4 min read.Updated: 21 Sep 2020, 09:02 PM ISTAjit Ranade
This leader of farmers would have welcomed India’s reformist spirit but asked for anxieties to be allayed
India’s economic policy has always had an urban bias. Whether it was to support early industrialization by keeping food prices low, or to mop up rural savings for funding industrial growth, the rural and hence agricultural sector has been at the receiving end of a bad bargain. Even the switch to an inflation-targeting mandate given to the central bank in 2016 has been deflationary for agriculture, as food items constitute more than half its reference index for retail inflation (by weightage). That the terms of trade were stacked against agriculture was known. It was also formally documented in the calculation of India’s aggregate measure of support (AMS) that was a prerequisite to joining the World Trade Organization in 1995. For most countries, especially in the West, AMS was positive, whereas for India it was and is still negative. Over the years, this imbalance was sought to be corrected by input subsidies for fertilizers, electricity, water and farm credit. Output price support was provided through government procurement and its mechanism of minimum support prices (MSPs). This is the paternalistic yet heavy hand of the state trying to help farmers. Not to forget other intrusive measures, like frequent bans on the import and export of various agricultural products, stock limits masquerading as “anti-hoarding" laws, and carving up geographic areas for exclusive input sourcing, as in the case of cane for sugar mills. Basically, the farmer’s life is defined by state intrusion. That is why the rallying cry of Shetkari Sanghatana, one of the first prominent nationwide farmer organizations, was “give us freedom". Its founder, Sharad Joshi (1935-2015) coined the slogan, “Bheek nako, ghamache daam hawe" (we don’t want alms, we want the fair price of our sweat and toil). For more, see ‘Remembering Sharad Joshi, the jeans-clad farmer’, Mint, 14 June 2017.