'It's a Budget of missed opportunity'
Dr M S Swaminathan, the man behind the Green Revolution that saw India turning into a nation with surplus food was happy that Yashwant Sinha's Budget addressed, at least, some of the problems that are plaguing the Indian farm sector.
In an interview with Shobha Warrier, he, however rues the fact that Sinha once again missed the opportunity to make the Budget a turning point in the history of Indian agriculture.
Would you call Mr Sinha's Budget pro-farmer?
Well, it has given some attention to agriculture and the reforms process more seriously than the earlier Budgets. But agriculture is a state subject, and the state governments should have their own schemes.
In 1955, restrictions were imposed because we were a food-deficit country. But now our problems are how to raise both home consumption and export.
Our farmers have demonstrated that production will go up in wheat, milk, rice, potato, sugarcane, etc if consumption goes up and if there is an assured and remunerative marketing opportunity.
Has Mr Sinha addressed issues like increasing home consumption and improving exports?
He has addressed them in a small way, by increasing the duties in some cases because the tariffs were very low.
Our tea, edible oil, etc were suffering because of that. However, it has not been addressed with the depth that it requires. But a beginning has been made in so far as decanalisation and decontrol of agriculture is concerned, and this is good.
Some attempt has been made to increase credit flow to agriculture.
The problem is, degrees of freedom are so limited in our country that he may have to waive many decisions. For example, if the fertiliser price is raised, and you say it is anti-kisan. On the other hand, you should know that there is so much inefficiency in the use of nutrients.
The factor productivity or productivity per unit of factor, whether it is water or fertiliser or pesticides, is very low in this country. That is why in spite of our low wages, our cost of production is much higher than the world cost.
Of course, large mechanised farms of the US or Europe or Oceania have some inherent advantages.
Our small farmers are struggling becaue of poor efficiency.
I always say, you may remove subsidies but improve services.
You see I am not against removing subsidies. My objection is why divert the money saved through cutting sibsidies to buy something else? The money that is saved by removing subsidies from the fertilisers should go back to farming, to provide better infrastructure for efficient fertiliser use.
For example, because of micro nutrient deficiencies, our efficiency of nitrogen, phosphorous, potash (NPK) is very low in comparison to world standards.
So, if the finance minister had said, 'I am going to save Rs 2 billion or Rs 5 billion or Rs 10 billion from fertiliser subsidies, and I am going to make it available by putting a chain of micro nutrient analysis laboratories for helping farmers to improve their efficiency on the use of inputs', then it would have been good.
In the arena of trade liberalisation , we have to achieve productivity and quality revolution. Unfortunately, this Budget does not provide for either of them.
Would you say it was more a political Budget than one that is intended for growth?
All Budgets are political not only in this country but everywhere. For example, Bush's Budget will be different from Clinton's. Conservative Budget will differ from that of Labour's. I would say, all political parties should honour the pledges that they make in their election manifestoes. Unfortunately, manifestoes have become meaningless in our country.
Another problem is, we have one crisis after another all the time.
If you look at our economy, you will see that the services sector is growing. But in what direction? In totally unproductive areas. The security of a few is absorbing more money than the livelihood security of the billions.
Has he addressed the problems that a poor small farmer faces?
A 'small farmer' is a euphemism for a person who has no access to inputs or credit. A small farm is ideal for intensive agriculture. So, only by overcoming the problems of the small farmer can you realise the potential of a small farm. This the finance minister has addressed by giving credit. If the farmer has credit at a reasonable interest rate, he can buy new seeds.
Is what he has given sufficient to overcome the problems of the small farmers?
Nothing can be sufficient in this country because no finance minister gives the data in per capita terms. He says, I have given so much amount last year, and this year, I have increased it by 1 or 2 billion. Meanwhile, we have added 17 or 18 million more children, and our population has grown.
So, in per capita terms, our investment is going down. That is one of the greatest disappointments. The finance minister must talk about population. But he puts the population explosion under the carpet. You may say, what can the FM do on population increase?
He can. For example, in health infrastructure. At least give a signal in the Budget and give some figures.
You have been talking about the need to improve food processing as a lot of our food production rots and goes to waste…
I have been writing and giving notes to everybody including the finance minister on food for sustainable development. Food is rotting here. Then, you are spending Rs 2500 per tonne per year to keep it in a 'poor' condition. So, my question is, why don't you convert it into an asset? Sampoorn Grameen Rozgar Yojna was started with 5 million tonnes. But there should be many more such projects because the government has surplus food.
The number one problem of this country is its surplus food stock. If you don't buy, the farmers won't grow. Then, you will have to import. Now, we are importing pulses and oil seeds in large quantities, and it is tantamount to neglecting dry farming.
There is not a word about dry farming in the budget. Sixty five per cent or two thirds of our land area is unirrigated. Importing food stock will be disastrous in India as agriculture is the backbone of the livelihood security system unlike in the developed countries.
Yes, the Budget has taken important measures regarding movement of grains, export, etc. But there are limitations for a central finance minister in agriculture, not the least because it is a state subject.
Because states are so much devoid of resources, central government can help them.
As I said, unsustainable or uneconomic subsidies, which promote inefficiency, must go. But that money should go back to the farm sector.
The Budget falls short of going into the state of crisis in agriculture. That is why people like Lester Brown (president and senior researcher with Worldwatch Institute, a private, non-profit Washington-based research institute devoted to the analysis of global environment) and others write that India will become a major food-importing nation.
In the earlier Budgets, the finance minister had talked about land and water but not this time, probably because he can only talk, and the respective ministries have to implement the policies.
Gradually I find the human and social dimensions in the Budget are giving way to mechanistic dimensions. I see that there is no continuity in the Budget. See, when you announce a new scheme in a Budget, you need to strengthen the scheme in the next Budget.
Where are we going wrong?
Do you know what government servants call the farmers and others?
Beneficiaries, when they themselves get 80 per cent of the money as salaries. It is the government servants or the bureaucrats are the beneficiaries and not the farmers. I have heard many bureaucrats saying, 'he (the farmer) is a beneficiary of the scheme'!
So, what has to change is the mindset of our country. It is sad that the farmers have to go to babus to get permission for everything. This problem was removed for the industry. The Confederation of Indian Industry and others are controlled by all the rich fellows, and they have access to all ministers and so on. So, their problems are better known.
In 1979-80, when China started economic reforms, they started it with agriculture and rural China. Now, 24 years after China, we have started the process of reform in agriculture.
I am sorry to say, this could have been a turning point in the agricultural history of India but Sinha has missed that opportunity.
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