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Before you listen to this episode of The Scene and the Unseen, I have a recommendation for
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Do check out Pullia Baazi, hosted by Saurabh Chandra and Pranay Kutasane, two really good
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Kickass podcast in Hindi, it's amazing.
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For someone not familiar with public policy or economics, the hardest subject to understand
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All of us know that there is a crisis in agriculture.
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All of us know that this crisis has been there for decades, regardless of which political
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party has been in power.
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But when we get down to the details of what is wrong and what we can do about it, all
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the intuitive, seemingly common sense solutions turn out to be wrong.
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Most of the interventions that one thinks of, well-intentioned interventions, interventions
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that aim to help farmers, actually hurt farmers instead.
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Agriculture in India has been destroyed by the tyranny of good intentions and the ubiquity
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of unintended consequences.
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That makes it a subject that more than any other fits this podcast title of The Scene
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Welcome to The Scene and the Unseen, our weekly podcast on economics, politics and behavioral
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Please welcome your host, Amit Verma.
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Welcome to The Scene and the Unseen.
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My subject for today is Indian agriculture, one that I've written a lot about over the
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years and I've also done a few episodes of The Scene and the Unseen on different aspects
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The most popular of them was one I did in Hindi with Gunwant Patil, a farmer leader
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of the Shethkari Sanghatana, and all of these will be linked from the show notes.
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But I wanted to do a comprehensive one in English that looks into all the different
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aspects of agriculture in India and lays bare the many ways in which the state has been
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making our farmers suffer for over seven decades.
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My guests today are two dear friends of mine who have been writing about this subject for
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Varun Mitra and Kumar Anand have written many columns and op-eds on this subject, some for
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me when I was editor of Pragati.
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The best pieces will be linked from the show notes.
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They've both been guests on the show before and I'm very pleased to invite them back
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But before we get to our conversation, let's take a quick commercial break.
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Did you know that Parsis in Mumbai, instead of being left at the Tower of Silence after
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they die, are now cremated?
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Because a cow fell sick in the early 1990s.
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Did you know that the smog in Delhi is caused by something that farmers in Punjab do and
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that there's no way to stop them?
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Did you know that there wasn't one gas tragedy in Bhopal but three?
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One of them was seen but two were unseen.
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Did you know that many well-intentioned government policies hurt the people they're supposed
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Why was demonetization a bad idea?
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How should GST have been implemented?
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Why are all our politicians so corrupt when not all of them are bad people?
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I'm Amit Verma and in my weekly podcast, The Seen and the Unseen, I take a shot at answering
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all these questions and many more.
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I aim to go beyond the seen and show you the unseen effects of public policy and private
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I speak to experts on economics, political philosophy, cognitive neuroscience and constitutional
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law so that the insights can blow not only my mind but also yours.
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The Seen and the Unseen releases every Monday.
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So do check out the archives and follow the show at seenunseen.in.
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You can also subscribe to The Seen and the Unseen on whatever podcast app you happen
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Varun, welcome to The Seen and the Unseen.
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Kumar, welcome back to The Seen and the Unseen.
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Varun, you know, before we start going sort of point by point about all the, you know,
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one, two, three, four, five, six, seven, eight, nine, ten things wrong with agriculture
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and many more than that actually, I'd like to ask you first to talk about your personal
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journey on the subject of Indian agriculture because, which is relevant to the modern time
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because you're someone who's been involved in this field not just as a writer and a columnist,
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but also as someone who's been on the ground, who's agitated with farmers and so on since
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And you were also deeply involved with the first BT Cotton Satyagraha of the 1990s.
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And you're sort of involved with the current one as well.
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Take me through the history of that.
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What was at stake there?
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And how, how did you get interested in agriculture in the first place?
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I think one was because it was in the mid nineties, India was reforming liberalization
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and India was changing rapidly and the expectations were very high.
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And one issue that came up exactly at that point in the early nineties was the entry
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And that was a highly and hotly contentious debate for six, seven years.
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And coming from the perspective of free market, free trade, of course, any opening that the
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WTO might bring into trade was attractive to us.
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But what attracted me particularly to agriculture was not just because agriculture, of course,
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at that time kind of kept out of WTO, but Sharad Joshi, who was the farmer's leader
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of the Shedkari and the founder of Shedkari Sangatana.
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He was one of India's foremost public figures who actually campaigned at the grassroots
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on WTO and opening trade.
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And in fact, his demand was that agriculture should be included so that agriculture becomes
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a normal trading issue.
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So that kind of first triggered my interest into understanding how does agriculture play
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out in this global context of reforms and liberalization, because no one else was talking
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Everyone thought that agriculture is to be kept out and separate.
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We discussed WTO as trade and other goods and things.
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In fact, as both Kumar and you have pointed out, when we liberalized in 91, we liberalized
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various parts of the economy, but not agriculture at all.
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So agriculture was completely set aside.
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And here was Sharad Joshi speaking to farmers, talking to WTO officials, including Dunkle
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when the Dunkle draft was on the ground.
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That trade must be reformed and agriculture must be a significant part of that.
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So that was my first personal introduction to agriculture, because I really had no background
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But a few years later, and after WTO began and all that, the issue that really attracted
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me and again due to Sharad Joshi, because we experienced, particularly in Gujarat, a
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phenomenon where farmers were allegedly planting an unapproved GM cotton, BT cotton.
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They didn't even know it was BT, because the company that released it didn't claim that
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They just found it to be that whatever it was, it did wonders to fight pests.
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And so in a year when there was a severe pest attack, these other set of farmers found that
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their crops were standing.
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And that triggered it all.
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That was in late 1990s, maybe 1998, 1999.
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That triggered a huge upheaval, both in the policy segments in Delhi, particularly, and
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also at the popular farmers level, because here was a crop that was unapproved.
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It was released without authorization by a company who didn't have the IPR.
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So it had the most messiest and murkiest beginning one could think of.
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But here were farmers who really thought that it was useful.
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And to the extent, and that was to my kind of first introduction to grassroots, to be
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able to see farmers from Maharashtra, Punjab, Haryana come down to Gujarat just to collect
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few pots of cotton so that they can extract the seeds and try it out in their farms later
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So that kind of triggered my interest that how is it people or farmers whom we generally
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think of as very inertia-bound, difficult to change, live in situations that are very
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challenging, not really integrated and connected to the rest of the world, yet learned just
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by sheer word of mouth that here was something different and something worth trying.
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That kind of interested me, this episode, because it showed me for the first time that
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policy, advocacy need not be from the ivory tars in which I lived.
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You know, that the advocacy and the policy has relevance on the ground, and if the stakeholders
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move, things can change rapidly.
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And that's exactly what happened in 2002, that in a campaign, in an intense campaign
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which barely lasted 10-15 days in March 2002, by 26th March, the Government of India had
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completely reversed its decision and approved the first GM cotton.
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I'll quickly give some context for my listeners and kind of bring them to speed on what happened
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and the context really is that, you know, all the things that were wrong with Indian
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agriculture, we'll of course discuss through this episode, but essentially what happened
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in the late 1970s was this leader called Sharad Joshi, who used to be a civil servant and
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then he had gone abroad and then he came back to India and he started farming.
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And in the late 1970s, he was the first farmer leader to, number one, correctly diagnose
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what the problems of Indian agriculture were beyond the immediate proximate problems.
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What were the deeper structural problems?
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And number two, he built a popular movement on the basis of that, which attracted lakhs
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In fact, at one point in time, he even had a rally for female farmers where more than
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a lakh female farmers turned up, which was a first of its kind.
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And Sharad Joshi's collected writings on agriculture are available in a book called Down to Earth.
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And you know, I think you might agree with me on this, you guys might agree with me that,
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you know, people often talk about, where are the great leaders after independence?
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All our great leaders were pre-independence, Yogan, Nehru, Patel, blah, blah, blah.
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But if I look through the 20th century and I think of one Indian political leader I really
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admire unreservedly is Sharad Joshi.
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He wasn't a political leader as such, but yeah, I mean, he was unique in the sense that
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particularly at a time when there was hardly anyone in India, except a few intellectuals
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who would bat for reforms and liberalization and a market-oriented direction for India.
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He was the only one who took these ideas to the masses.
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There is no other leader who took the ideas to the masses, Manmohan Singh surely didn't.
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And all the others who followed Manmohan Singh and the reforms in 1991, no one took it to
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And Sharad Joshi actually showed the potential if you take the ideas to the people.
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And to sort of then come from there to the whole GM thing.
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The fundamental thing that Sharad Joshi complained about is that farmers are shackled by the
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state in every way possible, which other citizens necessarily aren't.
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Other citizens were also shackled, especially before 1991, but to a lesser extent and to
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And we'll talk about all of those ways through the episode, but one of those ways obviously
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was freedom of choice, that farmers weren't allowed to choose the kind of seeds that they
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What was happening in the 1990s was that there was a crisis in cotton farming where a particular
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kind of pest called the bollworm was destroying cotton crops all across the country.
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And they were failing and farmers and everybody, essentially when it comes to livelihood becomes
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inventive, creative, they look for ways out.
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And BT cotton at that time was banned.
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And one can understand some of the suspicion of it, even though BT cotton was sort of GMO
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cotton, which was used elsewhere in the world and absolutely no side effects anywhere had
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Whatever, at that point it was banned, but these farmers said, we don't care if there's
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a law against it, if that will save us, we'll do it.
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And a small group of farmers in Gujarat got hold of BT cotton seeds from the black market
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And what happened in 2002, at the start of 2002, is that all cotton crops in Gujarat
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failed except the 10,000 hectares that had BT cotton.
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So get it, every cotton farmer has failed, the bollworms have destroyed them, except
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these guys that use these particular seeds.
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What is the government's response to this?
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The government's response to this is to turn to these farmers who successfully kept their
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crops alive and tell them, you broke the law, your crops must be destroyed.
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And at this point, the Shedkari Sangat and I in Maharashtra decided that they are going
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to stand with their Gujarat colleagues and along with farmers from elsewhere, thousands
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of them started a satyagraha, mostly outside the eyes of the mainstream media, went to
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Gujarat, squatted on the fields and said, no, we will not allow you to destroy these
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crops, lobbied the governments.
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And that particular government, the Vajpayee government at the time, eventually relented
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and allowed BT cotton to be planted.
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Yeah, the farmers had actually, that week in the last week of March, farmers from Gujarat,
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Maharashtra, Punjab, Haryana actually came to Delhi with Sharad Joshi, with bales of
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cotton which was harvested in November, December, the previous year, and which were BT.
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And they went to Ajit Singh, who was then agriculture minister, with all the TV cameras
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Ajit Singh hesitated even to touch the cotton because of the so-called fear, firstly, it
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was illegal and secondly, he thought his jeans will get modified.
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So it was, you know, that was an incredible, incredible experience in terms of bringing
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about policy change completely outside the ivory towers.
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In fact, which virtually shook the ivory towers.
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So to me, that was a huge learning experience, although it took more than 10, 15 years for
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me for this to actually seep down as to what it actually meant here.
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And I've seen a 1999, I think, Doordarshan clip of a press conference of the Shedkari
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Sanghatana over there, and there you, you are at the mic.
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Varun has a lot of those clips, by the way, and especially I like the one where Ajit Singh
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literally is moving away from, you know.
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I haven't seen that one.
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Somewhere to link for my…
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It's not online, but these are, you know, these were all video archival which we got,
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so not good quality, but you can still see.
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So to bring you up to the present day, I'll give you some more context.
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After the ban on BT cotton was lifted, over 90% of Indian cotton farmers today use BT
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And because of that, India has become the world's largest producer of cotton, which
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it wasn't ahead then, but we've moved ahead of China.
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According to Ashok Gulati, who's an expert on agriculture, the leading expert, our gains
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from BT cotton have been to the effect of $67 billion in the year since, and both from
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higher exports and import savings.
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And cotton farmers' income has actually doubled during this time.
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Second, what I want to point out is that GMO crops have become standard across the world.
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190 million hectares of GMO crops have been planted worldwide.
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GMO foods are accepted in 67 countries.
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And the third thing I'd like to point out is that the science on this is completely
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In all these years, billions of meals, millions of people who have eaten GMO food, there have
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been zero harmful side effects.
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A couple of years ago, 100 Nobel laureates signed a petition asserting that GMO foods
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are safe and blasting the anti-science NGOs that stood in the way of progress.
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And obviously, environmental NGOs will often have their own incentives to get the funding
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coming in and to keep going on over these causes.
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But the science on this is pretty much as settled as it is on, say, climate change,
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But politics is not, and we are now in the middle of another Satyagraha.
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So tell me a bit about that, Varun.
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Yeah, I mean, this issue came up because last 10 years after the original BT cotton was
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approved in 2002, the second generation with two genes, it was approved in 2006.
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So now it's 12 years and no more new kind of seeds have been introduced, new kind of
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BT cotton seeds have been introduced.
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12 years is a long time for these kind of technologies to last.
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Our mobiles, which are information-based, needs software updates every few months, every
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And the world over in cotton, fourth and fifth generation BT has already entered the market,
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whereas we are stuck with the second generation.
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As a result, the pest problem started growing in the last few years.
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The production has stagnated over the last few years.
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And what some farmers found, perhaps it started in 2015-16, but it was discovered in 2017
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officially by the government of India when they did a field survey in the second half
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of 2017 that 15% of cotton in Maharashtra, Gujarat, Andhra Pradesh, Telangana, which
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is the kind of Maharashtra is the largest cotton growing state in India.
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And 9% in Punjab, Haryana, were already a third generation BT cotton, which is called
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It's a kind of BT that in addition to pest control, it provides the cotton plant protection
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from herbicide so that the herbicide could be sprayed on the ground to kill the weeds
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because the weeds compete with the plant for the nutrition and the moisture and everything
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else and reduces the productivity and the yield of the main plant, that's cotton.
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And the cost of doing it, and it has been done traditionally by manual weeding.
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It is very time-consuming and in the last five, seven years, it has become extremely expensive because
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labor is in short supply in rural India, particularly labor when you need it, because every farmer
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needs their field to be weeded around the same time, so it's almost impossible to find
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And because of this labor cost in cotton, which in any case is high, which is about
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40%, and this weeding was a significant component to it, and some farmers were actually quitting
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cotton because of this labor cost.
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So the herbicide tolerant was introduced about five, six years ago, and today across the
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world, 60% of cotton is herbicide tolerant, whereas in India, it's not.
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So in 2017, there were rumors that maybe some companies have released it without approval
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or without acknowledging it, but in 2017, Government of India, Department of Biotechnology
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They haven't released the report yet, but all the media reports indicated that 15% of
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cotton in Maharashtra will already be HDBT.
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So the question was that if so many farmers across India in the cotton belt have already
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tried out the technology, then what is it that needs to be done further to get it approved?
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And there were two kinds of challenges, particularly regarding HDBT.
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This was under trial in India by Michael Monsanto as a patented technology.
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But because of two other issues that came up over the last few years, one was the price
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control and the second, that is Government of India, on the one hand, didn't want the
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farmers to have access to genetically modified cotton.
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On the other hand, wanted farmers to have more access to genetically modified cotton,
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therefore wanted to reduce the royalty and the fees on cotton.
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So that was one part and the second part was that there was a court case, which actually
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went to the extent of questioning the validity of IP intellectual property on genetically
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These two decisions, I think, together in 2016 led to companies withdraw their applications
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in case of HDBT, which means that today we have a situation where there is no company
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that has applied for approval and the farmers are already planting it.
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And therefore the government can neither approve it because there's no application, nor can
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they endorse what is already being planted.
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So it is another mess of a different kind than the one we witnessed in 2002 and it is
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in that context that the satyagraha came up.
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The satyagraha came up because here were the stakeholders whose livelihood was at stake.
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They, in Maharashtra itself, probably a few lakh, at least two lakh farmers have planted
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There can't be a larger field trial than that.
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These farmers are planting it on their own fields, taking all the risks on their own.
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They're not asking for any protection from anybody, neither did they seek price control
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on seeds, which in any case is just 5% or less for the total cost of farming cotton.
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So these farmers were taking risks on their own property for a technology which they believed
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was useful in the current context.
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And therefore the question was, why should they do it surreptitiously?
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Why should a segment of a population whose extremely resilient survives in extremely
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difficult conditions faces risks at a scale and frequency that none of us would ever imagine
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be in this situation of being told that what they're doing is illegal and therefore they
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even went to the extent of Christening, naming this cotton as Chor BT.
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So our intention was how do we turn this round?
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How do we turn the farmers from feeling ashamed of doing something which is legitimate and
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which is fair, they're doing it at their own cost and trying something new, into something
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that they could be proud of.
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And the satyagraha was an attempt to show to the farmers that this is not you who should
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be ashamed, it's the policymakers and the politicians who are preventing you, they should
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be ashamed for creating this situation.
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So the satyagraha was an outcome of that transition, that how do we get to farmers to recognize
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that what they're aiming for is something to be really proud of, the country should
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be proud of, that here are the most vulnerable sections of population willing to take this
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And here's the other who has no stake in cotton, no stake in agriculture, but have full authority
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and claim to have the authority to decide whether the farmer should do it or not.
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So yeah, so the satyagraha came about just primarily to instill in the farmers a sense
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of pride and dignity in what they're doing.
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And it should also honestly instill in many elites a sense of shame, because you find
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a lot of elites having opinions about what farmers should do or should not do, when the
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fact is that look, imagine if, like I am a writer, if the government was to tell me that
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laptops are banned, you cannot have the latest technology, you must write your pieces by
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hand and you must deliver it or send it by snail mail to your editor in Delhi.
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You know, how would that be?
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How would it be if they were to say, no, you can't use air conditioners or even fans, you
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know, we have the freedom of choice to buy whatever technology we need, either for our
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comfort or for our livelihood.
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But our farmers who are already oppressed in a hundred different ways, which we will
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discuss, and who are really the poorest of the poor, and they're not even given that
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freedom of choice, that what should I invest what little there is of my savings in and
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to grow whatever I want on my land.
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And that's kind of scandalous.
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And this is, this is sort of an ongoing thing right now, right?
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Yeah, it started in June in Akola district in Maharashtra, and now it's spread beyond
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It's covered almost whole of the cotton regions of Maharashtra.
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Crops have come out in a way we never expected them to come out.
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And we shall see how, where, where we progress, progress with this campaign, because like
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I said, HDBT is in a, in a more difficult situation because of its context.
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But there are other GM crops which might get approved, BT Brinjal being one, where virtually
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everything it has, it has, it has cleared all the regulatory steps that it needed to
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be, but politics held it back.
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I think BT Brinjal was passed in 2009, if I remember, and it was developed by Mahiko,
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which is a Maharashtra based company.
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And it's already been planted in a lot of land in Bangladesh, and they're doing very
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But over here it's not allowed.
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And it's been 10 years.
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And it's been 10 years.
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So it's amazing, and the same thing's happening with, with GM Mustard, whereas we are importing
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GM canola oil from Canada.
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And the technology that is being used in GM Mustard by Delhi University, Professor Deepak
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Pantel is the same technology that they used in canola.
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So why is it that we can import oil, edible oil, developed from canola in Canada, and
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not allow Indian farmers who have been growing mustard for generations, for centuries, have
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a new kind, new opportunity to improve their production, and consumers have more choice
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in terms of, and more, and a reasonable price in terms of, and better quality for, in terms
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of what the mustard oil could bring, could do to them.
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So it's, it's, this also has cleared virtually all regulatory steps.
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But every time it came up before the final regulatory body, somebody would come up and
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say that we need further tests.
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And I think, I hope we'll get a chance to discuss this whole issue of regulation and
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testing and underlying so-called principle, the precautionary principle and the real mess
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Well, let's talk about it now.
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And first of all, the thing to note about genetically modified foods is that all foods
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are genetically modified.
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You know, that that's the whole nature through which foods and crops evolve.
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All human beings are genetically modified.
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We are all genetically modified.
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It's just that now technology has advanced to the stage that you can actually control
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the process and modify them in specific ways, which increase productivity.
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And you know, one of the things about the precautionary principle, like Taleb keeps
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going on about the precautionary principle and blah, blah, is that number one has been
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more than 30 years and as Kumar pointed out recently, you know, billions of meals have
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been served with GMO food is completely safe.
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But my fundamental problem apart from that with the precautionary principle is the precautionary
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principle, for example, is also often used to dis say nuclear power or artificial intelligence.
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And my point in all those cases is, and it applies more in the context of GMO, is that
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precautionary principle is all well and good.
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But when applying the precautionary principle and stopping the technology will cause humanitarian
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damage, especially to the scale of what we would see in India.
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Had it not been for, you know, BT cotton earlier and HD BT cotton now, then that humanitarian
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cost is too large to ignore.
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And the precautionary principle can often be taken too far.
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I think, you know, it's more than the humanitarian cost, which could be, you know, a cost benefit
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The precautionary principle, in my view, is a fundamental challenge to human civilization
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as it has grown in the last 2000 years, because all technology could be stopped using the
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precautionary principle.
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You know, yeah, that is because what it is saying is that unless you are 100% sure that
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the technology is fine, you shouldn't go ahead with it.
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The question is, this is a reversal of everything we understand about science as such.
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Science grows precisely because it is not perfect.
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That is, a step today enables you to take the next step tomorrow.
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So every step today would have its limitations.
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And that's the nature of science.
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Precautionary principle is challenging and questioning the very science that they're
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You know, that in the name of science, they're destroying the fundamental aspect of science,
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which is built on a step by step progression, recognizing that every step will carry with
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it a degree of uncertainty and risk.
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And therefore, the next step is needed precisely because of that.
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The precautionary principle is challenging the very, very fundamental premise on which
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science works, because science doesn't work on certainty.
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Science works on uncertainty.
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And the second thing is, which is, in fact, that's why I think it should not be called
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even a principle, because just think of it.
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If we assume that we want a principle that will make us completely safe, think of the
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most unsafe thing that we could probably think of.
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Every human being is potentially a criminal, which would mean under a precautionary principle,
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every human being should be either have a police or be in a prison till they can prove
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To me, this is a reversal of 2000 years of jurisprudence, which held that man is innocent
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Well, recently, the Modi government did pass something which I retweeted, where they are
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now saying that the central government can declare anyone they feel like a terrorist
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and the burden of proof is not on the state to prove him guilty, but on the person to
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And as no one can prove a negative, if the government says you're a terrorist, you're
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But it didn't happen today.
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It didn't happen today.
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This has been happening since the 1970s, 80s, particularly, when the terrorism acts, the
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Tadas and all the rest came up.
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It happened with the dowry issue, where the onus of proof shifted.
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So these things didn't happen overnight.
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But today, the culmination is that this is becoming obvious.
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It's not just the farmers that are affected.
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This is an underlying premise that's going to threaten the civilization as we know it
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And we'll talk about the political economy of this near the end of the episode when I
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essentially want to talk about the political economy of getting any reform done in agriculture,
#
which is very complicated and all encompassing.
#
And you've been patiently listening to all of this so far, Kumar, and you and I have discussed
#
how it's a joy to just sit and listen to Barun talk about agriculture because there's so
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For the rest of the recording, we'll just talk to Barun.
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There's so much passion and insight that one gets from Barunda.
#
Kumar, what I'd like to sort of ask you to elaborate on is that you had also written
#
a piece for Pragati when I was editing there, very eloquently pointing out how farmers are
#
denied markets, free markets, the ability to trade freely in every area of their existence
#
from input to outputs, all of it.
#
Can we start going through the different ways in which they're denied markets and what the
#
Actually, it was much more eloquently summarized by Barun himself.
#
So various kind of controls which do exist.
#
So I used to deliver a talk earlier on after the global financial crisis in 2008 and used
#
to have this opening kind of query is which is the most regulated industry.
#
And of course, it comes to banking and finance.
#
But having looked into agriculture last few years, I'm pretty much convinced that probably
#
much more than banking and finance, agriculture, every aspect of it is controlled.
#
So the most regulated and controlled industry in today is definitely agriculture.
#
So all aspects of the trade that you can think of, it is controlled and Barun, please chip
#
in wherever you can, you want.
#
So for example, capital, the biggest capital that the farmer has, probably the only capital
#
in some sense is the land.
#
So every aspect of that freedom to buy, sell, rent or lease land is heavily controlled.
#
And those laws, given having put them into the ninth schedule, you can't go and talk
#
to them or get it challenged in the Supreme Court.
#
But now there is a PIL, which probably will be taken up and reversed.
#
The second aspect is credit control.
#
So because the capital is under control and property rights are not very secure, in our
#
case, the capitalization of the only asset and access to credit becomes circumspect.
#
So one story that we have was in Maharashtra, how the land banks, which were shut down,
#
was because land as a collateral was taken by the land banks who then used to give credit
#
And because the land banks are not allowed, in case loans go bad, to dispose of those
#
land and therefore make their profits or, as the normal trade would happen, make their
#
So therefore all the land banks have gone bust.
#
But not just because they couldn't dispose.
#
How many farmers in India are in a position to buy extra land?
#
So who's going to buy the land even if the banks were allowed to sell it?
#
Particularly when you have the additional component that only farmers can buy farmland.
#
So let's actually focus on that.
#
I'd done an episode a long time back with Shruti Rajgopalan on the right to property,
#
where she elaborated on that.
#
And I've done a separate episode on this as well.
#
I think the very first episode of the Seen in the Unseen was in agriculture.
#
And this crazy law that we've been reading against for a long time is that farmers can't
#
sell agricultural land for non-agricultural purposes.
#
Now what this basically means is that unless you get a land use certificate change from
#
the state, and what this basically means is that if a farmer can only sell a piece of
#
land for agricultural purposes, its value is something because the demand is that much
#
But the moment the land use certificate changes and the demand goes up, the price can shoot
#
up by as much as 40 times.
#
So for example, if your piece of land is worth 2 lakhs today, it can be worth 80 lakhs if
#
it's opened up for industries to buy.
#
And typically how nations progress is like more than 50% of the Indian population depends
#
on agriculture for a living.
#
This figure is in single figure percentages across the world.
#
I think in the US it's between 4 to 8%, in Europe it's single figure percentages.
#
And what happened is that agricultural productivity goes up, less people are employed, and factories
#
open everywhere, industries open.
#
Now there are different reasons for which we haven't had our manufacturing revolution,
#
a variety of different laws and restrictions and constraints there as well.
#
But one of them of course is that you can't sell agricultural land for non-agricultural
#
And as Shruti pointed out in her episode with me, this has also become a big scam, where
#
often what will happen is that the state will acquire land from the farmer when the land
#
can only be used for agricultural purposes.
#
And they'll change the land use certificate and give it to an industrialist and the land
#
Like apparently this was allegedly what the whole Robert Wadra scam for a few years was
#
about, that he managed to acquire a lot of agricultural land, got the land use certificate
#
changed and sold it for many multiples of what it was worth.
#
I think the number I've heard from everyone is that about 1% of GDP is what the money
#
gets made by changing just the land use, if I'm not wrong.
#
That's an unbelievably large amount and which is why we have an artificial scarcity in the
#
sense that, you know, every survey in the last 10, 15 years have said that farmers want
#
They are trapped in agriculture.
#
Yeah, they're trapped in agriculture.
#
In fact, in state after state, not even, not just that they're restricted in selling, they're
#
restricted from becoming landless.
#
That is, if a farmer is registered, recognized as per the land record as a farmer, even if
#
he can sell part of his land, he can never sell all of his land and become landless.
#
Which means that that exit policy that the industry and all the rest talks about, they
#
don't realize that the farmers are in a position where they can't even exit when they want
#
to and 70% of farmers, particularly children of farmers, do not want to continue in agriculture.
#
So if they can't exit, where's the capital that should have come to them in order to
#
make the transition going to be available from?
#
Like firstly, they can't sell the land for non-agricultural purposes.
#
Secondly, they're not allowed to sell it to begin with because they can't exit.
#
Thirdly, even if they could sell it, they would get a fraction of the price unless the
#
land use certificate got changed, which basically ain't going to happen.
#
There's no market for it.
#
That is, there are hardly a part of India where there are farmers willing and able to
#
buy additional farmland.
#
They would rather lease it informally rather than put in capital to buy it in their name.
#
So what is therefore happening is that the value of this land is what Hernando de Soto
#
would call debt capital, that the value of this land is completely wasted, whereas a
#
farmer could have taken some of this value, invested it elsewhere, reformed his own life.
#
And as both of you have spoken about before, many of the recent jobs agitations really
#
arise in a sense out of this agricultural crisis, whether it's the party darts of Gujarat
#
or the jarts of Haryana, who are basically landowning costs.
#
And one of the reasons there is a jobs crisis among them is that as generations go by, each
#
plot of land gets divided further and further and further till it is completely unsustainable.
#
And those farmers aren't allowed to even sell the land and exit.
#
And if they were allowed to, they could make some money off it and invest it in a better
#
However, they do that, but they can't even do that.
#
So ultimately you have these political agitations on the streets in these cases taking the form
#
of demands for reservation of jobs.
#
And actually, Kumar was just mentioning about the land banks going bust.
#
You can actually see, apart from the land banks, that the structure of agricultural
#
credit, agricultural loan has changed in the last 30 years.
#
In the 80s, the largest chunk of agricultural credit came from what they would say land
#
development, that is long-term loans for development of land, which was primarily based on credit
#
Today, it's completely reversed from two-thirds of land development loan.
#
It's now two-thirds is on crop loan, which is shorter, which means it is extremely risky
#
because crop is a cycle of three, four, five, six months, and it can fail.
#
Therefore, whereas the credit, two-thirds of the credit is in this risky venture, risky
#
aspect of agriculture, rather than in the capital aspect of agriculture, where it is
#
completely stable, that is on land itself.
#
And essentially, in this way, farmers are forced to gamble, whereas in another episode
#
I did with Kartik Shashidhar on futures markets in agriculture, he wrote about how the state
#
has banned futures markets in agriculture for farmers, and that is actually a great
#
way where they could hedge some of the risk.
#
And my very first episode of The Scene in the Unseen was with Pavan Srinath and Kartik
#
on corporatization of agriculture.
#
And the point they made was another thing the state doesn't allow is corporatization
#
of agriculture in the sense that because our policymakers decades ago back in the day used
#
to view companies with distrust and corporations with distrust, they didn't want large corporations
#
which take over lots and lots of farmland.
#
But what that forces you to do, by banning corporatization, what it forces you to do
#
is every farmer now has to have two skills.
#
One is farming, one is entrepreneurship.
#
And to master two skills is very difficult, to force every single small farmer to also
#
simultaneously be an entrepreneur is unfair, it denies farmers the advantages of scale
#
Of specialization, division of labor, all of those things.
#
But you know it has an additional element to it, that is now the law has in a way been
#
changed and there were the cooperatives which were supposed to be a farmer's way to scale.
#
Now there are, last few years particularly, there is this farmer producer organizations
#
which in law can be a company or a society.
#
But the challenge is, and which is where the key is, and the point that we haven't discussed
#
so far, that the land issue is not just about the sale part of it, there is a ceiling aspect.
#
Unlike every other sector of the economy where the first steps of liberalization was to lift
#
the ceiling on capital, you know we had a famous MRTPC etc which were precisely to keep
#
a ceiling on the capital and we knew the price the country paid.
#
Farmers are being told in virtually every state that only so much land is what you can
#
Which means that even if there are talented farmers who are entrepreneurial, and I'm sure
#
there are many given these numbers, they can't because legally they cannot acquire land beyond
#
the limit that the state has set in their area.
#
This is a law that doesn't exist for any other sector.
#
We have corporate India raising money from across the world, either debt or equity.
#
The farmer can't even raise it on the land on which he is because firstly his land has
#
a value which has been undermined and secondly there's a scale that he's asked not to cross.
#
So there's a Laxman Lekha on land ceiling.
#
After all the private sector going abroad and borrowing everywhere, government of India
#
also wanted to go abroad, everyone wanted to borrow except for farmers.
#
I mean this is the most ridiculous situation that we have created, handicapped, I mean
#
handicapped in the sense of handicapping their capital.
#
I mean there can't be a worse form of injustice and inefficiency that we have caused in agriculture
#
only because of this land related issues, both in terms of the valuation of it as well
#
as in terms of land ceiling, which means that you can't grow, which means that there can't
#
be an entrepreneurial farmer who can hope to acquire a thousand hectares or a hundred
#
And I mean the tragedy of it is so all-encompassing, there are no, you know there's no light at
#
the end of the tunnel, there's no silver lining to this cloud, forgive the cliches, because
#
you know a farmer can't exit farming, a farmer can't grow in farming and while he is within
#
farming he can't capitalize on the value of his land because that has artificially been
#
kept low with a stupid restriction.
#
What is the poor fellow to do?
#
Could things get worse?
#
Well yes, they are much, much worse and we'll come to that after the short commercial break.
#
And let us know what you think about that.
#
This week on Cyrus Says, it's a podcast crossover as hosts of our new show, Gay BCD Farhad Karkaria
#
and Sunetro Lairi joined Cyrus to talk about the meaning of being queer, how to defy labels
#
and how their podcast came about.
#
Also speaking of Gay BCD, Farhad and Sunetro in their show delve into the family stories
#
and recalling what it was like to navigate queerness as a kid.
#
On Paisa Vaisa, Anupam is joined by two guests, Ankur Chaudhary and Swapnil Bhaskar.
#
They're the co-founders of Goalwise, they discuss the new features at Goalwise and transitioning
#
from regular to direct mutual funds.
#
On Golgappa, Tripti is joined by Mahesh Ane, award-winning cinematographer who is known
#
for his work on Sudesh.
#
He talks about the ups and downs that he encountered along the way in the film industry.
#
On Ganadantra, Alok and Saru are joined by Smitaanar Saikia of Flame University, Pune
#
to talk about the history and impact of the NRC list and how it has caused marginalization
#
On another crossover, this time on Whatta Playout, Mikhail and Siddhartha are joined
#
by Sivaram Parmeswaran, the host of the podcast Football Shootball.
#
They talk about the thrill of watching football and following a club.
#
On Mr. and Mrs. Binge, Janice and Aniruddh look back at the best and worst moments of
#
On Advertising is Dead, Varun is joined by singer-songwriter Ankur Chaudhary who talks
#
about how artists find new forms of expression and monetize their work.
#
And with that, let's get you on with your show.
#
Welcome back to The Scene in the Unseen.
#
I'm chatting with Varun Mitra and Kumar Anand on Indian agriculture and we've just spoken
#
about all the restrictions on land.
#
The farmer can't exit, the farmer can't grow, the farmer can't capitalize on the value of
#
What is the farmer to do?
#
Can he at least buy all the inputs that he needs for his business from where he wants
#
Kumar, let me turn to you with that question.
#
The input after capital and credit, every input that you can think of is of course heavily
#
So think of water, seed, fertilizer, electricity, labor and we can take each one by one.
#
So in case of water, the major water scarcity problem around the country that we are seeing
#
today, and I remember listening to Ashok Gulati's memorial lecture on Sada Joshi at the Gokhale
#
Institute, I think last year it was, the inaugural lecture.
#
And that's what he said.
#
He had mentioned that how in case of sugarcane and in case of rice, particularly no one eats
#
rice in Punjab, but Punjab is the rice bowl of India in the sense and you produce mostly
#
most of the rice to be consumed in South India.
#
And the water table in Punjab has gone down, Punjab in Haryana has gone down significantly.
#
And therefore what Punjab exports is not rice, but it exports water.
#
And something similar you could say is about sugarcane in Maharashtra, where Maharashtra
#
being with all the subsidies that you grant for sugarcane to grow, what you are doing
#
is actually exporting again water or subsidizing the inefficient production of sugarcane.
#
And therefore when the push comes to serves, what you do to save a little bit of water
#
is ban IPL games in Maharashtra.
#
Yeah, in fact, it's kind of tragic that in the context of, for example, Punjab as you
#
said is arid, rice should not be grown on it because rice is water and incentive.
#
Now this is a classic example, which I'll take a brief detour to elaborate on what the
#
kind of unintended consequences that bad incentives can have.
#
In an arid place like Punjab, rice should not be grown, typically they'd be growing
#
Because they get free or hugely subsidized power and they can therefore use their borewells
#
to draw up groundwater and they can grow rice from there.
#
This leads number one to groundwater depletion.
#
But what this also leads to is when the, at the end of the rice season, when the rice
#
brand or whatever that the final byproduct of after the farming is left, yeah, that has
#
to be disposed of and the cheapest way to dispose of it is to burn it.
#
And when you burn it, what happens, the wind carries it to Delhi and exacerbates the pollution.
#
And that's one of the main causes for Delhi's bad pollution when it gets over a certain
#
You have the Himalayas on the other side, so it doesn't disperse.
#
So to a certain extent, one of the unintended consequences of free power to farmers in Punjab
#
is the pollution in Delhi.
#
And there's no way for the political economy to solve this because farmers are too important
#
to wood bank in Punjab.
#
So what can any Delhi government do?
#
Another unintended consequence of the same thing comes in Tamil Nadu, where recently
#
I read a figure that, you know, recently there's been talk of, oh, look at Chennai, look at
#
There's a water crisis.
#
People don't have water to drink.
#
And you have, you know, people talking about how city dwellers like people in Chennai should
#
Instead of taking a shower, you take a bucket bath or whatever.
#
But the fact is that that will do absolutely nothing.
#
That percentage of water, which is an everyday daily use of some four or 5%, 95% of the whole
#
water that is used as some figure like that in the nineties is used in farming and it's
#
used in farming again because of subsidized electricity and subsidized power and so on
#
and so forth, which is why India is today, like you correctly said, India is today the
#
biggest exporter of water in the world because this is all effectively what we are doing
#
is we export all these crops all over the place.
#
We're the biggest exporter of water in the world.
#
And when you think about the fact that we have such a huge water crisis growing in our
#
cities to be the biggest exporter of water in the world is not one statistic that we
#
Adam Smith clearly points out, you know, basically we are, like you rightly said, we are exporting
#
our wealth in that sense, you know, because doing things as inefficiently as possible
#
and the wonders of market, you know, specialization division, et cetera, we are just kind of foregone
#
So a friend of mine had said, you know, beautifully captured in one sentence, comparative advantage.
#
So who should be growing what, you know, it's left to the people and under the circumstances
#
that they that they trade, they figure out and it's do what you do best and trade for
#
But this is also really, you know, I mean, this issue, both in case of rice and sugar
#
cane is also related to the other element, which is price control.
#
The reason why Punjab and Haryana is growing rice, although historically, culturally, they
#
never grew rice, is one, like you said, the irrigation issue, the water issue, or the
#
power, the supply of subsidized electricity.
#
But the other is purchase.
#
If there were to be no MSP and if there were to be no FCI and such state bodies mandated
#
to purchase at the MSP, that is being set by the government, they wouldn't be growing
#
Tell us a bit about the MSP.
#
What's the history of the MSP?
#
It was supposed to be a support that is in case of distress.
#
So it was a well-intentioned support that we must make sure our farmers get a minimum
#
price for the crops and the government will pay.
#
So if the market is bad, it's okay, we'll pay somehow.
#
It has now become the maximum price that prevails in the market because in crops after crops,
#
particularly the crops that are procured, it's much higher than the market price.
#
And we have two dilemmas in this.
#
One is MSP has created this incentive for people to grow crops, which they never grew
#
in areas which it shouldn't have grown.
#
That's why they were never grown there.
#
And the procurement policy in those areas need not have privileged rice and wheat,
#
say Punjab and Haryana.
#
But there's a history to it in the sense Punjab and Haryana, where the areas where investment
#
in irrigation began with the Bhakra and all the irrigation projects after independence.
#
And India was pretty much starving at that point, which means that we had a ship-to-mouth
#
existence dependent on American supply.
#
And therefore food needed to be grown, so we incentivized farmers to grow more food
#
and therefore the irrigated lands that came into agriculture in Punjab and Haryana became
#
the first elements to do it.
#
So there is indeed a history to it, but what has happened since is simply our choice.
#
Because if we have this MSP policy, you are incentivizing farmers to grow more.
#
The moment you give that incentive, you have to then account for how much will you be able
#
So for instance, in rice and wheat, the government is barely buying 10-15% of the total production.
#
But that's still substantive because we are producing about 260-270 million tons of rice
#
and wheat, food grains particularly, every year.
#
So 10-15% is a very significant amount.
#
Secondly, we are announcing MSP for 24 odd crops.
#
The government is barely procuring six, which means we are telling farmers to grow more,
#
telling them a price at which the government will buy and then at the end of the day, neither
#
the government is not in a position to buy and farmers can't sell and they have an oversupply.
#
So we have caused a significant mismatch between supply and demand because of this misguided
#
incentive information that we are sending out every year, in fact, every cropping season.
#
And one of the lessons we learned from one of our heroes, Frederick Hayek, from his essay
#
The Use of Knowledge in Society is that central planning and price controls of this sort can
#
How does a society distribute its resources?
#
It happens all our knowledge is distributed, who wants what and how much, and all of that
#
is reflected in the price system.
#
So typically now what happens is that if in a particular area people want less tomatoes
#
and more potatoes, what will happen is that they'll be willing to pay more for potatoes,
#
the price of potatoes will go up, that will incentivize farmers elsewhere to make more
#
potatoes and fulfill their needs.
#
So you have one section of society fulfilling the needs of another section of society because
#
of the price system and the opposite would happen in tomatoes.
#
Now here what is happening is what people want is not something that the government
#
can possibly keep track of or even gives a damn about.
#
What instead happens is that you've got your list of MSPs, these are the crops, and those
#
then become the farmers are incentivized to just work on the basis of the artificial this
#
created by the government of MSPs, which the government may not even deliver on.
#
And what people actually want and are willing to pay for is completely irrelevant and it's
#
There's a complete mismatch between supply and demand.
#
So what are the sort of consequences of this?
#
Just on the same issue of MSP, the negative subsidy part of it, I used to, you know, the
#
data that Mr. Joshi had put together was for the end of towards the end of the 20th century
#
and the number that they had about 72% of negative subsidies what farmers had to pay,
#
you know, the difference between the international price and to summarize international price
#
So he coined the term negative subsidy for that, that the farmers paying the state.
#
The farmers paying the state.
#
And I was another impression that, you know, because of the higher MSPs now compared to
#
the market price, there is a positive subsidy probably going some at least for those crops
#
which the government is procuring from the farmers.
#
But I think the OECD and ICRIR study which recently has come together, they have put
#
together the data between 2001 and 1617 and they say farmers got 14% less than global
#
So put together, I think that the negative subsidy kind of continues.
#
In fact, you know, in that 15 years, 16 year period, I think that same study estimates
#
that the Indian farmers lost $700 billion.
#
That's a third of our current GDP.
#
And this is the scene in the unseen as a mind blowing example of our well intention policy
#
hurts the farmer instead of helping her.
#
And here we are talking of doubling the farmer's income, whereas we have robbed the farmers
#
in a manner we can't even imagine.
#
And we get worked up by the, you know, the bailouts packages that, you know, some of
#
the public sector banks or public sector units, sick units get, especially Air India.
#
So many outputs have been, you know, devoted to that.
#
Compare that with what we subsidized FCI.
#
And that doesn't figure into, so FCI has spent 1.2 lakh crore for excess stocks and a third
#
And what are the other sort of areas in which, you know, not allowing a free market to work
#
It's not just inputs, right?
#
Of course, I'll just list out some of the controls again.
#
So we talked about capital control, there is controlling credit, which is emanating
#
Then there are all kinds of input control, which we will probably touch upon in terms
#
of electricity and labor we already have.
#
Technology control we have covered.
#
Then price control like MSP and what the scene that we see in, you know, India exporting
#
water, et cetera, emanating from that.
#
Then of course there is market control, you know.
#
So the difference, you know, 10 to 20 times the difference between the farm gate price
#
and what the consumer pay.
#
And this is a good time for some Shero Shiree.
#
And I know you will repeat it.
#
Though you know, Kumar, I first heard this from you.
#
This is Mr. Joshi's share and I first heard it from my friend Kumar and so it kind of
#
sums up the farmer's predicament and also in a sense a consumer's predicament and has
#
Marthe hum bhi hai, marthe tum bhi ho, marthe hum bhi hai, marthe tum bhi ho, hum sasta
#
bech ke marthe hai, tum mengga kharit ke marthe ho.
#
I'll translate it in English for you.
#
I'll translate it in English briefly.
#
I die my friend and so do you.
#
I die my friend and so do you.
#
I sell my produce cheap and die.
#
You pay so much that you die too.
#
And what this really illustrates is something called the APMC.
#
Varun, tell me about the APMC.
#
The Agricultural Produce Marketing Committees, again another vintage from the 70s.
#
They were supposed to help the farmers beat the middlemen and the Adityas who control
#
In fact 30 or 40 years down the road the farmers are completely trapped by them, by the middlemen
#
So basically it gives you a monopoly, APMC gives a legal monopoly to markets designated
#
in a certain geography.
#
So it could be at the taluk level, it could be at the district level, but designated markets
#
have to be the farmers can only sell to those markets.
#
The only exception being farmers can directly sell to consumers.
#
The economists call them monopsony, a single buyer.
#
They call them monopsony.
#
It's like for example the BCCI or any sporting body in the world where you just have one
#
seller for a bunch of buyers and a classic illustration of that is there was a report
#
which revealed that in a particular area farmers sold tomatoes to the APMC because they had
#
nowhere else to sell them.
#
They sold tomatoes to the APMC at 2 rupees per kg.
#
Farmers bought them for 20 rupees a kg.
#
And what would typically happen is of course farmers are not going to reach consumers directly,
#
but if you have those much maligned middlemen instead of 2 rupees you could have the farmers
#
selling them for 10 rupees and the consumer buying them for 12 rupees.
#
Both the farmer and the consumer you know in one case making 8 rupees extra in the other
#
case saving 8 rupees and for the middlemen that 2 rupees amounts to quite enough if you
#
allow competition among middlemen but you don't.
#
And I've seen in fact it goes worse than that.
#
I met a miller you know he mills soya oil.
#
He told me that he has to pay a penalty to the designated APMC within which he lies because
#
he prefers to buy directly from the farmers.
#
Farmers prefer to sell to him because he gives a slightly better price.
#
But because he is not supposed to buy directly from farmers only consumers can which means
#
that he the APMC collects a daily penalty from him.
#
Which is like rent seeking.
#
There can't be a worst example than that and given that if you go to APMC even in states
#
like Punjab and Haryana and see how poor the marketing environment is you know in terms
#
of storage in terms of trading floors etc.
#
It is amazing that they collect fees from farmers for loading and unloading because
#
there are legalized loaders and unloaders at APMC even if the farmer doesn't use their
#
It's a very explicit illustration of how the state is a parasite.
#
And it has created people I mean turned people into parasites of traders who would have been
#
happy to compete with each other and improve their efficiency and deliver a product at
#
the consumer end at a more efficient less wasteful manner at a lower price are now gaining
#
or profiting from the rent rather than providing a service.
#
Rather than providing a better service both to their sellers the farmers and to the consumers
#
they are only collecting the rent out of from both sides.
#
Which is why the margin the price difference between the farm gate and the consumer is
#
It's 10 times, 20 times or 100 times.
#
I read last year actually last year in January price of potato in Delhi was about 20-25 or
#
Just 300 kilometers from Delhi in Uttar Pradesh the price of potato was less than 2.
#
No farmer would have the capacity to bring their produce from 200 kilometers away to
#
That's a 10-15 time differential right there.
#
I mean the analog that I'm thinking of like all of us write columns okay the analog I'm
#
thinking of is if the government puts up an APMC for columns so we can't sell it directly
#
to a newspaper we have to sell it to the columns APMC let's say the CPMC and so I have to
#
sell my column to the CPMC for 500 rupees and then whichever outlet buys it at whatever
#
I have no control over that but they can't buy directly from me and they can only buy
#
from the CPMC they can't publish from anywhere else so CPMC charges them a ton of money.
#
Now this would normally mean that I am not writing Baba because who's writing for so
#
little money however I am not allowed to exit writing which is exactly what's happening
#
I have I can't do anything else I mean this is due to all of these absolutely heartbreaking
#
but there's another element to that that is the which is even older vintage from the 1950s
#
the essential commodities.
#
Oh essential you know this again came when India there was a serious scarcity in food
#
and the government wanted to control the traders and the price vary fluctuations and therefore
#
the essential commodity empowers the government to act against any trader who deems to hold
#
stock beyond what's the limit at that point and the district authorities can declare which
#
crop what limit depending on their particular circumstance.
#
The Essential Commodities Act has meant it has had two hilarious and tragic consequences.
#
The extremely poor condition of our agriculture logistics in terms of storage transport etc.
#
is a direct consequence of Essential Commodities Act because no investor will risk the uncertainty
#
of an Essential Commodities Act being invoked at the drop of a hat at any part of the country
#
at any given point in time.
#
Secondly it has led to this absurdity part of which you mentioned earlier that the government
#
of India and the state bodies which procure food grain are today the world's largest
#
hoarders there's no country or no company that holds 90 million plus tons of food grain
#
in stock 20 30 percent of which will be wasted as the government of India and its other bodies
#
do when the need to hold for the public distribution system is barely 20 million tons so 20 25
#
million tons will have been more than enough for the government to tide over any PDS crisis
#
for the simple reason that we have a crop coming in every six months.
#
Yet we hold almost four times that and waste it.
#
So you know and this is because Essential Commodities Act simply does not provide the
#
leeway for traders and companies who would otherwise come into the market to create the
#
infrastructure and the efficiencies that will come with it.
#
If we are you know we are we are talking so much about building storage capacity without
#
thinking at all as to why the storage is not getting built because no store owner or the
#
no cold storage owner or a or a go down investor would take the risk of being at the deceiving
#
end of an Essential Commodities Act.
#
And again the parasitical state the rent seeking state and the just just a fear of that keeps
#
people from making these investments.
#
And this is exactly what has happened in case of onion where the prices of onion fluctuates
#
five to ten times every year during the off season and the and the down season.
#
And you can see every year Essential Commodities Act is invoked against traders in different
#
parts of the country particularly in onion growing areas.
#
And the result is it has no impact on the volatility of prices.
#
It has actually perpetuated this volatility because there is no investment to make this
#
to dampen the volatility in prices that we see.
#
And the farmers are receiving a pittance the consumers are paying through their nose and
#
somebody in between has actually blocked.
#
I mean you know this is the incredible situation that the people that our regulations have
#
actually blocked the passage which would have allowed a smoother flow and therefore eliminated
#
Indeed what is happening to onions is enough to make me cry.
#
So here's kind of you know a complicated question which I keep trying to figure out that you
#
know all of these things and more and we probably haven't even touched the surface but these
#
are mota mota some of the categories in which you know the state is messing with farmers
#
in the sense there are so many land restrictions you can't realize the value of your land you
#
can't expand beyond the point you can't exit you know your signals as far as inputs are
#
concerned are completely flawed you have very few choices there market signals are not getting
#
through your markets are controlled you have to sell it artificially low prices blah blah
#
blah blah blah it's an endless litany.
#
But the big question is number one even after a leader like Sharad Joshi and the Shedkari
#
Sangatana was a pretty big movement in Maharashtra even after leaders have pointed all of this
#
out why isn't there a farmers rebellion throughout the country instead we often see farmers make
#
demands for things like farm loan waivers which are really a temporary anesthetic and
#
they are useful in certain conditions and even Sharad Joshi once said that given the
#
negative subsidy that is imposed upon us the minimum you can do is a farm loan waiver so
#
that's fine it's populist but it's an anesthetic it doesn't cure the disease we know what we
#
need to do to cure the disease we know the condition of farmers have been in for decades
#
why isn't there enough demand from the farmers because if the farmers of India stand together
#
on something like this the government will have to listen there are too many of them.
#
That's the million dollar question and I think partly it is not so much because of the farmers
#
it's because the non farming sector that is people who are not engaged in farming wield
#
a much greater influence on shaping the shaping the policy regarding agriculture and I think
#
the challenge is to see how India recognizes the challenge that Bharat faces and I think
#
the only one way to do it perhaps would be for India to recognize the price India is
#
paying for keeping Bharat shackled I think we need to look at that that what is it that
#
India is paying for keeping farmers rural India Bharat shackled is it India that is
#
keeping Bharat shackled or both of them are shackled by the state by the state even India
#
loses in the sense if you go back to the tomatoes comparison the farmer is selling for two rupees
#
when he could sell for 10 and the consumers buying for 20 when he could buy for 12 you
#
know so both of them are effectively losing eight bucks each to a predatory state which
#
is predatory but so inefficient that a part of that is also blown up that is true but
#
you know I think what's happening is that India and increasingly so in the last 30 years
#
the price that we pay for our food has actually come down for much of India therefore we have
#
the surpluses and we have the development and we have all the other expenditures for
#
the farmers that may be true as far as food is concerned but the food is also they are
#
the producers of the food so they have you know so they are not in an equal situation
#
that is the benefit the food basket is is much more significant for them because they
#
are also the producers in the food basket and I think because India is not realizing
#
the price that they are paying not just in terms of food price because obviously they're
#
not paying too much of a food price and I think that's where the key is I mean that's
#
my that India is paying a much larger price that is India in the last 30 years have come
#
nowhere near what India should have after liberalization precisely because we chained
#
our agriculture back you know and I can't think of another country in the world including
#
China which is the last one which has made this transition this developmental transition
#
without unshackling agriculture so give me a counterfactual supposing the unshackled
#
agriculture in all the ways that the three of us would agree on and we discussed in 1991
#
what would India have gained yes we do I mean some of Bharat would have become India of
#
course the primary gain would have been that the support the political and social support
#
for our policy of opening up and liberalization would have been much more than what we have
#
today today we have none and which you can see the comparison that the first 10 years
#
China spent in the 80s to make the while they were struggling to make the transition where
#
was on the basis of agriculture they had no industry it's opening agriculture even while
#
keeping land ownership out of it because land is still owned by the state in China but freeing
#
agriculture trade agricultural input agricultural pricing China transformed its agriculture
#
in that 10-15 years today China's agriculture part of the GDP is larger than India's GDP
#
larger than India's GDP total India's GDP is two point some trillion China's agriculture
#
and food sector is more than that that's the price we are paying and I think this is not
#
just for India just look at it you know it's been cliche for the last 40-50 years that
#
we need to reform we need to do this that and the other but have you ever seen anywhere
#
the talk about particularly in developing countries and policies related to developing
#
countries that agriculture needs to be a top priority in terms of reforms whereas there
#
is not a single country in history which has made this economic transition without liberalizing
#
agriculture to begin with and one of the apart from China South Korea did it you know South
#
Korea and India were at the same level in 1950s in terms of per capita South Korea did
#
it in 30 years South Korea as today is today one of the key members of OECD that you know
#
the richest 24 countries in the world Taiwan did it New Zealand which was a laggard in
#
the in the Western world so to say you know it was one of the poorest in the Western world
#
in the 1980s liberalized by liberalizing its agriculture just imagine what we have done
#
New Zealand sells more milk to China than India which is the largest milk producer today
#
in the world where the price of milk has stagnated over the last two years three years that the
#
farmers are getting less price for milk yet nothing goes from India to anywhere else New
#
Zealand which is 10,000 kilometers away is selling milk and meat to China we are next
#
door with a few thousand kilometers of borders this is the tragedy this is the price we are
#
paying this is something that India needs to realize that the price that India is held
#
back because they're holding their farmers back and what kind of strikes me is we you
#
know just as like a couple of episodes back few weeks back I read an episode on gender
#
with Namita Bhandare where I spoke about the seen and the unseen in terms of the seen world
#
of men and the unseen world of women in India and it strikes me that there is another sort
#
of seen and unseen world within India which is a seen world of us elite city dwellers
#
and what we see around us and the unseen world which includes more than 50% of the country
#
with subsistence farming so if you are chaining them if you're keeping them practically enslaved
#
and tied to the land and you if you're keeping them poor if you're perpetuating I mean it's
#
much of our economy is a poverty generation machine and that's more than 50% of the country
#
and imagine that's how much that is sort of holding you back holding us back holding us
#
back I think India has to realize that it is it will never meet its potential or its
#
aspirations if it keeps that kind of approach towards the largest segment of India and in
#
fact that's India's largest private sector which means we haven't actually had any reform
#
any liberalization in our mindset at all we have perpetuated poverty in the largest section
#
of the population because we believe that those segments cannot deal with their challenges
#
completely ignoring that none of us in India would survive a few days in the condition
#
in which most in people in Bharat does.
#
In fact if you had to say like you know I pointed out in my analogy earlier if I had
#
a CPMC and if I wasn't allowed to buy laptops and to write by hand you know all of us have
#
freedoms which we take for granted and our farmers are denied those freedoms and very
#
condescendingly we come up with excuses for but you know which a question that comes to
#
mind rather as story is we always think we in India in this case think especially reading
#
op-eds and reading the news headlines that look farmers are getting these higher MSPs
#
all the time paid for by our taxes of course thinking that they don't pay taxes of course
#
which they do and a bigger chunk as far as a percentage of their income in indirect taxes
#
and they get loan waivers all the time you know which again we pay for it in which case
#
okay they are the ones which we are subsidizing all the time while if you remember a couple
#
of years ago I think it was early last year if I'm not wrong about 30,000 farmers more
#
than 30,000 farmers had marched from Nasik waste parts of Nasik to Azad Maidan in Bombay
#
and I spent the day with I couldn't speak Marathi so I had some colleagues with me who
#
was translating and majority of the farmers that we spoke to none of them had worked for
#
either higher MSPs or farm loan waivers while everyone you know all the news channels all
#
the op-ed headlines or the news headlines and the thing which was spoken on from the
#
dais itself you know the leaders were talking about higher MSPs and loan waivers these were
#
the top two and there were other demands there were a list of eight nine demands which the
#
chief minister Mr. Farnabas accepted and the farmers were you know put on a train to go
#
back but every farmer that we spoke to had walked there only for two things one the patta
#
under a forest rights act which they had received it was either in some cases not there at all
#
so they had no rights to the land which they had been cultivating although under FRA they
#
should be getting those rights and the paper paperwork for it or in other cases the recognition
#
is only one-tenth or even less of that so when you go and talk to Bharat in this case
#
you realize that they are not the ones who are looking for a subsidy or a you know a
#
dole but rather just asking to be left alone and the last couple of years that I've been
#
telling with Varun everywhere you go that's the story they are not looking for any kind
#
of you know waivers or a dole all that it's a very practical thing that 40 45 percent
#
of farmers have no access to formal credit yeah so even when you do the loan waiver in
#
Maharashtra only six percent of the farmers are going to get those credit you know under
#
the credits so yeah and and in case of MSP the government may declare its intention and
#
prices for 24 crops it buys six and even those six it buys just a fraction so the farmers
#
who actually benefit from that MSP are a tiny minority compared to that and they're probably
#
well-connected elites among the farmers to begin with you know hand-in-hand with the
#
predatory parasitical state do we have a broad some inkling in terms of that answer to the
#
million dollar question I think you know one thing is not so much to the million dollar
#
but as a progression you know to me what seems interesting is particularly in this transition
#
is and particularly in India's context where job is a big issue for urban India as well
#
as for rural India it's a huge issue unbelievably significant issue that is to recognize that
#
one sector throughout class two three hundred years of industrialization in the world that
#
was singularly responsible in creating the largest segment of jobs other side outside
#
of construction was textile and garments UK England's industrial revolution was powered
#
by textile and garments the US did the same Italy Germany Spain they all did it China
#
did it in the last 30 years India and this is the paradox again under the seen and unseen
#
while it is seen and we all celebrate that India is today the largest cotton producer
#
and the second largest exporter or the third largest exporter what we ignore is we export
#
our cotton to countries which has no cotton and are virtually out competing us on textile
#
and garments that is China they began in the 1980s after the liberalized agriculture textile
#
and garments was their singular sector that provide created jobs and the easiest and the
#
simplest and historically proven way of low-skilled workers migrating to out of agriculture you
#
know last 200 years there's not a single major country that has made this transition without
#
harnessing the power of cotton cotton has been the world's first industrial crop much
#
bigger than indigo ever was and we never caught onto it we never got into it and it's a great
#
opportunity loss because you know just going back decades three four five decades our advantage
#
was cheap labor we could have been a manufacturing superpower starting with textile and garments
#
but you know our industrial laws our labor laws our licensing laws basically shackled
#
that entire sector and we are fast reaching a stage where even if it were to be miraculously
#
unshackled you know automation and AI and all that could make a lot of that unshackling
#
redundant and typically what you really then have is I guess a lot of people moving out
#
of agriculture into manufacturing but that hasn't happened because of problems with both
#
sectors manufacturing is not allowed to come up and agriculture is and people are just
#
trapped inside it and it's it's but again to get back to the million dollar question
#
I mean is the reason that they aren't nationwide agitations over this and in fact their agitations
#
certainly over quick fixes dole-based fixes like farm loan waivers but not agitations
#
over these structural reforms is a possible reason that they are unintuitive that it's
#
it's too complicated it's hard to understand why free electricity for farmers is a bad
#
thing which farmer would say don't give me free electricity or which farmer would say
#
I don't want a fixed price from the APMs I think that's the question that we were trying
#
to answer you know when we talked to a farm leader in Haryana and although he comes from
#
you know in the Sarajoshi school of thought and would generally agree with all the reforms
#
that we would talk about in agriculture otherwise he said that's all right if for you to say
#
you know there should not be an MSP you know probably a market-determined price would be
#
a better off for the farmers but I as a farm leader cannot go to my estate and talk this
#
with with my farmers if I say I will be lynched on stage you know the dependency the dependency
#
which has been built over the years to break that away you know I think you know this is
#
a serious issue but it has the other side also in the sense you know who are the farmers
#
who planted the BT cotton 20 years ago and who are planting the HDBT cotton today who's
#
the farmer who planted BT brinjal in Haryana you know the same farmers coming from similar
#
conditions you know similar background chose something that they thought was beneficial
#
but double directly beneficial I mean I'd argue by saying that okay at a time when bollworms
#
are killing whatever cotton crops you plant it's actually logical and intuitive to try
#
something else but when you look at some of these structural reforms it is not such a
#
straight line that you can draw from this to that like he's correctly saying is that
#
if a potato farmer is making potatoes because there is a guaranteed MSP I'm just taking
#
an example I don't know if there's an MSP in potatoes but let's say a potato farmer
#
is growing potatoes because there is a guaranteed price on it from the government and that's
#
his incentive if you tell him that you even take that certitude away even though obviously
#
it's a qualified certitude because most of the time the government doesn't even follow
#
through on his promise then what does he have and the uncertainty of it's like that conundrum
#
where markets don't exist and you're telling someone trust markets and he can't intellectually
#
bring himself to do so because they don't exist and he hasn't seen them in operation
#
it's like a vicious circle yeah it is true but again you know you see at least I see
#
a potential in the sense again the experience of India itself in the last on this issue
#
of cotton that we were discussing cotton success is not just it has broken out of production
#
issues and such but its success also is that it's one of the crops where in the last four
#
or five years MSP has been almost irrelevant cotton is India's global crop in fact cotton
#
farmers in Vidarva told me recently that they're so proud that it's India that sets the market
#
price in the world on cotton that it's not the Chicago exchange that sets it wow and
#
they feel happy about it that that's what they've achieved and this is not a triumph
#
of the state it's a triumph of society exactly exactly that to me that some farmers realize
#
what they have achieved on a crop on which they it was where India was barely self-sufficient
#
20 years ago you know it used to go up and down because our production used to be a third
#
of what it is today and it used to have its own fluctuations so given that that that cotton
#
has broken out and it's the only crop that seems to have broken out and it has broken
#
out on two grounds one is of course the technology the GM the other is another campaign Sharad
#
Joshi did which is to end the state monopoly and procurement of cotton so the trading and
#
all that element became more market driven so it's not the price that we can target first
#
yeah if we if we create institutions that are process driven in terms of trade and market
#
and technology wherever it is available then this conundrum can be broken cotton is perhaps
#
the best example because cotton was in that situation 10 years ago but you know both of
#
you have spent a lot of time with farmers and farmer leaders both and what are the solutions
#
that they hanker for quite apart from the practical one where the cotton farmers had
#
a practical problem and they sorted it out and it has worked out well it's fine I buy
#
that it's a demonstration of what can happen at a policy level when you reduce the role
#
of the state but what do farmers actually want I have spent one time in the last only
#
couple of years and thanks most of the time with Barun and with the kind of farmers that
#
we have met for in all the cases because they come from a particular school of thought and
#
thanks to the great message and the rhetoric Mr. Joshi was able to communicate was that
#
leave us alone no leave the farmers alone and stop helping us but is there a selection
#
by sir because of course it is of course that is the kind of farmers that we have met but
#
I'm assuming that Barun have met up with all kinds and you know but it's not just the
#
state kari sangatana farmers you know the example that he gave his own experience in
#
Bombay for the Kisan march you know Mumbai march of the Kisans from Nasik to Bombay
#
the farmers who came there largely tribals they were not really asking for the loan
#
waiver and the rest and I think this is where the distinction is and not a single one from
#
of them were from state kari sangatana oh okay not a single yeah because they were
#
from the tribal areas of Nasik and they were not asking for these because these are no
#
relevant because in their case they didn't even have the land rights on which to do their
#
agriculture to get the credit so that they can have ask for loan waiver you know I think
#
it's the question is will a consumer be happy if he's told that he has to pay more and if
#
somebody says that I'm going to reduce the price and the same is true for farmers the
#
question is firstly the practicality of doing it which is the state promises MSP for 24
#
crops or buys only six and that to about 10 15 percent of that if at all so this there
#
must be a way to leverage this gap between what is being promised and what is being performed
#
or delivered and I think the agitations and all the rest that you see is primarily on
#
this delivery issue not on the promise issue everyone is promising in India the same thing
#
but that a lot of that agitation then I suppose would be driven by saying that you promised
#
us MSP in 24 you're buying only six by all 24 and as we know that's not exactly the solution
#
right correct the question is quick and you can actually see what has happened and that
#
is one way we might head actually I mean it's it's actually not the solution that you're
#
looking for but the direction we might end up heading and sugarcane provides a very good
#
example India is one of the largest producer sugarcane we have priced our sugarcane out
#
of the global market we are producing much more than we'll consume and at a price which
#
no one else will buy too high you mean yeah which is crazy doesn't it make no sense and
#
how has the state been successful not because it is procuring sugar but because the state
#
is mandating to the sugar mills whether private or public sector to buy at the price which
#
the state is setting for them so how do the mills make money then who the mills the mills
#
are not making money that's the problem so why are they existing they are existing because
#
they're trying to collect just like the loan waiver and all the rest they're either postponing
#
which is why in state after state you'll see that their mills are saying that we'll pay
#
you later so you know farmers need the cash now for their next season whereas the payment
#
may happen six seven months or a year later and sometimes it may not even happen because
#
they will over a period of time then there will be a negotiation as to how much will
#
be paid so if the actual payment was one lakh it may be negotiated that since one lakh cannot
#
be paid can we settle for 80 and if you just had a free market for example and you allowed
#
it to be exported and the market satisfies it could even go for 90 which would be better
#
off for the farmer correct because that that would then show that if our crop was productive
#
or the productivity was high enough then we could actually compete in the world now we
#
have created a situation unlike cotton and cotton and sugarcane to me is really interesting
#
because in both are significant crops in Maharashtra whereas cotton is a global success sugarcane
#
we are stuck it's because in cotton we could break out one because of the technology and
#
two because of the price control the monopoly of procurement that was broken and the integration
#
happened with the rest of the world market so the price have virtually reflects the world
#
price you know so the farmers get a real signal that what is the price level at which you
#
produce and if prices everywhere if the state didn't interfere in prices anywhere the farmers
#
would be able to adjust year on year according to what the demand is and optimize for that
#
and be as profitable as possible rather than go through this kind of bullshit where they
#
are being forced to sell at a price to sugar mills who can't afford it and therefore delay
#
payments and then make haircut deals with them and nobody benefits in this everybody's
#
a loser it's a negative something and we have we have stocks which we don't know don't know
#
what you're going to do so what we are going to do now is and this is this is probably
#
the real hazard that might happen in the next car next year or two that people in the government
#
seem to be thinking that rather than giving up on this sugarcane model why not adopt the
#
sugarcane model my god which is in crop after crop the traders were would be told that that
#
a price for your monopsony would be that you buy what the state can't at the price at which
#
the state is setting sugarcane is in this problem precisely because it has to buy at
#
a price with the state is setting which they cannot meet because the market will not pay
#
them and the state is actually thinking I can't believe but it's true that the state
#
is actually thinking of extending this model to other crops by asking traders that the
#
price for your monopoly trading privileges is that you buy at the price we are telling
#
So I'm again going to do that little indulgent think of contextualizing this from a point
#
of view of if these restrictions apply to me how would it be so earlier we did that
#
with the APMC and the CPMC and how you know the CPMC gives me five hundred rupees per
#
column and blah blah blah in this case it's almost like there are column mills like cotton
#
mills there are column mills and the government has mandated that I who can do nothing else
#
but write columns have to sell to that mill at a good price say a price that I'm happy
#
with however the column mills are very unprofitable and they can't afford this high price so they
#
tell me that you write your column now and we will pay you 10 months later and 10 months
#
later they come back to me and say hey we'll give you only 50 percent and this uncertainty
#
is too much and my kids are starving I mean I don't have kids but if I did they would
#
starve and I am eventually hanging myself from a ceiling fan that's that's basically
#
what it comes down to and that's exactly what's happening and that's exactly what's happening
#
we've sort of discussed the demand side of the problem right that okay farmers are gradually
#
cottoning onto it and you know there's been a success with BT cotton and all that there
#
is in fact an ongoing satyagraha and a lot of people even beyond the shedkari sangatana
#
are figuring out the reforms that they need and going beyond all of that that's a demand
#
side let's hope it all comes together I mean more than 50% of the country if they agitate
#
for something you know things should happen I want to talk about the supply side now which
#
is the political economy of it which is even if there is no demand coming from the farmers
#
for these reforms a lot of reforms sometimes happen because economists and policymakers
#
figure out that this is good for our country this is good for the economy we should do
#
this anyway and what I tend to sort of read in the newspapers and the broadsheets over
#
the last you know ever since I've been a you know aware of newspaper columns maybe 30 years
#
or whatever and through these decades all of these things that we have just spoken about
#
has been spoken about none of this is new or path-breaking columnist after columnist
#
will write about Mr Gulati himself Ashok Gulati himself has been writing for that long on
#
these very subjects yet there are no reforms tell me a little bit about it why are there
#
no reforms what are the interest groups that are sort of against it what are the incentives
#
of all of the players who could make a difference Kumar public choice you should have an answer
#
I think you could say this is a billion dollar question after a million dollars definitely
#
there has been a lot of lip service to it you know two examples that come to mind immediately
#
are one from the present and one from quite late past as I was not listening to the budget
#
speech but Nirmala Sitharaman in her speech was saying that every policy that we make
#
we keep Gaon, Garib and Kisan at the center of it let me repeat every policy that we make
#
we keep Gaon, Garib and Kisan the village the poor and the farmer at the center of it
#
and while I think the only policy that they did announce about in agriculture for farmers
#
was about zero budget farming for which they had allocated about a thousand crore so if
#
that really do catch on then farmers are screwed on a big level and the other example comes
#
from the past I'm quoting from a book India Progress or Poverty where Sudarshanoi is quoting
#
another person Michael Lipton in the course of a very able analysis of the main issues
#
of Indian agriculture policy argues the share of total planned resources devoted to agriculture
#
has declined over all four plans yet planners insist on its importance they persist in setting
#
higher targets for it while providing insufficient inputs to attain them the explanation of the
#
paradox lies in the urban bias of Indian planning and of the Indian socio-economic system the
#
urban elite of industrial employers and unionized employees together with their rural allies
#
the urban oriented big farmers exert a big major influence on planners and policy makers
#
and policy is largely conducted in the interest of this grand alliance the vast mass of unorganizable
#
and illiterate small farmers are unable to be heard so of course like what I was saying
#
you know all kinds of lessons that we have talked about in public choice you know comes
#
into play so there is of course a lot of lip service like Mr. Tarumandir or like Mr. Lipton
#
was saying about all the plans so throughout our Indian planning history we did provide
#
a lot of lip service to agriculture but while every time it was Jai Jawan, Jai Kishan is
#
not limited to Mr. Shastri alone but rather to all you know policy makers and politicians
#
in history including Mr. Modi but in all of the cases it has been just limited to the
#
lip to lip service you know it has not gone beyond in recognizing what is the problem
#
with agriculture and then providing the solution now they have come up with a high-powered
#
committee of chief ministers you know but I don't think there's much will come out
#
of it because there's a complete lack of recognition of what the problem is you know so one could
#
be just it's a free rider problem you know that it is very hard for the farmers to organize
#
or even in this case even see unintended consequences you know the dependency which has been built
#
over the years it's hard to break out of that and therefore they are all very busy with
#
meeting their you know day-to-day requirements and not thinking of large policies or what
#
are those policy changes tweaks could do long-term you know benefits could bring them long-term
#
benefits in fact I see the status quo continues in fact I see like three concepts which I
#
learned from public choice theory being applicable in this case one of course you mentioned the
#
free rider problem where even if you know a farmer sees daddy suffering because of a
#
particular policy he'll be like let someone else do the protesting I have enough to take
#
care of in my everyday life and therefore I won't do it another concept is again the
#
concept of concentrated benefits and distribute dispersed costs so what is happening here
#
is let's say for example let's take a particular policy to illustrate it let's take banning
#
GMO like banning BT cotton now what happens is that you have to think about who is losing
#
and who is gaining from any policy what banning BT cotton ensures is that farmers have no
#
options but to use tons of pesticides so the pesticide lobby benefits hugely when pesticide
#
companies benefit hugely when GMO is banned and therefore it is in their interest to form
#
a lobbying group and to bribe politicians or make campaign contributions or whatever
#
whereas for individual farmers the loss is firstly notional it might not even be visible
#
to them and and secondly it is dispersed across so many other farmers that the cost of organizing
#
become too much and it's it's again the free rider effect comes into play and the third
#
concept which I learned from public choice which again applies to this in the context
#
of you know why don't farmers vote this particular way is rational ignorance where for a farmer
#
to actually get the kind of knowledge of public policy and economics and of the sector to
#
understand this deeper structural problems is not worth the cost because he is just thinking
#
what is a benefit of one vote anyway there's not much benefit it is rational to remain
#
ignorant absolutely and and but you've kind of spent some time also trying to understand
#
the political economy of these what are the kind of forces which are against these reforms
#
you know I mean in terms of the political actors themselves we have a convergence irrespective
#
of the stated ideologies and the convergence is regarding power that the politicians expect
#
to enjoy and that is the power of patronage so as long as we have a convergence in terms
#
of political practice of patronage being the singular determinant in how politics is to
#
be governed so we have no political options coming up as we can see and which is probably
#
not just true for agriculture which is true in general for reforms as such that there's
#
no no one willing and able to break this the question is and I think in a normal economy
#
if there's a logjam of this kind some entrepreneurs some disruptive technology comes in in this
#
case we aren't seeing too much of too much of that coming up and which is why I think
#
the challenge is particularly on the supply side is for those who are shaping the supply
#
side opinion not just politicians but all the other stakeholders non-farmers all the
#
other Indians if they realize that the price that they are paying is not just the trade
#
off between the low food price that they enjoy currently which they do but all the other
#
aspects of life which they expect to benefit from they are not reaping those benefits because
#
the other segment of India the Bharat is shackled I think if the supply side stakeholders particularly
#
on the wider voter side who have so many issues to grapple with if they begin to realize that
#
their freedom is related to their prosperity their future is directly related to the freedom
#
and prosperity and future of Bharat there might be a convergence as long as we think
#
we can live off one another which is what the current situation is and the middlemen
#
the political establishment are very happy to play that ball playing one against the
#
other it will not be quite I think that realization is multiple steps you know in terms of thinking
#
away so in terms of unintended consequences there are couple that you can spot okay these
#
are the second and third level in this case I think it is much more much beyond so expecting
#
that to kind of go through incredibly unintuitive and you know which is why even I said at the
#
start of the episode that for people who are familiar with public policy and economics
#
and I spent time studying it will okay they'll get it that what are the effects of distorting
#
prices what are the effects of these sort of constraints on land and not not allowing
#
capital to be free they'll get it but otherwise it seems unintuitive and it also strikes me
#
that even if an enlightened politician is to understand that look in the long term in
#
10 years in 15 years India will benefit if we make these reforms but that is a long term
#
and as Keynes famously said in the long term we are all dead or if you are a believing
#
Hindu perhaps reborn somewhere else perhaps reborn as a cow if you've done some good deeds
#
but sacrilegious but the thing is if you look at a politician's incentives the life cycle
#
of a politician is five years from one election to the next and his incentives will always
#
be tailored towards the short term how do I win the next election and a farm loan waiver
#
is a quick and easy way promising to increase MSP is a quick and easy way while you know
#
Kumar you pointed out that friend of yours had told you the farmer leader that if I go
#
to my fellow farmers and I tell them that I'll cut the MSP I'll get beaten up on the stage
#
so even if a politician himself herself is to understand that this is what we need to
#
do they also need to win elections and besides the election cycle is not for five years is
#
much less than that so every major political party and you know in our current political
#
party system the power is concentrated with the party high commands or whatever the major
#
political parties every six to eight months but definitely within a year out of 30 states
#
you can say that on an average six states go to election every year so the election
#
cycle is almost non-stop so you constantly have to be in campaigning mode so basically
#
you're promising farm loan waivers of course all the time all the time or you cannot take
#
a step which could be risky which because the after effects you know you will be beaten
#
in election and then the domino effect of that could be disastrous so you are very very
#
risk averse in that in that sense.
#
I think that's what entrepreneurship is all about political entrepreneurship how do you
#
disrupt the comfort zone that prevails at a particular point in time and unfortunately
#
one reason why India had made all these changes and I think there had been quite a few studies
#
of course 2004-2014 election on that particularly 2019 election completely contradicts that
#
but so far the Indian story had been the political economic story had been that with increasing
#
political competition India's reforms had some chance and as you can see between nineteen
#
seventy nineteen fifty and nineteen seventy seven when we had political dominance growth
#
was hardly an issue a political issue rest of the other things were but come nineteen
#
nineties when political dominance virtually evaporated for twenty twenty five years irrespective
#
of government performance had a premium that is government tried to perform at least something.
#
Well to be honest in ninety one reforms were like circumstantial it wasn't political will
#
but because we had an IMF crisis.
#
But it's not a coincidence that it happened at a time when political dominance was broken
#
that is political dominance would not have led to that situation at all as is as we can
#
But I wonder how we had a balance of payments crisis we needed the loan from the IMF they
#
I mean all that is true but we didn't go the way Mexico and Brazil had gone which is infrared
#
No I buy a broader point and your broader point is that we are likely to see more competition
#
of ideas and therefore a greater chance for these kind of ideas to find a voice in the
#
political marketplace if there is competition.
#
So are you therefore saying that because now we have virtually entered a monolithic era
#
it would seem that that competition is gone and therefore even a complacent BJP which
#
had earlier especially under watch by he had made some soothing noises that even they have
#
basically resorted to stratism all over again and we have no hope.
#
I think the only only silver lining in that in the current context is that precisely because
#
we have a monolith emerging therefore the potential for David to stand up to the Goliath
#
So the market for political entrepreneurship couldn't be brighter than it is now.
#
And you are a man who is a big big fan of a person we've discussed before who was a
#
David who took on a Goliath and there were many Davids who took on that particular Goliath
#
but he was a big biggest David taking on that Goliath and that Goliath fell and that man
#
What would Gandhi do today?
#
I think and in fact in fact Varun just even to sort of take the context of agriculture
#
out this is a really fascinating question to ask someone like you who's thought so deeply
#
about Gandhi for so many years.
#
In general if Gandhi was transplanted into India today how would he react what would
#
You know I think this requires an episode this should be a marketing pitch for a future
#
episode on this good idea but if you're still listening to this episode and you want to
#
hear this hypothetical Gandhi episode kindly tag Varun and me and we'll see what we can
#
I think I look at Gandhi as a political entrepreneur without parallel and his principal success
#
was primarily in getting a crafting a message that will go out to the people and politics
#
is all about messaging as we have seen and therefore and the uniqueness of Gandhi was
#
that the message was not just abstract or an idea as such but what people could actually
#
I would not compare the Kisan Satyagraha today with the Satyagrahas of Gandhi but the common
#
element is that when Gandhi asked people to make salt people could make salt when the
#
farmers decided to plant the unapproved HDBT they could do so.
#
You know it is this participation I think this capacity and the space to participate
#
I think is critical for political transformation because it is that participation that opens
#
the door for political entrepreneurship to leverage the capital the political capital
#
the social capital that is getting built.
#
It is that you know so Gandhi's success was in leveraging you know leveraging the political
#
capital by enabling participation in the political process no matter how small it was.
#
A pinch of salt didn't shake the empire because it was a pinch of salt.
#
Pinch of salt shook the empire because people could make it and millions made it.
#
HDBT cotton is almost the same that cotton farmers in millions or lakhs 15% in Maharashtra,
#
Gujarat, Andhra, Tamil Nadu which is 60% of India's cotton. Lakhs of farmers have already
#
Now it is this space which is actually which has been India's saving grace right through
#
the informal economy has actually saved our politics because it provided this space completely
#
outside of the law but for people to continue to engage and do something and survive.
#
In fact the irony is that the salt tax today is far more than the salt tax that Gandhi
#
was protesting. So our government while we may not call them a colonial government is
#
far more oppressive in certain ways.
#
But the same thing happened with cotton. Britain was facing competition from India at the turn
#
of the last century. You know Manchester was being threatened by cotton from India in 1920s.
#
And now we have a 56 inch Manchester.
#
And after independence we have virtually restricted our cotton and textile sector. As a result
#
we handicapped ourselves and missed the industrial revolution completely. We talk of manufacturing
#
or make in India. Agriculture is India's largest make in India. We talk of private sector in
#
India. Agriculture in India is the largest private sector in India. We handicapped them
#
and said that we are going to wave the flag or show the flag to the other sectors. And
#
What I was telling earlier that at the time of independence India used to export agriculture
#
commodities and consumer goods. Some consumer goods but used to be an exporter of agriculture
#
And of course at some point of time very soon you know after that we came to a situation
#
where we under PL 480 etc we had to you know just to survive we had to import grains.
#
This changed in the last 10 years.
#
So this is fascinating. The point that you make is that people could actually do something.
#
For example there is you can't really make your own salt so the satyagraha was people
#
making their own salt. You are not allowed to plant cotton so the satyagraha was people
#
planting cotton. So it happens to be one policy which has a sort of visible and easy to do
#
rebellion to it. But when it comes to many of the things that we have discussed today
#
for example you can't sell your land for non-agricultural purposes or you can't grow beyond a point
#
because of the land ceiling issues and so on and so forth. And what kind of visible
#
rebellion is there to something that is fundamentally such a sort of abstract restriction and.
#
You know I think you know it's really interesting if you think of it. Are people not selling
#
land? People are selling land even if there is no title to it. How? Because you know it's
#
not being recorded in the registrars. It doesn't mean that people are not transferring. I have
#
seen people transfer land just by signing on a plain piece of paper and 10 people in
#
the village acknowledge that yes this transfer took place. Sure so even if there is a jugad
#
like that though you won't get the same price that you would otherwise have got. So there
#
is a loss there. Correct. The question is and I think this is what the BT cotton or
#
the salt example actually shows that the question is how do we leverage the transactions that
#
people are already taking on their own but doing it surreptitiously without you know
#
with a sense of shame and fear but turn it around to a sense of pride. Gandhi did exactly
#
that. The satyagraha was to turn poverty and fear and all the rest into something of pride
#
and achievement and dignity. So the messaging was not just a conceptual message that we
#
are going to fight the British. It was a very tangible practical message of what you are
#
doing as a matter of your right and therefore as a matter of your pride. And probably a
#
Mark of his genius that he found the peg on which to rest at which was the salt thing
#
which had even been an issue in the 1890s. I think Dada Bhai Naoroji once brought it
#
up in the British Parliament as well. So it had been an issue for a while but it was his
#
genius in recognizing that I need to make a visible protest and this is salt. The same
#
way that planting cotton was I think Lalit Bahale was a farmer who started this particular
#
agitation in Akola and Maharashtra. But I worry that some of the things that we are
#
protesting against may not really find such visible means of protest. I mean we'll talk
#
about Gandhi some other time but I think I've taken enough of your time today and I'll sort
#
of wrap up by asking both of you a question that you know India is at this moment in time
#
in the middle of multiple crisis. We have a fiscal crisis, a credit crisis, we have
#
a jobs crisis, we have an agricultural crisis. All of these feed into each other you know
#
education, jobs, everything feeds into everything else when all of it is together a social crisis.
#
But looking at it from the lens of agriculture and our farmers and more than 50% of the country
#
depending on agriculture, looking let's say 15 years into the future which is not too
#
long a window but not too short either, what makes you hopeful and what makes you despair?
#
I think the despair is precisely because we may have seen through these things in the
#
past in history that the economic crisis is an opportunity of two kinds that it can initiate
#
steps for more rational sensible reforms or it can unleash the most undesirable elements
#
of society. And in the short term I can't avoid but think we might be heading that way.
#
That all the crises that are converging will only encourage at least a large section of
#
the political establishment to unleash the hoodlums and wave the flag as a way to divert
#
from the real challenges and find enemies to target instead of undertaking the reforms
#
that needs to be done. And this is now racking. If it comes through the price will be huge.
#
But history also shows that this is not a sustainable model. And 15 years particularly
#
with today's communication technology, 15 years of this approach I think is unsustainable.
#
And therefore the change might come suddenly abruptly and in ways we can't predict now
#
but I don't think we'll have to wait for 15 years to emerge from the collapse. But it
#
is extremely nerve-racking to think that we might actually be heading in that direction.
#
I mean I was discussing our economic crisis with a friend of ours, Mohit Satyananda, a
#
couple of days ago and the question I asked him was that look we know how bad things are.
#
Where are the riots? How far away are the riots? You know tens of thousands of jobs
#
are being lost across the country. And are we just so apathetic that...
#
We're not apathetic. We're actually rioting. The question is who's directing the riots?
#
The protests and all the rest would happen. The only it will not happen in the direction
#
which you and I might want it to happen. It will be directed to find the enemy and target
#
the enemy whether it's inside or outside.
#
To fight imaginary demons. What makes you hopeful?
#
Oh that this is not a sustainable model. That this model has been tried out in many countries
#
over the last two, three centuries. And this model barely lasted a decade or so. And with
#
today's communication technology and the information flow that is there, I mean a decade would
#
be the outer limit to which I hope I'm just being optimistic.
#
So what makes you hopeful is not the better angels of our nature but the fact that you
#
think that the worst demons of our nature will eventually get tired. Kumar, despair
#
What makes me despair is I don't seem to find a way around all the lessons of public choice
#
which when applied here, how do you get around them? Whether it's rational ignorance, how
#
can people be more aware on their own thinking. Currently it's rational thinking. Concentrated
#
benefit dispersed cost or free rider problem and many others. I don't see a way around
#
and therefore to create a huge demand for such a change. Recognizing the problem for
#
a majority and then asking for the demand. Mr. Joshi was much more successful in galvanizing
#
lakhs and lakhs of people and at least a big percentage of them could see the root cause
#
of the problem and ask for it. Unfortunately that was not the tipping point or it was still
#
given the size scale of our population. It was not the chunk which could move the needle.
#
So to that extent that is where my despair would come from. What makes me a little bit
#
hopeful is also that the cost of doing politics has come down. I mean whether it's communication
#
or etc. So the vacuum that we were talking about earlier, of course it's very costly
#
to do elections etc. the election politics but at the same time if you do it smartly
#
probably there is a way in which it does not require thousands of crores for you to make
#
your voice heard or make your impact in policy. So the reduced cost of communication both
#
in terms of getting your information out to masses and galvanizing those in terms of votes
#
etc. So there could be hope there and also for the fact that maybe there's a crisis what
#
Varun was also mentioning. Crisis round the corner like 1991 reforms was not only because
#
it happened mostly because of the crisis we had. So if the crisis takes us to the tipping
#
point for a right set of things done well in this which case the danger is that maybe
#
we could be dragged down in the wrong direction but I'm hopeful.
#
No I mean the point you made about the cheaper cost of doing politics and entrepreneurs taking
#
advantage of that is very insightful and perhaps even precinct one I think 10 years later people
#
may listen to this podcast and say huh this Gohan knew what he was talking about.
#
Also it's not just the cost you know it's the you don't influence policy just by entering
#
elections. You know Shalit Joshi didn't win elections but he got that bit of policy or
#
quite a few bits of policy changed. So the challenge is you know the election is only
#
one and perhaps one of the critical milestones in terms of measurement. But a change of policy
#
happens in in much more nuanced and much more substantive manner all the time. And technology
#
and all the rest is going to make it happen. So it's going to be issue specific building
#
from an issue to a larger narrative. That is the challenge. Issue specific it will keep
#
happening out of sheer circumstance.
#
And I keep thinking you know most of the time that the sentence that I used in the book
#
that we wrote together you know is how you know as liberals you know advocating for individual
#
freedom and in all aspects of our lives social, political, economic etc. You know we have
#
probably we can probably say that we have theory on our side history on our side you
#
know but somehow we have done a very poor job of communicating we don't have people
#
on our side. We have done a very poor job of getting our message out and winning people
#
You have the winning ideas but we have the winning ideas but not the winning narratives.
#
On that note which is a note of both despair and hope. Thank you so much for coming on
#
the show Kumar and Varun.
#
If you enjoyed listening to this episode you can follow Varun on Twitter at Varun S Mitra.
#
You can follow Kumar on Twitter at Kumar Anand. You can follow me at Amit Verma A M I T B
#
A R M A. You can browse past episodes of the Seen and the Unseen at SeenUnseen.in, ThinkPragati.com
#
and IVM Podcast.com. The Seen and the Unseen is supported by the Takshashila Institution
#
and Independent Centre for Research and Education and Public Policy. Takshashila offers 12 week
#
courses in Public Policy, Technology Policy and Strategic Studies for both full time students
#
and working professionals. Visit takshashila.org.in for more details. Thank you for listening.
#
Hello everyone I'm Zain.
#
And welcome back to a brand new season of Marbles Lost and Found.
#
A show on mental health and its stigma and we're kind of making it an open conversation.
#
Pretty much yeah and we're really really excited about this season because we have a number
#
of guests on and we'll be talking about things like addiction, grief, children and mental
#
health. Exactly children and mental health and our listeners have also written in.
#
Yeah and we have an episode dedicated to that.
#
Yes and guys thank you so much for writing and we really really appreciate it.
#
And we're really excited for you to tune in on Tuesdays on the IVM website or app or wherever
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you get your podcasts from.
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And you can find Marbles Lost and Found on Facebook or you can find Marbles Lost and
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Found on Instagram as well. The handle being Marbles Podcast India.
#
Can't wait for you to tune in.
#
Thank you very much. See you guys soon.
#
Hello everyone welcome to Tech Careers in the New, the new podcast series presented
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by Accenture. I'm your host Shiladitya Mukhopadhyay. In this podcast series we'll get you the
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latest and greatest in the world of technology that's shaping the future of business as we
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know it. We're talking intelligent platforms, cloud, AI, blockchain, extended reality and
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