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:
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!