Prof. Arindam Chaudhuri

Hony. Dean, Centre For Economic Research and Advanced Studies, IIPM




One wonders why the majority of ailments that plague India have to do with our agriculture sector, more so when India is primarily considered to be an agrarian economy. Such is the state of affairs that if, on one hand, farmers are committing suicides on account of not fetching the right price for their produce, then on the other hand, inflation is bleeding the pockets of millions of middle and lower middle class Indians. The irony is, all this is no secret, this imbroglio has almost become an annual feature; yet, the government invariably fails to take any pro-active measures to arrest the situation. Of course, there is no economic or humane justification to such a nonchalant attitude of the government, but yes, there are cheap political rationalities for the same. For example, in order to arrest the inflation, whenever any government tries to import some of the basic agriculture commodities to ease the prices, voices of dissension come up from quite a few sections of the polity. Although the reason why many a political party behaves in such a manner is not difficult to understand, as Indian agriculture is a complex web in which middlemen in the entire supply chain are more dominant than the original producers of farm produce. And these ‘Great Indian Middlemen’ or dalals make it a point to immerse the political parties in so much patronage that out of sheer gratification, even before the interests of farmers or the end consumers are taken care of, it is invariably made sure that those responsible for most of the ailments plaguing agriculture in India remain completely untouched.




So does that mean that Indian agriculture is incurable and the inflationary pressures that bleed every pocket are uncontrollable? My answer is – NO! For all selfish reasons, consecutive governments have astutely kept agriculture a ‘holy cow’, completely outside the ambit of all kinds of reforms. Otherwise, why is it that the price of all the agricultural produce is rising at a time when the price for all the FMCG (Fast Moving Consumer Goods) products, consumer durables, automobiles are coming down? Why is it that at a time when telecom – which was once beyond the reach of even an upper middle class Indian – has become so affordable that even a poor rickshaw puller can afford it, the price of food is rising? Or for that matter, at a time when even flying by air is gradually becoming affordable for millions of middle class and lower middle class, then why is it that they are feeling the pinch of price rise of onions and potatoes? Needless to state that for all these sectors, there is a huge competition resulting in continuous innovation. In each of these sectors, be it telecom, FMCG, aviation or consumer durables, there is an organised supply chain that is managed and monitored with the best available technology. Moreover, competing market scenarios in each of these sectors have been continuously pushing the companies to optimise on costs at every possible level. But nothing like this happens in the case of agriculture. Right from the sourcing of material to the delivery of the end product, the chain is skewed; entangled in a maze that is in the stranglehold of middlemen. The farmers are as much victims of the scheme of things as end customers and the nation as a whole. Farmers don’t even get 30% of the actual price that the end customers pay. What more, the propaganda machinery of the government has made them believe that agriculture is kept out of reforms ‘for their benefit’. So much so that at a time when the entire world is singing the paean of scalability and productivity, our policy makers still find solace under the garb of fragmented holdings, which they think, brings equality.



The only way out of this messy web is to consider agriculture as just any other business and run it in the same way as a business is supposed to be run. Till then, farmers would keep dying and the consumers, bleeding!