A Quarter Century of Neo-Liberal Economic Policies: Unending Distress and Peasant Resistance

It is a quarter century (1991-2016) after the implementation of the Neo-Liberal Economic Policies that saw a package of policies including liberalisation, privatisation and globalisation being implemented in India. They were part of the Structural Adjustment Programme dictated by the Bretton Woods twins namely the International Monetary Fund and World Bank under control of imperialist countries. In 1993, the Congress-led Government at the Centre came out with an Agricultural Policy Resolution that manifested the new thrust in the agrarian sector. The BJP which was in the opposition also extended unequivocal support to the policies. Each of these ruling class parties competed to claim parental rights over these policies. A massive campaign was launched by the ruling classes proclaiming that an open market and free trade would usher in all-round development of agriculture and bring around a transformation leading to prosperity for the peasantry. Even certain organisations of the peasantry were euphoric about these policies and argued that they would ensure that agriculture will be a viable and profitable venture with access to international markets.

What are the policy changes that were witnessed in the agrarian sector under the Neo-Liberal era?

 The ushering in of the Neo-Liberal economic policies marked a decisive break from the era of State-directed Planning. This period is synonymous with a systematic withdrawal of the State from agriculture and from a scenario of State-directed public sector engagement with research, extension, provision of inputs, cheap credit, support price, procurement, processing and marketing aimed at self-reliance the ruling classes have allowed a total take-over of every sector by predatory agribusinesses.

 Public investment in agriculture in real terms has seen a steady decline. There has been a continuous decline in the rate of growth of Indian agriculture due to the cumulative impact of the Neoliberal economic policies and the low public expenditure in the sector. The contribution of Agriculture and Allied Sector in the Gross Domestic Product (GDP) of the country has been steadily declining over the years and is hovering around 14 percent. The growth performance of agriculture is lower than other sectors. However, agriculture still remains principal source of livelihood for more than 50 percent of the nation's population.

 Employment generation has stagnated and rural infrastructure development especially irrigational infrastructure has also declined. Rural employment has seen a collapse and the poor and dispossessed are forced to migrate in search of jobs. Annual earnings of workers – both self-employed and wage-employed – as well as wage rates either stayed stagnant or declined in real terms in this period.

 Financial liberalisation reversed the policy of social and development banking thereby contributing to the deprivation and distress of the rural poor. It has reduced access of the peasantry to institutional credit and put farmers at the mercy of moneylenders. Even as the Government is claiming that the credit flow to agriculture has increased studies have shown that the beneficiaries are the landlords, rich peasants and even agribusinesses. Indebtedness has also resulted in loss of land as the peasantry lose their main economic asset to clear their debts.

 The State’s withdrawal from agriculture has been accompanied by a takeover by predatory agribusinesses. In the name of a strategic cooperation in agriculture with USA the India-US Knowledge Initiative in Agriculture (KIA) was initiated. The American monopolies in seed, food and retail-trade namely Monsanto, Archer-Daniels-Midland and Wal-Mart were given representation on the KIA Board in addition to the present day incarnation of the erstwhile Imperial Tobacco Company and others like FICCI and CII representing the interests of Agribusinesses. This Board has dictated the direction of agricultural policy and research in the country ever since.

 In this period States ruled by the Congress as well as the BJP and their allies have been going full steam ahead by superimposing a network of extension services to be provided by Agribusinesses over the public extension services they so meticulously dismantled. The ruling class parties are vying with each other to promote FDI in agriculture and retail trade. Peasant agriculture is being sidelined by promoting technologies tailor-made to benefit corporate agriculture.

 Indian peasantry were exposed to volatile world market prices and rendered vulnerable to price fluctuations in the world market due to trade liberalisation and the removal of quantitative restrictions on agricultural imports under the WTO regime. Import duties have been reduced way below the WTO stipulations even and the present trend of signing Free Trade Agreements with advanced capitalist countries practising highly subsidised agriculture is moving towards total removal of all import duties. The threat of dumping from regions with a glut in production is looming large in foodgrains, horticultural crops, dairy and fisheries. There is no protection for the vulnerable Indian peasantry and no mechanism for Price Stabilisation is in place.

 In the context of the failure of the Doha Round of WTO the ruling classes have resorted to a myriad of Free Trade Agreements (FTAs) within the paradigm of trade liberalisation and removal of quantitative restrictions. India-ASEAN FTA was concluded despite widespread protests and its adverse effects are being faced by Farmers in Kerala. The drastic fall in prices of rubber and other commercial crops is a direct result of this Agreement. India is all set to conclude the India-EU Free Trade Agreement. There are 56 other FTAs with various countries and regional groups in the pipeline including with USA, Japan and Israel. The Government is going ahead with Free Trade Agreements bound to have far-reaching consequences for agriculture and other sectors without following federal principles and the time-tested norms of Parliamentary democracy. Indian Farmers are forced to compete with highly subsidised agriculture from other countries. The WTO regime also is forcing India to cut agricultural subsidies, food subsidies and scale down public stockholding programmes.

 The implementation of the Neoliberal economic policies has led to reversal of land reforms, greater concentration and centralisation of land as well as resources. The countryside has witnessed the continued domination of landlord sections in most parts of India and land is increasingly being concentrated in a few hands with monopoly control in the absence of meaningful Land Reforms and effective implementation of ceiling laws. The alarming proportion of land loss can be understood if one compares percentage of landless households during the 43rd Round Survey of NSSO (1987-88) to the 68th Round (2011-12) NSSO Survey. The landless households in the countryside (possesing less than 0.01 hectare of land) increased from 35 percent to 49 percent during this period. It is in the same period that top ten percent have come to posses 50.2 percent of lands, an increase by 2 percentage points, when the share of bottom 50 percent declined from 4.1 to 0.4 percent (Vikas Rawal, 2013). Pauperisation of the peasantry is a clear result of the two decades of implementation of neoliberal policies.

 Large scale acquisitions and conversion of agricultural land as well as forest land for SEZs, mining, industries and urbanisation is taking place. Land acquired in the name of SEZs and industrialisation is also often at unfair terms and misused for real estate purposes. People are being dispossessed of their land without proper resettlement or rehabilitation. In the name of infrastructure projects, golf courses, Formula One racing tracks and residential complexes are coming up. Indian as well as foreign companies are purchasing land in cities and rural areas for real estate purpose and indulging in speculative activity. The acquisitions in many States are having no transparency at all and the actual area of land acquired is manifold higher than what is being reported in the media. This is bound to have serious implications on food security and livelihood security of millions.

 There has been a substantial reduction in subsidies provided to the agriculture sector; in particular the subsidies for fertilisers have been reduced drastically. Moreover, prices of fertilisers, seeds, pesticides and other inputs have been decontrolled, which creates another upward pressure on the prices of agricultural inputs. Costs of fertilisers, irrigation costs and seed costs have increased manifold. Additionally, the government has reduced agricultural extension services, which again adversely affects the farmers. All this has resulted in an increase in cost of cultivation. This massive increase in the prices of inputs is a direct result of the policies pursued by the central government entailing a cut back on crucial subsidies and deregulating prices of inputs like fertilizers. On the face of such an increase in cost of cultivation, the only way to keep farming viable is to increase the Minimum Support Price (MSP). However, even as the input costs are rising unceasingly the MSP fixed by the Government are neither fair nor remunerative. In most of the crops the MSP announced does not even meet the costs of production. The Swaminathan Commission recommendation for computing MSP as C2+50% is nowhere taken into account. Moreover there are no effective procurement facilities and in most regions it is at best skeletal forcing farmers to sell to unscrupulous traders at distress prices.

What has this quarter century meant for Indian agriculture, the peasantry and rural poor?

Intensifying Agrarian Distress and Farmers’ Suicides

A quarter century of implementation of Neoliberal economic policies has had a drastic impact on peasant livelihoods. In India more than a 3,20,000 farmers have committed suicide since 1995. Put in simple terms it means one suicide every half an hour. The unprecedented nature of human tragedy is a phenomenon unseen and unheard of in the entire human history. This figure excludes thousands of suicides by tenant farmers/share-croppers, Adivasis and Dalits without pattas, women peasants, forest land cultivators and agricultural workers because State Governments are unwilling to recognise them as farmers’ suicides. 

Roughly half the farmers in the country did not wish to continue farming and would rather quit if they had an alternative. There is a disturbing trend of dispossession and destitution wherein pauperised peasantry are forced to become agricultural workers or migrant workers as they cannot overcome the crisis of subsistence. Certain experts have also noted that there has been a sharp fall in the number of farmers in the country in the last two and a half decades. According to them approximately, 15 million main cultivators have quit the occupation since 1991.

It was in such a scenario that the BJP came to power with Narendra Modi as the Prime Minister. They had promised that the BJP Government will usher in “Achhe Din” for Farmers and put an end to Farm Suicides. Increased public investment in agriculture and rural development, steps to enhance the profitability in agriculture by ensuring a minimum of 50 percent profits over the cost of the production, cheaper agricultural inputs and credit, introduction of latest technologies for farming and high-yielding seeds, linking of the MGNREGA to agriculture, a farm insurance scheme to take care of crop loss due to unforeseen natural calamities, strengthening and expansion of rural credit facilities, expansion of irrigation facilities, a price stabilisation fund to protect farmers from volatile world market prices, welfare measures for Farmers above 60 years, Small and Marginal Farmers and Farm labour were among the promises. The Manifesto also promised that “The BJP will adopt a ‘National Land Use Policy’, which will look at the scientific acquisition of non-cultivable land and its development, protect the interest of farmers and keep in mind the food production goals and economic goals of the country.”

However, the hopes generated were soon belied. The BJP-led NDA Government under Narendra Modi’s leadership has seen an intensification of the Neoliberal onslaught. Two years of Modi-led BJP Government has heightened agrarian distress. Immediately after coming to power it elections gave an affidavit to the Supreme Court stating that it was impossible give Farmers MSP according to Dr.Swaminathan Commission recommendations of at least 50 percent above the cost of production. To add to the problems of farmers it also issued a Government Order to States threatening that procurement would be banned from States providing bonus over and above the MSP fixed by the Central Government. The Government also sacrificed the interests of the Farmers and the hungry millions at the WTO negotiations.

The BJP Government also brought a draconian Land Acquisition Ordinance which would facilitate smooth take-over of land for corporate profiteering and real-estate speculation. It sought to do away with the principle of seeking prior-informed consent of land owners and dependants on land, Social Impact Assessment and Food Security restrictions. It also sought to open up land up to 1 KM on both sides of expressways for corporate land grab. According to a calculation in the case of the Delhi Mumbai Industrial Corridor which passes through 6 States there is the potential threat of loss of almost 7 lakh Sq.Km or 38 percent of all agricultural land in the country to forcible acquisition. The scale of acquisition can be understood when one considers the fact that this would translate to more than twice the size of United Kingdom. This is just the tip of the ice-berg.

One of the first attacks by the BJP-led NDA Government was on the working class and their rights in the name of ‘Labour Reforms’. This was followed up with a systematic effort to subvert the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). MGNREGA has been scaled down drastically and is being starved of funds. Through a Circular issued on 21st July 2014 the Central Government directed the States to limit the implementation of the MGNREGA only to 2500 Blocks which are “most backward” in development. Even the latest Budget allocated only Rs.38,500 crores when the actual allocation required was more than Rs.65,000 crores. The national average days of employment provided in a year is only about 36 days. A recent study showed that there have been negligible employment generation even in drought hit States. Data shows that in 2015-16 of the households that were provided work under the scheme in these regions, merely 1.8 per cent got full 150 days of employment.

Growth Rate of Agriculture has drastically fallen from 3.7 percent in 2014 to merely 1.1 percent in this period. Farmers’ suicides have increased and touched new heights. In December, 2014 merely six months into the Modi led BJP Government the mid-term assessment showed a 26 percent increase in Farm suicides. The BJP-ruled Maharashtra has seen a 40 percent increase in Farmers’ Suicides. In 2015 in Maharashtra alone there have been suicides by over 3,228 distress-stricken Farmers which is almost double the earlier peak years. In the same year Karnataka witnessed over 1500 suicides. The Government is continuing in a criminal denial mode and refusing to accept the truth. If a couple of years ago 48 Farmers committed suicide every day, it has increased to 52 suicides every day in 2015.

The average income a Farmer earns from farming activities, including what is retained for family consumption is estimated to be only Rs.20,000/- per year in 17 States according to a recent study. That would mean a meagre amount of only Rs.1,666/- per month. One has to note that it is in a scenario of high inflation in prices of food grains and essential commodities as well as health and educational expenses that we are talking of such low incomes. According to the latest Situation Assessment Survey of Agricultural Households in India by the NSSO in its 70th round (January – December, 2013) more than 60 percent of the rural households in India are indebted with 92.9 percent of households in Andhra Pradesh being indebted.

There have been no social security measures for agricultural labourers or the peasantry. The promise of comprehensive farm insurance scheme to take care of crop and income loss due to unforeseen natural calamities and crop losses has been belied by a policy which prises open agricultural insurance to Multinational Companies. Nothing concrete has been done for the Small, Marginal Farmers and Farm Labour who are reeling under falling incomes and rising prices. All sections of the peasantry have seen declining incomes forcing them to sell their assets on the one hand and being unable to invest in technology, tractors and irrigational infrastructure on the other.

Peasant Resistance and United Struggles Ahead

The All India Kisan Sabha stood steadfast in opposition to the Neo-Liberal Economic policies from the very beginning. The All India Kisan Sabha and All India Agricultural Workers’ Union were amongst the first rural organisations in the country to oppose the Neoliberal Economic Policies and launched struggles against them almost immediately. Right from the beginning AIKS and AIAWU asserted that these policies would harm the interests of Indian agriculture and would adversely affect the overwhelming majority of the peasantry as well as agricultural workers. In order to expose these policies, to unmask the vested interests they served and to rally wide sections of the peasantry against them it became necessary to come out with an Alternative Agricultural Policy. The Policy was adopted by AIKS and AIAWU in September 1993 and later updated in 2003 and 2010 to incorporate responses to the changing scenario. As a matter of fact the Left Parties and Trade Unions, AIKS, AIAWU also built up opposition to the General Agreement on Tariffs and Trade and the surreptitious signing of the Agreement by the Congress Government in 1994. The struggles under the broad platform called the National Platform of Mass Organisations and the united struggles of Central Trade Unions have been historic.

Massive struggles have been launched against these policies in States as well as at the Centre. The AIKS and AIAWU carried out country-wide Jathas with the slogan “Save Kisan Save India” and “No To Suicides; Unite and Fight”. Struggles locally on the burning issues of the people and peasantry and the adverse impact of Neoliberal policies have been carried out. The struggle against land monopolies, feudal vestiges and caste oppression as well as the struggle for meeting the basic needs of the people like food, housing, education and health are inseparable from these struggles. AIKS also organised the families of Farmers who committed suicide and had struggles. Massive struggles against indiscriminate land acquisition and for land rights, remunerative prices and procurement etc were launched in this period.

All India Kisan Sabha took the lead in organising the peasantry against the draconian Land Acquisition Ordinance brought by the Narendra Modi led BJP Government and an issue-based unity was built involving all peasant organisations, agricultural workers’ organisations, Adivasis, Dalits, social movements and mass mobilisation and protests were held all over the country against it. A joint platform emerged in the name of Bhoomi Adhikar Andolan, copies of the Ordinance were burnt in more than 300 districts, and massive signature campaign was conducted. Massive protests in States and also before the Parliament forced the Government to withdraw the Ordinance. A two-week long campaign and observance of Demands Day and joining the Working Class Strike on 2nd September were taken up.

The struggle for an alternative is arduous and resistance to Neoliberal policies has to be built meticulously. The struggle can only be advanced to a national level if broadest possible unity of the peasantry and agricultural workers as well as the rural poor is built and a consistent ideological-political offensive is launched against the Neoliberal policies and the corporate take-over of agriculture. Worker-Peasant unity has to be the basis of struggles that can usher in a radical alternative.

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