Price Crash and Imports

THE farmers’ movement as a whole is already forced to make a strategic shift from demanding remunerative prices to minimum support prices. Even minimum support has become a mirage in view of the distress sale and stranglehold of moneylenders. Many farmers, particularly small and marginal farmers, are forced to sell their produce at less than minimum support prices on many occasions because of lack of storage facilities and their immediate need for money for debt servicing and domestic financial requirements. Most of the farmers have shifted to commercial cultivation not out of greed for profits but out of longing for liberation from long-pending debts. As they have shifted from subsistence farming hoping for a good harvest and subsequent better profit to repay all loans, they neither get food grains for subsistence nor get good profit for repayment of loans, rather they get entrapped in debt taken on exorbitant interest rates ranging from 36% to 300%. Still, they consider commercial crops to be the only panacea to liberate themselves from debts. For instance, peasants consider cotton to be white gold and firmly believe that one good crop can make them rich and free them from all old debts. This is the secret behind the sudden unprecedented escalation in cotton cropped areas in Andhra Pradesh, Maharashtra and elsewhere.

The Monopoly Cotton Procurement System that is in vogue in Maharashtra is definitely a silver lining in the darkness. It is only a matter of time before this system is dismantled. Political parties of all hues are advocating winding up of the system as and when they assume power in the state and oppose it as and when they are pushed to the opposition. Mounting losses of the Cotton Marketing Board are also not a good sign. But, the system has enough potential to help farmers refrain from distress sales, as the procurement prices are fixed in the beginning itself and the bonus amount over and above the minimum support price is disbursed in advance by the state government. It is the bonus, the timely announcement of the price and the guaranteed procurement that makes the system attractive, as the traders cannot depress the prices beyond a certain point because the farmers have a choice. But, this system also appears to have run into rough weather with the government decision to procure at market prices and because to non-payment of dues to the peasants. In spite of all practical discrepancies, some such system should be evolved in all states to avoid distress sales and to ensure guaranteed procurement at a reasonably fair price. The farmers should also be extended sufficient institutional financial assistance in time.

Farmers are highly vulnerable to price fluctuation which are beyond their control. The fluctuations in national and international markets decide their fate. The fluctuation in prices, low prices, are mainly a consequence of market manipulations by dominant developed countries which provide a 100 per cent subsidy for their own agriculture rather than operate according to the laws of the so-called free market. The recent developments in the international arena expose the myth of ‘class neutrality’ or ‘freedom’ of the market. The market reflects a definite tilt in favour of developed countries against the third world and in favour of dominant powers against exploited labouring peasantry. The dominant powers decide the mode of functioning of the so-called free market. All tall talk of free competition and possibilities of third world countries entering the markets of the developed world is nothing but rhetoric that remains only on paper. In fact, the spate of suicides of Indian farmers has a direct correlation with this hard reality of manipulated markets dictated by big powers.

Crop loss because of pesticides and heavy indebtedness are only partial explanations of the phenomenon. For instance, cotton farmers’ suicides are triggered, on the one hand, by crop losses because of uncontrollable caterpillars and, on the other hand, by the crash of prices that was primarily pushed by indiscriminate imports that were forced on us through WTO conditionalities to remove Quantitative Restrictions on imports. Removal of Quantitative Restrictions is actually a deathblow to the country's agriculture and economy.

Still, the country had an option of imposing a high tariff wall to protect domestic producers. But, to expect exercising such an option from the domestic agents of imperialist finance capital is nothing but political naivete. The government had an option of imposing an import tariff ranging from 100-300 per cent for agricultural commodities. But, the government refused to increase the import tariff even to the level of 60% and increased only to the level of 10% from that of 5% in the case of cotton when the farmers of our country were dying. This is in contrast to the situation of the sugar lobby of Maharashtra and paddy and wheat lobbies of Punjab, which were successful in forcing the government to impose higher tariff rates for their produce. As a result, imported cotton flooded the market and halved the prices in favour of textile lobbies.

There are so many examples like edible oils, rubber, coffee, sugar, wheat, broken rice, etc., that have gone the same way as that of cotton. For example, under the free market conditions of globalisation, the Indian tea companies have been forced into a heavy loss due to cheaper imports from Sri Lanka and Malaysia. Many tea estate owners have not been paying wages to the workers for 6 months to one year. In the absence of alternative employment, the tea estate workers are simply starving. More than 400 starvation deaths have occurred among tea labourers in West Bengal itself. The Left Front Government led by CPI(M) has not done anything about it. With huge sugar stocks in hand, sugar mills have been refusing to pay their dues to cane growers. Sugarcane arrears in UP have already crossed Rs.1000 crores. Crash of prices is not only a death blow to our farmers but also a resource transfer to the wealthy, industrialized countries. The farmers of the industrialized world are subsidized in full, through profits earned out of exploitation of peasants of the third world.