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BUDGET 2004

"This is first aid, the need is hospitalisation"

Friday 30 July 2004, by MOORTHY*R.V.

In keeping with the United Progressive Alliance’s promises in the Common Minimum Programme (CMP), Finance Minister P. Chidambaram made agriculture a major focus of the Budget. Siddharth Narrain spoke to K. Varadharajan, general secretary of the All India Kisan Sabha, on his perception of the Budget. Excerpts from the interview:

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R.V. MOORTHY

Are the provisions of the Budget in consonance with the spirit of the CMP, especially with the parts that relate to the agricultural sector? Does this Budget indicate a major shift in agricultural policy from that of the previous government?

This Budget amounts to first aid when the need is hospitalisation. In Chidambaram’s proposal, there is definitely a turn to the villages compared to the earlier Budgets. The Budget has allocated an additional amount of over Rs.900 crores for agriculture and he has a specific plan for irrigation, especially tanks and other forms of conserving water. These are definitely steps in the right direction. The 2 per cent cess to be utilised in providing compulsory education for children up to eight years of age will also help the rural poor. The Finance Minister has also suggested more allotments for the Scheduled Castes and the Scheduled Tribes, which is good because they constitute most of the rural poor. But there are basic issues such as poverty that have not been addressed. For example, the Employment Guarantee Scheme was meant to generate 100 days of work a year for at least one person in a family. This Budget could have begun addressing this issue.

What is your reaction to the Finance Minister’s decision to entrust the implementation of the government’s policy to double the flow of agricultural credit in three years to the public sector and private banks?

The existing problem is that more than 72 per cent of credit is from the private sector, that is, moneylenders and traders connected with agricultural inputs. This involves a high interest rate and is one of the main causes of farmers’ suicides. This is why the All India Kisan Sabha and other organisations have been demanding that the availability of government institutional and non-institutional loans should be increased manifold. Although doubling the amount of credit in three years is a positive step, our experience is that private banks are not interested in the rural sector. We feel that credit facilities should be increased through cooperatives and nationalised banks by strengthening NABARD [National Bank for Agriculture and Rural Development].

Has the Budget done enough to address the reasons for farmers’ suicides?

The main reasons for farmers’ suicides are the supply of the wrong quality of seeds by multinational seed companies, the high cost of inputs, price fluctuation, and the non-availability of government credit. The Finance Minister has addressed the issue of government credit, but none of the other main aspects. The issues of quantitative restrictions, import policy and the entry of MNCs [multinational corporations] into the seed and other agriculture-related industries have not been addressed.

The actual outlay for the Department of Agriculture and Cooperatives remains at the same level as the interim Budget of the previous government. Do you see this as a problem?

We need to take into account that the Budget is meant for six months. Also, some of the extra allotment for Rs.10,000 crores to develop infrastructure may reach rural India. Even after taking these into account, the fund allotted is far below expectations.

Does the Budget adequately address the demands of oilseed farmers?

Oilseed farmers have been affected by the import of crude and refined palm oil. Raising the import duty on refined palm oil from 70 to 75 per cent shows the good intention of the government, but the crucial question is whether it is enough to prevent imports

Will the proposed insurance schemes, including the one against adverse weather, successfully cover farm income and livestock?

The prevailing insurance scheme is of no use to the farmer. The basic issue is whether you consider a region, a village or the individual as the unit for insurance. At a recent meeting that the Prime Minister held with farmers’ associations, we said that unless you consider the individual as a unit the farmer will not benefit. The farmer is affected by weather, pests and the supply of wrong seeds. But if the region is taken as a unit while insuring farmers, many of those affected do not benefit and so most farmers will not take insurance. The insurance schemes suggested in this Budget are welcome proposals. The Finance Minister, before restructuring the present schemes, should consult the kisan sabhas.

According to the Finance Minister, India is self-sufficient in the production of wheat and paddy and deficient in other areas such as horticulture, oilseeds and floriculture. He has also said that a distinct bias in the agricultural price support policies in favour of rice and wheat has distorted cropping patterns. Do you agree with this assessment?

Although diversification of crops is needed, to say that we have attained self-sufficiency in wheat and rice is not true. Dr. M.S. Swaminathan [renowned agricultural scientist] and others have warned that if the rate of growth of foodgrain production continues to be lower than the rate of growth of population, we will become a net importer of foodgrains by 2010. The Finance Minister has assumed that the market will decide the price and alternative crops. So he has suggested a market-dominated arrangement instead of the minimum support price system for deciding crop patterns and the price structure. If this is implemented, it will be an attack on farmers, especially small and marginal farmers who are the worst affected in today’s market arrangements.

Have the issues in the Agricultural Worker’s Bill been addressed in the Budget?

The basic necessity for agricultural workers is comprehensive legislation that will cover wages and assure employment. Many States have lakhs of acres of government wasteland. The CMP says that some of this land will be redistributed among the landless. This issue has not been addressed by the Budget. Land reforms, which have not been implemented seriously in many States, has not been touched in this Budget.

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