May 29, 2015
Instead of delivering irrelevant homilies to small farmers, Mr Modi should be thinking in terms of creating a huge demand for alternative employment, mainly in the construction sector. His promised hundred new cities is a capital idea.
In his speech to a farmers’ gathering in the capital on May 26, Prime Minister Narendra Modi advised them to retain a third of their holding for farming, another third for fodder for the cattle and livestock, and the final third to grow timber. He seems to be oblivious of the reality.
The average size of a farm holding is 1.15 hectare, of which Mr Modi wants the farmer to reserve about 0.36 ha for growing crops for sustenance and sale, 0.36 for fodder for livestock, and the rest for growing timber, which will take a quarter of a century to mature. How will the family live and who will feed them meanwhile?
These things apparently don’t figure in the Prime Minister’s imagery. He clearly is thinking of the Badal or Pawar kind of farmers, who drive imported SUVs and have huge benami farmlands. Besides, farming for such folk is just to ascribe income gotten by other means.
The data contained in the 2011 Agriculture Census reveals a stark picture for Bharat. Mr Modi will do well to see it and also to get his Niti Aayog to give him a detailed breakdown of the situation, which keeps worsening as holdings get further fragmented with every generation.
With daughters getting an equal share of ancestral and parental property, the share of women ownership has been increasing, from 11.70 per cent in 2005-06 to 12.78 per cent in 2010-11 with the corresponding operated area of 9.33 per cent to 10.34 per cent. This is probably the only silver lining to a very dark cloud.
The small and marginal holdings taken together (below 2 ha) constituted 85 per cent in 2010-11 against 83.29 per cent in 2005-06 and the operated area at 44.58 per cent in the current census as against the corresponding figure of 41.14 per cent in 2005-06. Obviously some consolidation of holdings is taking place, but nevertheless a two-three per cent drop every five years will result in a huge expansion of holdings and reduction in average size. Clearly, Mr Modi’s advice makes no sense to people with such small holdings that can only allow for subsistence farming.
Instead of telling them what to grow, Mr Modi should tell his finance ministry to think of schemes whereby banks can lend to small farmers for purchase of adjacent holdings. The consolidation of small holdings will improve the scale of economy for the individual farmer and enable farms to become more productive. This should be his next major programme.
The semi-medium and medium operational holding (2-10 ha) in 2010-11 were 14.29 per cent with the operated area at 44.88 per cent. The corresponding figures for 2005-06 were 15.86 per cent and 47.05 per cent. The large holdings (10 ha and above) were 0.70 per cent of total number of holdings in 2010-11 with a share of 10.59 per cent in the operated area as against 0.85 per cent and 11.82 per cent respectively in 2005-06 census. These are the people who get the maximum of the state’s largesse in the form of free water and electricity, subsidised fertiliser and procurement. Clearly, it is these farmers with relatively large holdings who can afford to invest in long gestation timber plantations and in growing fodder for their dairy business. India, incidentally, is the world’s biggest dairy producer nation. And it’s from these that the Badals and Pawars come.
It doesn’t require much application of mind to realise that the only way the state can better the lives of farmers is to reduce their dependence on land for existence. This means a huge expansion of jobs in sectors that can absorb people with low marketable skills. Construction and the building and rebuilding of rural infrastructure offer a great avenue for such jobs. And we know for sure that the nation would do well with more such assets. Such works create new demands on goods and services, and more disposable incomes can only be good for the economy.
The share of agriculture in gross domestic product has been declining every passing year. What was once over 60 per cent of the GDP is now about 13.7 per cent. The livestock sector is also rapidly declining as a percentage of the GDP. It is now 3.92 per cent. Despite this precipitous fall in their share of the GDP, they still employ the most people — over 50 per cent of employable adults. Since India’s population has almost trebled since 1947, very clearly numbers hugely dwarf the marginal decline in share.
The 2011 census tells us that in that year we had a total workforce of 487 million. Half of these, that is about 244 million, are in the farm sector and of the rest, 94 per cent worked in small enterprises in the unorganised sector ranging from being small vendors, to beedi making or diamond polishing at home. The organised sector, the ones we are all focused on, the ones who get middle class wages, DA, LTA and medical benefits, and who work less than eight hours a day for less than 200 days a year, employs just 27.5 million. Of these the government employs 17.3 million. This is the golden and gated nation which lords over the vast unorganised and disorganised country. This is the India that every “Bharatwasi” wants to migrate into.
From 2004-2005 to 2011-12, India’s real non-agricultural GDP grew by an average 9.4 per cent per annum, but employment grew only at 3.5 per cent. Services and manufacturing were the fastest growing sectors at 10.1 per cent and 8.9 per cent respectively. However, they added jobs only at 2.5 per cent and 1.5 per cent respectively. The data clearly indicates that Indian peasants are moving out of agriculture at an accelerated pace since 2004.
The increase in the share of employment has been mainly in the construction sector and to a lesser extent in services. Employment share of manufacturing has increased only marginally. Nevertheless, it is clear that people are shifting from agriculture and one big reason for this is the increasing enrolment of youth between 15 and 24 in educational institutions.
However, agricultural labour does not seem to be absorbed into the expanding manufacturing sector. These expatriates from Bharat are increasingly taking up seasonal casual work to avoid further deterioration in standards of living. The households of these migrant workers are still in the villages. Since the man of the house is now mostly away on work sites, the women increasingly stay away from work to tend to the home.
Clearly, this Prime Minister, too, is as divorced from reality as his predecessor. He might want to sound expansive and visionary, but to be credible he must have his feet on the ground and know the reality around him. Instead of delivering irrelevant homilies to small and hence poor farmers, Mr Modi should be thinking in terms of creating a huge demand for alternative employment, mainly in the construction sector. His promised hundred new cities is a capital idea.
The question then is, where is the money going to come for this? There is the Chandrababu model, which merely means taking away the land from peasants and giving it to cronies in India and abroad to develop. Or there can be a Modi model that will envisage diversion of the huge sums given away on unmerited subsidies to the golden 27.5 million or by collecting the few lakh crores of unpaid taxes or by getting countries like China and Japan to subscribe to bonds issued by the government expressly to build a new India.
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