Begin dawn in Agriculture Sector

One of the sectors of the economy which is the bottom of the pyramid both in the national agenda and the mind of the administrators has been the agriculture and related sector.

One of the sectors of the economy which is the bottom of the pyramid both in the national agenda and the mind of the administrators has been the agriculture and related sector.
One of the sectors of the economy which is the bottom of the pyramid both in the national agenda and the mind of the administrators has been the agriculture and related sector.

In the recent past, India had raised ourselves to the 5th position in the World Economic status.

I recall a quote from a modern thinker which I read as “Economy is a too serious matter to be left to Economist.” While being perplexed at the outset, later introspection led me to really believe this. These were those days when we recently come out of license Permit raj in 1993 when I was a student at Manchester University. I always used to wonder why the New Industrial Policy was announced and why not a dedicated Agricultural Policy. At this very same period of my life, another interesting observation I read in a book by Professor Jagdish Bhagwati (India in Transition: 1994). He had expressly echoed the above statement in the book, stating that the Indian Economy hitherto (before 1991) had failed because there were too many economists handling it. In this context, please be assured that I do not hold any rancor or derision against the economists per se or those economists in the Indian system. My refrain was why the structure had never hit the headlines or agenda for major structural reforms.

Present structure of GDP

At the outset, before the COVID-19 pandemic stuck, our erudite Finance Minister had announced the target of $5 Trillion economy as the target. Further in the recent past, we had raised ourselves to the 5th position in the World economic status. I am profoundly proud of this achievement. Notwithstanding it is my humble submission here that to achieve the target we need to indeed undertake a radical change in our policies, economic agenda, and economic thinking. The vice and hindrances have to be overcome. The economy had to be made to gallop. The present over-reliance on service structure as a contributor to GDP has to change. The primacy to have to be accorded to value-added goods to replace the present overwhelming focus on the service sector. The contribution of industries including the mining sector and agriculture and the related sector has to increase. They should contribution a healthy robust 50-55% to the GDP. This should be an underlying premise. In 2005 the National Manufacturing Strategy had in some form identified this.

In their bid to make a fast profit these institutions compromise due diligence in spite of all regulatory provisions for lending and we have cases of Mallya’s and Choksis to attended to besides huge volumes clogging the Debt Recovery Tribunal. 

Legacy

Actually the rapid growth and development after the new Industrial Policy 1991 had certain distortions built into it. Firstly the reluctance to build big manufacturing capacities had met with a big mental block from industrial houses. This is on account of our Constitutional Provisions under which under Part IV had if overall interpreted stated the national goals self-reliance and social justice. This had been the spirit of Industrial Policy Resolution of 1948 and 1956, operating under the legal teeth of Industrial Development Regulation Act 1951 which contained the draconian provision under Section 19 which vested with powers to government officials to enter premises seek information, etc., which in retrospect exposed itself as a fountainhead of corruption. To remind you, the industry is on the state list (Entry 24) of Schedule VII of the Constitution of India.

Risk and capacity phobia

Besides, there was risk wariness amongst the investors a legacy they had inherited. In the pre-liberalization as a World Bank report of 1989 -90 or so stated that “several Nylon Filament Plants had been established at 7 to 13% of the capacities compared to plants in other parts of the World.” Hence that wariness has never taken up addressed. In this situation, the investors started investing in lower gestation period projects which is getting further validated by the fact that many of the top industrial houses of those times are found to be involved in real estate projects, retailing, etc. Hence at some point in time, an ecosystem to bring some level of parity through investment equalization instruments need to be introduced between high investment longer gestation big-ticket projects and shorter cycle projects is required. In fact, we have reached the situation of even institutional financers fading away and shifting to retail financing, In their bid to make a fast profit these institutions compromise due diligence in spite all regulatory provisions for lending and we have cases of Mallya’s and Choksis to attended to besides huge volumes clogging the Debt Recovery Tribunal. The institution of Board of Industrial and Financial Reconstruction (BIFR) and Appellate Authority for Industrial and Financial Reconstruction India {AAFIR) for financial reconstruction which has ceased to exist was never allowed to be chaired by a financial professional but by retired Bureaucrats. These are issues to be addressed immediately.

Agriculture bottom of the Pyramid

One of the sectors of the economy which is the bottom of the pyramid both in the national agenda and the mind of the administrators has been the agriculture and related sector. The perception of poor farmers continues even after 73 years of Independence. The root cause of this is the Constitution of India. What was an existential situation in respect of the sector that has been incorporated in the Constitution of India? The proscription clauses under Article 269 of the Constitution of India is the biggest give away till any amendment to the Constitution the farmer will always remain poor. This has been the agenda of governance to get further accentuated by virtue of express provisions of Income Tax Section 10. The import of this is the farming community should always spread their palms for bounties from the government in the form of minimum support prices, fertilizers, and other subsidies, crop insurances procurement issues. Hence farming was always made sustainable, even in the case of cash crops like cotton, jute, etc. we have the Article 270 or the Minimum support prices and all sorts of bounties, notwithstanding the fact these handouts have not to make them sustainable economically. No one has thought about this sector in an out of box manner. We had a Planning Commission established in 1951 by a non-statutory resolution. Per se, it has no status except that of an attached office and grantee institutions. Mostly used as a post-retirement sinecure for retired officers. Now in its new avatar that in National Institution for Transforming India (NITI) the same set of stakeholders has converted it into one. Readers may kindly confirm the profile of the CEO or principal advisor of NITI to corroborate this.

Ecosystem to keep the farmer poor

Recalling from the scale wariness or phobia of the industrialist, let me share that the position in the Agricultural sector is, even more, alarming with concomitant consequences. The skill required in farming is much. However, since it is handed over from generation to generation with no formal ranking it is generally understated. Most importantly as a consequence of lower returns, there is migration from this sector which is perpetually happening. Besides the real estate lobbies which are getting powerful day by day are enabling policy changes or even land use declaration from agriculture to non-agriculture in collusion with our politicians and bureaucracy who do not envision the macro impacts and its vicissitudes. The case studies of many hinterland areas to big cities will reveal the shrinking areas under agriculture and the irresponsible lifestyle of the beneficiaries of land compensations. Even the land pooling which under implementation in Delhi and surrounding areas is an indicator of this. At the same time, rural to urban migration is taking place uncontrolled. The recent ruckus over migrants in several cities in this time of pandemic is also a cause of this.

The case studies of many hinterland areas to big cities will reveal the shrinking areas under agriculture and the irresponsible lifestyle of the beneficiaries of land compensations. 

Possible mitigation steps

Why no one ever thought building capacity of scales in this sector. We have heard a lot about farm indebtedness and rural indebtedness while growing up. But after many years there has been mitigation. Hence, a new era should be introduced. Through corporatization and other such endeavor let the landholdings be aggregated. The minimum size of a farm should be 300 acres. The contributing farmers are engaged by the same corporates as farmworkers with a fair wage equivalent to that of an industrial worker in a city. If required make the Minimum Wages Act sector-neutral. His inherent skills are harnessed and given proper up-gradation from time to time. Provide urban amenities in rural areas. I remember a paper that was introduced in 2005 by former IIT Director Prof. P.V. Indiresan which never got the attention it deserved. Let this theme be reinforced. The corporate should also provide for all amenities like housing, children’s education, medical insurance for the farmworkers, and also build capacity for cold storage and warehousing in the same 300-acre parcel. Concurrently related economic activities like poultry, piggery, sheep rearing, slaughterhouses, aquaculture, and fisheries, etc also are allowed in the same farmland. The said corporate may also be permitted to sell these and export the products under a brand name like Godrej Basmati or Aashirwad pulses or Tata Chicken. Introduce international quality certification facilities in rural areas.

Legislative changes required

In addition to the above policy initiatives, we also need to make suitable amendments in the legal framework like Article 260, 270, Land Reforms Act of several states, etc.

Potential spinoffs

  1. The spinoff to the national economy will be unlimited. I have listed some of them.
  2. The plight of farmers will improve economically.
  3. Agriculture will again begin attracting human resources.
  4. There will be a huge employment generation.
  5. Less dependence on government handouts and resulting in attendant fiscal benefits.
  6. No blackmailing by the large mills like in the sugar or jute industry.
  7. Arrest migration to urban areas.
  8. Citizens and the food processing industry will get quality produce.
  9. Agriculture will be a major contributor to GDP cake as well as Tax kitty.
  10. Incentivize farm innovation for higher yield, eco-farming, productivity improvement, etc.

Note:
1. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.

RV Subramani (RVS Mani)
Latest posts by RV Subramani (RVS Mani) (see all)

5 COMMENTS

  1. Even cooperatives are corporations. Rightly said.

    Milk cooperatives like Amul (which by the way is one of the biggest cooperatives in the world)

    We INDIANS have become LITERATES through British Curriculum & in the process have become UNEDUCATED INDIANS.

    LITERATES are satisfied with ‘Statistics’, ‘show-Offs’ & ‘Managing the figures’ & ‘image building’

    EDUCATED ONES go in for the ‘truth’ & strive to obtain the ‘real benefits’ without any adverse consequences.

    Madam,
    You say AMUL is one of the BIGGEST COOPERATIVES in the Globe
    May be gathering millions of litres of Milk
    May be largest producer of Dairy Products – Long Shelf-life Milk, Yoghurt, Milk Products, Sweets

    But do you know each & every drop of (so called) milk collected by AMUL (or for that matter any Dairy or cooperative or corporate) is just WHITE POISON!!!

    Have you observed any child willingly drinking Dairy Milk???

    Have you ever tasted freshly extracted Milk from a Desi Cow? Have you ever seen a Desi Cow??

    YES. EACH & EVERY DROP OF MILK AVAILABLE IN DAIRIES IS JUST WHITE COLORED SLOW POISON.

    We are suffering the effects of WHITE REVOLUTION (the second biggest fraud on India after GREEN REVOLUTION) today.

    The CORPORATES from the West hired a traitor called Verghese Kurien – created the DAIRY INDUSTRY – which is unknown to India – to promote their breed of (so called) Cows

    Diabetes, Cancer, Heart Attack & Stroke have become House-Hold Diseases today thanks to the WHITE REVOLUTION & its creations – the DAIRIES in India – of which AMUL is the biggest contributor.

    Most of the Milk collected in Dairies are from foreign breed cows like Jersey, Holstein etc which are not only not beneficial but harmful.

    Even if the Milk collected is from Desi Cows, Cows born through ARTIFICIAL INSEMINATION have no Nutrition value & their Milk is useless.

    And you know what is the prime PRODUCE or PRODUCT of Dairies??
    The prime PRODUCE is not the WHITE POISON called MILK. The prime PRODUCE is BEEF!!!
    You may ask how???
    The MILK collected in Dairies are supplied by various Cattle owners – which in India are invariably Foreign Breed cows & almost always born through ARTIFICIAL INSEMINATION.
    The moment a MALE CALF is born – which has no utility – it is sold to butchers in South India , Goa, NE States. Lakhs of Calves are mercilessly slaughtered within days of birth.
    THIS IS WHAT COOPERATIVES & DAIRIES ACHIEVE.

    Mr. Mani says – The minimum size of a farm should be 300 acres.

    Yes. This is what the MNC Seed Sellers, Fertilizer Mafia & Pesticide & GM Mafia want.

    Large Land Holdings invariably engage in MONOCULTURE.
    It is easy for these Mafia to market their Poison to LARGE LAND HOLDERS.

    THE ONLY SOLUTION, AGAIN I REPEAT TO OUR AGRICULTURAL WOES IS TO BAN CHEMICAL FARMING & EDUCATE THE FARMERS IN COW BASED NATURAL FARMING.

    • Okay Sir, looks like you have made up your mind on everything, so there is nothing more to be said. No room for discussion. We’ll agree to disagree. Thank you.

  2. Very good article ? Food for thought. If the base of the pyramid, the farming and food growing industry, is strong and solid, no power on earth can shake or blackmail a nation.

    • Very Good Article???!!! Oh God, Save Indian Agriculture & Indian Food from the Greedy Corporates.

      Save Indian Agriculture from MNC Agents & proponents of GREEN REVOLUTION

      Save Indian Agriculture from the LITERATE, UNEDUCATED thinkers like RVS Mani & Savitri.

      Mr. Mani, You say: “Through corporatization and other such endeavor let the landholdings be aggregated.”

      Corporates & their Agents like M.S. Swaminathan, C Subranmainan, & the Congress Dynasts have done enough to destroy Indian Agriculture & Indian Health System.

      It is the CORPORATES & their AGENTS who have pushed our farmers to the brink of Poverty,suicides & what not!!!

      Today the entire Indian Agriculture is a hostage of the Corporates – (1) Seeds (2) Unwanted agricultural tools (3) Harmful Chemical Fertilizers (4) Poisonous Pesticides – For anything & everything the farmer is dependant on Greedy Corporate thieves who suck the last drop of blood from the farmers. …And you say COPORATIZE THE LAND HOLDINGS???!!!

      Mr. Mani, Please refrain from such self-destructive suggestions – lest I am forced to infer your article is sponsored by a greedy MNC like Monsanto

      To be brought back to rails, INDIAN AGRICULTURE:
      (a) Needs to be Decorporatized first.
      (b) Sikkim Model should be adopted by banning Chemical Farming
      (c) Monetary Assistance from Govt will never help AGRICULTURE
      (d) Indian Govt should – on a war footing – protect our Desi Cows & bulls
      (e) Initially for about 2-3 Years Farmers need Training on COW BASED ORGANIC NATURAL FARMING

      COW BASED ORGANIC NATURAL FARMING if adopted for 2 years will:
      1. detoxify our fast degrading Agricultural Lands & increase productivity
      2. increase Carbon Content of Soil & reduce Water requirements by 90%
      3. Make a perfect FOOD CHAIN & detoxify our Food.
      4. Decontaminate our Water Table by eliminating poisonous Agro products
      5. FARMERS’ SUICIDES WILL TOTALLY STOP

      ONE HUMBLE SUGGESTION TO YOU MR. MANI, PLEASE STOP WRITING SUCH ARTICLES ON ‘AGRICULTURE’ SITTING IN YOUR AIRCONDITONED OFFICE CHAMBER. GO & WORK IN A GOSHALA & ASSOCIATED ORGANIC FARMING FOR 3 MONTHS. THEN YOU WILL REALIZE HOW POISONOUS ARE THESE CORPORATES.

      • Dear Mr.Iyer, abuse and hysteria do not aid discussion or even debate. Please calm down.

        Mr. Mani was only suggesting the removal of agriculture as a constant beggar industry of Government to be being an independent, completely empowered, contributing sector of the nation which has the potential to make the nation one of the strongest in the world. This is so possible especially in India given it’s geographical, natural and climatic conditions, and it’s fecundity. The Government has to remove it’s stranglehold on farming and entrepreneurship has to happen. The Govt’s job is only to regulate with right policies the healthy and wholesome tilling of land and keep it in Indian hands.
        Secondly corporate is not a bad word, by itself. It just means a formal body formed for
        enterprise. Even cooperatives are corporations. And corporate functioning can be done by any such body, even those run by Govts.Corporates do not mean only robber barons and mega MNCs. Even small and medium indigenous enterprises, completely legal and functioning with integrity are corporations.
        All that you have yourself suggested – organic culture, home grown and traditional knowledge systems, ecological water management, micro and medium food processing and farm produce processing units etc etc can be part of a corporate structure. (They already are – eg: a fast growing organic produce industry, milk cooperatives like Amul(which by the way is one of the biggest cooperatives in the world) handlooms and jute, home made produce etc etc )
        It is time farmers (and all allied specialities) became bigger and better than the top executives and managers and expert consultants in all your usual fields today. Farming should be in the top of the job market today, not the bottom.
        BTW the Sikkim model is successful because the Govt established it on corporate lines and runs it professionally backed with the right policies on top. I too am a great admirer of it.
        Please read Mr.Mani’s article properly.

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