hammer1.gif (1140 bytes) People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)

Vol. XXV

No. 21

May 27,2001


Include Land Reforms In Agricultural Strategy: West Bengal

The government of West Bengal has demanded inclusion of land reforms in the over all production strategy for agriculture. It called for clearing, within a definite time frame, the state wise targets in terms of vesting and distribution of ceiling-surplus agricultural land.

Presenting the Left Front government's views at a conference of chief ministers on "Agricultural Strategies and Food Management", the state finance minister Dr. Ashim Das Gupta called for a review of the entire agriculture policy announced by the Centre last year. He also asked for setting up of a committee with the prime minister as chairman and chief ministers of all states as members to review the entire issues of WTO.

Expressing concern over the declining rate of growth of agricultural production in the country as a whole, he wanted the centre to take remedial measures in full coordination with the states. He drew attention to the Farm Management Studies data which showed that the highest record of production and employment generation per hectare is obtained from the land of small farmers and said " land reforms is not a charity but a productive move."

Among the suggestions made by the Left Front government were diversification of cropping pattern, expansion of infrastructure for agricultural marketing, making employment generation also a key target, immediate reintroduction of Essential Commodities Act ,1981 with adequate stringent provisions, etc. It strongly opposed central government's withdrawal from it's nationally responsible role of maintaining the Public Distribution System.

Below we reproduce the full text of the speech delivered by the West Bengal finance minister in the conference.

WE appreciate the convening of this conference of chief ministers on agricultural strategies and food management. This conference has been convened at a time when there are reasons to be much concerned about certain critical issues in the agricultural sector. These issues relate to the declining rate of growth in agricultural production in the country, inadequate investment in agriculture, insufficient availability of agricultural credit, problems of prices of agricultural produce, the scope of public distribution system and adverse impact of WTO on the agricultural sector. We shall give our views on these, and other related issues, in terms of our observations on each of the agenda items.

Agenda Item No 1 : Agricultural Production Strategies

As just mentioned above, there are, indeed, reasons to be concerned about the declining rate of growth of agricultural production in the country as a whole. The average rate of growth of all-India index of total agricultural production has declined very sharply from 4.1 per cent in the decade of 80’s (1981-91) to 1.5 per cent in the post-liberalisation decade of 90’s (1991-2001). Although the National Policy on agriculture had in 2000 set the target of a growth rate in excess of 4 per cent per annum in agriculture, the actual rate of growth in the total agricultural production in the country was (-) 3.5 per cent in 2000-2001, and that of foodgrains was even lower at (-) 4.7 per cent. There is thus a need to review the entire agricultural policy, detect the inadequacies, and then take remedial measures by the government of India in full coordination with the states.

In reviewing the agricultural policy, it is important not only to set the target in terms of at least 4 per cent annual rate of growth of sustainable agricultural production, and achieve self-sufficiency in all the major crops to ensure food and nutritional security, but also set the target in terms of as much employment generation as possible from this sector.

Given these objectives of production growth and employment generation in agriculture, and the fact, obtained from the Farm Management Studies data, that the highest record of production and employment generation per hectare is obtained from the land of smaller farmers, there is a critical need in the agricultural policy, to accord a special emphasis on land reforms. Land reform is not a charity, but a productive move.

It is fashionable these days to talk about economic reforms. But, the essence of economic reforms lies in moving from less to more competition. This competition in agriculture requires, among others, more equal to land, and that means redistributive land reforms. There is, however, no reference to redistributive land reforms anywhere in the agenda items of today’s critical meeting on agricultural strategy. This deficiency should be rectified in terms of specific inclusion of land reforms in the production strategy, and clear state-wise targets of vesting and distribution of ceiling-surplus agricultural land be set and implemented within a definite time-frame.

With modesty, we may point out that in West Bengal, we have started the entire agricultural strategy with land reforms, supported the land reform measures by the provision of non-land inputs, such as irrigation facilities, improved seeds, fertilisers etc., and involved the common farmers through the elected Panchayats in a decentralised manner. As a result, it has been possible to achieve the average annual rate of growth of index of overall agricultural production at 3.8 per cent in the decade of 90’s (1991-2001) as against the all-India rate of growth of 1.5 per cent over the similar period. Moreover, according to the latest statewise data available for the entire period from 1980-81 to 1999-2000, while the average annual rate of growth of foodgrains production for all the major states has been 2.5 per cent over this period, the corresponding rate of growth for West Bengal has been the highest at 4.1 per cent. In West Bengal, we are determined, on the basis of our polciy and past performance, to maintain and achieve a "4 % plus" over-all annual rate of growth in agricultural production with emphasis on employment generation as well as narrowing down the gap between the state’s requirement and the state’s production with respect to major crops, provided we get adequate assistance in terms of funds and other measures in relation to non-land inputs, research, credit, marketing facilities and remunerative prices from the government of India. That takes us to the relevant issues mentioned in the note under this Agenda item.

Among the non-land inputs, most important is to provide irrigation facilities and, for a state like West Bengal, which is a tail end of the major rivers in the country, to also provide drainage and flood-control facilities. In the sphere of irrigation, particularly in minor irrigation, support in terms of rural electrification is also necessary. If the conference convened by the government of India is to be truly meaningful for the states, then this assistance has to be clearly in terms of central grants, supported by the state’s budgetary provision in these areas. So long involvement of the government of India has been primarily in terms of high-cost loans such as provided by the NABARD etc. It is essential that a significant part of the central assistance should be in terms of grants. For tail-end states like West Bengal, the central government support should be at at least Rs 200 crore per year for these purposes. From the state government, we are prepared to match this central support, by an equal amount each year.

There is an important need to diversify the cropping pattern with emphasis on oilseeds, pulses, etc, as well as diversify towards horticulture, floriculture, medicinal plants, cashew nuts and plantation crops and link up with agri-inputs as well as food processing industries. This is critically important for value-addition in agriculture and employment generation.

For the importanc of narrowing down the gap between demand and supply and also for employment generation, a special emphasis needs also to be given to animal resource development, social forestry and fishery. In West Bengal, there is a significant scope of developing aqua-culture potential, including marine fishery and proteins.

For items mentioned in paras 7 and 8 it is essential to provide hybrid/high-yielding varieties of seeds, and fertilisers, including bio-fertilisers, as well as implements at reasonable prices for the common farmers/fishermen/enterpreneurs. For all these, the present macro-mode assistance from the government of India has to be significantly expanded for the states. For a State like West Bengal, with great agricultural potentialities, the annual central provision should at least be doubled from its present level of only Rs 25 crore.

With such potentialities of growth in agriculture and allied sectors, and high tradition of scientific research in West Bengal, there is a critical need to foster research activities in the field of bio-technology with applications in West Bengal. This should be a joint effort of the centre, the state and private sector. On this issue, an immediate interaction between the centre and the state is necessary, with sufficient provision of funds by the centre.

In the sphere of agricultural research, a special emphasis needs to be given to jute, which is the main cash crop of West Bengal, covering around 6 lakh hectares, sharing around 70 per cent of area and around 75 per cent of production of jute in the country. In order to boost up the economy of jute growers in the state, it is necessary to take adequate steps for quality improvement in order to serve better the domestic market and avail of international markets for diversified jute products. In view of the above, a mini technology mission on jute for improving quality and export oriented diversification should be set up as specific joint centre-state scheme.

Although deposit mobilisation per branch by the commercial banks in West Bengal is 21 per cent higher than the all-India average, the credit-deposit ratio in West Bengal is only 44 per cent which is much below the national average of 58 per cent. This credit deployment is especially low in agriculture and allied sectors. Against a credit requirement of around Rs. 5000 crore for the agricultural sector in West Bengal per year, the actual disbursement in West Bengal by the commercial banks in 2000-2001 has been only Rs 250 crore and that of cooperative banks RS 370 crores. It is essential for the government of India to give clear instruction to the banks to increase the disbursement of credit for all the states, and to increase beyond Rs 1000 crore specially for West Bengal in the current year, and then increase it adequately to match the total requirement as mentioned above as soon as possible. It is unfortunate that against a target of 2.05 lakh of Kisan Credit Cards for West Bengal in 2000-2001 by the banks, the actual achievement has been only about 82 thousand. This state level target should be increased to at least 5 lakh, and must be reached within the current year, with a special emphasis on the small and marginal farmers. There should then be a target of reaching all the small and marginal farmers in terms of Kisan Credit Cards by the Commercial and Cooperative banks within a period of five years.

There is very significant scope of expanding the infrastructure for agricultural marketing. In this context, it needs to be pointed out that because of certain conditions centrally imposed, West Bengal is finding it difficult to make use of the Capital Investment Subsidy Scheme covering 25 per cent for cost of construction of cold storage and other facilities. These conditions are (a) there should not be any control on rentals of cold storage and (b) there should not be any control on space booking. But, in West Bengal, after land reforms, major activities in agriculture are carried out by the small and marginal farmers constituting nearly 90 per cent of total farmers. In order to protect the interest of small and marginal farmers, there should be some social restrictions on rent and space-booking in the cold storages. The government of India should appreciate the stand of the state government and allow us to use the funds relevant for this purpose.

Related to marketing, there are also the important issues related to remunerative price for the cultivators and fair price of common consumers. We shall refer to these issues in the context of other agenda items.

If these steps are taken by the government of India and adequate funds are provided in critical spheres as mentioned above, it will be possible for the state government to provide concurrent support, mobilise private investment and achieve target of production and employment generation in the agricultural and allied sectors as indicated at the outset.

Agenda Item No 2 :

Removal of Restrictions of Movement and Stocking of all Agricultural Produces.

As mentioned in the annexure of the Agenda note, in West Bengal there is no ban, as such, on sale of its agro products to other states. It is only in the case of rice that there are certain restrictions as follows :

  1. Under West Bengal Rice and Paddy (Control) Order, 1997, the state government issues licence to the rice traders who are entitled to sell rice outside the state to traders having licence of the concerned state government. Again, licenced traders can purchase rice from licenced traders of other states and bring this purchased rice to West Bengal.
  2. The Statutory Rationing System, comprising greater Kolkata and the industrial areas of Howrah, Hooghly, North 24 Parganas and Burdwan, is in vogue since 1966 and free transaction of rice and wheat is not allowed in these areas. However, of late provision has been made in West Bengal Rice and Paddy (Control) Order, 1997 to issue licences to traders for dealing in rive in these Statutory Rationing areas as mentioned above.

Agenda Item No 3 : The Essential Commodities Act, 1955

As a strategy to control prices, reduce fluctuation of prices and achieve equitable distribution of essential commodities and to effectively deal with unfair trade practices, the government of India enacted Essential Commodities Act in the year 1955. With the passage of time, it was found that unless some of the provisions of the Act are made stringent – hoarding, blackmarketing and profiteering in essential commodities can not be checked. It is with this end in view, that the Essential Commodities (Special Provision) Act 1981 was introduced y amending the original Essential Commodities Act of 1955 so that the persons in such unfair practices can be more effectively dealt with. The life of Essential Commodities (Special Provisions) Act of 1981 has been extended from time to time, and last upto April 4, 1998. Thereafter, a new Essential Commodities (Amendment) Ordinance had been introduced by severely diluting the enforcement provisions of the Essential Commodities (Special Provision) Act, 1981 and from July 8, 1998 even that ordinance had also been allowed to lapse leaving now the states only with rather weaker provisions of the Original Essential Commodities Act of 1955.

In this context, the government of West Bengal strongly urges the government of India to reintroduce the Essential Commodities (Special Provisions) Act, 1981 with adequate stringent provisions through appropriate legislation in the parliament without any further delay.

Agenda Item No 4 : Decentralisation of Procurement and Distribution.

We strongly hold the view that emphasis on public distribution in essential commodities is necessary for reasons of moving towards competition itself. An accountable public distribution system, organised from the national level, and in coordination with the states, can indeed act as a countervailing competitive force against the monopolistic powers known to be operative in the sphere of trading of those commodities, and can thus help contain the price-rise, which is extremely important for the common people of our country.

Of late, there have been two types of assaults from the national level on this public distribution system (PDS). Although, in a truncated manner, the BPL population is covered under the subsidised PDS, the entire population above the poverty line is virtually deprived of any benefit of PDS, since the government of India has increased the Central Issue Pirce (CIP) of rice and wheat for the PDS at a level which is much higher than the corresponding open market price, resulting in poor off-take. This has resulted in excess stockpiling and reduced market availability. As a result, this recent policy of the government of India has not only been counterproductive in containing price hike for consumers, but has also been fiscally counter-productive.

After creating this problem, the government of India now seems to leave the entire matter to the states in the name of decentralisation in procurement and distribution. The real problem here will be with respect to the states where certain essential items are genuinely scarce in supply. Then these states will be left in a near-anarchic situation to get into unhealthy competition with one another in reaching the source of supply, driving the price levels further. We, therefore, strongly oppose the government of India’s withdrawing from its nationally responsible organising role in maintaining the PDS with appropriate subsidy not only for BPL population, but also an optimal, though reudced, subsidy for APL population for PDS.

It is relevant to mention in this context that the high-level committee appointed by the prime minister on long-term grain policy, headed by Professor Abhijit Sen, former chairman of the commission for Agricultural Costs and Prices, has reportedly recommended in strong terms in its Interim report, for strengthening and not withdrawal, of public distribution system from the national level. The committee has recommended that CIP should be fixed at 50 per cent of the economic cost for the BPL and 75 per cent of the economic cost for the APL population, and suggested a reduction of 25 per cent in the CIP of foodgrains for APL population, for better off-take, and improved stock and fiscal management.

In view of the above points and the recommendations of the Interim Report of this High-Level Committee, we strongly feel that no decision on withdrawal by the government of India from the centralised management of PDS be taken in this conference. After obtaining the Final Report of the High Level Committee, its recommendations may be seriously discussed with the states before taking any hurried decision on a matter which is so vitally important for all the states.

Agenda Item No 5 : Impact of WTO on Indian Agriculture.

The government of West Bengal has strong reservations about the signing of Agreement on Agriculture (AOA) under WTO. "Agriculture" is included as item 14 in the state list under Schedule VII of the Constitution of India. Since agriculture is a state subject, all agreements, legislation's etc, are within the exclusive domain of the state government's. It is totally unacceptable to us that the government of India had signed the AOA under WTO on such an important policy issue like agriculture without first arriving at a consensus among the state governments.

The contents of AOA, signed by the government of India, will have far-reaching consequences in distorting the overall cropping pattern in the country. Even today more than 70 per cent of India’s population live in the rural areas where agriculture is the primary occupation. Food security of the country is one of our major concerns and indiscriminate import and export of agricultural produce on the pretext of gaining greater market access for our agricultural produce, will definitely jeopardise the food security of the country as well as the interest of the major foodgrain producing states. Consequently, both the rural areas and the urban and semi-urban areas of the country will be adversely affected.

By the recent declaration of Exim Policy, the government of India has withdrawn QRs in respect of some 750 odd items including agricultural commodities and aggravated the situation further. It is extremely difficult to restrict import of major agricultural commodities merely by way of tariffication. This process of indiscriminate liberalisation is already showing its disastrous consequences in terms of adverse effect on remunerative prices for the farmers. Unless the entire decision is reviewed and stopped, the "negative" multiplier effect in terms of adverse effects on not only agricultural growth, but also on the overall growth of the economy will be enormous, with drastic rise in the rate of unemployment.

We strongly demand that the government of India should not proceed with this withdrawal of QRs at all, and immediately set up a Committee with the prime minister as the chairman, and chief ministers of all the states as members to review the entire issues on WTO, with respect to agriculture, before taking any action in the sphere of agriculture in relation to WTO. We demand a similar review of other issues in relation to WTO in terms of this High Level Committee of the prime minister and the chief ministers as well.

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