Resources Research

Making local sense of food, urban growth, population and energy

The colour of an Indian farmer’s money

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Were our crops to be tied, cyclically and in uneasy dependence, to the trickles of credit, India’s food stocks would be in a desperately poor state and food insecurity would stalk every district. To hear it from the Government of India and its multitude of agencies and allies, all of which in one way or another are connected with agriculture and food, the needs of the kisan (farmer) can be well met, and it takes only the kisan, toiling soul that she is, to “avail” of such plenitude.

Easier stated than done. We may not doubt the intentions that have made these provisions, but we prefer to see proof on the ground, in the fields of our marginal and small farmers, rather than as optimistic indicators that adorn the pages of reports read by no farmer. Where is this disconnection taking place? To borrow from the world of film, Yojana Bhavan and Krishi Bhavan, we have a problem! And it is this: the basis of every school of conventional economic thinking is scarcity – the idea that there is “not enough for everyone” – and the dramatic effects this reality has on human behaviour, and the measurement of behaviours is after all the DNA of economics. This allegation of scarcity is the foundation on which all of the economic systems of past and present are built.

Hence the problem is, are conventional economics approaches (from which flow these heavily-referenced reports and surveys that inform us about the state of India’s agriculture and food) any use for analysing a post-scarcity economy? Such as the ones our 640 districts will face over the next 25 years, and indeed which they face every time there is a flood or a drought? I think not. We should rather break free from analysing these matters and issues in the binary terms of ‘price’ and ‘cost’ – these are economics ‘tags’ that we intuitively know have no significance in an agro-ecological system. For social scientists and multi-disciplinarians, this is simple enough, not so for the organs and apparatus of governance. Yet for the sake of reaching an understanding that is more in tune with the kisan, it is unavoidable. When will one culture of understanding displace the other? This may not be foretold, but can be encouraged.

Let us make a rapid and selective review of what is being said about credit, the provision of money, to our farmers and agriculturists. The following paragraphs are from the Reserve Bank of India’s ‘Report of the Committee on Priority Sector Lending (2012 February), whose executive summary has said: “The need for directed lending in India would continue considering that there is lack of access to credit for a vast segment of the society. Credit remains a scarce commodity for certain sections/sectors and they continue to remain outside purview of the formal financial system. Therefore, those sectors where sufficient credit does not flow, those people who do not get adequate credit may get the benefit of directed lending.” [Get this document here (pdf).]

There are a few important insights that this paragraph provides. One, perhaps the most important, is that credit is presented as simultaneously a need for the small farmer and as a commodity (a scarce one, do you notice?). Two, there is a formal and an informal, and it is the products of the formal that are presented as possessing the ability to solve the small and marginal farmer’s problems. Three, there is a class stratification within the recipients of credit, those who are “financially included” and those who are not – and we have seen enough evidence over the last decade to show that the overlap of the marginal farmers and the financially excluded is very high, high enough to have been surprising two Plan periods ago, and for the measures this RBI report is discussing now, to have been not a preface, but an epilogue. Read the full comment on Agropedia.

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