The Big Story: Investing in the farm

For now, a reprieve. On Sunday, as Madhya Pradesh Chief Minister Shivraj Singh Chouhan ended his 28-hour fast, claiming peace had returned to his state, Maharashtra announced that it had “agreed in principal to a blanket loan waiver”. The Maharashtra government’s move may stanch farmer protests that have raged for a fortnight now, demanding loan waivers and better prices for agricultural produce. But loan waivers are a stop-gap measure that do not address the deeper causes of the distress that brought has farmers out in several parts of India.

In stark contrast to these protests are the new gross domestic product figures, which show a robust 4.9% growth in agriculture. But these growth figures measure production. What they do not reflect are the rising cost of farm inputs, especially irrigation, a sharp drop in prices that started as far back as 2014 and stagnant or falling farm wages. Bumper crops do not always make a prosperous farmer. To begin with, the government needs to build better safety nets for farmers. For instance, minimum support prices are offered on a range of crops but the government procures mostly rice and wheat. In times of distress, it needs to make good on the promise of minimum support price for other produce, especially pulses and oilseeds. For perishables, such as onions, procured by the Madhya Pradesh government in large quantities, warehousing facilities need to be created.

But the more vital, long-term measure goal should be price stabilisation. This involves market reform, and not just through legislative changes like the Agricultural Produce Market Committee Act, which needs the cooperation of the states to work, or through e-marketing. As economist Himanshu points out, the government must create new markets and make them accessible to farmers. Also needed is better anticipation of output and information systems, so that the government knows what it needs to import and farmers know what to sow.

Key to both short-term and long-term measures is public investment in agriculture. Despite the government talking up its focus on rural development, the increase in agricultural spending in this year’s budget was only nominal. For stability in the agricultural sector, for instance, it needs to create basic infrastructure, such as irrigation and warehousing facilities. These are investment heavy projects, with few short-term gains. Question is, does the government have the political will to go through the slog?

The Big Scroll

Mridula Chari reports that better prices, rather than loan waivers, are what farmers in Madhya Pradesh really want.

Sruthisagar Yamunam interviews economist Himanshu, who explains that the farmer protests express years of accumulated distress.

Rakesh Dixit explains how Madhya Pradesh Chief Minister Shivraj Singh Chouhan has often used the Gandhian weapon of the fast to deflect blame.

Punditry

  1. In the Indian Express, Harish Damodaran points out that demonetisation may not have affected production but it did have an impact on the prices during harvest.
  2. In the Hindu, Stanly Johnny argues that, 50 years after the Six-Day War, Israel chooses territories over peace.
  3. In the Telegraph, Manini Chatterjee writes that state and non-state actors are working together to attack liberal values.

Giggles

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Arup K Chatterjee finds that, post Brexit, Bollywood has lost its taste for London:

“I did not know any of those streets then, but now I know that during the three-minute-duration of the song, Baldev Singh had walked a distance of nearly 20 kilometers, from Trafalgar Square to his shop, carrying his umbrella as a faithful subject of the Commonwealth – crossing the Big Ben, Waterloo Bridge, British Museum, the Serpentine, Hyde Park, Buckingham Palace, Tower Bridge, and finally, a drizzly St James’s Park, before entering Southall.

Unlike what Milkha Singh once allegedly did in Rome, Baldev Singh apparently never looked back upon his epic walk from Punjab to Paddington. What is more extraordinary, he confesses that he crosses through the same route each day, and each day the streets ask him his name. Gone are the days when London afforded such a vicarious velocity to anonymous Indians, in cinema and the South Asian imagination.”