Respected  Prime Minister,

Issues: 1. Independence Day Address by the Hon’ble Prime Minister to Indian Public.

2. Problems of farmers not addressed. Urging for immediate implementation of recommendations of the NCF to reduce the plight of farmers

1) In the Independence day address, your esteemed self have, among other things, addressed to the demands of salary revision for 5 million Central Government employees costing to the exchequer Rs17, 800 Crore annually and additional Rs 29,400 crore by way of arrears from January 2006 and announced that the government has gone "beyond" the recommendations of the Sixth Pay Commission in increasing their emoluments. The lowest pay and allowances an employee gets is hiked to Rs 10,000 for month. We are happy that our Jawans got better Pay Package.

2) In the Independence Day address achievements on Agri front are highlighted, but none of these helped in increasing income of the average farmer. And in the outlook for 2008-09, the EAC has predicted decline in agri sector growth to 2% during 2008-09 from 4.5% last year. Unfortunately, farmers are still committing suicides being unable to repay the debts incurred for production purpose and dying in the struggle to get a bag of fertilizers to produce food for urban people. Inflation is raging affecting the farmers most and they are the worst sufferers of this runaway inflation. In this connection we bring to your kind attention the undue and inexplicable delay in implementing the important recommendations of the National Commission on Farmers, headed by Prof.M.S.Swaminathan, aiming at redressing  the distressing  conditions of 600 millions of Indian farmers. The final report was submitted in October 2006.While inconsequential and peripheral recommendations are included in the National Agricultural policy document 2007, no decisions are taken on important recommendations of the NCF so far which impact on the conditions of the farmers.

3) The VI Pay Commission was appointed in October 2006 and submitted its report in March 2008.With in 4 months, quick decision to revise pay of employees has been taken by the Government with utmost alacrity and commendable speed and the government has gone "beyond" its recommendations and announced bountiful largesse to them .The study made by the ADB, released recently, revealing that India is paying too much to Government employees, of course, is  of no consequence in announcing the bountiful bonanza to the bureaucrats.

4) What we are concerned about is that the same alacrity and commendable speed is not exhibited in implementing the recommendations of the NCF even after a lapse of 22 months from the date of submitting the recommendations. The most important recommendations of NCF are languishing for want of decisions; the most important one being that the MSP should be at least 50% more than the weighted average cost of production. And the “net take home income” of farmers should be comparable to those of civil servants. A list of other important recommendations implementation of which will help the beleaguered farmers, is given in the annexure. Even after commencement of Khariff season, MSPs are not finalized as recommended by the CACP. Instead these recommendations are unnecessarily referred to the members of EAC, who are no experts in determining agri prices. And the EAC came out with an astounding recommendation that Paddy does not require MSP of Rs1000 per quintal as the acreage under paddy has increased during this khariff season. It is like saying that employees do not require any increase in pay because there are plenty of unemployed seeking jobs and the ratio of vacancies to applications is 1:100!

5) That the farmers produce is under priced for decades and that they are not compensated for their toil and risk taken, is well documented by the NCF.

i. Studies by  the planning commission and others  show that while the  income ratio of agri workers and non-agri workers during 1950-51 was 1:1.8, it got widened during  1978/9 to 1983/84  to 1:2.8, it  further widened to 1:5.2during 1998/9 t0 2003/04 and it is estimated by the  Centre for Development Economics  that “whereas agricultural sectoral GDP stood at nearly Rs.3,000 billion in 2002-03, it will rise to no more than a whisker under Rs.4,000 billion a decade later in 2011-12 at the agricultural growth rate forecast for the Eleventh Plan. Meanwhile, the combined manufacturing and services sectors would have soared from Rs. 9,000 billion to around Rs. 20,000 billion, widening the gap between the relatively stagnant sectors of the economy and the boom sectors from Rs.6,000 billion to Rs.16,000 billion.” Can a house divided against itself stand?

ii. The Eleventh Plan candidly confesses (para 1.3):“GDP per agricultural worker is currently around Rs.2,000 per month, which is only about 75% higher in real terms than in 1950 compared to a four-fold increase in overall real per capita GDP.”

iii. The Standing Committee on Agriculture in their Report NO 41 dated 22nd July 2008, have stated that the prices of agricultural produce received by the farmers are lower than the prices of the same prevailing in a free market and are often less than the cost of cultivation.  Remunerative prices should be fixed for farmers’ produce. The focus of our development is more towards raising industrial production and recently on the service sector; this lop-sided growth of our economy is increasing the gap between the rich of the cities & poor farmers of the villages. Farmer centric policies which can only solve our food security and unemployment problem are not on the agenda of the successive governments,

iv. A study conducted by ANGRAU, Hyderabad brought out startling revelations about non-profitability of agriculture.”In order to get Rs4000 per month (equivalent to salary of a peon), a farmer needs 15 to 20 acres of dry land in Telengana and Rayalaseema areas and 5 acres wet plus  2 1/2 acres dry land in coastal area in A.P. If it is totally wet land, 10 acres of land where paddy can be cultivated is needed.”

v. The Commission headed by Arjun Segupta revealed that Average monthly income per family household (Rs./Month) from cultivation (2003) of small farmer and big farmer was  Rs1578 and Rs 8321 respectively. In comparison, the lowest paid government employee now gets pay and perks exceeding Rs 10,000 per month. The NCF recommended that the “net take home income” of farmers should be comparable to those of civil servants. There is absolutely no comparison between the paltry amount a farmer gets for producing life sustaining food to the pay and perks of bureaucrats. How can such wide disparity be justified in economic terms?

Vi. While many marginal farmers are demoted as landless labourers and small farmers as marginal farmers and medium farmers as small farmers during their life time, Government have assured three  promotions to employees during their service . Can this kind of discrimination be allowed to continue in a socialist democracy?

5)Such wide unacceptable disparities in farm and non farm incomes have occurred mainly because agriculture produce is underpriced for decades and the surplus amount is transferred to organized sector workers including government employees whose productivity did not increase even nominally, with succesive  pay raises. Can this be sustained in a democratic society wedded to inclusive growth? Even politically agri workers are in majority. Surely we can not allow 70% of rural people to be left behind and weeping while miniscule minorities of organized and vocal urban sections corner the fruits of the toil of rural people.  The NCF has cautioned that ‘Economic growth which bypasses a large population is joyless growth and not sustainable in the long run. What then is the future for India’s rural population numbering over 700 million? We cannot be silent onlookers to a situation where 30% of India is shining and 70% is weeping. Equity considerations can not be ignored for too long. Faster growth in agriculture with improvement in welfare of the rural population is important. The need is not only to register increase in agriculture production in million tons but actual improvement in rural incomes.’

6) In the light of what is narrated above detailing the  pitiable plight of the farmers  and continuous under pricing of their produce to benefit the urban elite, which is iniquitous and perilous to the nation’s food security and farmers welfare ,we earnestly urge, on behalf of over 700 million rural  Indian farmers and workers to implement forth with the recommendations of the NCF. Farmers are even now committing suicides unable to repay debts because of such under pricing of their produce, dying in the process of the struggle for getting a bag of fertilizers to produce food and feed the urban elite.

Statements like “Everything else can wait, but not agriculture”- Jawaharlal Nehru, 1947”Agriculture is a high-risk economic activity” “Agriculture is not just a food producing machine for the urban population” PUTTING FARMERS FIRST, remain mere slogans bereft of any benefit to the provider of food to the nation’s teeming millions. Let us recall the saying of Saint Tiruvalluvar on what happens when the farmer is neglected for long and do justice to farmers by implementing the recommendations of the NCF as promptly as the recommendations of the Pay Panel are implemented.
“Farmers are the linchpin of the world, for they support all those who take to other work, not having the strength to plow. When those who plough the fields stand by with folded arms, even completely desireless ascetics will not subsist.”

With regards,
Yours sincerely,
P.Chengal Reddy,
Secretary General

JAI JAWAN                                                                         JAI KISAN

Annexure: Important recommendations of the N C F.

1)MSP TO BE AT LEAST 50% MORE THAN C2 COST. The Commission on Agricultural Costs and Prices (CACP) should be an autonomous statutory organization with its primary mandate being the recommendation of remunerative prices for the principal agricultural commodities of both dry-farming and irrigated areas. The MSP should be at least 50% more than the weighted average cost of production. The “net take home income” of farmers should be comparable to those of civil servants. The CACP should become an important policy instrument for safeguarding the survival of farmers and farming. Suggestions for crop diversification should be preceded by assured market linkages. The Membership of the CACP should include a few practicing farmers. The scope of the MSP programme should be expanded to cover all crops of importance to food and income security for small farmers.

2) A Market Price Stabilisation Fund should be established to protect farmers during periods of violent fluctuations in prices; as, for example, in the case of perishable commodities like onion, potato, tomato.

3)Commodity-based farmers’ organisations should be promoted to combine decentralised production with centralised services such as post-harvest management, value addition and marketing, for leveraging institutional support and facilitating direct farmer-consumer linkage. An efficient marketing system with farmer’s organisations as important players could significantly add to farmer’s income from his produce. As a matter of fact farmer’s organisations are needed at various levels of the value chain. The small and marginal farmers suffer loss of income due to distress sale immediately after harvest and are also on receiving end against the Commission agents/traders etc.

4) Infrastructure Investment fund for Farmers (IIFF) India has accumulated foreign exchange reserves (FER) of $165 billion equivalent to about Rs.7.2 lakh crore(Now Rs14 lakh Crores.) Part of these funds should be utilized for infrastructure investment for farmers, targeting and monitoring income generating schemes, and improving marketability of their produce.

5) Adequate Credit and full Insurance cover: The banking system needs to meet the large unmet credit potential needed to raise agriculture, at 4% interest rate. (Presently only half the farmers are covered, that too with insufficient credit)Agriculture is a high-risk economic activity. In drought prone areas, credit should not be just for the season, but for a Credit Cycle of 4-5 years and include consumption credit, so that the farmer has the capacity to spread his/her liabilities and meet the repayment requirements. The banks need to liberally provide pledge loans. However, as there are not many accredited god owns, the bankers may have to rely on storage of produce with the farmers.
Farmers need user-friendly insurance instruments covering production, right from sowing to post-harvest operations and also to cover the market risks for all crops throughout the country, (Presently only17% of the farmers are covered)The scope of Agricultural Insurance Policies should become wider and should also cover health insurance.

6) Social Security: Coverage of farmers, particularly small and marginal farmers and landless agricultural workers, under a comprehensive National Social Security Scheme is essential for ensuring livelihood security. Such a scheme should take care of expenses up to a ceiling for hospitalization in case of illness of a family member, maternity, life insurance and old age pension.

7) TO MINISTER TO THE WELFARE OF FARMERS
Agricultural progress should be measured by the growth in the net income of farm families. Along with production growth rates, income growth rates should also be measured and published by the Economics and Statistics Directorate of the Union Ministry of Agriculture.
 The Ministry and Departments of Agriculture both in the Centre and States may be restructured to become Ministry / Department of Agriculture and Farmers’ Welfare in order to highlight their critical role. Agriculture is not just a food producing machine for the urban population, but a major source of skilled and remunerative employment and global outsourcing hub.

8) TO INCLUDE AGRICULTURE IN THE CONCURRENT LIST
Central and State Governments to consider seriously the question of including Agriculture under the Concurrent List in Schedule VII, Article 246 of the Constitution. Important policy decisions like those relating to prices, credit and trade, are taken by the Government of India.

9) TO ENTRUST RESPONSIBILITY TO PANCHAYATS
Article 243 G of the 11th Schedule of the Constitution (73rd Amendment) Act, 1992 entrusts Panchayats with responsibility for agriculture including agricultural extension.

10) TO CREATE AGRI RISK FUND
An Agriculture Risk Fund should be set up to insulate farmers from risks arising from recurrent droughts and other weather aberrations,
Prime farmland must be conserved for agriculture and should not be diverted for non-agricultural purposes and for programmes like the Special Economic Zone.