Utsa Patnaik

A Global Angle to the Farmer Protests | UPSC

Utsa Patnaik is Professor Emeritus, Jawaharlal Nehru University

RECREATION OF COLONIAL TIMES

• SURPLUS IS THE KEY : Northern industrial countries, namely the United States, European Union (EU), cannot produce the tropical and sub-tropical crops in high demand by their own consumers while they have mountains of surplus grain and dairy products.
• EXPORT MARKETS : For over two decades, they have put relentless pressure on developing countries to give up their own public procurement systems, insisting that they should buy their food grains from advanced countries.
• CONTRACT FARMING : While diverting their food-crop-producing land to contract farming of export crops that these industrial countries want but cannot themselves produce.

• PROVEN EXAMPLE : Dozens of developing countries, ranging from the Philippines in the mid-1990s to Botswana (Africa) a decade later, succumbed to this pressure.
• RAPID PRODUCTION : They paid the price when with rapid diversion of grain to ethanol production in the U.S. and the EU, world grain prices trebled in a matter of months from end-2007.
• FOOD RIOTS : Thirty-seven newly import-dependent countries saw food riots, with urban populations being pushed into greater poverty.
• BUFFER STOCKS : Food security for the developing world is far too important a matter to be left to the global market, but the relentless attack on their public stocking of grain for ensuring food security continues.
• STAGNANT AGRICULTURAL GROWTH : India had barely managed to pull back from the brink a decade ago: procurement prices were raised substantially after virtually stagnating during the six years preceding the 2008 price-spike.

• POVERTY LINE : Unemployment caused by the 2016 demonetisation followed by the 2020 pandemic has reduced aggregate demand by now to a historic low.

A CASE OF UNFAIR TRADE

• UNFAIR TRADE PRACTISES : Our farmers have been exposed for no rhyme or reason to unfair trade, and to the volatility of global prices that has plunged them into unrepayable debt and distress.
• SUBSIDIES IN DEVELOPED COUNTRIES : Advanced countries in the mid-1990s, converted their own price support measures to massive subsidies given as direct cash transfers to their own farmers.
• AGREEMENTS : Transfers that in a blatantly self-serving manner they wrote into the Agreement on Agriculture as ‘not subject to reduction commitments’.

• U.S. ANNUAL FARM OUTPUT : For the U.S., the direct cash transfers it gives to its 2.02 million farmers, amounting to a huge half or more of its annual farm output value, uses up only 1% of its budget.
• ECONOMIC IMPOSSIBILITY : For India, over 50% of the entire central government annual Budget would be required to give even a quarter of annual farm output value to our 120 million farmers.

IT’S ABOUT A REASONABLE PRICE

• MODEST LIVING : All they want is a reasonable price for the vital crops they produce for the nation, so that they can cover costs and live at a modest standard.

• AGRONOMIC PRACTICES : The solution lies in introducing improved agronomic practices such as the System of Rice Intensification which economises water, not in reducing rice production.
• LOWEST PAY : Our farmers are among the lowest cost producers in the world, and the support prices in 2013-14 at the prevailing exchange rate of ₹60.5 per dollar were well below global prices, which means that actual support was negative.

RIGHT ASSESSMENT

• EXPERIENCED FARMERS : Farmers have already experienced contract farming with foreign agribusinesses in Punjab and Haryana.

• DIFFERENCES : They say clearly that they do not wish to deal with powerful, faceless private corporations that renege on price and quantity contracts when it suits them.