For farmers, 2021 was a historic year. The farmers not only set an example for how to lead a democratic protest, against all odds, but were also successful in forcing the government to repeal the three farm laws at the heart of the protests. The year 2022 will reveal the impact of the repeal of these three farm laws on the livelihoods of farmers. Moreover, it is yet to be seen how the issue of Minimum Support Price (MSP) is going to unfold, in light of Union agriculture minister Narendra Singh Tomar’s flip-flop on the repeal of the laws.The farmers’ protest raises another big question today: were farmers deliberately ignored in the budget because they did not support the ruling Bharatiya Janata Party (BJP), despite the repeal of the laws? India in 2022 can no longer ignore the contribution and importance of agriculture in strengthening the economy and ensuring the well being of the country at large. But innovative policies a to transform the livelihoods of farmers and ensure a healthy agriculture as well as a healthy environment.In an interview with The Wire, Devinder Sharma, a trained agricultural scientist and noted agriculture expert, spoke at length on the budgetary allocation for agriculture; the impact of agriculture on the Indian economy and GDP; the short-term and long-term impacts of the repeal of the three farm laws; several issues pertaining to MSP; why government is less concerned about the agricultural economy as compared to the corporate economy and the challenges that 2022 brings. Sharma is also an award-winning Indian journalist, writer, thinker and researcher well-known and respected for his views on food and trade policy. Devinder Sharma. Photo: Sujan SinghHas the budget taken care of the aspirations of farmers and are you satisfied with the budgetary allocations for farmers?Given that the agriculture sector performed tremendously during the two years of the pandemic, when agriculture was the brightest star of the Indian economy, and considering that the iconic farm movement is still fresh in our memory, one would have expected the Finance Minister to have used the opportunity to compensate farmers for their yeoman role as well as to further strengthen agriculture with more generous investments. Especially with 2022 being the target year for doubling farmers income, I was expecting this year’s budget to shift the policy focus to making agriculture the second engine of growth. After all, we all know that the route to an ‘atmanirbhar Bharat’ passes through agriculture, and, as I have said earlier, that is also the way to achieve ‘sabka saath, sabka vikas’. But on the contrary, I find that the budget for the ‘amrit kaal’ period – the 25 years to come which will coincide with 100 years of Indian Independence – has, in reality, side-lined agriculture. The budget for agriculture and allied sectors is almost the same as last year; in fact, it’s a little less. Moreover, at a time when economists feel that the emphasis should have been on build upon rural demand, the budgetary allocations for fertilisers, MNREGA and food security have been further cut. Also read: ‘With Budget 2022-23, Govt Has Once Again Failed Millions of Rural Citizens’: NREGA Sangharsh MochaIt is being said that the government has deliberately ignored farmers in the budget because they are not supporting the BJP in elections, even after the government repealed three farm laws and gave them an assurance on MSP. Your response?Well, a lot of people are saying that. Only two years back, while presenting the 2020 budget, the Finance Minister had spent quite a lot of time explaining the 16-point agenda for agriculture. Although it was based on ushering in market reforms in agriculture, something that the protesting farmers had revolted against, the budget this year, too, could have been used to not only lay out a roadmap for rebuilding agriculture based on the domestic strengths and needs, but to also incentivise farmers, keeping in mind the dire need to address the appalling income insecurity farmers are faced with. But this year, the emphasis on agriculture was certainly missing. Political intentions apart, agriculture remains the biggest employer, and any move to make it economically viable and profitable also goes a long way in addressing India’s enormous employment crisis. A lot more was expected than simply backing the application of kisan drones and digital technologies in agriculture. How has agriculture shaped our economy in the last decade? In what way has agriculture impacted our GDP and economic growth in recent times? Agriculture has always been called the ‘mainstay’ of the national economy, but has largely remained neglected. Though agriculture employs a large chunk of the population, it has been deliberately kept impoverished. The entire intention is to create such unfavourable economic conditions that more and more people are forced to migrate from rural to urban areas in search for menial jobs. In fact, agriculture has been systematically sacrificed over the years to keep economic reforms viable. The best way to do so is by denying farmers their rightful income by deliberately keeping farm gate prices low. Let me illustrate. In 1970, the MSP of wheat was Rs 76 per quintal. Forty-five years later, in 2015, it increased to Rs 1,450 per quintal; a 19-fold jump. Compare this to how income parity worked in the same time-frame; the basic pay and Dearness Allowance for government employees increased 120 -150 times; that of college and university lecturers/professors, 150 – 170 times; and that of school teachers, 280 – 320 times. I am sure if the monthly income of all these sections had increased in the same proportion as the MSP for farmers, a large number of them would have either died by suicide or left their jobs. This was accompanied by declining public sector investments in agriculture. To give you an idea, let’s look at a report from the Reserve Bank of India (RBI). Accordingly, public sector investment in agriculture hovered between 0.3 to 0.4% of the GDP between 2011-12 and 2017-18. When 50% of the population is employed in this sector, how can you expect a miracle to take place in agriculture with such low investment?So, conveniently, agriculture was painted as a laggard; a burden on the economy. That’s how the economic design was made to work. The share of agriculture in the GDP, therefore, continues to decline, but this is not because agriculture is unproductive, only that it was made to appear as such.Also read: In Economic Survey and Budget 2022, Agriculture is the Elephant in the RoomHow do you think the repeal of the three farm laws is going to help farmers in the short and long terms?The repeal of the three contentious farm laws is a step in the right direction. These three laws were basically an effort to usher in market reforms in agriculture in the name of helping farmers. But such market reforms have failed to prop up farm incomes anywhere else in the world. That is why the rich countries continue to pump in massive subsidies, year after year, to retain whatever little percentage of farmers remain on the farms and also to ensure agriculture remains competitive. Whether in America, Canada, the European Union or Australia, free markets in agriculture have only pushed small farmers to abandon farming and migrate; multiplied farm distress, leading to increased rate of indebtedness and suicides; and created severe environmental crises, the destruction of the natural resource base, exacerbating agriculture’s share in climate change. In the long run, the proposed market reforms in agriculture would have devastated Indian agriculture too. That’s not the kind of agriculture India needs. We do not need to push farmers out of farming; we need to revive agriculture to a level that it sustains the large farming population, thereby reducing the pressure on cities to create jobs, especially at a time when we are faced with jobless growth in cities. Therefore, even if it means reversing the dominant economic thinking that aims at increased migration from rural areas, so be it. That model of economic growth has outlived its utility. Economists must now accept that agriculture alone has the potential to reboot the economy. It was, therefore, heartening to see the Indian government accept the protesting farmers’ demand for repealing the laws. This, in my understanding, is the first reformative step that is required to revitalise agriculture, which has the potential to emerge as the second engine of growth. A vibrant agriculture is the need of the hour and, given the right kind of incentives, it has the inbuilt capacity to achieve the Prime Minister’s vision of sabka saath, sabka vikas. How is MSP important for the livelihood of farmers?For almost 150 years, wherever free markets in agriculture have been in operation, farm incomes have been on a steep decline. In Canada, for instance, wheat prices have declined from $30 per bushel in 1857 to $5 per bushel in 2017. In America, it is no better. Wheat prices, when adjusted for inflation, have slumped in the same proportion in the same period. Now take a look at Europe. Surviving at the mercy of supermarkets, farming has ceased to be profitable. Ironically, farms are dying at a time when ample capital investments have already been made in modernising agriculture with food processing, building warehouses, creating rural infrastructure like roads, providing internet connectivity, scientific storage and a chain of cold storages. Why, then, should agriculture be in crisis? Isn’t the same flawed model being prescribed for India? To illustrate, not many know that in March, 2021, French farmers had hung suicide dolls on trees outside Parliament to draw attention to the severe crisis prevailing on the farms. This is happening in a country where market reforms have been in place for several decades. Almost a quarter of the French farming population is struggling below the poverty line. In neighbouring Germany, it is no better. An estimated 130,000 farms have closed down since 2005. In India, the Economic Survey, 2016 tells us that the average income of a farming family in 17 states – which means roughly half the country – is only Rs 20,000 per year. The point I am trying to make is that markets are ruthlessly exploiting farmers, providing them with prices that do not even cover the cost of production. Therefore, with indebtedness soaring, devastatingly hitting livelihoods, farmers are left with little choice but to quit agriculture. Providing a guaranteed income by way of an assured price is what farmers are demanding across the globe. In India, the demand for providing legal sanctity to the MSPs, therefore, is highly justified. We already have a mechanism for providing MSP and the need now is to expand it, strengthen it, and ensure that no trading takes place below this benchmark. Let us not forget, farmers, too, need a living income. Like you and me, they, too, have families to support; they too need to fulfil their aspirations and that is possible only if they get a guarantee of a minimum assured price. Whether the income increase comes through an assured MSP or direct income support or deficiency payments or a combination of the three approaches, is certainly a question of delivery. But first and foremost is the need to recognise that low farm incomes over the decades are what have aggravated the agrarian crisis.What would be the real financial burden of MSP on the government?A lot of figures are being tossed around. I don’t know where the magical figure of a Rs 17 lakh crore burden on the government come from, if all the produce is to be procured. With some electronic media not even caring to look into the veracity of these inflated claims, the contemptuous bias that a dominant section of the elite, as well as a leading section of the media, carries against farmers comes out crystal clear. I think it was, ostensibly, to create a ‘fear psychosis’; as if the economy would tank if the entire produce is to be procured. The fact is that the total expenditure if the entire produce is procured comes to around Rs 11.9 lakh crore, as some studies have shown. There are estimates ranging from about Rs 40,000 crore to Rs 5 lakh crore on the other extreme. The fact is that farmers are not asking for the entire harvest to be procured. All they are asking is that a legal sanctity be provided to the MSPs for 23 crops for which the prices are announced every year, which means no trading should be allowed below that price. It doesn’t, therefore, mean that the entire produce has to be bought by the government. Also read: Why the Farmers’ Demand to Legalise MSP is JustifiedHow would you respond to the many exaggerated figures with regards to the burden that MSP would impose?Sadly, I find that people generally harbour a feeling of contempt for farmers. The educated elite, barring a small percentage, do not want farmers to be given a high price. Every time you announce loan waivers or some packets for the farmers, we see an uproar, wanting to know where this money will come from; how big the fiscal deficit will be, and so on. But when huge corporate tax cuts, economic stimulus packages and corporate write-offs are announced, no questions are asked. Nevertheless, what we need to understand is that the demand for making MSP a legal instrument has tremendous economic implications. Besides making farming a viable enterprise, thereby reducing the pressure on cities to create additional employment, higher incomes for farmers would translate into higher economic growth. When the 7th Pay Commission was announced, benefiting some 4-5% of the population, economists had called it a ‘booster dose’ for the economy. The argument was that more income in the hands of the employees would actually bring more money into markets, which would mean demand will grow, thereby acting as a booster dose. Now, imagine if 50% of the country was to receive higher incomes by way of a guaranteed MSP. The huge demand it will create will not only act as a booster, but as a ‘rocket dose’ for the economy.The Agricultural economy has never been as big of a concern as compared to the corporate economy. Why do you think that is?This is because the neoliberal economic thinking has been drilled into us that there is no escape but to sacrifice agriculture for the sake of economic growth. To achieve higher economic growth, there is no choice but to reduce the share of the population employed in agriculture. This is what ‘Economics 101’ has programmed us to believe. Many economists, and that includes a former RBI Governor, even go to the extent of saying that the biggest reforms would be when we are able to move people out of agriculture into the cities, because cities need cheap labour. In other words, they think creating an army of ‘dehati mazdoor’ (impoverished labourers) in cities is employment generation. This is outdated economics. According to a study by Oxfam, the top 1% in India holds four times as much wealth as the bottom 73%. This is because neoliberal economics relied on the ‘Trickle Down’ theory, which is widely believed to have exacerbated global inequality. This is because we deliberately kept agriculture impoverished, sucked income from the bottom to the top. This has to change, especially for a country like India where 70% of rural households are engaged in agriculture. We need a new economics which makes farming an economically viable enterprise, thereby reversing the economic design of pushing people out of farming into the cities. We need a new economics which ushers in sustainable food farming systems; that reverses the climate catastrophe that lies ahead. What India needs is production by the masses, and not production for the masses. We need a healthy agriculture, a healthy environment and wealthy farmers. We cannot go on following the wrong pathway of sacrificing agriculture for the sake of industry. It is, therefore, time to resurrect agriculture, convert it into a second engine for economic growth. After all, if the bottom 50% of the population of India grows economically, imagine the multiplier effect it will have on the national economy. That’s the kind of ‘atmanirbhar Bharat’ we should look forward to. How would you compare India’s policy of farmer subsidies to those of developing and developed countries?The US, EU countries, Canada and other big players subsidise exports of agricultural commodities or export at prices which are actually below the cost of production. These subsidies, often hidden, lower international prices as a result of which farmers in developing countries, including India, are priced out. In 2018, the OECD countries, comprising the richest trading block, provided agricultural subsidies to the tune of $246 billion. Along with unfair trade practises, these subsidies have always played a significant role in protecting farmers in developed countries against price volatilities. Every five years, the US comes out with a Farm Bill that makes provisions for farm subsidies and investments for the next five years. In the last Farm Bill, in 2018, it had made a provision for $867 billion of farm support for the next ten years. This process has been going on since the 1930s, after the Dust Bowl phenomenon had hit America. Even with such huge subsidy support, the US farmers are faced with a severe agrarian crisis. In 2020 alone, farmers were saddled with a debt of $425 billion; suicide rates in rural areas were 45% higher than in urban centres. With markets failing to provide farmers with higher incomes, subsidies were being pumped in to sustain whatever remains of family farms. Nearly 40% of the average income of American farmers, comprising just 1.5% of the population, actually comes from subsidy support. Also read: The Dangers of Agricultural Parity Amnesia: Lessons From the USAccording to a submission made by India before the World Trade Organisation (WTO) in September, 2021, the per farmer support provided by rich countries like Switzerland ($37,952), Norway ($31,904), Canada ($26,850), and the US is ($24,714) is much higher than the $451 in India. It is, therefore, quite clear that international prices, subdued by subsidies, are no comparison of global competitiveness. As long as Indian farmers are pitted against the treasuries of rich developed countries, it will never be a fair comparison. In fact, it will be grossly unfair. Indian farmers will always find the going tough and will be pushed out of agriculture. What India needs is to reframe its agricultural policies; to provide farmers with a guaranteed income by way of an assured MSP. We need a policy mix that suits our own economic interests, to rebuild our agriculture. Apart from the farm laws and MSP, what do you think are the other challenges before India’s agriculture and labour market?The rollback of the three contentious farm laws provides a historic opportunity to rethink, reinvent and redesign the future of Indian agriculture. Withdrawing the three laws will protect Indian agriculture from the kind of devastation that rich developed countries are faced with when it comes to farming populations. The second step in this reformative process should be to provide farmers with a legally binding MSP regime, where trading below the announced MSP is prohibited. If a market driven economy like Spain can bring in a law which makes trading below cost of production illegal, I see no reason why India cannot provide a legal sanctity to MSP. Such a bold decision will have international repercussions, with farmers everywhere demanding a guaranteed income on India’s pattern. India has the ability to take the lead in initiating the much-needed reforms in global agriculture, based on India’s own desi version of providing an assured income to farmers, providing them with a living income. No matter how neoliberal economists will try to say otherwise, the markets will adjust accordingly.Once the income guarantee is enforced, India needs to move from the Green Revolution to an ‘Evergreen Revolution’. We need to redesign the cropping pattern in a way it minimises environmental damage, reduces water intake and provides for ecosystem protection. Redesigning farming systems, bringing markets closer to the farmers, and developing a food distribution system that provides for household nutritional security should be the hallmark of the new agricultural policy that India needs.