Monday, February 12, 2007

REST IN PEACE - India’s agrarian crisis has the WTO’s signature all over it
- India’s agrarian crisis has the WTO’s signature all over it
Cutting Corners
Ashok Mitra

Imperialism is still the highest stage of capitalism. But the first decade of the 21st century is a different proposition compared to the first decade of the 20th. It is no longer territorial imperialism, but imperialism via trade, which depicts capitalism’s pristine phase. The World Trade Organization, which is basically a concordat of the United States of America and the west European nations, is, some will say, acting as the deus ex machina, so that international capitalism could fulfil its ordained mission.
It is therefore an iniquitous world. Millions of farmers in Latin America, Africa and south Asia are, at present, direct victims of the wondrous regime set up by the WTO. With the gradual dismantling of quantitative restrictions and tariff barriers, the peasantry in the poorer countries is facing rack and ruin. A whole range of farm commodities can be offered for trading by the technologically advanced Western countries at prices that would not cover farmers’ costs in the poor continents. One reason is the neo-colonial edict: some are more equal than others; subsidies are out for farmers in India, Pakistan or Bangladesh, but not for those in the US, or in France.
Basing themselves on the rationale arrivable from such fraudulence, a group of Western economists have enunciated a breathtaking theory. Since they are failing to meet global competition, farmers in the developing economies should move away from primary production, and that task be left to the care of the Western countries which are as efficient in agriculture as in several branches of industry. The poor nations should concentrate on lowcost service activities generating inputs for sustaining growth in the industrially-advanced nations.
The agrarian crisis in India has the signature of the WTO fiats written all over. Whether it is wheat, rice, corn, cotton, tobacco or sugarcane, the market is being flooded by imports from North America and Europe. Whatever improvements in productivity were inducted into Indian agriculture four decades ago via the so-called New Agricultural Strategy have now exhausted their potential, and it is increasingly difficult for the Indian peasantry to face competition from imported farm products. Owners of bigger-sized holdings, such as those exceeding 20 acres, will still find it possible, at least for some more time, to withstand the heat of competition from overseas on account of various economies of scale they enjoy. But they too have their doubts about how long they would be able to cope with the consequences of trade globalization. Many of them are accordingly showing an interest in entering into contract farming arrangements with foreign corporates, which might allow them to survive in the long run.
The dilemma faced by middle-level farmers is far more acute. The king of economies of scale rich peasants can reap advantage of is beyond their reach. They are, therefore, directly at the receiving end of the tribulations caused by the WTO’s hectoring. The incidence of suicide is fairly high among this group; many of them borrowed heavily to expand their farming activities and have failed to repay.
But not all peasants have the nerve to commit suicide. Some of them are victims of a troubled conscience; it would be a gross sin to disappear leaving their families in the lurch. Quite a few among these middle peasants have discovered an alternative escape route. The sudden spurt of special economic zones in different parts of the country, under the benign patronage of the Centre as well as several state governments, has led to a boom in land prices. Foreign investors — and some domestic parties as well — are also coming in with their lush schemes to sink money in developing such symbols of luxury living, as high-rise residential townships, wide eight- or ten-lane motorways, fly-overs, pharmaceutical hubs and food parks; they are only too eager to take over land from the struggling farmers. Besides, the demand for land is being further accentuated by new trends in tourism, including health and sex tourism.
The middle peasants in different parts of the country have thus been offered life-buoys to keep them afloat in the ocean of economic distress. Land speculation is reaching crazy heights, and providing an opportunity for survival to those land-holders whose returns from cultivating activities have taken a dip owing to depressed farm prices. They do not have to take, they have discovered, the course of self-annihilation; they can sell their land and fulfil their tryst with destiny. The authorities on their part have been most generous and eased the land-ceiling laws. Middle-level farmers often have enough organizational acumen and financial buffer to allow them to bargain effectively for the land they put on offer. Once they receive a reasonable sum from the sale of land, a number of choices are again open. They can put the money in time deposits with the banks, draw the interest, and enjoy good living in the manner of a proper rentier. Or they can invest a part of the money in the share market, thereby giving themselves the chance of doubling or tripling the money they received from land sales.
The problem is of an altogether different genre for very small peasant proprietors — who often themselves cultivate the tiny plot of land they own — and landless farm workers. A small peasant, owning at best a couple of acres of land and most of the time much less, does not have any staying power. He cannot afford to bargain for long with the land sharks. Not surprisingly, he is forced to sell the pittance of his land at an exceedingly modest price. Some wise ones may advise him to place with a bank the cash that he has got by selling the land, and live on the interest earned. But since the size of his land is very small, the sum earned from its sale is paltry too, and the interest likely to be earned if this sum is deposited with a bank will be equally paltry. The small peasant proprietor therefore reaches a dead end.
Much worse is going to be the plight of the millions of agricultural workers who labour on a daily basis on the holdings being given away to the SEZs and to promoters of ritzy hotels, highways, fly-overs and tourism treats. Where will they find any alternative occupation? The new facilities that come up are unlikely to absorb even five per cent of the farm workers who are deprived of their occupational pursuit.
Such grim prospects for a substantial segment of society obviously do not stir the conscience of policy-makers. The argument put forth by policy-makers seems to be flawless. The population at large will benefit from import of cheap grains, textiles and suchlike from overseas; also because of dismantling of trade barriers, export of IT-related service-activities is growing by leaps and bounds; after all, one cannot have everything together in life; we cannot aspire for an eight to ten per cent annual growth in gross domestic product and yet carp about rural unrest or lessening employment. That apart, has not the rural employment guarantee scheme been set up to offer relief to the poor?
The top decile of Indian society is experiencing unprecedented prosperity. It will import more and more of consumption goods from overseas, thereby denying the poor the privilege of producing these goods domestically. The poor in the countryside will continue to starve and die. But has not that been an integral part of the India which the world has known since antiquity; why get worked up over it?