December 2007, Number 12


Resolution on Agrarian Crisis and the Way Out (Draft)

Addressing the Agricultural Summit in Delhi on April 9, 2005, Prime Minister Manmohan Singh disputed the notion of the country passing through an agricultural crisis. Just after a year and two months he had to rush to Vidarbha on June 1, 2006 with a relief package to stem the wave of farmers’ suicides. His package however failed to prevent farmers from committing suicide and since his 2006 visit, the number of farmers who have committed suicides in Vidarbha alone has crossed 1200.

The agrarian crisis is a cruel counterpoint to the heady euphoria of a soaring Sensex and tall talks of double-digit economic growth. Marked by virtual stagnation in agricultural growth and increasing unviability of farming itself, agriculture is in a state of veritable disaster. Suicides by highly indebted farmers incurring heavy loss in farming have been continuing as a phenomenon in successive NDA and UPA regimes, and the “packaged” panaceas of the governments have hardly been able to stem this suicide wave. The failure of the government to even ease the crisis with its packages and remakes of the same packages, only proves that the government’s contention that the crisis was transient, partial and localized only in some regions of the country is totally wrong. Rather, the crisis is more fundamental and structural and its aggravation is very much rooted in the neo-liberal policies of liberalization and globalization.

On the face of it, the agrarian crisis presents itself as a series of paradoxes:

    • India supposedly on the roll as an advanced “Nuclear Power”; “IT Superpower”; emerging “Asian Giant.” – but Bharat on its deathbed.

    • High growth in non-agricultural sector, handsome growth in non-agricultural incomes but decline in the demand for agricultural products and stagnation or sharp decline in agricultural output prices.

    • The average annual agricultural growth for the last ten years is less than 2% while the non-agricultural growth was on the higher side of 6%.

    • Indian economy is booming at a record 8-9% GDP growth for the third successive year but the tottering Indian agriculture is struggling to achieve even an average 2% annual growth.

    • Stagnant agricultural production, slower growth in agricultural input use and declining input demand but very sharp increases in input prices.

    • However, in some regions/crops there is ever growing input intensity but more and more of input use and more and more input expenditure only lead to lesser and lesser productivity/yield growth and even lesser and lesser production.

    • Higher the agricultural growth, say in Punjab, greater the number of suicides. Higher the yield, more severe the crisis. Higher the input use, lesser the profit margins. Higher the investment, lesser the returns. Higher the income, greater the indebtedness and greater the number of suicides.

    • Incidence of suicides is the highest in states with relatively most developed agriculture like Punjab, Andhra Pradesh and Kerala.

    • Incidence of suicides is also the highest in industrially most developed states like Maharashtra and Karnataka.

    • The earlier paradox of coexistence of agricultural/food surpluses with underfed population has given way to a new pattern of coexistence of underfed population with shrinking food supply, food production and foodgrains availability.

    • The Indian government signed Agreement on Agriculture (AoA) under WTO under the pretext of a sharp increase in agricultural exports but it has developed import dependence for food supply and it is ready to pay more prices to Australian and American agri-business multinationals than what it is willing to pay its own farmers.

    • The earlier procurement crisis due to “abundance” has given way to a different procurement crisis due to “scarcity”. The PDS coverage and off-take are poor, diversion/leakage in PDS is more and there are starvation deaths in many parts of the country. But the Left-supported UPA Government is keen on dismantling the time-tested Minimum Support Price (MSP) and procurement mechanism.

    • The textile industry is booming. In the post-MFA (Multi-Fibre Agreement) regime, India is outsmarting even China in many spheres of garment exports. Cotton production too has hit record levels, but so also the number of cotton farmer suicides! And now sugar also is turning very bitter for farmers.

    • Agriculture presents a bleak scenario. Rural incomes scenario is dismal. But there is a clamour among industrialists about the “Growing Rural Markets in India’; about dormant rural market segments for luxury cars and FMCGs. Multinationals and big corporates are vying with each other to get into corporate farming and contract farming as well as retail and wholesale trade in agricultural inputs and outputs.

Only a closer look at the underlying factors at a deeper level can unravel the mystery behind these paradoxes. Apart from the tragic suicides by farmers, the agrarian crisis has many other serious dimensions like increasing unviability of farming as consequence of steep increase in input prices and a large lag of output prices, almost virtual stagnation in agricultural growth, growing indebtedness of farmers, recent deceleration of non-farm growth, the irrigation crisis, the crisis in the development of rural infrastructure, the ecological crisis and so on. Factors like the unprecedented corporate land-grab for industry and real estate speculation, declining public investment and capital formation in agriculture, continuing dependence of farmers on private moneylenders with usurious interests, lack of adequate insurance coverage for farming in the face of frequent natural and market risks, growing stranglehold of multinational companies in seeds and pesticide business, in retail and wholesale trade in agricultural commodities, heavy subsidies to agriculture in the developed countries and the inability of the poor Indian farmers to compete with the heavily subsidized agribusinesses and farmers of the West in the international market and trade liberalization and reckless opening up of the Indian agriculture in such a backdrop despite occasional posturing at the WTO, have all contributed to the aggravation of the present crisis. A deliberate conspiracy to dismantle state procurement and the public distribution system (PDS) despite declining food availability and alarmingly decreasing per capita consumption of food also contributed no less to the agrarian crisis. Above all, the failure to carry out land reforms and the continuing skewed landownership and land tenure and widespread prevalence of tenancy, mostly in its semi-feudal forms, remains the fundamental reason and the foundation of this crisis.

Stagnation in agricultural production

The average annual growth rate of foodgrains production in the last 12 years (from 1994-95 to 2006-07) works out to a meagre 1.49 per cent. The growth rate of non-foodgrains works out to 1.46 per cent per annum in this period. There is no need to stress the implication of the fact that this is lesser than the growth rate of the population. Interestingly, this entire period is, by strange coincidence, supposed to be the greatest and unprecedented boom period for the overall economy and the total GDP of the country.

If the overall agricultural growth could not register an average of 2 per cent growth in recent years, foodgrains production recorded barely half a per cent growth per annum in the last six years. In absolute terms, compared to 1999-2000 when the total foodgrains production in the country was 209.8 million tonnes, by 2006-07 the foodgrains production could be increased barely by about 6 million tonnes in as many years as the figure stood at 216.13 million tonnes in 2006-07. Food self-sufficiency, leave alone food security, is already under threat.

Growing Indebtedness and the Resurgence of Usury

Heavy indebtedness has been the immediate reason for most suicides by farmers. It is not just routine indebtedness but a virtual debt trap for many farmers. For instance, in Punjab, the total annual rural debt of the state—Rs.24,000 crore in 2003-04—is more than its gross annual earnings from agriculture. According to a recent report of the National Sample Survey Organization (NSSO), each Punjab farmer has a debt of Rs.41,576, against the national average of Rs.12,505. If the total debt is more than the gross annual earnings from agriculture and if the average debt per farmer is Rs. 41,576, that means already many small and marginal farmers must have irretrievably fallen into the debt trap. Their interest commitment per year would work out to more than their earnings/profits from agriculture. As it is, many of them have been forced out of farming, losing their land and a good number even resorting to the extreme step. Punjab is a clear example to show that under conditions of the present Indian agrarian crisis, high indebtedness is also associated with high-income but high-risk, high-investment and high-cost farming which precisely is being advocated as the solution for the crisis.

Institutional credit hardly accounts for 40 per cent of the total agricultural credit and farmers depend on private moneylenders who charge exorbitant rates of interest – up to 60 per cent and even more. To top it all, the RBI has now begun toying with the idea of legitimizing private moneylenders by registering them and legalizing their private moneylending!

Whatever institutional credit is available is cornered mostly by big farmers. Several case studies have shown that bulk of the institutional credit goes to farmers owning more than 10 acres. And kulaks often recycle this institutional credit as private loans to small farmers at usurious rates of interest. When it comes to repayment, these kulaks often turn out to be wilful defaulters. Of course, the share of agricultural credit in total non-performing assets of banks is only around 3-4 per cent while major and medium companies account for 60 per cent of bank NPAs. Yet while the corporate sector gets away with astronomical amount of defaults and major and medium companies periodically get loan waivers without a grumble from the banking bureaucracy, the loans of small farmers are never written off.

Trade Liberalisation in Agricultural Commodities

A key factor behind the agrarian crisis is the impact of trade liberalisation on the output prices following the signing of the Agreement on Agriculture under the WTO. Kerala is perhaps the worst affected state due to the fallout of the WTO agreement. Over the past few years, ever since economic liberalisation became the development mantra, “God’s own country” has been flooded with cheap and highly subsidised agricultural imports, throwing its agrarian economy out of gear.

The Vajpayee Government eliminated the quantitative restrictions (QRs) on 714 agricultural commodities and products on April 1, 2001, fully two years ahead of the time India was required to do so by the WTO. Average tariff level was lowered to 35%, far below the bound rate fixed by the WTO, which was 100% for crops. No wonder then that agricultural imports are growing much faster than agricultural exports. In fact, the impact of trade liberalisation is not fully captured by the increase in the volume of imports. Even if there is no actual import, the low international prices and the threat of potential import depress the domestic price. And international prices are pulled down not by market forces of supply and demand, but primarily by absurdly high farm subsidies in developed countries. In the United States, subsidy to a mere 9,00,000 farmers has increased by 700% since 1996. The US Government is providing a subsidy of US $35,000 to each of its farmers. How can the poor Indian farmer, with an average annual income of $300-400, compete with his American counterpart?

The indebtedness and suicides by cotton farmers in Vidarbha and Telengana should also be seen as a particularly disastrous upshot of trade liberalization. Cotton exports were liberalised in 1990-91 in the backdrop of high international prices. Lured by high prices, lakhs of farmers diversified and switched over to cotton, especially in Telengana, Vidarbha and North Karnataka and even in Punjab, taking heavy loans at exorbitant interests to meet the switchover costs and high input costs of cotton cultivation. But the world prices of cotton started crashing from the end of 1996 onwards and by 2001 it was practically at half the level it was in 1995. Currently, it is the turn of the so-called “high-value” farming of sugarcane growers to suffer a similar fate as suffered by cotton farmers in the late 1990s.

Price Precipice – Output Prices Stagnate, Input Prices Soar

Indian farmers are being squeezed by a price precipice – sharply increasing input prices and stagnating output prices. The prices of all agricultural inputs are skyrocketing – fertilisers, pesticides, seeds, water and even infrastructure costs like transportation and cold storage.

In contrast, the output price for paddy never increased more than 4 per cent per annum since 2001-02 and the price of wheat more than 2 per cent on an average. The price crash in the case of the so-called “commercial crops” is even more dramatic.

The collapse in output prices is not a result of increased production or higher productivity. In fact, prices are falling even as the rate of production is falling, though the reverse should happen if the forces of demand and supply are in full play. Significantly, output prices have fallen even as the cost of production has gone up. The cause for this unprecedented fall is partly the wrong export-import policies. According to Prof. Abhijit Sen, former chairman of the Agricultural Costs and Prices Commission and now a Planning Commission member, the terms of trade have shifted 5 to 6% against agriculture since late 1990s. The profitability of agriculture has fallen by 25-40% depending on the crop, season and region. Ms. Barbara Harris-White has documented the crisis of rice farmers in West Bengal due to price crash – which has led to some farmers’ suicides even in the most fertile paddy belt of Burdwan – because of the LF Government’s failure to allocate adequate funds to the food department to procure paddy from the farmers at centrally fixed MSP and because of competition from cheaper rice smuggled in from Nepal, Bangladesh and Burma and from Bihar and Jharkhand where wages are too low.

Strategic Neglect of Indian Agriculture

The Ninth Plan as well as the Tenth Plan had set the target of agricultural growth at 4 per cent per annum and it could not be achieved. Without seriously analysing the reasons for this failure, the Approach Paper to the Eleventh Plan has again come up with 4 per cent target and the failure story is going to repeat once again all over.

The Department of Agriculture had sought an outlay of Rs.18,253.81 crore for the Ninth Five-Year Plan, but was provided Rs.7,813.69 crore, which was only 43 per cent of the demand. Again during the 10th Plan, as against a demand of Rs.25,000 crore, the sector was given Rs.13,000 crore, which was just 52.8 per cent of the demand. No wonder, the Plan targets were not achieved. The target set for the current XI Plan is 4 per cent.

Contrary to its lip service to higher agricultural growth, the UPA Government appears to have come to the conclusion that agricultural growth is not important to the overall GDP growth. Several bourgeois ideologues have argued that the share of agriculture in the GDP has declined to 18.5 per cent and even doubling the present 2 per cent agricultural growth would contribute at best 0.5 per cent to the GDP growth. This argument is fallacious on several counts. Firstly, 60 per cent of the workforce is still dependent on agriculture. Higher incomes to them, due to higher agricultural growth, alone can sustain non-agricultural growth. Secondly, service sector growth cannot be sustained without sustained growth in the real productive sectors of the economy. Thirdly, high GDP growth cannot be sustained only through higher investment, depending on foreign fund flows, both FDI and external commercial borrowing by the industry. If the Indian economy has to acquire more internal dynamism, agriculture should continue to remain the foundation for overall growth. With persistent and prolonged stagnation in the agricultural sector, a prolonged recession in the manufacturing and service sectors is not far away and when it sets in, greater surrender to foreign capital is inevitable.

Declining Public Investment in Agriculture

Rural expenditure has fallen to less than six per cent of GDP during the last five years, a fall of around 30,000 crores of rupees annually. In absolute terms, public investments in agriculture have been stagnating or falling over years, and stand at around Rs.20,000 crore today.

This decline in public investment is reflected most ominously in the area of irrigation. The investment in irrigation has sharply come down from 23 percent of the total outlay in the first five-year plan period to a mere five percent now notwithstanding Bharat Nirman and its Accelerated Irrigation Benefit Scheme (AIBS). Even if the full target for the irrigation component of Bharat Nirman is to be spent, each district in India would only get around Rs.70 crore on an average, which is mere peanuts.

Contrast this steady drop in investment in agriculture to the massive tax concessions granted to the corporate sector. The Finance Minister himself put the value of such concessions at a staggering Rs. 158,000 crore in his 2006-07 budget. Tax loss due to SEZs has also been estimated by the Finance Ministry to be around an additional Rs.100,000 crore in the next few years.

Failure and Betrayal on the Land Reform Front

The failure of the Indian big bourgeoisie to carry out thorough land reforms in India because of their historic alliance with feudal landlords comes back to haunt them time and again. If the agrarian crisis has assumed such serious proportions, one of the fundamental reasons lies in the present skewed land ownership and land tenure.

There is still enormous concentration of land in a few hands. Around 1.6 per cent of total landholders occupy approximately 17.3 per cent of the total operated area, and on the other hand, no less than 59.4 per cent of landholders operate just 15.1 per cent of it. This inequality in landholding and survival of landlordism is at the root of the present agrarian crisis.

According to the NSSO Operational Holdings data, about 78.7% of holdings falling in marginal and small farmers categories operating less than 2.0 hectares of land operate only 32.4% of the total area whereas 8.7% of holdings belonging to medium and large category operating above 4 hectares of land operate 44.4% of total area. The average size of holding for marginal farmers accounting for 61.6% of the operational holdings is a paltry 0.40 hectare in 1995-96. For another 18.7% of holdings falling in the small farmer category, the average holding size is 1.42 hectare. [Agricultural Statistics at a Glance 2004, Ministry of Agriculture] State-subsidised consolidation of holdings, especially in the case of small and marginal farmers and tenants, has been given up. Moreover, a sizable chunk of tenant farmers pay a substantial part of their produce/earnings to the landowners. In other words, a huge chunk of money is thus being siphoned off by the landowners which otherwise could have gone into reinvestment in agriculture and increasing productivity.

West Bengal under three decades of Left Front rule is widely hailed as the most celebrated land redistribution and tenancy reform model in the country. But recently the UNDP’s West Bengal Human Development Report confirmed a reverse trend of eviction of pattadars and sharecroppers that was being observed on a micro level for quite some time. According to this report, 13.23% of pattadars who had gained land under redistribution programme have now lost their land while 14.37% of registered bargadars have also been evicted. In other words, around 2.5 lakh small sharecroppers have been evicted – mostly reinforced by unviability and lack of access to institutional credit – under the CPI(M)-led Left regime even before the government started grabbing their land – the plan is to acquire a total of 1,25,000 acres of farm land for corporate houses, foreign and domestic – to hand it over to the Tatas and Salims!

Like several other state governments, the CPI(M)-led Left Front government of West Bengal is also contemplating a reversal of land ceiling legislation to enable consolidation of viable holding. But the government never bothered to consider the ideas of its own erstwhile ministers and architects of land reforms who had recommended that the state government make arrangement for bank credit for outright purchase of barga/rented land from the landowners by around 1.6 million bargadars accounting for 25-28% of the operated area in West Bengal. Readily available state-guaranteed bank credit to tenants for such consolidation of rented holdings and to marginal owners to buy more land and consolidate their holdings would go a long way in improving the viability of agriculture. But all governments are now thinking of relaxing or reversing tenancy laws to facilitate land consolidation by re-expropriating small and marginal peasants.

Crisis Spreads to Allied Sectors

Relatively higher growth in allied sectors like fishing and dairying initially helped the government to cover up to some extent the real extent of crisis in crop sector. But after the abolition of QRs in import of dairy products and slashing of tariff rates by the Vajpayee Government, dumping of cheaper skimmed milk power in the Indian market and the low international prices have transmitted the crisis to Indian dairy farmers as well. Under WTO, India bound itself to only 15 per cent duty upto 10,000 tonnes of powdered milk imports. With milk from Denmark and Holland flooding Indian markets, Punjab, where diversification into dairying was very advanced, was among the worst affected. There is also a conspiracy by the government to subvert the successful cooperative dairy movement and NDDB and the Operation Flood schemes are not being extended to several states.

Fisheries is also under stress as the operation of foreign trawlers and other fishing vessels of foreign companies in Indian waters has reduced the catch of smaller Indian fishermen by half, especially in Kerala-Mangalore coast. The globalisation of Indian seas and liberalization of Indian fisheries, by both the NDA and the UPA governments, have wreaked a greater havoc on the fisherfolks in southern states than the tsunami. In such a backdrop, it is only a matter of time before the allied sectors also land into a similar crisis like the crop production sector.

Impact of the Crisis on Agricultural Labourers

Agrarian crisis not only affects peasants but also agricultural labourers as rich farmers try to pass on part of the burden of their crisis on labourers. Employment opportunities decline and real wages of agricultural labourers stagnate and even decline in some areas. Caste oppression intensifies as a form of labour control.

The official data (NSSO/RLE) however claim a steady increase in the real wages of agricultural labourers between 1983 to 1999-2000. The peak liberalization period of 1993-94 to 1999-2000 is being trumpeted as the period of very sharp increase in real wages of agricultural labourers. Is it really true that the real wages are increasing steadily in all regions? Especially when employment growth in agriculture had fallen to 0.1 per cent, resulting in absolutely no expansion in demand for labour and no additional labour absorption? Empirical data from field reports clearly suggest contrary trends, with such increase being observed only in some regions of Andhra Pradesh and Tamil Nadu (there too real wages are stagnating since 2000 despite increases in nominal wage as prices have been increasing more sharply). Agricultural wages growth in traditionally high-wage regions like Kerala, Punjab, Haryana and western UP has been getting depressed clearly.

Even assuming that the official data on the extent of real wage increase for agricultural labourers in 1990s to be correct, the agrarian crisis has brought about a perceptible trend of wage compression in recent years in all states. The stagnation in non-farm employment and wages are also tightening the labour market conditions for agricultural labourers. Between 1991 and 2001 Censuses, in many states, the number of agricultural labourers has sharply increased, and on closer examination it turns out that the increase is sharper among marginal agricultural labourers than among main agricultural labourers. Especially, the relatively higher increase among marginal labourers is common among women labourers. This is one important dimension of “feminization of agricultural labour”. Under pressure for wage compression due to the crisis, landowners resort to increasing use of female labour and women labourers are invariably paid 60-70 per cent, or even 50 per cent and below in some areas, compared to men in different operations for the same type of work.

Poverty, Underconsumption and Starvation

One of the larger social dimensions of the agrarian crisis is the decline in income and consumption levels of the landless labourers and small and marginal farmers. The wise men in the Planning Commission now say that low incomes and low consumption are due to low agricultural growth and then in the same breath go on to say that growth can go up only if incomes and consumption and thereby demand for agricultural products go up!

According to the NSSO report 594, nearly a third of the peasantry in India is under the poverty line and the incidence of poverty among agricultural labourers as a social group is more than double.

Under the false pretext of fiscal burden and fiscal crisis, the UPA Government has been attempting to subvert and do away with the very mechanism of state procurement and even the PDS. Food subsidy for the APL population was abolished a decade ago by the Left-supported UF regime through the introduction of the TPDS scheme though considerable sections of the APL population are also badly in need of subsidized foodgrains and the issue prices even for the BPL category have been hiked repeatedly leading to a sharp reduction in the offtake. And this is happening in a situation when the extent of coverage of the BPL population in some states, especially in the Hindi belt, under the PDS is already shockingly low. Thanks to speculation by mercantile capital and hoarders and big capital also joining this league in a big way in recent times, the difference between the farmgate price and the retail price that consumers pay is very huge. This alone disproves the myth that organized retail would bring down the consumer price.

As per the latest NSSO data, the incidence of poverty among agricultural labourers and dalits as separate social groups is more than double than among the general population in many states and their consumption expenditure levels are also comparatively very low. The severe malnutrition crisis widespread in India, especially among children and women, is thus inseparably linked with liberalization in agriculture. Starvation deaths witnessed in the tribal belts of Maharashtra and Andhra Pradesh, and among the rural poor in Jharkhand, Bihar and Orissa have already begun to spread in many other states including UP and West Bengal.

The Empty Slogan of Second Green Revolution

There is also a clamour for a second green revolution to overcome the ongoing agrarian crisis. Any such second breakthrough presupposes a revolution in dryland farming. But no new technological breakthrough is in sight in any major crop comparable to the success of the HYV varieties of the original Green Revolution of the late 1960s. Acting at the behest of the seeds MNCs, the Department of Biotechnology has hastily permitted large-scale field trials of the controversial GM crops despite caution by the Supreme Court. The much-hyped Bt.cotton seeds of Monsanto have proved to be a disastrous failure time and again and studies have established the link between the crisis of cotton farmers in Vidarbha and the failure of Monsanto’s Bt. cotton seeds there. Yet the Seed Bill 2004 has no liability clause, to compensate the farmers, against the corporates which supply spurious seeds that fail.

Meanwhile, there is an attempt to hijack the Indian human resources and talents, who delivered excellent results in the early decades of the Green Revolution in delivering high-productivity crop varieties, through the Indo-US Knowledge Initiative on Agriculture, the governing board of which is dominated by representatives from MNCs like Monsanto and Wal-Mart. During the original green revolution occurred the first “Great Gene Robbery,” when MS Swaminathan, currently the chairman of the National Commission for Farmers and then the chairman of the Indian Council for Agricultural Research, simply handed over to the US MNCs, through the Manila-based IRRI, the germplasm of more than a lakh rice varieties, and the second green revolution aptly begins with this second gene robbery as under this “initiative” Indian scientists are to work for developing genetically modified crops suited to tropics for the US corporates! This is not just outsourcing but downright destruction of Indian independence in agricultural research and as bad as the threatened erosion of Indian sovereignty under the Indo-US nuclear deal.

The Way Out

Though only a thoroughgoing agrarian revolution with sweeping agrarian reforms can liberate Indian agriculture and the peasantry from ever-recurring, periodical crises due to the landlord-path of capitalist transition, partial mitigation of the ongoing agrarian crisis is possible if the Indian big bourgeoisie is compelled to undertake a comprehensive package under the pressure of the peasant movement.

The highlights of such a package should be as follows:

1) Thoroughgoing land reforms. Abolition of benami landholding and absentee landlordism and legalization of all land held by poor and toiling peasants and agrarian labourers. Compulsory registration of tenancy and share-cropping and conferring of ownership on poor and toiling tenants and share-croppers. Restoration of tribal land to tribals and settlement of their traditional cultivable lands in forests.

2) All attempts at reversal of land reforms laws including ceiling limits and tenancy regulations must be ended. Land ceiling should be lowered keeping in view the increase in productivity so that more land is made available for redistribution. Interest-free bank loans should be extended to small and middle farmers to help them consolidate their holdings.

3) India should walk out of the WTO-sponsored Agreement on Agriculture. It should refuse to proceed with multilateral trade negotiations under WTO, unless the developed countries stop all their subsidies to their agriculture and agro-businesses without diverting the existing subsidies to all sorts of exemption “Boxes”.

4) Set up an Agricultural Tariff Commission, along the lines of Agricultural Costs and Prices Commission (ACPC), with representation from peasant organisations, to decide on tariff levels and protection for different agricultural commodities in response to price fluctuations in the international markets and to check unnecessary imports of foodgrains from foreign agribusiness firms at prices higher than what is being paid to Indian farmers. Re-impose Quantitative Restrictions on agricultural imports.

5) Apart from fixing the MSP (minimum support price) for state procurement, the ACPC should also enforce payment of MSP for cotton, sugarcane and tobacco directly procured by spinning mills, sugar mills and tobacco companies. The licenses of companies not paying the statutory MSP should be cancelled. A ‘market stabilisation fund’ should be established to support farmers threatened by sharp fluctuations in international and domestic market prices for agricultural produce.

6) MSP should cover all agricultural commodities and ensure a comfortable margin over all costs. Procurement should be made in all regions in all states directly from the farmers and there should be no ceiling on procurement. Strict action should be taken against sugar mills and others engaging in corporate farming and organised wholesale and retail trade for failing to pay farmers prices equivalent to MSP. Sugar mills and cotton mills with large pending dues to farmers should be taken over by the state.

7) Where diversification is recommended by the government, the crop switchover cost should be borne by the state. Indiscriminate crop diversification and changes in cropping pattern to meet export requirements should be checked to ensure food security. Where necessary livelihood-support/food security-support subsidies should also be extended to farmers growing food crops, especially in the semi-arid regions.

8) There should be total ban on forward trading in agricultural produce/futures trading and all speculation in commodity markets.

9) In view of the looming threat of sharp increases in international oil/gas prices, the domestic prices of fertilisers and diesel supplied for farm purposes should be frozen immediately. Diesel used in agriculture should be subsidized, and fertiliser subsidy hiked for small and marginal farmers. All subsidies should go directly to the farmers and not to the fertiliser units.

10) Regulate prices of other inputs like seeds and pesticides. A price control authority for these inputs should be set up along the lines of Drug Price Control Authority. The Seeds Bill 2004 should be scrapped. All seeds and pesticides companies whose products fail should be penalised to the extent of damage suffered by the farmers. As in the case of life-saving drugs, livelihood-supporting seeds and pesticides must also be exempted from the purview of the notorious pro-MNC amendment to the law on intellectual property rights and the anti-national agreement on TRIPS under the WTO. Law should be enacted to mete out severe punishments to traders of spurious seeds and pesticides.

11) Set up cooperative marketing federations of farmers to procure and market horticultural products with adequate cold-storage and transportation facilities to abolish middlemen. Subsidised kits of inputs should be provided to small and medium farmers through these cooperatives to even out sharp regional productivity differentials.

12) Public investment in agriculture should be quadrupled. The Union and State Governments should enact Public Investment Responsibility Acts to ensure a minimum fixed share of budgets going into agriculture and related areas like irrigation, flood control and rural development.

13) Public investments in irrigation should be doubled. Diversion of irrigation water to industries and mines, to SEZs and entertainments like water-sports should be banned. The present top-down, bureaucratic watershed programmes should be restructured to overcome their present class bias and be made genuine popular initiatives of the masses so that the groundwater table can be maintained at sustainable levels. The government should fully subsidise the adoption of water-saving technologies for drip and sprinkler irrigation to improve water use efficiency.

14) It is not sufficient to just double institutional credit for agriculture. All agricultural loans – short-term as well as term loans – should be provided at low rates of interest not exceeding 4 per cent per annum, and loans up to Rs.2 lakhs should be provided in adequate measure without collateral, including to tenants and share-croppers. Wherever needed outstanding loans and interests of small and medium farmers should be waived. The current size-class priorities/skewedness should be altered in farm lending. A new debt relief act should be enacted to curb usury.

15) Crop insurance compensating for all forms of crop damage should be extended to cover all crops, all areas, and all farmers, including those who do not avail institutional loans. Right to compensation in case of natural disasters should also be incorporated into the proposed Disaster Management Bill. All industries causing water and soil pollution should be penalised/closed down. Adequate public investment in drainage channels and other measures to maintain eco-balance should be made to overcome other ecological crises like water-logging, salination and new pest/viral attacks.

16) Agricultural extension services should be revived and strengthened to modernise farming methods. Agricultural research should be liberated from imperialist and corporate clutches like the Indo-US Knowledge Initiative in Agriculture and restructured to make it more result-oriented. The Indian government should fight to end the Western MNC monopoly over Indian germplasm in major crops, stolen by the West and MNCs through ICAR in the past, and to restore them to the Indian farmers. Indiscriminate introduction of genetically modified (GM) crops should be stopped, allowing their introduction only after rigorous scientific evaluation. Big business houses liable for pesticide poisoning should be punished and damages recovered from them under the principle of “polluter pays”.

17) Rural infrastructure should be beefed up to strengthen agricultural growth. The RIDF corpus should be made unlimited and panchayats, cooperatives and even agricultural users’ organisations should be entitled to borrow directly from the RIDF bypassing the bureaucracy.

18) Foreign vessels and fishing companies should be banned from fishing in Indian maritime zone. Mechanised boats and trawlers should be regulated so that they will not encroach upon the fishing opportunities of traditional fishermen. Proper cold storage, transportation and marketing facilities should be arranged for fisherfolk. Indiscriminate dumping of highly subsidised, cheap dairy products from the West should be banned. Operation Flood project should be extended to cover all regions.

19) The NREGA should be expanded to provide at least 200 days of employment with minimum wages of at least Rs. 100 per day. Violation of Minimum Wages Act should be made a cognizable offence. The Targeted Public Distribution System confined only to BPL category should be abolished and subsidised foodgrains and other essential commodities made available to the bottom rungs of APL category as well. Inter-state migrants act should be amended to cover intra-state migration as well.

20) Forcible acquisition of farmland from farmers must be stopped and the Land Acquisition Act 1894 as well as the SEZs Act 2005 should be scrapped altogether. All land grabbed from farmers should be returned to them. The town and village industries (TVEs) model of China may be adapted to Indian conditions so as to promote employment-intensive rural industrialisation. Unrestricted low-cost institutional credit should be provided for rural non-farm activities.

While widely propagating this package of immediate solutions we must also establish stronger links between agrarian struggles and the broader democratic movement. Rallying progressive democratic sections of the non-agrarian population in support of the struggles of the rural poor and small and middle peasants and building up powerful campaigns against attacks on fighting peasants and agricultural must be taken up as an important task of the Party and all its mass organizations. We must demand exemplary punishment to the police-politician-anti-social nexus responsible for Kalinganagar-Nandigram-Mudigonda type of massacres and freedom for all rural poor and peasant activists who have been implicated and imprisoned in false cases. 