Farmers loan trap

Farmers committing suicide is causing a political upheaval in many states of the country. Political parties across the spectrum are trying to cash in on the misery of the poor farmer. Do the politicians really care for this hard working community who put food on our plates? Their gullibility is encashed by the politicians for garnering votes.

Tenant farmers are those who cultivate crops by taking land on lease, most of them are economically and socially backward and crop loss will be devastating for their families. Over the years I have seen the struggle the tenant farmers go through to make money on the land they rent. There are too many factors that need to come together to help the tenant farmer make money. Weather, Water, Cost of seeds, Cost of fertilizers, Availability of seeds and fertilizers on time, Cost of labor and machinery, interest rate charged by MFIs or worse the local money lender etc are some of the variables that need to be favorable for the farmer to make a decent return/acre. Last year as a good year with everything falling in place, this year it is excessive rain that is causing the problems. Next year it could be fewer rains that will pain the poor farmer.

In a good year these farmers at best make even. Considering the typical cycle for good farming years is say once in 3/4 years these folks are always behind the curve in terms of getting rid of loans etc. Hence they resort to the extreme.
Government schemes are of no help either, for example data shows that Rs 11,353 crores were waived off by the centre under the farm loan waiver scheme out of which only 130 crore loans of tenant farmers benefitted. This is truly unbelievable and disturbing. The wells of farmers are getting full benefits of such schemes.

Most of the tenant farmers get into the vicious cycle of loans and more borrowings not only for farming purposes but for other purposes like child education, family responsibilities, health care etc. There are many reasons for this financial mess, the local money lenders squeeze their blood out charging interest rates up to 40%, MFIs are no better charging upwards of 25%, government banks do not give loans due to lack of identity and other proofs. Hence most of the time they are catching up with no hope of getting debt free.

The other aspect is there are too many of these farmers trying to cultivate a small land holding which is not viable. The productivity from each acre has to double from the current numbers if they have to make a decent profit (for e.g.: Paddy for a bumper crop one can expect 34-38 bags/acre in a fertile area, even at this rate the tenant farmer may just be breaking even, it has to go to 50 bags/acre for the tenant farmer to make a decent profit). Unscientific cultivation practices are some of the reasons for poor productivity; this is a whole different story.

There are many steps that the government need to take to help the tenant farmers (1) Regulate the tenancy acts to make it win win for both the land owner and farmer (in a bad year both parties should share the pain) (2) Loan trap – introduce regulation on interest rates charged by local money lenders, enable penetration of MFIs (don’t kill this industry, regulate it) they are better than the local money lenders (3) Retrain the young farmers in allied skills and help them get jobs in urban areas, we don’t need so many young people performing farming duties with such low productivity, we need to introduce automation in farming (4) Increase financial inclusivity, get all the farmers open bank accounts ( use the help of UID authority) and transfer cash to their accounts as part of govt grants. (5) Let the PSUs give cheaper loans to help the tenant farmers purchase lands.

I am sure someone in the government has better ideas than the above but I guess is stuck in the maze of policies, red tape and lethargy.Meanwhile the suicides continue to create havoc in the farming community.

Pesky frisking

Every time an Indian Diplomat or a politician is frisked or asked to go through the security check at an US airport or else where it is an issue and we call for apologies etc. The standard American response is we regret but will adhere to the security process next time too. Diplomatic niceties can wait but security is important for the Americans. I agree that TSA agents at times get carried away and can be insensitive but in general they go by the book.

If we are so offended do what Brazil does to American citizens, get the Americans finger printed and subject them to your procedures. There is a problem in doing this, we ourselves do not take our rule books seriously, our neta’s and babu’s are used to exclusive privileges in airports and other public institutions and feel insulted to stand in queue for their turn like others do. Feudal mentality reigns amongst our ruling class.

We should take the spirit behind the security procedures at the US airport’s and have much more robust procedures at our airports since our airports are more vulnerable. Do not keep sulking on small matters and keep protesting, let us elevate our discipline in public life and show the world we mean business.

First step towards achieving this – introduce a legislation to stop our MLA’s and MP’s going around our cities and towns with their cronies like robin hood’s, ordinary citizens suffer while they have a free right of away. Let us not preach rules to others while we never follow one.

Corruption Mania

Enough has been said about the Nira Radia tapes. What is baffling is the “pro-active” media, both print and Television going slow on exposing the involvement of Journalists in the 2G scam. It is very interesting to hear Vir Sanghvi talking to Nira Radia and helping her to fix the message for Mukesh. Barkha dutt’s self righteous messaging on TV shows also falls apart. I challenge the TV channels to play the recordings to show that they really stand for the “ Truth” not only the truth they are comfortable with.

Coming to the 2G scam itself I think successive governments have played around with the policy leading to huge losses to the exchequer. But what A.Raja has done is the mother of all scams. What he has done in broad is galling. It is possible only in India. Impossible to believe that no one in the Govt knew.
The scam / corruption count is around 150k crores (75 2G + 75 CWG). So much work for the CVC to investigate, who himself is under investigation. Totally confusing on how we run the country.

Even more shameful in the Adarsh housing scam, it shows our utter lack of respect for folks who defend the country.

A helping hand

Every morning Bikshapati reaches to this reasonably affluent community on his rickety cycle, parks it in a remote corner and starts his daily chores. An old man with a hunch, pushing 60 years, his eyes giving away the pain that life is giving to him and his family.

For 100 dollars a month he works for an average 12 hours a day for 25 days. He walks the roads of the community and collects garbage lying around does other miscellaneous chores, meanwhile is pulled and pushed by households to get their work done. This community is no different from other communities in the country “It is ok to throw garbage around in public areas but my house should be clean” and this man’s duty is clean up the mess around.

It is just not Bikshapati, there are an army of maids who stream in every day and help the community live in sanity. A daily grind to eke out an income to shore up their husbands earnings.

No labor law is applicable for lakhs of Bikshapatis and maids who work tirelessly and are selfless. They have no idea what it means to have a health insurance; they do not know what it means to get a pension.

This unorganized sector of labor that is moving in large numbers to the metros for a living pose challenge to the government. As usual governments and cities are not ready to host them, they live in jhuggis in bus stations and on platforms. There are half hearted attempts being made by the government to set up shelters for the migrant labor, will it work. Government is not serious.

Identity is an issue for all these faceless citizens, they do not know their entitlements, ration cards, free health cards, old age pension schemes etc etc. They live by the day. They are large in numbers.

Local communities need to come together to help these people. Can we get them group insurance, sponsor kid’s education etc and create a secure environment for their living.Local communities need to step in where the government fails.

( BTW- I was a in a government office with a senior officer, he got a call inquiring about monthly old age pension not being disbursed for the latest month, when the officer checked with his staff on why it has not happened the response was that the modem was down and this in the 3rd week of the month. All this for INR 300/month. Such are the ways bureaucracy works.

An intractable problem

The recent IFRI report puts India 67th among 84 developing countries in the Global Hunger Index (GHI). Countries which are written off as failed states have done better than India in the survey. It may not be a true reflection of the success of those countries in implementing innovative programs to reduce malnutrition and hunger and could be a statistical aberration considering the size of India’s population.

Having said that our record in executing large scale social programs is a failure and we continue to search for answers. UID is being touted as a mechanism to track and ensure that the government benefits reach the real beneficiaries (however a recent report in TOI states that the AP government officials are favoring certain agencies for distributing the UID numbers and the whole tendering process is being questioned).

A host of programs NREGA, ICDS, MDM and a revamped PDS are failing to address the fundamental issue of freeing the citizen from hunger. The figures coming of the study of IFRI are alarming – 22% Undernourished population, 43.5% underweight children under 5 years and 6.9% under 5 mortality rate.

Amongst the BRIC countries Brazil, China and Russia are doing much better with Brazil coming out tops and has figures close to that of a developed country. There is no doubt that the Anti poverty schemes like “Bolsa Familia” in Brazil are having a positive impact on its society and is ushering a period of prosperity in that country. In India It is not the lack of food grains for distribution but the delivery mechanism that fails such social programs.

Unfortunately such programs in India continue to fail due to lax implementation, lack of political will and an apathetic bureaucracy.

The Union government’s draft Right to Food (Guarantee of Safety and Security) Act is a step in the right direction, it insists on “the physical, economic and social right of all citizens to have access to safe and nutritious food, consistent with an adequate diet necessary to lead an active and healthy life with dignity…” The proposed law offers a quantity of cereal at a modest cost each month to all those living under the poverty line. The governments recognition of Right to Food deserves credit but what is more important is to address the miserable functioning of the existing system and to rectify the discrepancies across States and the general non-transparency and confusion in the definition of the beneficiaries (the ambiguities in the understanding who the real beneficiaries are).For example in the state of AP it was found that number of BPL cards distributed were more than the total BPL families in the state.

Apart from the Right to Food itself Government should strengthen the NREGA and other employment generation programs to empower the men and women financially; this will generate adequate purchasing power for them and ensure Food security too.

India should rise to the challenge of eradicating hunger, such eradication should be supported by strong legislation, creating effective delivery mechanisms, excellent execution and tracking mechanisms. India’s aspiration of being a global super power and the respect we seek from the international community for recognition as one will require that we build a hunger free and healthy nation.

Jairam Ramesh rejecting the Vedanta mining project owing to environmental violations by Vedanta and tribal rights protection is a bold move. All of us should hope this momentous decision by the minister will set a bench mark before clearance is given for such projects in the future.

In India what happens in the name of mining natural resources is unabashed looting of the nation’s wealth by politicians and industrial houses. A weak and corrupt regulatory environment aides these coterie in carrying out the nefarious activities of illegal mining, exports, tax evasion,environmetal damage etc.

The environment ministry has long been a rubber stamp headed by pliable ministers who had no interest in using their power to push the country towards sustainable development. It is a welcome relief to see Jairam take over a powerful corporation and its state backers on the principal of environment protection and tribal rights. It is a victory for the Dongriya Kondhs for they waged a war against the mining project for the past 4 years. (There are many horror stories on how the Orissa police harassed the tribal’s to push them out of their lands)

Take the case of Obulapuram mines in the Karnataka, AP region where huge irregularities in mining operations were noted by the Supreme Court nominated CEC. The Karnataka government had no guts to take on the Reddy brothers and hence under pressure took the easy route of banning iron ore exports from the state ports, I am sure the Reddy brothers are exporting the ore from AP and other nearby ports.

The exploration rights for the Bayyaram mines have been cancelled by the Union mining ministry owing to allegations of due process not being followed in allocation of the license (YSRs son-in-law managed to get the rights).

Overall the mining industry in the country is in a sort of a Wild West situation with little or control being exerted by the state in monitoring the industries activities (obviously both are in collusion).

This is one industry I would prefer the state to take full control and probably nationalize. Case in point the Supreme Court ruled that the government has the last word on pricing and utilization of national assets the same yard stick should be applied in the case of the mining industry. Mines are natural resources and national assets; the Government has the responsibility of formulating a policy that addresses all the aspects related to environment and ecological damage, people displacement, sustainability and rehabilitation.

Thinking about the poor

I took a train last weekend to a coastal town for a family function. I was alone and observing the scenes inside and outside the train.

As the train moved through towns and cities and along the tracks there ghettos and mud houses, many of them, it is a typical sight across India. Within the train there are hawkers, beggars and all sorts of vendors selling their vares. This is India living on the margins. It is hand to mount existence for these families. As far as my memory goes this scene has not changed in the last twenty years including the train compartments design.

Are the benefits of economic liberalization reaching these families? Are the children raised in these families having access to higher education? How about access to decent healthcare. When will these families move into decent housing, there are millions of them to be taken care. These are some of the questions bother many of us. Are our planners and bureaucrats up to the challenge of providing reasonable housing to the BPL families? Where is all the govt spend on improving public infrastructure going?

All the noise about GDP growth, all sorts of schemes for employment generation, health care programs – is it making a real difference to the lower middle class and below stratum of the country. Visibly it doesn’t seem to. Estimates of poor in the country vary by who is giving the data, obviously planning commission and other government sources give better date, however one can safely estimate 60-70% of the population earning less than <2 USD/day. A study by the Oxford Poverty and Human Development Initiative using a Multi-dimensional Poverty Index (MPI) found that there are 421 million poor living under the MPI in 8 north India states of Bihar, Chattisgarh, Jharkand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal and this number is higher than the 410 million poor living in the 26 poorest African nations. India’s poverty elimination/alleviation strategy is heading towards a total failure.

We need to have a serious look at the china story and how it managed to reduce poverty levels from a whopping 64% to the current 10-15% levels in flat 4 decades. Our common refrain about progress in a democracy will naturally be slow due to debate, accommodation of views etc is a poor consolation to the fact that we are having the largest number of poor and deprived in this land.

There is surely a need for a coordinated assault on this issue by the entire Indian state, human resource development, retraining, economic inclusivity, industrialization, modernization of agriculture, healthcare, driving rural youth to industrial work, infrastructure development and related investments are all the aspects in the puzzle of poverty elimination, but who will execute these plans, I think that is what we are still trying to figure out. For once let us ask the Chinese and Brazilians.