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Loan waiver didn’t help farmers - P. Chengal Reddy, Secretary General, CIFA by Vibha Sharma : The Tribune 14-12-08

Consortium of Indian Farmers Association (CIFA) Secretary General P. Chengal Reddy has been working as a farmers’ activist for over 25 years. A farmer and lawyer by profession, Reddy now spends his time networking farmers as Commodity Interest Groups and assisting them in training in HRD and other aspects.

This week CIFA held a conclave in the Capital to identify issues for inclusion in the Union Budget 2009-10. In an interview to The Sunday Tribune, Reddy says, CIFA is the only non-political farmers’ organisation of India working to build competitiveness of small farmers by evolving a combination of technology, market and farmer partnership programs.

It is working in 25 states in India and organises regular interactions with MPs, holds a pre-budget meeting to identify issues for inclusion in the Union Budget and encourages partnership with markets.

Excerpts:

Q: What are the most urgent issues concerning farmers should the next government address?

A: Augmentation of income is one. Fair pricing of farm produce as per the CNF formula, enhancing irrigation facilities and storing and marketing facilities are other major issues. Providing opportunities for supplementary income by developing dairy, poultry, sheep rearing, piggery, making extension services effective and enhancing yields are other major issues.

Q: MSP, whether it is for rice, wheat or sugarcane, has always been a contentious issue though there is an increase in the support price every year. Why?

A: It is due to MSPs not even covering C2 costs. The MSP calculations are based on prices prevailing one or two years ago, that too, not based on field realities. Together with lesser apportionment for family labour, lease amount and capital cost of land result in fixing MSP less than cost, a fact brought out by the NCF and the Standing Committee on Agriculture.
Consider paddy MSP for example. From 1993 to 1999, the average increase was only Rs 25 and the increase in the next two years was just Rs 20. During 2003-04, there was no increase at all. There is no increase in MSP of sugar cane this year.

Q: You also say that the UPA government’s multi-crore loan waiver scheme has not really benefited the farmers. Why?

A: It benefited only banks to cleanse their balance sheets. Benefit to farmers accrues only when fresh loans are disbursed. But that did not happen. From April to August this year, agri loan outstanding actually decreased by Rs 11,000 crore, where as there was huge increase for other sectors at the cost of agri sector. The government has not ensured that fresh loans are promptly given to farmers whose loans are waived.

Q: You are asking the export ban to be lifted on food grains. Will this not become a threat to the country’s food security?

A: The government has procured more than mandated buffer stocks and the grains are rotting in the godowns. This year advance estimates show that paddy production will be a record. So it is beneficial to allow rice exports earning the much-needed foreign exchange. Otherwise, there may be a glut and losses on account of spoilage, which is now Rs 10,000 crore, may increase further. Government policies should be calibrated to match the production and gains of exporting. There is already a glut in cotton market.

Q: What will be the CIFA’s message to Indian farmers?

A: Our message is simple and straightforward. Farmers’ livelihood is beset with umpteen problems and farming is the riskiest profession.  Elect as your representatives who understand farmers’ problems and will advocate, lobby and legislate policies and measures which will ensure that farmers get fair compensation for their toil and travails. Farmers constitute the majority of voters in most constituencies. What is the relevance of the Indian policymakers blindly copying Western models of consumerism, over dependent on service sector and industries?

India is predominantly an agriculture-dependent rural economy. It is impractical to shift 50 per cent of rural people (500 million) to urban areas.

Making plans to accommodate them in industries is not possible. The best solution is to develop agriculture sustainability by providing huge resources in the next 10 years. The corporate sector must be taxed more and the money thereon must be invested in the rural areas. Or else encourage investment in rural areas by providing tax incentives and other concessions. Encouraging rural artisans, and the village and cottage Industries as envisaged by Mahatma Gandhi is the best solution.

Sadly, our so-called economists and policymakers never visit villages and stay there to understand the native wisdom