Cifa has alluded to the findings of the Arjun Sengupta commission on unorganized workers to affirm that the earnings of even the bigger farmers compares rather poorly with those at the lowest rungs of the government system. The average monthly income per household from cultivation was reckoned by the commission at a paltry Rs 1,578 for small farmers and Rs 8,321 for the big farmers. By way of comparison, the lowest paid government employee now gets Rs 10,000 a month. It is an easy point to make after this that while the government has taken no more than 4 months to implement the 6th pay commission report, and in fact improved on the commission’s recommendations, little action has resulted from the report of the National Commission on farmers, headed by M.S. Swaminathan, in 22 months.

The important issue is what keeps farm incomes low, and what needs to be done about it. The answers, however, is not what the Swaminathan commission suggested, namely to raise the government’s minimum support prices (MSP) by at least 50 per cent more than the weighted average cost of production. This is a solution that will add to food costs, and cause inflation. It could even result in an increase in the general incidence of poverty, because the primary link to poverty is food prices. Rather, the solution lies in bringing about a structural transformation in the economy, achieving significant productivity gains on the farm and simultaneously reducing the number of people who live off agriculture. That means creating more non agricultural jobs, which in turn means achieving rapid growth in the sectors and activities that generate the maximum number of entry level jobs. One obvious answer that this points to is labour intensive manufacture of simple products, as the Chinese have shown. But this requires a change in the country’s labour laws, which the country’s politicians will not allow. If legislators could see the link between labour laws and the existence of rural poverty, perhaps their attitudes might change.