farmers' plight

[Parameswer Komaragiri <parameswer@yahoo.com>]

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It is interresting and bewildering to see west also
subsidises farmers where as WTO drive third worlers to
cut'em  back . I dont say subsidies are good . But am
trying to understand how they fundamentally exist at
all in so called open market economies and what in
their economy sustains subsidy ?

http://www.twnside.org.sg/title/2126.htm

Ofcourse despite this Farmers in US also are seen
dwelling on hand to mouth lively hood.That is another
matter.And please read the following article about
farmers' plight in India.

http://asia.cnn.com/2001/WORLD/asiapcf/south/04/08/india.tully.suicide/index
.html

Millions of Indians still go to bed hungry every night
and farmers, far from prospering, are committing
suicide because the price they get for their produce
doesn't cover their production costs. In the Southern
State of Karnataka I met the families of five farmers
who had committed suicide, and in Punjab the
government has just announced statutory compensation
for the family of any farmer who commits suicide. Last
year twenty four suicides were reported from just one
District in the Punjab. Both Punjab and Karnataka are
considered among the most prosperous states of India.
So what has gone wrong? The market has not expanded to
absorb the increased production created by the Green
revolution. In the Karnataka villages there was some
talk about returning to subsistence agriculture, not
spending money on fertilizers and high-yielding seeds,
but turning its back on the green revolution which has
transformed the country's agriculture can't be the
answer. Some argue that the government should expand
the market. Those millions of Indians who go to bed
hungry don't have the purchasing power to buy the food
they need so some economists suggest prices should be
more heavily subsidised others would prefer the
government to start public works and use the grain
mountain its sitting on to pay the workers with food. 

Farmers fear cheap imports:
But the World Bank and the IMF have told India it must
cut back on all subsidies. India has also been told it
must reduce its fiscal deficit. Increased subsidies
would do exactly the opposite. Now farmers fear their
market will contract further because under the WTO
agreement India will not be able to protect its
agriculture from cheap imports. Restrictions on
quantity controls are no longer allowed and no one
seems to know the height of the tariff walls India
will be allowed to erect. Farmers do know that last
year there was a slump in edible oil prices because of
the import of cheap palm oil. Part of the answer does
lie within India itself. All the effort so far has
been concentrated on increasing production, dealing
with the produce- post harvest management -- has
received little or no attention. Storage and transport
are inadequate and expensive, so waiting for seasonal
changes or moving produce from surplus to deficit
areas are both beyond the means of most farmers. In
the vegetable market in Bangalore, the capital of
Karnataka and the capital of India's burgeoning IT
industry , I saw no evidence of any modern technology
to prevent middlemen rigging the prices, and certainly
no market information for farmers. 
More than 10 years ago Rajiv Gandhi set up a food
processing ministry to expand the agricultural market
but its impact has been minimal. Rajiv Gandhi's mother
nationalised the banks so that they would provide
cheap credit to farmers. 

Crippling interest rates :

More than 30 years after the nationalisation farmers
are still borrowing from moneylenders at the crippling
interest rate of five percent per month because the
banks are so bureaucratic, and all too often corrupt,
too. 
Every farmer who committed suicide in Karnataka was
deeply in debt. One had a list of his creditors in his
pocket. 
It included a local official who was demanding a bribe
to register a land transfer. Many of the farmers I
spoke to said the government should relax controls on
exports. But I wonder how much impact that would have.

India is still a land of small farmers where five
acres is considered a reasonable holding and fifty
massive. 
Can India's farmers hope to compete with the economies
of scale, and incidentally the hidden or not so well
hidden subsidies, Western farmers enjoy? I doubt it.
Market economists would argue that Indian farmers will
never be able to compete if they are not open to
global competition and protect their inefficiency
behind tariff walls. 
There is no doubt that Indian agriculture could be
more efficient, especially its post-harvest
management, but I find it very difficult to understand
how there can be one global agricultural order which
will allow for the needs of India's small farmers and
at the same time satisfy Western farmers demands for
free trade and open markets. 
So global free trade could well lead to more suicides
among Indian farmers without helping those Indian
consumers who are below the bread-line. 





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