Farmer can look to greener pastures - DTE - Section A.1
Waiting for an escape route?
A number of eminent people have talked about a second agricultural revolution that is set to happen in India. Some have called it a second Green Revolution; others the Rainbow Revolution that will include white, blue and yellow too. Very simply, the next revolution would mark a qualitative change in agricultural technology and the marketing of farm commodities.
Now, with the advent of genetic engineering, the seeds of tomorrow are more likely to be produced by manipulating the genes. This new technology might reverse the trend set by the Green Revolution that was based on the abundant use of water, pesticides and fertilisers.
As regards the marketing of farm commodities, gone are the days when one dreamt of self-sufficient villages or nations. Transport, communications and information technology have facilitated the globalisation process.
Agricultural production in the days to come must not only be competitive and find markets abroad, but also keep the geographical advantage in one's own country. There are many who feel that the farmer, given the handicaps he faces in respect of the size of holding, the extent of capitalisation and the paucity of infrastructure, would find it difficult to enter the new era of genes and the WTO. Not that the hurdles are insurmountable.
India has abundant sunshine, ample water resources and a hardy peasant class — factors that will prove decisive in the long run. The handicaps posed by social and political institutions will vanish, sooner or later, and the farmer can soon prove himself to be second to none in the world community. While this does not mean that the farm community does not possess the wherewithal to face this futuristic kind of agriculture, those who are diffident about tackling new technologies and pessimistic about the future of farming in such a scenario will not be able to make the best of their natural advantages.
What do we do to change the mindset of the farmer? First, there has to be a massive education drive to convince the farmers that their backwardness is entirely due to a set of artificially contrived anti-farmer policies and that, in spite of the stranglehold of governmental regulation, they are quite capable of handling the global challenges.
The grape farmers of Maharashtra have shown that it can be done. That many of the successful farmers in the OECD countries are of Indian origin is proof enough. But there is more to it than that.
Agriculture in India has been a closed economy for centuries. Those born in farmers' families depend on agriculture for their livelihood. Every member of a farmer family takes the first possible opportunity to leave farming and the countryside and settle down in a non-agricultural environment.
Experience has shown that farmers who have opted out of agriculture have made a better living for themselves while many of those who stayed back have become impoverished and indebted. The closed character of agriculture is largely due to governmental restrictions in many regions on non-farmers entering the sector.
Those who make a living out of agriculture sometimes find no escape. They are also denied access to new investments and capital.
The Green Revolution of the 1960s overcame this problem in a rather fortuitous manner. The switch from a cultivation practice based on home-grown seeds and cattle manure to one based on hybrid seeds, fertilisers and pesticides was not easy. Even at that time, a large number of farmers wanted to quit agriculture. From this community sprang a number of leaders demanding abolition of landlordism and the tenancy system. They succeeded beyond measure and that was how the anti-tenancy and anti-zamindar legislation came into effect.
The Green Revolution of the 1960s was preceded by a programme that acted as an unintended `golden handshake' or voluntary retirement scheme for tired farmers. The qualitative switchover involved in the new WTO-based revolution in farm technologies and genetic modification is even more drastic. The proportion of farmers who are apprehensive of the new world of agriculture is increasing.
Clearly, there must be some way by which those who find themselves trapped in agriculture are offered an escape route, giving way to those who feel confident of tackling the more technical and mechanised cultivation system.
It will not suffice to allow a few large corporations to acquire substantial landholdings; they may not be able to cultivate land even as efficiently as the farmers of today. What is needed is the setting up of an active and efficient land market that can bring about liberalisation in the farm sector and ensure freedom of entry and exit.
It would appear that most of the properties offered for sale are suitable for farmers wanting to establish opulent farmhouses. If some arrangements are evolved to encourage farmers to come forward with offers of sale and for the intending buyers to register their requirements, a very healthy and booming market can develop.
A great new opportunity has come up without any design. A proposal to bring about a convergence of the Forward Markets Commission (FMC) and the Securities and Exchange Board of India (SEBI) is now under contemplation and scrutiny. The major difficulty in bringing together these two regulators is that they have fairly diverse fields of activity and functions.
The objective of the commodity futures markets is price discovery and risk management while the stock exchanges ensure orderly investments. If instead of trying to converge the commodity futures markets and the stock exchanges, one could attempt bringing together the land market and the stock exchanges; the former could flourish at the rates at which the commodity futures market is exploding — 350-400 per cent annually.
The country is on the threshold of a second agricultural revolution. One essential precondition of a smooth revolution is to facilitate the exit of one class and the entry of another, enthused by the challenges of the new era. The development of a land market will not only reinforce agriculture to accept the challenges of the new revolution but will also provide the substantial investments required for bringing it about.
16.11.2005 - Sharad Joshi
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