able to pinpoint the issues very well, the answers lie elsewhere. The author is critical of the Kisan Credit cards and agricultural insurance – this columnist feels that there is no other way. He commends the Governments of Karnataka and Chattisgarh, but stops short of saying that this can be a good example of the nation to accept and adopt. Why not make an appeal to all the Parliamentarians and legislators to cut across party lines and draw up a national agricultural credit and insurance policy, along with a national consensus on treating farm labour as a specialized activity. We have to find solutions to make the country a better place, not quibble over what went wrong, and to whom the blame should be apportioned.