[Reader-list] Reg: Set - 4
rakesh.rnbdj at gmail.com
Mon Jun 21 22:14:31 IST 2010
Source: The Hindu
Article Theme: Farmer's suicides
Date: March 1, 2010
And yet another pro-farmer budget
*The real heroes of India's success story were our farmers. Through their
hard work, they ensured “food security” for the country.**— Pranab
Mukherjee, interim budget speech Feb. 16, 2009*
*This Budget belongs to 'Aam Aadmi'. It belongs to the farmer, the
agriculturist, the entrepreneur and the investor*. *— Pranab Mukherjee,
budget speech, Feb. 26, 2010*
Gee! Another pro-farmer budget. Going by the media, every budget this past
decade has been one. Editorials across ten years have always found “a new
thrust” to agriculture that spelt “good news” for the farmer. Rarely
mentioned are the massive subsidies, now larger than ever before, for the
Corporate sector. This year alone, the budget gifts over Rs. 500,000 crore
in write-offs, direct and indirect, to the Big Boys. That's Rs. 57 crore
every single hour on average — almost a crore a minute. Beating last year's
Rs. 30 crore an hour by more than 70 per cent. (See Tables 5 and 12 of the
“Statement of Revenue Foregone” section of the budget.)
Maybe the pro-farmer claim was merely a typo or proofing error. They just
dropped the word “corporate” before “farmer.” Reinstate that and all is
true. This is a budget crafted for, and perhaps by, the corporate farmer and
Some television Channels set the tone for the debate before the budget in
giant hoardings: Will Pranab Mukherjee function “like the CEO of India Inc.,
or will he behave like a politician?” The message was straight: the finance
minister's job is to serve India Inc. not the people of India. A second ad
in this series read: “Will FM's speech DESTROY or CREATE Market Wealth?” In
the event, the Finance Minister more than lived up to their demands. The
budget hands out new bonanzas for Corporate Kleptocrats. It goes further
than earlier ones in pushing the private sector as prime driver of
development and economy. Not the public sector.
Take Mr. Mukherjee's “four-pronged strategy” for agriculture. The first of
these, “agricultural production,” could mean anything. The other three are a
goldmine for large corporations, not the countless millions of small and
marginal farmers who produce India's food. Take “Reduction in wastage of
produce.” This means more big bucks for companies setting up storage
facilities. Take this together with the related “Credit Support to farmers.”
Already, an Ambani or a Godrej can set up a cold storage in Mumbai and get
agricultural rates of credit for it. That's thanks to our re-jigging of what
“agricultural credit” and “priority sector lending” mean. This budget takes
that process further.
More and more of “agricultural” credit will go not to farmers but
corporations. Indeed, “even External Commercial Borrowings will henceforth
be available for cold storage or cold room facility.” The budget even says:
“Changes in the definition of infrastructure under the ECB policy are being
made” to foster this process. Some of those changes have already happened.
Several of the loans disbursed as “agricultural credit” are in excess of Rs.
10 crore and even Rs. 25 crore. And even as loans of this size steadily grew
in number between 2000 and 2006, agricultural loans of less than Rs. 25,000
fell by more than half in the same period. (See Revival of Agricultural
Credit in the 2000s: An Explanation. R. Ramakumar and Pallavi Chavan,
*EPW*December 29, 2007.)
Met any subsistence farmers taking out Rs. 25 crore loans lately? Nor will
it be small or marginal farmers availing of the “full exemption from customs
duty to refrigeration units required for the manufacture of refrigerated
vans or trucks.” Nor is the “infusion of technology” proclaimed going to
The budget promises “appropriate banking facilities” in every village with a
population of over 2000. Since 1993, the number of rural branches of
scheduled commercial banks has steadily fallen, even as the rural population
has grown. So taken together with the licenses to be given out to private
operators, this means the new branches will be those of private banks. Not
one of whom has an iota of interest in small and marginal farmers. Nor are
they bound by the social banking obligations that once guided the
nationalised sector. “A thrust to the food processing sector” is exactly the
same. More cash for big companies. You know who the “state-of-the-art
infrastructure” will be built for — with public money.
Of the many claims the media have dished out for weeks now, none is more
absurd than the fiction that farmers have gained massively from soaring food
prices. And that rural India is doing so well, its saving the rest of us.
(And doing that on a projected growth of minus 0.2 per cent).
Higher MSPs certainly helped ease pressure. So have higher global prices for
some products in a few cases - briefly. But with higher food prices, with
retail prices rising many times faster than wholesale, where does the farmer
begin to benefit? Farm gate prices are way below those of even the wholesale
markets. Further, over 70 per cent of Indian farmers are net purchasers of
foodgrain. (Between 55 per cent and 60 per cent of the average Indian farm
household's monthly per capita expenditure goes on food.) Huge rises in food
prices crush them. Remember the excuse trotted out for letting Big Retail
sell agricultural produce? It would do away with the “middleman,” giving
farmers and consumers a better deal. Yet prices of fresh produce are
costlier at big retail's outlets. You still get a better deal from the petty
vendor on the street. Often, that pathetic “middleman” they're crushing is a
poor woman street vendor. The last and weakest link in the chain of
intermediaries between farmer and public. The new middlemen wear suits.
The ‘higher-prices-benefit-farmers' mob seems clueless about what has
happened with cultivation costs. It took Rs. 2,500, for instance, to
cultivate an acre of cotton in Vidarbha in 1991. Rs. 13,500 in 2006-07 and
Rs. 18,000 to Rs. 20,000 today. (Counting family labour and like costs). The
'gains' from these higher costs are cornered by the corporate world in
sectors like seed, fertiliser and pesticide. Soaring input costs have been
crucial to farm bankruptcies, debt and suicides. The looming cuts in
fertiliser subsidies won't spark rural euphoria either.
An incentive to repay loans on time — which millions of farmers cannot do —
is being passed off as an additional subsidy to the aam kisan in this
budget. And there is still an air of self-congratulation on the Rs.
70,000-crore farm loan waiver of 2008. A one-off waiver that comes once in
so many decades. Yet revenue foregone in this budget in direct tax
concessions to corporate tax payers is close to Rs. 80,000 crores. It was
over Rs. 66,000 crore last year. And Rs. 62,000 crore the year before that.
In all, Rs. 2,08,000 crores of direct freebies in 36 months.
Consider that this loot-and-grab sortie has been on for two decades now. It
means that in direct tax freebies alone the corporate sector has had the
equivalent of some 15 'farm loan waivers' since 1991. Then there's the
indirect stuff. In this year's budget: Revenue foregone in excise duty — Rs.
1,70,765 crores. Customs duty — Rs.2,49,021 crores. Together with the
Rs.80,000 crore in direct write-offs, the total nears Rs. 500,000 crores.
The media's shameless lobbying for Corporate “wishlists” began weeks before
the budget. A class and vested interest analysis of the writers, panels,
discussants, “experts” (and anchors) would be edifying. Budget time is when
Big media are seen for what they are: stenographers to the powerful.
Ill-informed aam aadmi rants in the streets are quickly 'balanced' by ‘the
experts.' Sure, there is, in a few panels, the odd dissenter. This
discussant the anchor always turns to with a wry smile of amused tolerance.
The unstated message to viewers: “here's this whacko with his loony left
delusions. Accept him as the comic relief in what are otherwise serious
Never mind that some of these deluded dissenters warned — correctly — of the
type of crisis that shook the world in 2008. Not one of the “experts” ever
came within miles of predicting that meltdown. They were in fact proclaiming
the Golden Age to be upon us when their babble hit the fan. But no questions
on their competence. Many of the “experts” have direct ties to large
corporations and peddle their interests with zest. Sometimes, with a little
more sophistication than panting media hucksters who show not a trace of the
scepticism their profession demands of them. Straining at the leash to beat
their rivals in serving the richest 1 per cent (or less) of Indians.
Mr. Mukherjee's budget speech spouts dated World Bank babble about the “the
focus of economic activity” shifting “towards the non-governmental actors.”
And about “the role of Government as an enabler.” (Private corporations and
football clubs also qualify as non-governmental actors, but never mind). “An
enabling Government does not try to deliver directly to the citizens
everything that they need. Instead it creates an enabling ethos...” His
budget does that. It enables a grasping corporate world to grab more public
wealth. And the entrenchment of perhaps of the most parasitic elite in the
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