Comment left on this Blog on Agricultural Reforms in Gujarat, and My Thoughts

A few weeks back, I had tweeted the following about a news report titled – ‘Gujarat does a double!’ (click):

I was pleasantly surprised to find an elaborate response to my above skeptical (and not much cynical) tweet on this blog by someone with who I had hardly interacted! 🙂 I liked the comment because it had contained some logical points and apparently the respondent had followed the story in some details. I am reproducing the comment almost verbatim (only modifying it a bit for better readability and to make its formatting consistent with the one I use on this blog) for the readers’ benefit:

…wanted to post links to two very reliable articles on the stunning agricultural boom on the semi-arid lands of Gujarat:

Mr Modi’s miracle – Business Standard (click)

How did Gujarat Become a Farming Paradise? – Forbes India (click)

Does much to dispel the argument of many (like Malika Sarabhai etc.) that only industrialists are prospering in Gujarat. Gujarat’s agricultural growth story is a miracle to be studied and followed for the benefit of the entire country, but the mainstream media, owing to extraneous reasons, is guilty of not highlighting these achievements.

Your question on whether this growth benefits all kinds of farmers is a relevant one. Only time will fully reveal that. But I feel that this agricultural boom is definitely benefiting all, unlike the famous Green Revolution under which only the rich wheat growing farmers of Punjab and Haryana prospered. The reason is simple: Green Revolution relied on expensive hybrid seeds and irrigation facilities which only the rich farmers could afford. Gujarat’s growth on the other hand is a result of decentralized irrigation initiatives which are locally situated and managed. Focus is on small and minor irrigation projects and watershed facilities which are cheap and affordable (irrigation is pretty much the main issue in arid Gujarat). Other innovative initiatives such as those mentioned in this link (click) help disseminate technical knowledge and expertise to farmers for better productivity.

Our present day inflation problem is a direct result of practically NO SUBSTANTIAL investment in agriculture in the last 10 years to raise productivity. The past two 5 years plans have aimed for 4% agriculture growth and we have barely touched 2-3% (and that too dependent on monsoon). This coupled with the fact that the National Advisory Council-led government believes in populist, wasteful schemes like NREGA, has increased disposable income with the rural poor without raising their productivity. The massive inflation is a culmination of all this.

For decades now, it has been emphasized that the only way to bring India’s masses out of abject poverty is to attain high agricultural growth. But it is not even fashionable to talk about agriculture anymore in public fora. It’s either industries or IT (which are hardly prospering as well)

Narendra Modi has ensured that both industry and agriculture develop adequately and THAT IS THE reason for low poverty levels in Gujarat. It’s an absolute shame that our country’s media and think tanks have ignored these achievements and on the contrary, seek to undermine them just for political and ideological reasons.

There is not much I would add on this. I tend to be skeptical of statistics, especially when there would be no way to verify them myself. But even if one were to assume that there is gross exaggeration in the growth rate in agricultural sector pegged at above 11 per cent in Gujarat, it is extraordinary when compared to that in other states (of around 3 to 4 per cent). What caught my attention is that this growth rate in the agricultural sector is even greater than the growth rate in the industrial sector! But that is not what is important. What I liked pointed out in the comment I have reproduced above is the emphasis on ‘decentralization’. I believe, a lot of governance-related problems in India are related to excessive concentration of powers in New Delhi. But dwelling much on that would be besides the point. Another thing that had impressed me in one of the links was allowing farmers to enter contracts with private parties in advance. It is like hedging in Stock markets (of which I do not understand much! 😀 ). Suffice to say that ‘hedging’ involves selling something whenever it ‘matures’ at a pre-decided rate. The buyer has the temptation of getting it somewhat cheaper and not having to scout for a seller in hurry, and the seller has the confidence that sudden abundance (in this context, say, because of a ‘bumper’ yield of an agricultural product) of whatever it is he/she wants to sell would not lower the prices too much. Of course, this kind of hedging with private parties would only be possible if the people at the top stop interfering with the business of sovereign buyers and sellers (‘decentralization’). I quote the relevant portion from Forbes’ India article:

This also opened up contract farming. In 2004-05, Gujarat took an unusual step. It allowed companies to buy crops from farmers a year in advance. This helped the farmers hedge against price upheavals and guaranteed a minimum price. What’s more, there is also some flexibility to allow higher payments if prices rose at the time of transaction. While it reduced market risks for the farmer, it also encouraged companies to invest in farming indirectly.

Another thing I want to emphasize upon is that we should not maintain this dichotomy between ‘agriculture’ and ‘industry’. The idea that ‘agriculture’ is for mere sustenance and looking with scorn any attempts to make profit through it should both be done away with. Agriculture is also an industry. The better systematized it gets, the more extensive (as against ‘intensive’ – too many ‘farmers’ depending on small tracts of lands) it will become and higher would be the per-acre yields – at least that is what the ‘Social studies’ text book had said in the school! 😀 I have for long felt that agricultural sector in India is one of the largest reservoirs of ‘disguised unemployment’. In other words, we do not need so many farmers, and that even if there were to be much fewer farmers than there currently are, the total national yield of agricultural products would remain exactly the same, or it may even improve! So, far too many people are engaged in farming simply because they have no other avenues to get employed and earn a livelihood. It is in this respect I feel, India needs to get more urbanized. Again the problem with popular discourse in this matter is that ‘urbanization’ is looked at as something alien to India and our ‘ethos’ and ‘culture’, etc. People unwittingly link urbanization with just shopping malls, multiplexes, pubs, etc., but in my opinion, urbanization is all about intensive and more efficient use of one of the scarcest resources – land. There is nothing scary about people leaving agriculture and searching for some other means of livelihood, because frankly, as I said above, we do not need them to be engaged in farming!

Of course, I am not saying urbanization has to be about people leaving their homelands for far off places or building megacities that become too difficult to manage. We can always have numerous small centers of urbanization. Readers might also appreciate that save for few industries, an example of which is agriculture, most industrial development anyway leads to imminent urbanization.

Before the readers start wondering what the blog post was about to begin with and what it has come to, let me conclude by saying that we must not look at industrialization and imminently coupled urbanization with suspicion. That is the only way we can get out of this mess created by India’s huge population density. We need to stop romanticizing agriculture to be something idyllic and labor-intensive only so that it can ’employ’ more people.

I thank the said respondent for leaving an elaborate comment and also permitting me to reproduce it!


4 thoughts on “Comment left on this Blog on Agricultural Reforms in Gujarat, and My Thoughts

  1. I second your comment on this post 😛 The comment of the commentator was so so good. I read it once and it made sense to me instantaneously, unlike your posts which I have to read twice or thrice sometimes. {but I do read them complete always} 🙂

  2. I am taken aback by so much praise for a comment which I wrote in a jiffy 😀

    Ketan has written a great piece and I am glad he highlighted the concept ‘decentralization’, which is a key policy term in Indian governance today, but entered our collective vocabulary as late as 1992 with the 73rd and 74th Constitutional Amendments, which ushered in a third tier of government in the form of village panchayats and municipalities and provided for public participation in planning and implementation.

    If we examine the urbanization-rural economy issue,
    which Ketan alluded to, in a larger historical context, it will become evident that our current problems of dismal state of agriculture, rural poverty and unemployment can all be traced back to the faulty pattern of economic growth adopted immediately after Independence. Contrary to what many might believe, the tussle during those initial years of planning was not between socialism and capitalism; but rather between socialism (or what is called the Nehru-Mahanolobis model of growth) and the Gandhian model of growth. Nehru wanted the State to invest in heavy industries, large hydroelectric and thermal power plants (or what he called the ‘temples of modern India’) to drive industrialization and consequently achieve rapid economic growth. Gandhian model on the other hand emphasized on scientific development of agriculture and rapid growth of cottage and village industries. Gandhiji had a firm belief, as we all know, in empowering India’s villages – making them self-sufficient, self-sustaining and based on swaraj.

    Prior to the British rule, India was wealthy and prospering precisely because its small-scale and handicraft industry was booming. Indian handicrafts were famous traded across the world. British policies destroyed the handicrafts and village industries, which gave employment to a majority of our population, which was now forced to survive on exploitative agriculture. Following independence, ideally India should have revived these traditions and make our villages prosperous again. But, it’s not for nothing that people say that the British colonizers were replaced by Indian elites. Though the colonial exploitation vanished, nothing much changed for the rural Indians, who hardly benefitted from big industries being set up in selected parts of the country. Their pauperization continued unabated. Interestingly, when the Janata Party came to power briefly in 1977, they developed their 5-Year Plan on Gandhian model principles. It was a complete turnaround from previous economic policies. This, however, was a brief change and the subsequent government annulled this and reverted to the Nehru model. My mother always says that had Gandhiji not been assassinated when he was; his ideas of a village-centric economy and swaraj or decision-making power of the gram would have given direction to India’s economic growth and we might not have been so poor today. Ironically, China adopted the Gandhian model, while not ignoring investment in heavy industries.

    For me, the above description represents a deeper, entrenched, ideological phenomenon whereby we discarded, at the dawn of Independence, every institution that we had inherited from our ancestors. We incorporated alien concepts in our public life – a deeply, centralized top-down bureaucracy; a planned economic growth model; heavy-industries led growth, Anglicized court system. The masses were considered incompetent to make any decision for themselves. The villages were considered useless, merely an abode of starving masses. It is not for nothing that the State was called mai-baap.

    The ironic thing is that after 50 years of a FAILED EXPERIMENT with alien institutions, we are now reverting to the indigenous systems we originally discarded with contempt.

    So, it was realized that the bureaucracy cannot be relied upon to bring welfare to the masses and the people should have the power to decide for themselves, and the 73rd and 74th Amendments were passed.

    It was realized that heavy industries have done nothing to improve the lives of the masses, so now the govt. is trying hard to revive village economies and cottage industries. The tragic part is that most of the indigenous skills, which were passed down from generation to generation have been lost. The govt. is now entrusted with the additional task of instilling these skills and capacity-building. Gandhi is in vogue again. His belief that India cannot prosper unless the villages prosper is ringing true, half a century after his death. So, we have programmes like the PURA, a brainchild of one of our greatest Presidents, Abdul Kalam. Neo-Gandhian policies now talk about bringing ‘urbanisation’ to the villages, so that these become self-sufficient and grow sustainably. Where Nehru wanted to set up IITs, we now want to give the ‘right to education’ to every child in the villages.

    It was realized that the British inherited system of administering justice had failed for the common man. So, now we have nyaya panchayts or lok adalats which resolve disputes at the local level, like it used to be done in ancient times.

    The SAD and tragic part is, these initiatives are coming too late in the day. Today, the population is so unmanageable that it NEGATES the positive effects of any sound initiative taken towards empowerment and emancipation.

    Ketan remarked: “There is nothing scary about people leaving agriculture and searching for some other means of livelihood, because frankly, as I said above, we do not need them to be engaged in farming!” – I agree with you! As do most people who are engaged in agriculture, I am sure!! The question is what do they do, if not agriculture? They ONLY choice they have, in the absence of a thriving rural economy, is to migrate to cities and live in slums! What is amazing is how a simple development can change all this – 24/7 power supply to villages or 100% rural electrification. Gujarat has achieved this to a great extent, and I hear stories about ‘reverse migration’! – i.e. urban poor migrating back to their villages because now they have the means to survive on something other than their unproductive agricultural practices. Assured power supply means they can engage in alternate employment for their livelihood – produce handicrafts/goods on a small scale. You’re right, we don’t need so many people farming and that is the crux of rural poverty. I dream of a day where Indian villages brings to mind pictures of rich farmers with huge farming lands – so huge, that they use aircrafts to spray insecticides 😀

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