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Business News/ Opinion / The death of a farmer
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The death of a farmer

In his death, Gajendra Singh has served a grim reminder of the emerging trend of rural distress

Farmer Gajendra Singh during Aam Aadmi Party’s rally against the Union government’s Land Acquisition Bill at Jantar Mantar in New Delhi. Photo: PTIPremium
Farmer Gajendra Singh during Aam Aadmi Party’s rally against the Union government’s Land Acquisition Bill at Jantar Mantar in New Delhi. Photo: PTI

Last week, Gajendra Singh, a farmer from Rajasthan, shocked the nation by committing suicide during a rally organized by the Aam Aadmi Party (AAP). Worse, it unleashed a round of unbecoming blame game between all the parties as everyone scrambled to own the politically expedient “farmer-friendly" label. In short, the tragedy of Singh’s avoidable demise has been turned into a farce.

Sad while Singh’s demise is, it is equally important to remind ourselves as to why he was forced to take such an inclement step. In his death, if you ignore the mudslinging, Singh has served a grim reminder of the emerging trend of rural distress. Ignore it at your own peril.

Politically, it is a ticking time bomb, especially for the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA). Not only is it the party at the helm in the centre and hence responsible for public policy, it is also looking to expand its political footprint in the upcoming assembly polls in Bihar—primarily an agrarian economy.

Similarly, for companies it is an equal cause for worry. Over the last decade and more, it has been the backbone of the consumer economy, especially for FMCGs, or fast-moving consumer goods. As India traded up, rural India started mimicking the consumption behaviour of their urban counterparts—unleashing a consumer boom in the process. From the slowing sales numbers of automobiles and consumer goods, it is evident that rural distress is beginning to bite where it hurts.

By keeping the debate focused on the blame game, our politicians are doing a great disservice. The only sane voice in all of this was of the Lok Sabha speaker Sumitra Mahajan, who repeatedly appealed to all to refrain from politicizing the tragedy; but was largely ignored.

Ironically, such an approach is most convenient. On the one hand, the government gets an opportunity to grandstand with its claims, while its opponents get an opportunity to malign its intentions. For the media, these are fantastic TRPs (television rating points). And over time it will recede from everyone’s memory, till we come up with the next tragedy. Indeed this is very unfortunate. If we take a step back, then Singh’s death should serve as a wake-up call.

This round of rural distress—as Mint’s current series, India’s Fractured Farms, details—is unique. And fixing the problem will require structural solutions, not the band-aid approach that politicians favour. The crisis is not getting the desired attention, because of the fact that the share of agriculture in gross domestic product (GDP) is below 15% and pales in comparison to the share of, say, services.

What people often forget is that, yes, while its relative share in GDP has been shrinking, in absolute terms Indian agriculture has grown dramatically over the past 10 years—by over 50%. And this growth has been inspired by commercial farming decisions—like diversifying into cash crops, horticulture (like grapes, tangerine, lemons, and so on) or undertaking multiple cropping—responding to growing demand both from within and outside the country.

And this is the nub of the problem. The economics of Indian farming has been fundamentally altered. Inputs, like labour and irrigation, have increasingly become monetized, even as farm output has now been linked to the vagaries of the international and domestic market.

Consequently, now there are sizeable downside risks—outside of the monsoon and freak weather developments to farming. In good times they go unnoticed, but in bad times they can be devastating. The Indian farmer’s fortunes are now linked to the market economy, but there is really not much to mitigate the risks. The existing institutional mechanism to address risk is wired to an old agricultural economy and limits itself to credit and subsidies. The only new addition is crop insurance, of which the less said the better—especially when it comes to payout.

Contrast this with Indian industry. There are so many market-based mechanisms to cover risks in manufacturing or at least defray it (like through public holdings). On top of it, they are always looking to the government for a bailout in bad times and concessions otherwise. This is not to make a case against industry, as it is to make a case for agriculture.

We have a situation on hand. The NDA inherited an economy with structural challenges; and one of them is agriculture. Unfortunately, it is not sexy enough to gain the attention it requires. Weird, because it employs, even now, about 50% of the workforce and was key to the NDA’s spectacular win in the 16th general elections. For other sectors it has evolved a structural response, while deploying short-term firefighting measures for the farm sector. Baffling as to why its approach to agriculture is bereft of the big picture. Is the NDA taking Indian agriculture for granted?

Anil Padmanabhan is deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comments are welcome at capitalcalculus@livemint.com. His Twitter handle is @capitalcalculus

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Published: 27 Apr 2015, 12:23 AM IST
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