On 4th April, the Madras High Court directed the Government of Tamilnadu to waive all farm loans accessed through cooperative banks. This comes at a time when farmers from drought-stricken Tamil Nadu have been agitating in New Delhi for several weeks. Their terrible plight has been visibly on display in all major TV news channels.
On 11th April, the recently formed BJP government in Uttar Pradesh announced waiver of bank loans of less than Rs. 1,00,000, allegedly to benefit more than two crore “small and marginal farmers”. The BJP-led government in Maharashtra has declared its intention to come up with a similar scheme.
These developments reveal that the crisis of agriculture in our country is so acute, with crores of farmers in such dire straits, that doing something about it has become a political necessity for the ruling class.
The demand for waiving loans of farmers in distress has been growing more and more strong in recent years. With massive amounts of public money being spent to finance loan waivers to big capitalists, it became impossible for the ruling BJP to maintain any credibility without coming up with some form of debt relief for farmers.
Past experience with farm loan waiver schemes of central and state governments in our country shows that they invariably fall short of fulfilling even the immediate needs of all farmers in distress. Some farmers benefit while others are left out. In any case, even when a farm loan waiver scheme is implemented well and reaches all farmers in distress, it only amounts to some temporary relief. It is necessary but not sufficient to lift farmers out of crisis. Another crisis is bound to arrive sooner or later, as long as the financial returns from farming remains extremely low for the majority and continues to become more and more risky for all.
Root cause of the problem
The root cause of the problem lies in the fact that all aspects of agricultural production have been and are being geared more and more towards maximizing the profits of big capitalist corporations, Indian and foreign. Monopoly companies are rapidly expanding in the market for seeds, fertiliser and pesticides as well as in crop procurement, food processing and agro-exports. Integrated wholesale-cum-retail trading firms are increasing their claims on the value of agricultural output, at the expense of the farmers who till the soil. Banks are rapidly increasing their control over farm land.
Before the British East India Company came to this subcontinent, the relation between the State and those who tilled the soil was based on the recognition of reciprocal rights and duties. The State had the right to collect land revenue and the duty to ensure the provision of irrigation and other inputs required for cultivating the soil. The tillers had the right to secure possession of the land they tilled, as long as they cultivated it and produced food and other essential crops as intended.
Land was not treated as a commodity. It was not bought and sold. Land was recognised to be a gift of nature. It was allocated by the State to individual families and groups of families to be used for specific purposes, such as for tilling and crop cultivation, or for developing as grazing land, or some other socially useful purpose. While an individual had possession of the land, he could not sell it to anyone else. Possession of land was secure in the hands of the tiller as long as he cultivated socially useful crops. If the land was misused, the State had the right to take it away and reallocate it to someone else. However, it had no right to interfere with land that was being used as intended.
The British colonialists wrecked the old relations of production and trampled in the mud the principle of reciprocal rights and duties. They established a State which recognised unlimited rights for the British capitalist robbers but only duties for the Indian natives who tilled the soil. The colonial State distributed privileges to a minority of Indians who collaborated with the colonial system, giving rise to zamindars and other exploiting intermediaries. After 1947, the big capitalists and big landlords of our country have further developed the State and system of plunder inherited from colonial times.
In the early decades after independence from colonial rule, the State carried out land reforms to get rid of some of the most hated forms of oppression of the peasantry by feudal landlords and open the space for capitalist development in agriculture. Under the label of Green Revolution, the State promoted capitalist farming among large landholders in selected areas and encouraged commercial farming more widely among the middle and poor peasants. An all-India system of public procurement of essential food grains was established. Banks were nationalized so as to expand rural credit to farmers and concentrate rural savings to generate finance capital for the monopoly houses.
Since the nineties, the nature of State intervention is being reformed to suit the aggressive global expansionist drive of the monopoly houses, under the banner of globalisation, through liberalisation and privatisation,
Proclaiming the dictum that every farming family must fend for itself in a “free market”, the big bourgeoisie has organised the wrecking of even the inadequate State support system to farming that existed in the previous period. Agricultural input and output markets have been opened up to global and Indian capitalist corporations. This has raised the insecurity of farm incomes to an unprecedented degree. Input costs have risen steeply, leading the majority of farmers to depend on bank financing, while weather and price fluctuations have made net incomes highly uncertain. Prosperity in one good year induces farmers to incur higher levels of debt, while one or two successive bad years pushes them into a dire situation.
In 2016, at a time when tomatoes were selling for at least Rs. 15 per kilogram in urban areas, farmers who had toiled hard for three months to reap a bountiful harvest were faced with prices as low as 30 to 50 paise per kilo. In Jashpur (Chhattisgarh), Chickmaggalur (Karnataka) and Nashik (Maharashtra), there were reports of desperate farmers dumping their tomatoes.
Maharashtra state leaves Tur Dal farmers high and dry
In the drought years of 2013-14 and 2014-15, the government urged farmers to shift to tur cultivation from cash crops like sugarcane and cotton. This was because a shortfall in tur production last year caused prices to skyrocket that caused widespread public outcry.
But after shifting production to tur according to the government's recommendation, farmers have been left high and dry. Tur production in Maharashtra has increased five-fold to 20 lakh tonnes in the current year. As a result, market prices have fallen sharply, from Rs. 8500-9000 per quintal last year to Rs. 4200-4500. The Maharashtra government has not kept up its promise of procuring tur at the Minimum Support Price of Rs. 5050 per quintal. In fact, it has closed 300 dal buying centres, after the central government refused to extend the procurement deadline of April 22. More than 10 Lakh quintals of tur dal worth Rs. 500 crore have yet to be procured by the Maharashtra government. There have been reports of traders buying tur at Rs. 3700-Rs. 4200 per quintal from the procurement agencies and selling it back to them at the MSP of Rs. 5050 per quintal. So, while it is refusing to buy tur from farmers, it has no problem paying the MSP to traders. Farmers, anxious for cash ahead of the Kharif sowing season, have had to sell their produce on the open market at prices lower than the MSP by Rs.1000, leading to huge losses.
Tur dal farmers in Maharashra and Karnataka toiled hard to achieve a record harvest in 2016, only to be left facing a selling price well below the average cost of production (According to the Karnataka Agricultural Prices Commission, the total cost of production in the state works out to Rs 6,403 per quintal). Only the previous year, Government of India had imported tur dal at Rs. 10,114 per quintal. When there is acute shortage the government pays a high price to import but when there is a boom in domestic production, the farmers are made to bear a financial loss.
These are just a few examples of the extremely unequal and exploitative relations of production and exchange facing the vast majority of those who till the land, with the State refusing to bear any responsibility for their security of livelihood.
Only way out
There is only one way to lift farming out of its present critical condition and dangerous course. The orientation and aim of agriculture and all sectors of social production must be changed. Instead of ensuring maximum profits for capitalist monopolies, the goal of social production must be to ensure secure livelihood and prosperity for all.
The relations of agricultural production and exchange must be changed in such a way that it restores, in modern conditions, the principle of reciprocal rights and duties of the State and the tillers of the soil. The tillers have the duty to cultivate the soil efficiently and produce the required amounts of various socially useful crops, while the State is duty bound to ensure the provision of irrigation and other inputs as well as guaranteed procurement of the outputs at stable and remunerative prices.
In order to carry out its duty, the State must take over all large-scale trade in agricultural inputs and products. It must reorient banking from profit maximization to fulfilling the needs of extended social reproduction.
Bringing agricultural trade and banking under social control will make it possible to establish a modern universal public procurement and public distribution system, covering all crops and all essential articles of mass consumption.
A State that is committed to provide for all would assist and encourage the peasants who are toiling on small plots of land to voluntarily pool their assets to create larger scale collective farms. It would support the development of such collective farms as highly productive modern agricultural enterprises. .
Land is not and must not be treated as a commodity, to be bought and sold by private parties. Land use must be regulated according to a social plan, taking into consideration the needs of agriculture and animal husbandry, the needs of industry and services, need for residential space and other social needs. The colonial land laws must be immediately repealed. In its place a new law must be established, which recognizes land and other natural resources as national property and provides for harmonising its various uses with one another and with the general interest of society.
This is the program of economic reorientation around which the working class needs to forge a firm alliance with the majority of peasants. Workers and peasants need to wage a united struggle for their rights and demand that the State must fulfill its duty. We must wage the immediate struggle with the perspective and aim of capturing political power and establishing such a State that would fulfill its duty of ensuring prosperity and protection for those who produce the material blessings, including and especially those who till the soil.