India can’t have true reform in agriculture if we keep hitching it to rural development

While everyone has been focusing on the Narendra Modi government’s budgetary allocations to agriculture, its location in the Budget has just as much to tell us about how limited the understanding of the problems and possibilities of Indian agriculture has actually become.

 

By placing agriculture and a wide-ranging 16-point action agenda to double farmers’ incomes in the very opening sections of the longest Budget speech ever delivered, Finance Minister Nirmala Sitharaman might have justifiably felt that she was giving agriculture and India’s farmers pride of place (or plate) on her government’s political and economic agenda. However, this choice reflects quite the opposite: the systematic misrecognition and marginalisation of agriculture and its roles in Indian economy and society. Rethinking these assumptions is critical if deep and farsighted agricultural reforms are to have a real chance.

 

For instance, what does it tell us about the government’s understanding of agriculture that along with health, water, sanitation and education it is part of a section titled ‘Aspirational India’, and finds no mention in the section on ‘Economic Development’? Agriculture, here, is about ‘seeking better standards of living’ but not about the creation and multiplication of wealth and value, even though the extraction, realisation and transformation of value (in one form or another) is part of virtually every agricultural process.

 

Farmers as aspirants, not entrepreneurs
 

Farmers are then cast as aspirants, but not as risk-taking entrepreneurs, even though the range and intensity of their exposure to risk is unmatched.

 

Similarly, they are viewed only as job seekers and not as job makers even though agriculture as a sector remains the largest employer in the economy. And while Sitharaman’s key action points for agriculture covered aspects such as markets, credit, insurance, power, inputs, transport and logistics, these somehow never rise to the status of complex commodity markets, agro-commercial systems, industries, investments, serious risk mitigation instruments, and high-quality public infrastructure.

 

By glossing agriculture as aspirational, one only reinforces the view that agriculture is some sort of residue, a stalled structural transformation, a subsistence industry, or a buffer stock for food grains. But agricultural commodity markets have always been at the very heart of development: the connective tissue in the Indian economy, a key driver of growth, and vital to the wider dynamics of distribution, diversification and equity. It is time that the Indian policy imagination reinvests in the idea of agriculture and its multiplier effects and on all that it will take to change the terms of engagement in favour of farmers.

 

Why hitch agriculture to rural development
 

Here’s another one. What does it say about the understanding of agriculture that it has been tethered in the Budget to rural development? In this case, the convergence may be fairly simply explained by the fact that under the second Modi government, the Agriculture and Rural Development portfolios share a common Union minister. More substantially, one might even hope that closer integration of key schemes like the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and the National Rural Livelihood Mission (NRLM) with agricultural programmes would be more productive.

 

At the same time, hitching agriculture to rural development is highly limiting on two counts.

 

First, it obscures the linkages and interrelations between agricultural production, circulation and consumption, which invariably criss-cross over rural-urban boundaries. As importantly, it also sidesteps the very real political and economic trade-offs between maintaining low urban consumer prices and delivering high (or simply remunerative) returns to rural producers. In its chapter on ‘Thalinomics’, the Economic Survey seems to imply (without any evidence or evaluation) that a slew of agricultural reforms introduced in 2015-16 enhanced agricultural productivity and the efficiency of agricultural markets to such an extent that this, in turn, drove the slowdown in the price of the Indian Thali over subsequent years.

This is done, moreover, without any mention of the impact of crashing commodity prices, the repeated use of stock limits and trade restrictions at the slightest upward movement in prices, and various other inflation-targeting measures deployed by the government during the same period – and its relation to farmers’ incomes and agrarian distress.

 

The urban and the agrarian 
 

By drawing agriculture and rural development together, one also completely ignores the historic and dynamic relationship between agriculture and urbanisation in India, especially in the life and fortunes of small agricultural market or mandi towns across the country. Historically, rural India has always been more than agriculture, and agrarian India has always gone beyond the rural to extend into commercial, social and political networks of exchange with urban centres of trade and administration. However, it is all too common for us to characterise the agrarian and rural as an exporter of bulk produce, unskilled bodies and crop burning residue into our cities, with little acknowledgement of the diverse ways in which agricultural surplus has also shaped industrial and urban trajectories across Indian regions.

 

Instead of setting up rigid urban-versus-rural oppositions and transfers, it would be far more productive and prescient to draw out the interlinkages and take them into account in both urban and agricultural planning and development.

 

True reforms need a public vision for agriculture
 

Finally, what does it tell us when the single largest allocation to agriculture, irrigation and allied activities (accounting for nearly half the total outlay of Rs 1.60 lakh crore) is Rs 75,000 crore to a single scheme, PM-Kisan, an income support transfer amounting to Rs 6,000 per year to landholding farmers? Leaving its current infirmities in design and implementation (exclusion, identification, disbursement) aside, the overriding commitment to a centrally administered income support measure is eventually an almost inevitable outcome of this very limited political and economic vision for Indian agriculture and its future.

 

It is true that there are significant reforms, especially in the domain of agricultural marketing and trade regulation, that do not depend on the union budgetary outlays to gather momentum. But as long as our dominant assumptions about agriculture remain, Indian agriculture will not be able to mobilise the public vision, investment, knowledge resources, institutional capacities and partnerships it so deeply needs.