Saturday, August 27, 2016

Indian Farmers; Certain Myths and Facts - Destruction of Indian Rural Economy

Generally people not connected with farming have certain myths about Indian farmers, This log tries to dispel same:-

Myth No 1. Farmers pay no Tax?

Fact No 1. False. All farmers pay tax in form of annual land revenue tax to state govt. Some states gives relief to small farmers. When farmers sell their products in Mandis, they pay mandi tax.

Myth No 2. Farmers pay no income tax?

Fact No 2. If parameters of business are applied then actually farmers have no income. It is actually in negative.  Just consider following facts

1. All farming lands are owned by state. Farmers only have tilling rights in form of a patta. Farmers tilt land to grow food for the sate to create food security which is so important for national survival.

2.  Rates of the farming products are fixed by govt under a unfavorable formula which is only followed in India. Farmers have no say in same.

3. Farmers are required to sell their products in fixed mandis which helps govts to control the movement of their products.

4. While fixing the price price of products, farmers labors and labor as hired is not taken as cost. In fact most of the farmers earn less then minimum wages of laborer.

If seen in light of above facts, govt has no ground to impose income tax on farmers as in real terms as applied in business there is no income? Govts are shamelessly hiding this fact and taking the credit of not imposing income tax.

Myth No 3. Some farmers are big landlords?

Fact No 3. There are no big landlords as is the impression. Average land holding of farmers is less than 1 acres and in same land they earn far lesser than a Govt peon. Most of the sates have land ceiling acts and they cant hold land beyond a limit. Like in UP max land holding limit is 15 acres. Not even .5% farmers hold such land and even in this land holding farmers income in best of the irrigated land is lesser than a Govt supervisor. Please note that no such land ceiling applies on land holding on businessman.

Myth No 4. Farming is a profitable business? 

Fact No 4. As explained above farming is a business of loss. Most of the farmers earn lesser than laborers. In fact farmers earn far lesser than the min interest value of market price of their land.

Myth No 5. Govt pays good price for the products of the farmers?

Fact No 5. False. Actually govt is exploiting farmers as bonded laborers. Price fixing formula of the govt doesn't give desired consideration to factors like, labor cost, inflation, market price fluctuations, drought etc. It is actually a cost minus model which is solely driven by negative market price swings of the international market and govt's wish to pay.  The advantage of positive market swings are never passed on to the farmers. In addition not all products of the farmers are covered under assured minimum pricing of the govt. In these products middleman make huge profits. Farmers have no control on the supply chains of the their products which are actually controlled by the businessmen.

Myth No 6. Govt pays huge subsidies to farming sector. 

Fact no 6. The share of farming subsidies are only 20% of the total subsidies bill of govt of India. If bad debt of industries is added into this, than share of relief provided to farmers dips to less than 5%. Please note that almost 40% people in India depend on farming. In fact subsidies in PDS actually harm farmers as a bulk of such cheap products come back in market through black channels bringing down the market price. Even controlled bank loans given to farmers have high interest rates though  lower than the commercial loans.

Myth No 7. Govt is very sensitive to farmers need?

Fact No 7. False.

Govt after govts are ignoring farmers forcing them to commit suicide. It has a strong caste dimension.

Political power in India has been in hands of those castes which traditionally come from non farming sectors. Due to caste based structure of Indian society, mostly martial castes (from all sections including, muslims, some brahman castes and tribal) hold land. Rural dalit workers were depended on farmers. It was a well integrated rural economy. Earlier kings did not pay salaries to soldiers instead they gave them land to survive. Soldiers came from such farming families. Military leaders came from Zamindar and small princely states. After independence, political power was passed on to the non martial composition of castes by British deliberately to keep India weak.

Cong remained in power on Brahmin+Musim+Dalit votes and saw martial castes as threat. Congress promoted the concept of soft state and under garb of socialism, worked to marginalize farmers and soldiers. Princely states were abolished, their privy purses were abolished in 71 ( taking advantage of victory of 71 war), Zamindai abolished, land ceiling act brought in to snatch farmers land and make them economically weak, price control regime unfavorable to farmers put in place to makes these castes helpless, mandi laws put in place to tightly control supply chains, farmers land was made non bankable unlike business land holdings, soldiers salaries and pensions were reduced drastically bringing down cash supplies to rural market further,

All these actions were taken to basically punish these martial castes and make them politically, socially and economical weak. Dalits were separated out from a well integrated eco system by offering them reservation to the extent of giving them reservation in political structure of the country. This measure brought little change in eco condition of the rural dalits but created new sect of dalit ruling families. BJP like cong also promotes the concept the soft power. That means there is no place for farmers and soldiers in their schemes. Majority of Dalits also suffer as rural economy is starved of cash flows. Though India suffered and is suffering but  caste based vote bank political games are converting farmers and soldiers into laborers. Instead of developing India, 60% of the Indian population is being pushed in backwardness.

In fact in most of the developing and developed democracies farmers are seen as a tool to provide food security to the nation. Govts therefore place an arrangement to ensure farmers get more than minimum wages  in cost plus profit plus grants model. Govt takes extra care to anticipate international market swings and accordingly advice farmers to increase or decrease products to keep a control over pricing.

Where as in India farmers and soldier suffer due to pure caste based politics to keep castes holding bulk of land, out of political power and also to make them economically weak and socially isolated. Concept of soft power which is yet to be validated is being promoted  at cost of destroying rural economy. No wonder farmers are committing suicide and soldiers are agitating for respectable salaries.