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It’s time for a New Deal for rural India

It’s time for a New Deal for rural India
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First Published: Tue, Aug 18 2009. 11 41 PM IST
Updated: Tue, Aug 18 2009. 11 41 PM IST
It is now official. We are in the middle of the worst drought since independence. By official estimates, the shortfall in rain is around 29% of normal levels and at least 200 districts have already been declared drought hit. Apart from the intensity, this drought also appears severe on account of its spread; large parts of north-west India have been affected by it besides the usual suspects—central and southern states.
The government is legitimately worried, as it should be, but unfortunately more about the impact of the drought on economic growth rather than on livelihoods, distress migration and, above all, food security.
To a certain extent, the concerns about its impact on growth are valid but less so compared to the previous droughts: partly because agriculture accounts for much less of national income now than it did during previous droughts and partly because other sectors of the economy are less dependent on agriculture than they were earlier. So, the concerns are valid but are not as important for growth as they are for livelihood and food security, since at least half of India’s population still depends on agriculture for its livelihood and that is not much different from previous spells of drought.
This drought was as much anticipated by the government as by any casual observer of agriculture in India. For those who did not anticipate it, this drought is a grim reminder of the fact that not all of boom in agriculture was driven by government policy. It is an altogether different matter that the rain gods hardly ever get credit for good monsoons.
But more than their economic impact, droughts are also historic events, not because of the extent of damage that they have caused but because every drought has been a lesson for public policies which have shaped the future of the country. Since a drought is a natural phenomenon, it depends on the government to consider it either as a catastrophic event or a landmark for public policy.
Droughts are natural shocks and therefore unanticipated. But they become landmark events for public policy depending on a government’s ability to convert challenges into opportunities. Let me illustrate this point with some instances.
The first major drought after independence was in the mid-1960s, with severe consequences for food security. But the government of the day was successful in converting the challenge into a golden opportunity.
The opportunity was the green revolution and by the end of the next decade we were more or less self-sufficient in food. It was also successful in increasing irrigation on a much bigger scale than in the previous decades.
The second major public policy lesson was also a response to droughts. The much-appreciated National Rural Employment Guarantee Act (NREGA) is a successor of such a policy initiative. It was the Maharashtra Employment Guarantee Scheme which was started initially as a drought relief programme that formed the basis of a unique experiment in the world to provide guaranteed employment to the rural poor.
The importance of public employment programmes was also appreciated in the 1987-88 drought, which incidentally also saw a significant reduction in rural poverty for the first time. This was ably supported by the public policy of keeping cereal prices low and providing food security to the poor.
The 2002-03 drought was again severe and manifested itself in large-scale farmer suicides, but it also exposed the limitations of credit delivery in rural areas. The rapid expansion of credit in rural areas subsequently has not been enough to correct the serious imbalances on that front but it was successful in emphasising the magnitude of the problem. But more than that, it did provide the background for emphasising the importance of public employment programmes. The result is NREGA.
So what kind of opportunity does this drought throw up? In the long run, this drought has highlighted the vulnerabilities of Indian agriculture to the seasonal monsoons, despite claims of record production in the last four years. There cannot be a better time to usher a second green revolution and create a sustainable food security environment. It is high time to take up the long-term challenge of investing in agriculture and particularly on creating long-term sustainable irrigation systems. These may not be large-scale irrigation systems alone but even small water harvesting and conservation works undertaken as part of NREGA. But, in the short run, it is the best time to strengthen NREGA and expand its scope to individual entitlement from the existing household entitlement.
Some of these are already part of the existing institutional structure. But this drought is also a golden opportunity to convert this challenge into a successful public policy initiative. This opportunity is the enactment of the Right to Food Act. There cannot be a better time to do this. There is already a political consensus. This is also the time when the government stocks are full of foodgrain and it is economically insulated because of high growth achieved in the previous four years. This government has the option of being remembered for having faced the worst drought since independence or being remembered for successfully fighting it by enacting the Right to Food Act.
Either way this is a historic crossroads. The choice is the government’s.
Himanshu is an assistant professor at Jawaharlal Nehru University and visiting fellow at Centre de Sciences Humaines, New Delhi. Farm Truths looks at issues in agriculture and runs on alternate Wednesdays. Respond to this column at farmtruths@livemint.com
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First Published: Tue, Aug 18 2009. 11 41 PM IST