The first lecture in TERI SAS Lecture Series on Sustainability, Agrarian Crisis, Sustainable Development and Contemporary Farm Policies in India, discusses the agrarian situation in India in the light of the three farm laws passed by the government.
The three farm laws introduced in India last September have received sustained protests from farmers. They have steered the debates on the looming agrarian crisis. In this context, TERI School of Advanced Studies organised a lecture on agrarian crisis, sustainable development and contemporary farm policies in India on 16 April 2021 to facilitate a better understanding of the subject.
Distinguished food and trade policy analyst as well as an award-winning Indian journalist, Devinder Sharma delivered the talk. In this seminar, he responds to the three acts that were passed by the government. He begins outlining the historical journey of India’s food security, stating that India has had quite the record when it comes to achieving self-sufficiency in agriculture or food production.
The following are the highlights from his talk:
Why do markets not increase farmers’ income?
He emphasised that markets in general, contrary to the popular notion, have not been increasing the farmers’ income. The popular impression we carry, believing that markets have helped in increasing farm incomes in developed countries is, therefore, misleading. This he backed up by arguing that if the open markets in agriculture are so good, there is no reason why the rich developed countries would have pumped in massive subsidies year after year.
These market-driven agricultural reforms have been prevalent in the United States for more than 6 to 7 decades. If the markets were good enough, why would American farmers saddled with the bankruptcy of USD 425 billion this year? In fact, farm incomes have been on a steep decline, if adjusted for inflation, since the 1960s.
Role of subsidies
Before every WTO Ministerial Conference, the massive agricultural subsidies being provided by the rich countries become a bone of contention. The richest block—the Organisation for Economic Cooperation and Development (OECD)—continues to provide massive farm subsidies. Despite opposition from the developing countries, these rich countries have not done away with these subsidies because that is what sustains their agriculture, and not markets.
In 2018, the OECD countries provided subsidy support of USD 246 billion, with European countries alone providing USD 100 billion. On the other hand, China has emerged as the biggest farm subsidiser, providing USD 212 billion in 2016.
On average, an American farmer gets a subsidy of USD 62,000 every year. Compared with this, an Indian farmer gets a paltry USD 282.
If all the “green box” subsidies, which, in WTO parlance, means non-trade distorting subsidies, are withdrawn, a 2007 study had shown that agricultural exports from the US, Canada and European Union would drop by 40 per cent. In other words, even the so-called competitiveness of farm exports of the developed countries hinges on subsidy support.
The importance of market selling price (MSP) and regulated markets in farming practices
The real “azadi” for farmers will be when the farmers have the certainty that wherever and to whomsoever they sell their produce, at least they will get a price equivalent to MSP. To make this possible, the challenge is to expand the existing network of 7,000 APMC regulated mandis to cover the entire country. We will need 42,000 regulated mandis if a mandi has to be provided in a 5 km radius.
The goal of the TERI SAS Lecture Series on Sustainability is to highlight major challenges related to various fields like gender, governance and agriculture in terms of sustainability.
Dr Swarup Dutta, Assistant Professor and Programme Coordinator, MA SDP, TERI
Report by Anupriya Pandey and Shruti B., Team ulaunch.
