SWARAJ  

The BJP needs to get Narendra Modi and Arun Shourie involved more in its policy discussions. Not to mention outside experts like Bibek Debroy and Ila Patnaik. This comes from a well-wisher who is just following the BJP motto of “country first, party second, and self last”. 

Because after rehashing old ideas on education, the BJP’s policy direction on agriculture is even more disappointing . This is their position on Shri LK Advani’s website. 

And the following are just the most dangerous of their ideas, along with my explanations and constructive alternatives. 

“Promote mass production by masses and not by machines…” And I thought that the Luddites were dead; even the dense Reds have understood the value of technology. The country and the farmers will not get rich until less and less people are required to make more and more stuff, thanks to increased mechanization, automation and generalproductivity increases. Why then – where will the other farmers get jobs? Well in far-off cities and nearby towns, in factories and restaurants, maybe even in food-packaging industries. Their children will hopefully receive a great education, and go on to become doctors and engineers. By playing into this anti-mechanization Gandhian economics, the BJP is looking like a throwback to its Swadeshi-voodo-economics days. One way to get both smart and populist is to have complete tax exemptions for tractors.   

“Declare water as a common property…“  How tragic? Private water is helping farmers in Gujarat and elsewhere make money by trading it. And the reason why water levels are falling in many parts of the country is precisely because water is de facto commonly owned, and absolutely free. Private ownsership will decrease shortages, will be environmentally sustainable, and will send the right price signals – unlike now when “water-guzzling crops like rice and sugarcane [are grown] in states like Punjab, Haryana, Rajasthan and Maharashtra, where rainfall is not enough to recharge aquifers“ Milton Friedman had obviously exaggerated when he said that “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand”. But even he would be surprised to know that “Even Cherrapunji, India, the wettest place on earth, suffers from recurrent water shortages.” Instead of out-leftying the left on water, the BJP needs to call for farmers to own their own water. 

“The scope of the MSP programme should be expanded…” Now, farmers like all other Indians should get some welfare if their incomes go below a certain level. But why should it be crop-specific? The last two governments have rightly been trying, with some success, to dismantle the mandi monopoly at the state level so that farmers can sell their produce to private players if they get a better price. In that fortunate case, the MSP is not relevant for the farmer, but if there are no private players offering a premium then that means that the farmer should not grow that crop any more. One of the big distortions in Indian agriculture has been that it has concentrated too much too long on wheat and rice, especially the former. Fruits, vegetables and pulses have been relatively ignored. The solution is to let the market decide, and give the farmers a crop-agnostic safety net.

“…public distribution systems (PDS) would need to be strengthened…” An idea, that despite the best intentions promoting it, will only result in more corruption. Instead we must scrap the PDS and distribute food stamps.

“Introduce measures which can help attract and retain youths in farming by making it intellectually stimulating and economically rewarding…” Nandan Nilekani writes in his latest book – that according throughout his wife Rohini Nilekani’s travels in rural India, she did not meet a single child who wants to grow up to become a farmer. They all want to be doctors or engineers or teachers and so on. But even if we grant the “intellectually stimulating” part, there is no doubt that by retaining the youth agriculture would get only less economically rewarding, not more. A century and a half ago, America also was an almost entirely agricultural nation – but today only slightly more than 2 percent of its population produce much more food. While American agriculture is not free of government distortions either, this remarkable change happened because of productivity growth and market competition in both agriculture and other sectors. India will have to do the same. Sui generis sounds romantic, but it is not realistic.

To sum up, Swaraj makes the following suggestions:

1. Make water private, and charge for it (and electricity too). To compensate poor farmers, use direct cash transfers.

2. Instead of having loan waivers and make-work schemes (where the work is often repeated next monsoon), let us liberalize agriculture and encourage mechanization. That will create long-lasting well-paying jobs.

3. Create food stamps. Its been in the US for decades, and with smart cards these days it is a no-brainer.

4. Instead of fertilizer subsidies and minimum support prices, let us help the farmers by making many more pucca rural roads and localized irrigation schemes.

5. Let India support free trade in agriculture – at the least do not handicap our own exporting famers.