Agriculture is most profitable and lucrative profession


For the first time in many years, the Indian agriculture received its share of space in mainstream mass media. It’s not that there have been some sea change or transformation but it has suddenly become lucrative and attractive profession (to highlight agricultural distress, farmer’s suicide and off-course Padyatras of Young Emerging Political Scion).

Suddenly all the punditry become expert in agriculture and started to offer their opinions and expert advices on how to improve agriculture and how (illiterate & ignorant) farmers should do the farming.

But if we take critical view and take benefit of hindsight, we can see that agriculture has always been most lucrative profession, after all we are known an ‘Krishi Pradhan Desh’ and it become a instant social media hit when someone put his/her photo in lush green mustard farm. It’s also miracle that most of photos have mustard in background while it’s grown in very small areas and oil-seed are one of agricultural product which India imports.

After a bit of sarcasm, now let’s takes hard look at harsh, brutal and dark realities of agriculture in India:

  1. India’s planner never wanted to promote agriculture. They have same disdain for agriculture as Urban Indian has for people coming from rural areas (normally addressed as ‘Dehati’). This is sole reason that we have always set targets for agricultural growth much lower than manufacturing, services and overall economy. Take example of 12th Five Year plan – The growth target for agriculture is set at 4% while target for overall economic growth is set at 8%. It’s another matter that even these lower targets are rarely met.
  2. This deliberate, planned and sustained efforts to (de)promote agriculture has resulted in reducing share of agriculture in economy from ~50% at time of independence to less than 15% in 2015. Since it has happened by deliberate neglect, we didn’t care to create employment opportunity for populations depended on agriculture which continues to remain almost same (more than half of total population) as at time of independence.
  3. But in democracy, its majority which rules. Why such a large population lost its clout and repeatedly ignored? The reason lies in fragmentation and division among them by identity of region, language, religion and caste.
  4. While we routinely blame the skewed subsidies in form of power, fertilizer and MSP to farmers but don’t see the invisible subsidy provided to urban dwellers in form of assured electricity, piped water supply and transportation facilities. We don’t see and question lakhs of Crore subsidy to Metro rail as subsidy (here urban commuters need not pay full fare. Its infrastructure creation not subsidy!) But power provided to farmers needs to charged at market rate. We blame farmers lobby for all the ills of state distribution boards, power sector and economic woes while ready to elect a government in National capital (having largest per capita income in country) which promise them free water and subsidized power.
  5. Well, these are not double standard! It’s their legitimate right, because urban dweller pay taxes so they must have claim over the resources. Why the hell on earth, we should care for Nange Fakirs living in hinterland. What do they provide for us? Oh yes, we can express solidarity with them when one of them commits suicide. Suicide would make interesting story , especially if it happens in full public view, and we can always find motley crowd of activist who care for global food security & campaign for rights of poor and marginal farmers without even having any iota of understanding about how it feel to remain a hungry even for a day.
  6. Now take a look at some aspects of agricultural economics. We complain about food inflation. Governments have been toppled on this very serious issue. Why the dumb, non-responsive government is doing when onion is sold at Rs 30/kg in urban area? The political class & bureaucratic, mainly coming from this crowd itself, take steps to reduce price. But we ever see the government moving into action when potato are sold at Rs 2/kg by farmers. Where the government did goes? Oh I forgot, the Price stabilization funds are meant only to subsidize urban consumer, not to compensate farmers for their distressed sell.  Stupid they are, as they have produced bumper crop.
  7. Oh, now come to main point of farming being a very lucrative profession. One simple way to measure profitability of any profession is ratio of output/input prices. In farm sector, this is measured by Terms of trade. Here are some sample statistics to see for yourself :  harsish
  8. Very newspaper editorial and economic expert have blamed high MSP for runway food inflation in past year. But have you ever care to read how MSP are calculated? I would just provide some of novel assumptions followed in calculation of MSP
    1. Only the number of hours that bullocks work on farm is used for calculation, as if the animals don’t need to fed on other days of year.
    2. Interest on working capital is calculated for half the cropping season, presuming that farmers would repay the loan when the crop is half grown.
    3. Post harvest expenses are not accounted for
    4. .All members of a family engaged in farming are valued just as non-skilled laborer. No concept of managerial remuneration leaves apart the profit, oh after all what they contribute?  Industry requires manager, not farming.
    5. Cost of factors of production is one essential component. But it is presumed that farmers own hereditary land, so they are not entitled to seek market rent for their land.
  1. Ok well, this is story behind the much celebrated MSP number. Now come to much broader issues of farmer’s subsidy. You must have heard that more than 1 lakh subsidy per year is provided to farmers. Its pure misnomer and deception. When world cotton prices are at Rs 8000/ per tonne, the farmers are paid Rs 4000/tonne. Shetkari Sanghathan has done some background calculation to show that government is extracting lakhs of rupees from farmers and distributing it among affluent urban consumer directly (by suppressing prices of cereals, pulses, vegetables) and indirectly (by ensuring cheaper industrial raw material e.g. cotton for textile industry). By governments own admission (as per submission to WTO), the farm subsidies to wheat are in negative.
  2. It’s not a new story. Farmers are always there to sacrifice for the national development. They should readily provide land for affordable housing and social infrastructure without their consent. They should produce pulses and oilseed, even if they are not remunerative, to meet national demand. Their property rights do not matter. If we adopt non-discriminatory attitude, we should build affordable housing in Lutyens Delhi rather than by acquiring land in NCR periphery.
  3. Come to Economic reform. We demand reform, choice and liberalization in all sector but farming. Farmers are not capable of making independent and informed choice. They needs hand holding. This is reason that they can’t sell outside designated area (due to APMC restrictions) , they can’t sell directly to customers & then can’t share global price rise due to export restriction but need to share losses due to fall in global prices.
  4. Need more proofs on why farming is most profitable and lucrative profession and business? You need to ask this question to our political farmers who have fortunes out of farm land. They can earn crores; yes you heard it right, in between their election cycle from their farming land.
  5. But previous government has not much to alleviate the status of farmers. Oh yes, MNREGA did wonder for farmers as per studies of social scientist and activists. It is responsible for rising farm wages. Oh, then its good na! that a labourer is benefiting from higher wages. But their impact wiped out for laborer by high inflation.
    1. If 100 days of labour has been reserved for 250 days of lean season, it would have doubled the employment generated, without more investment.
  6. Oh if not MNREGA, then Farm Loan waiver was definitely good for farmer. The sad reality is that it helped only those farmers who have defaulted on institutional credit (not the regular payer or nor the non-institutional debtor).
  7. Unfortunately the sad and hard truth is that no one cares for so called Ann Data (grain producer). There is no organized body to represent their interest, they are given short-shrift by political class and bureaucrats are simple unable to comprehend the complex problems due to their elitist background. The same failed policies which haven’t changed anything are advocated by media punditry and social activist.

All these problems ultimately comes to the Niyat’ or Intention of policy makers and other stakeholders. If there is sincere intention, nothing is impossible as being shown by excellent performance of Agriculture in Madhaya Pradesh, Chattisgarh and Gujrat who have delivered more than 7% agricultural growth for more than decade from 2001-02 to 2011-12.

India’s farmers would be better served if they are left to themselves. Yes, there is scope for extending irrigation, providing high yielding seeds. removing restriction on trade of agricultural commodities and creating a national market for them,  extending credit facilities in simple & convenient ways and creating a viable income insurance and weather insurance to reduce unpredictability. But above all , what is require are honest and genuine intention. Political dramabazzi or scoring political points to secure their vote are most fatal for farmers.

Independence Day : Reflections on Economy , Politics and Society


I am writing this post after about 2 years of hibernation from writing . As we are approaching another Independence Day I would like to reflect on the current status of Economy, politics and Society.

We Indian used to brag a lot about our economic performance but sky-scrapper with shaky foundations are rarely able to withstand the storms and cyclones. While Amartya Sen may have rightly project Indians as “Argumentative Indians” but he just stopped there. Just the Arguments are not enough to win the game. To use diplomatic parlance, you may win many arguments in room but that doesn’t ensure victory in game. To win the game, you need to have a clear vision , know your strength and shortcoming and use the strategy to achieve your full potentials while exploiting the vulnerability of opponents. To cut short, implementation is key in winning the game. This is where we fail miserably.

Tough some people have rightly identified the implementation gap and are working to bridge the same. “Ib-In” or India Backbone Implementation Network is case in point

On economic management India is classic example of “To kill the Goose That Laid the Golden Eggs“. While India was struggling to climb the stairs of growth the ‘coteries of crony capitalism’ disguised as voteries of inclusive growth killed the Goose in search of a Golden Egg. They advocated re-distribution giving a scant regard to sustainable revenue generation or growth.  While they may advocate that  programmes like MNREGA has doubled/tripled/quadrupled the wages for Rural and Urban Manual laborer for whom only source of subsistence is their wage and this has actually led to inclusive growth. what they ignore is productivity increase of Economy which has actually declined in recent years  indicating loss of competitiveness in Economy. This is hindering the growth of India as a manufacturing hub , which can create large employment opportunities to effectively leverage the Demographic dividend, at a time when MNCs are looking to diversify their manufacturing base as china is becoming costly. To grow at a rate that pulls more people out of poverty, India needs to invest more, create more non-farm jobs or manufacturing jobs . but who cares about growth as long as they are able to grow their personal empire  classic example being crony capitalism witnessed in series of scams from 2G , Mining, Commonwaelth , Sarkari Damaad & list goes on….  A very good technical analysis or procedural details on working of crony capitalism can be found in Sarkari Damaad case aka Rober Vadra land deal case.

This loot of national resources will go unhindered as long as public doesn’t understand or care about their rights and duties and continue to think on basis of their own short term interest /benefits /advantages (by demanding reservation/ subsidy /allowances) rather than keeping public interest(which would includes demanding governance, basic infrastructure, accountability from public officials including politicians and bureaucrats) in mind. As in case of change of presidentship from George W Bush to Barack Obama has demonstrated, behind much of the chest-thumping of politicians, there usually lies a continuity of policy between different administrations.” This is where the vigilant , conscious public & citizenry come into picture. We have every right to know the vision and strategy of our political leaders which includes government as well as opposition. In this hyper-informative digital world we can hardly remain aloof from Public affairs , but consciousnesses of public affairs also bring with its own set of views, prejudices and biases. But we can greatly overcome the shortcoming of these biases and prejudices if we make a conscious efforts to make us aware about them. As rightly & timely inquired by one sympathizer of Mr. Narendra Modi in a column in newspaper, we need to ask tough question from our politicians rather than believing in spin given by their sympathizers . This is kind of vigilance we required to make politician accountable to general public. While many present their views through columns as done by one of MP in today’s paper on foreign policy but nuanced , critical public discourses on issues of relevance are largely missing from Indian Public life.

On the social front we have witnessed huge churning happening in last year which included mobilization on the issues of corruption, anti-rap protest. but we are yet to see any impact of these mobilization on actual social life. while reporting of corruption & rape cases may have gone up temporarily but we are hardly seeing any change of heart in general public or increased morality in public life. We have scant regard of sensibility of others. we are not used to think critically during our socialization process whether it is at home or in school and society.Only a enduring, sustained long term efforts on the parts of public to create awareness accompanied by institutional change can bring a societal transformation.

India is society of confrontation and conflict. There are ideological, political, religious, regional and caste based division present at every moment in every hook and corner of country ample evidence of which we see in form of communal violence(whether it is in J&K, UP or Assam), political blame-game( on transferring of bureaucrats to who is writing the speech ) , Caste rivalries or honour killing which are just another manifestation of existing wide gulf in different castes  in society, Regional movements for creation of new state of Telenagana, Gorkhaland , Bodoland & half a dozen others. This list is unending and ever expanding.

In spite of these division , conflict and confrontation, what had united the people living from Kashmir to Kanyakumari , Silchar to Porbander – this is Idea India and belief of people in this Idea of India. Some discomfort and struggle makes us comfortable & tough, removing every discomfort make the species fragile. e.g. extreme hygiene , by destroying the body’s natural ability to fight with germs and adapt to environment , we become vulnerable. we counter it by ingesting probiotics , the good ‘dirt’ that we denied the body in first place. Similarly we can’t just wished away from reality and live in a Utopian world but we can achieve a true Independence for India only if  the “common problems of India” could become “common concern for all”. This will create shared sense of understanding and give all of us a stake in progress of nation . only then we can prosper, develop and realize the true independence, independence from our ignorance, our hatredness towards other, independence from our parochial thinking , independence from dogmas, independence from bad habits and above all independence of mind.

Jai Hind Jai Bharat.