A farmer is a very unfortunate figure everywhere on earth. From Bangladesh to Burkina Faso, or from Pakistan to Peru, yes everywhere. There seems to be a systemic bias against the farmers at both the levels-state and the society. Even nature seems to be less inclined towards them. Just imagine! When broadcasting seeds for his crops, birds appear from nowhere to eat them with impunity. If his crop survives the vagaries of weather which sometimes can play havoc with his standing crops, rodents of different types are ready to have a feast on the hard earned produce of the farmers. When he takes his crops to the market for selling, there are many predators ready to pounce on the fruits of his efforts.
While the prices of agricultural commodities generally get depressed at the harvesting time more due to collusion of the vested interests than the market forces of supply and demand, the middleman will take away a sizeable chunk of his produce on one pretext or other. In fact, the middleman will have his cut in three ways. Firstly he will charge higher prices for the inputs he provides to the farmer. Secondly, he will charge usurious rates of interest for the loans he has advanced for this purpose Finally he will pay him less than market prices when he purchases the agricultural produce farmer brings to him for sale. A farmer normally never realizes that he has not been fairly compensated for the efforts he made to produce that crop, forget about fetching good prices.
Unfortunately urbanites only see the flashy cars driven by the scions of big landlords and assume that every farmer is making hay. Not at all. Such people represent only less than one percent of any farming community. Rest of the lot is just living from hand to mouth, trying to survive against heavy odds. Anyone who wants to challenge my assertion, kindly rent a piece of agricultural land and show me how to mint money from agriculture.
However my biggest complaint is against those consumers who will be willing to pay huge sums for clothing and other necessities of life but will always purchase agricultural produce with a frown on their faces as if it is their birthright to buy these goods for a pittance. They will pay whatever price an industrialist asks for his products but are ready to pay only “reasonable” price for the agricultural commodity. They cannot imagine how much hard work of countless human beings had gone in ensuring that our super markets are filled with fresh fruits and vegetables and cereals. I will invite them to come and see the planting of rice in a paddy field. With temperature hovering around 100 degrees FH, women plant saplings in water which is as hot as your coffee becomes after one minute of its making. And every woman has to bend hundreds of times a day to plant these saplings in an acre-a backbreaking job. Getting up at two o clock in winter for chatting is one thing; going to water the fields in pitch dark is another.
Frankly the biggest culprit in this squeezing the peasant is the state which tries its best to ensure that agricultural terms of trade, the ratio of agricultural prices to industrial prices, both measured as price indices, should remain in favour of the industrial sector. It has two objectives in mind for this unfair treatment to farmers. On the one hand it wants to ensure availability of agricultural raw material at throwaway prices to the industrial sector and on the other it wants to suppress prices of food items for fear of urban unrest in case the farmers get good prices for their products.
That is why, with few exceptional years, these terms of trade are always against the agricultural sector, more by design and less by default. They are under the impression that any increase in the prices of agricultural commodities in general and of food crops in particular, would directly and proportionately increase the general price level in the country, creating labour unrest. The proponents of this point of view always come up with lot of statistical evidence to prove their hypothesis, relying on neo classical theories with full battery of jargons. Unfortunately the poor farmers do not have this much of sophisticated skills to reply and their case for fair returns goes by default. Is it really so? Evidence and logic do not corroborate this hypothesis.
Every student of economics knows how complex are these issues having multiple sources of origin and affected by myriad of economic and non economic factors. No doubt, when a country is facing inflationary pressures, prices of food items increase along with the prices of other non-food items. That is expected because inflation by definition means increase in the general price level over a period of time but in no way you can blame the farmers for causing this escalation in inflation. It is extremely difficult to pinpoint a single causative factor to blame for a complex and constantly evolving situation; you have to treat it with judicious use of a broad spectrum remedy, not a single shot dose.
Secondly, , it is the duty of the state to formulate a comprehensive social safety networks to help those affected by the inflationary trends .You cannot put entire responsibility of saving the poor on the shoulders of one stake holder in the economy; let other sectors also play a role in this noble cause by paying proper taxes. Thirdly, if we do not incentivize the farmers to produce food commodities by paying them fair returns it will result in reduced production of the very food crops which are supposed to keep the general price level stable either due to loss in productivity of their crops or diversion of land use to more lucrative cash crops.
John F. Kennedy said about the plight of American farmers 50 years ago that “The American farmer is the only man in our economy who buys everything he buys at retail, sells everything he sells at wholesale, and pays the freight both ways.” It is as true a statement about any farmer today as it was true for the American farmers 50 years ago. Only during the food crises, the governments raise the procurement prices of agricultural commodities but forcibly purchase the surplus from the farmers, depriving them the opportunity to receive the true market prices for their produce.
What are the essential requirements for stopping this squeezing of the peasants? Few suggestions;
- Rationalize the prices of the inputs farmers use for cultivating the food and nonfood crops and ensure their availability at the right time and nearest to the place of production. Government must allocate a substantial amount in its contingency budget to provide subsidy to the farmers if the prices of these inputs are increased unreasonably by the traders.
- Ensure that the farmers get good prices for their produce which should not only cover their financial costs of production but also compensate him for the intangible labour which cannot be adequately measured enabling him to live a decent life
- One of the ways that farmers get fair returns for their efforts is selective procurement when the prices of agricultural commodities crash because of over production. Do not punish him for producing enough food for you
- Improving the marketing infrastructure such as rural roads, storage go downs, market places would go a long way in helping the farmers to sell their produce at reasonable rates, improving his mobility, holding capacity and bargaining power
- In order to obviate the possibility of his ruination due to vagaries of weather or other natural disasters, introduce crop insurance schemes