Poverty Line. Poverty is Not Natural by Natarajan Nagarethinam - HTML preview

Chapter 8

Farmers in distress

Compare farmers in other countries

In every other country farming is a profitable activity.

In developed societies, every citizen, irrespective of what they produce receive compensation for their contribution adequately.

The citizen, therefore, live in comforts that one desire.

Suicide by farmers, in several thousands in number, due to loan burden (caused by failed crops or failed monsoon) are common in India.

The problem is acute among the small and marginal farmers.

There are rich farmers who own large tracts of land and wield political power in all parts of the country. They are the ones who get funding from Government schemes and farm loans.

1. The small and marginal farmers are impoverished and largely depend on greedy money lenders who charge mind boggling interest rates.

2. The insensitive traders exploit the poor financial situation of farmers and buy the produce at beaten down prices.

Why Indian farmers are poor?

Poverty has a long history traced from alien rulers and present economic policies of various governments added to it.

Presently, there are a few very serious issues.

Invariably they work with barrowed funds that too at mind boggling interest rates from local money lenders.

• They are too poor for farm inputs from their own funds.
• Since they do not own sufficiently large properties financial institutions do not fund them.
• The profit margins are too low that they won’t be left with funds for the next season.

The poor farmers don't have access to storage so that the produce and sell at the right price. Any delay in return the barrowed funds to money lenders leads to higher interest pay out. This predicament of small farmers are exploited by secndary producers, traders and Corporate Super market and Hyper Market Chains to buy the produce from farmers at beaten down prices.

Rich and super rich among farmers

There is a class of producers of Products who are rich and super rich in the society.

There are a few rich farmers who are into mechanised farming. and traders merely procure from farmers at distress price, store, convert into secondary products and make several times profits over the procurement price.

For them, farming is no different from an Engineering industry.

Such farmers own vast tracts of land. Use less man power and deploy more machinery for farming. In addition to liberal funds from bank at very low interest rates. This income from farming helps them save tax.

They can afford to create large storages so that they can wait for right price and at the right time to get maximum price.

Their strength is their wealth. It is said that “It is not the people who make money, but it is the money who brings in more money ”.

A. Financial institutions fund them generously, at a reasonable / low interest rates. Their already strong money muscle is further reinforced.

B. The low interest fund enable them to buy the primary products from the distressed Primary producers at beaten down prices, store them and convert into secondary products.

C. Use fewer manpower and technology and machinery process a large quantity of Secondary Products— such as the Wheat flour, Rava, rice products, Biscuits, noodles fruit juices, to name a few. Even the primary products become secondary when packed and sold. They are sold at higher prices. Typically the secondary producer profit 200 times the cost of procuring the same from primary producers.

The last words

Poverty unemployment and unrest among citizen.

These can be mitigated with a combination of efforts.

A. Make Farming Profitable:

This does not call fo great theories like Quantum Mechanics. Creating and running storage facilities in villages to store farm produce so that distress selling by farmers are prevented. This would counter the mafia operating all over the country who is largely responsible for the Farmer’s plight.

B. Create Secondary Product centres.

Involve farming community in villages, and deploy state of art machinery to develop and market secondary products.

This is the only way that the Farmer can get a better price (for any finished products). This way a competition is created to MNC by village industry. This will benefit both the producer and consumer alike. Why do we need MNC and large corporates sell wheat flour?.

C. Creating a farmer’s service kendra to market that could be run by unemployed educated youth from villages who ensure right price for primary and secondary products produced by farmers.

D. Restoration of Traditional Economy: Having removed the traditional economy with controlled economy, is a planned ploy of invaders to harm Indian interests.

Continuation of controlled economy to international business, in every sector of economy is a sin continued by our own leaders. Switch to two tier economy where large part of the country do not seek Government to provide jobs. Block entry of foreign products except in high tech and defence sectors.

These steps can benefit the poor but is expected to create a storm and opposed tooth and nail by political leaders acting as agents of corporate firms and MNC companies operating from this soil.

In the name of achieving an economic super power status, the successive governments in India indulges in policies and practices which are harmful to citizen.

Wealth of the nation is thrown open to a small band of corporate families which siphon off to other economies. They are Spiritually immature not knowing the truth that:

“All the wealth in the world belong to God. One should not indulge in it too much. Use only that which is absolutely needed. Rig Veda”.

Let the leaders of every hue remember. No one takes the wealth at death, along with them.

Two solutions!

There are two ways to solve the poverty, unemployment and potential threat to peace in the society.

(1) Go forward in the current pace and direction of Economy and await a mass movement by the hungry and educated unemployed people.

(2) Set the direction reverse with the 2 tier-economy and have a peaceful nation.

I welcome comments from readers.

N.Natarajan