Volume 2, No. 2, February 2001

 Agricultural Crisis in AP:

Suicides Cannot Solve Peasants Problems;
Taking up Arms is the only Way !

— Ramakanth

Until now, the problem of remunerative prices only affected commercial crops. But this year it has also badly hit foodgrains, like rice and other cereals. Today, 25 lakh tonnes of rice are lying unsold in the rice-miller’s godowns — which was purchased from the peasantry at throw-away rates.

Last November the Swarna variety of rice fetched a price of Rs. 425 per 75 kg. bag. This year it has dropped to Rs. 360. Also, high quality rice like Sona Masuri, has no market. Besides, in the current year the FCI began treating Sona Masuri as a common variety, instead of the Grade ‘A’ normally given to it (This was later reversed due to farmers’ pressure). Old rice, which last year fetched Rs. 750 per 75 kg. bag is only getting Rs. 500 this year.

After the completion of the ongoing Kharif season (July to December) another 82 lakh tonnes of produce will reach the market, and a further 40 lakh tonnes during the Rabi season. A disastrous situation is facing the peasantry, for if stocks continue to mount, the prices will crash even further with the peasantry resorting to distress sales. It is ironic that, while lakhs of people in AP are starving, unable to purchase their basic food due to hiked up PDS rates, thousands of tonnes of rice are rotting in the godowns.

A similar situation is faced by the bumper maize crop. Cultivated in 4.07 lakh hectors of land, the peasantry got a good crop this year of 13 lakh tonnes. But this was of little value for that section of the peasantry that tried to sell its surplus. Prices this year crashed from Rs. 700 per quintal to Rs. 300 per quintal. And even at this low price there were no buyers.

Red Gram too was likely to face a similar situation. Even two months before the harvest, the rate had dropped from Rs. 2,300 per quintal to Rs. 1,100.

The state of the groundnut crop was even worse. It faced a double attack of poor yields and low prices. AP is the second largest producer of groundnuts (after Gujarat) with 48 lakh acres under groundnut cultivation. Of this, one-third is in the Rayalaseema region which has faced drought conditions in six years of the past decade. This year the yield was barely 5½ quintals per hectare, while prices dropped from Rs. 1000 to Rs. 700 per quintal, compared to the government rate of Rs. 1,200 per quintal. Besides, cost of inputs have skyrocketed, coming to roughly Rs. 9,000 per hectare, resulting in about Rs. 3,000 loss per hectare. In addition, this years’ crop was badly attacked by pests. In Anantapur district alone, 3 lakh acres of crops were destroyed by disease. Much of the pesticides used were ineffective due to adulteration. Besides, the government themselves sold the banned pest-prone JL-24 variety to farmers, in order to curry favour with the MNC manufacturers. With the serious losses, many farmers committed suicide.

The tragedy is that as early as July the Rekulakunta Agricultural Centre cautioned about the spread of pests. But the hi-tech Chandrababu Naidu’s video-conferencing could not pick up the warnings. It was only after the suicides began and much of the crop was destroyed, that he awoke from his slumber with high-sounding pronouncements. He promised spraying by helicopters and free distribution of Monocrotophos. But this was mere Naidu-hype, as this pesticide is only effective till 45 days after plantation. Naidu announced his great scheme 55 days after the plantation. Later he even tried to withdraw this free distribution saying it was too late anyway. But the agitated farmers seized the Monocrotophos, like taking dowry for a dead bride-groom.

AP is a big producer of tobacco and chillis. Both crops are in severe crisis. The situation of tobacco was so bad that the state government promulgated a ‘crop holiday’ (i.e., not to harvest the crop) this year. Even the Single Judge of the High Court issued an order for a tobacco crop holiday. In other words anyone growing tobacco can be arrested. And as far as the chilli growers go, they produce nothing but tears. Already the last years’ crop of 20 lakh tonnes is rotting in the cold storage. In the current year the rate for low quality chillis has dropped from Rs. 1,630 per quintal to Rs. 1,020 per quintal; and for high quality from Rs. 4,210 to Rs. 3,700. With the earlier crop still not sold, one can well imagine what will be the fate of the current crop.

Cotton is another widely grown crop in AP. Successive failures have seen the maximum suicides in this area. This year they face an even worse disaster. The bulk of the crop has been destroyed by the yellow rot. Adulterated pesticides have no effect on the disease. Additionally, drought conditions in some areas have added to their despair. The peasants have to spend Rs. 8000 per acre for the crop. A yield of 5 quintals per acre is the minimum necessary to cover costs. But, in the districts of Warangal, Nalgonda and Medak the situation is so bad that not more than 2 quintals per acre is expected. The situation in the more prosperous Circar districts of Guntur and Krishna is not much better. To compound the crisis of the cotton-growing peasantry, the government has actually reduced the quantum of bank loans to the farmer. Earlier the farmer was given Rs. 4000 per acre (even though the cost was Rs. 8000). Now the government has changed the category of ‘farmer’ to ‘farm sector’ which includes the food processing industries, cold storages, etc. In other words now this Rs. 4000 is distributed amongst the entire ‘farm sector’ thereby reducing the share of the loan to the farmer even further, thereby pushing him deeper into the clutches of the money lender.

The position of tamarind, turmeric and black gram is also deteriorating. Many peasants who faced losses in cotton have turned to castor cultivation. The area under castor in the state has increased from 2.2 lakh hectares last year to as much as 3.6 lakh hectares in the current year. Though the product this year will be 2½ lakh tonnes the prices have crashed from Rs. 1,500 last year to Rs. 800 this year.

The state of the palm oil growers is also precarious, due to the flood of imports. Till now the central government has been paying remunerative prices due to a ‘market intervention’ plan. But the plan is now due to expire. This will result in the utter ruination of the palm growers.

The broiler producing poultry farms are on the verge of collapse. The wholesaler, commission agent, big-business nexus is sqeezing out the small-scale producer.

The oil mills are also facing closure. The state government’s ruling that all cooking oil should be sold in sealed packs, has killed most of the small-scale mill owners who are unable to spend lakhs of rupees on packaging. The government is pretending that this is to prevent adulteration; when in fact it is only to hand over the edible oil market to the multinationals that have recently entered it in a big way. It also helps promote the packaging business, which again is chiefly controlled by multinationals

There is a clear-cut criminal nexus between the state government and the imperialists to promote international agri-business in AP and thereby kill not only the farmer but also the small producer.

Reduction of subsidies and raising charges (water, electricity, etc); promoting imperialist seeds, fertilisers, pesticides etc; dumping of cheap imported products, etc — are all a part of selling the AP agrarian sector to the foreign sharks. Chandrababu Naidu, as chief commission agent of US agribusiness, has been primarily responsible for the systematic destruction of the peasantry. Let us take a look at the steps taken by this agent :

In 1996 he increased the water cess and in 1999 and 2000 twice increased the electricity power charges. Irrigation has been totally neglected with most projects being starved of funds. While Naidu siphons off hundreds of crores towards hi-tech promotion, he cannot spare even a few crores for irrigation. Only the rich agrarian pockets get water from the big projects while the rest of AP is parched. To cover up his willful neglect of irrigation he has gone on a hi-tech propaganda calling on people to dig cantour pits etc., for better watershed management. He thereby absolves the state government from any responsibility.

The much-hyped mini projects, like the Galeru-Nagari, Handri-Neeva and the Velugonda projects (this was supposed to supply water to 4.5 lakh acres in Prakasham, Nellore and Cuddapah districts), which were inaugurated with much fanfare in 1996, has not been allotted any funds. The old projects like Jurala, SLBC and the Telugu Ganga are getting minor amounts. The Telugu Ganga project (which is to supply water to Chennai city and some parts of Rayalaseema) was allocated a mere Rs. 80 crores this year, which would not even cover the old dues of the contractors and salaries of the employees.

As a result of this warped policy vast areas of AP are reeling under drought; while sections of the middle and rich peasantry have turned to borewells (also pushed by the World Bank) resulting in the depletion of the water table.

Last year 688 mandals were declared as drought affected, yet nominal help was given. The total amount declared as relief measures was a mere Rs. 100 crores. The banks that were supposedly told to reschedule (i.e., extend the time for payment) the old loans, conveniently ignored the ‘order’ saying that they had not received instructions from the head office. The banks merely adjusted the new loans as payment for the old dues, thereby pushing the peasantry deeper into the clutches of the usurer.

The state of the farmers utilising borewells is extremely insecure. Having been forced to pay massive increases in electricity charges, the supply is erratic and the voltage fluctuating. The erratic supply has resulted in enormous damage to the Kharif crop. Also, the fluctuation of voltage supply has resulted in thousands of motors getting burnt out. Regular power-cut and destruction of motors resulted in crops drying up in vast areas resulting in nominal yields and huge losses. Yet they were forced to pay the hiked up electricity charges and costs for purchasing new motors.

If we turn to the supply of seeds, pesticides and fertilisers, we find that the state government has left the peasantry to the mercy of the big companies and unscrupulous traders. This year the government’s supply of seeds was meagre. For the kharif season 60 lakh quintals of seeds were required. But the state government supplied a mere 20% through the state seed development corporation and Oilfed agencies. In Anantapur district, where there was a requirement of 14 lakh tonnes the government supplied 1.12 lakh tonnes. As a result of agitation the government supplied a nominal 68,000 quintals extra. If such was the situation in the plain areas, one can well image the situation in the backward adivasi regions. Nothing was supplied to them. Taking advantage of this situation traders supplied adulterated seeds for nearly 50,000 acres. The worst affected were Khammam and Warangal districts. For example, the adulterated XL-35 cotton seed resulted in extensive growth, but no flowers.

The government is intentionally not allotting funds for the Seed Development Corporation or the Oilfed. As a result they are unable to procure seeds. It is thereby slowly handing over all seed procurement and distribution to private and MNC agencies. This is nothing but knowingly pushing the peasantry into the clutches of the MNC leeches like Monsanto, Dupont, Novortis, ITC etc., who already have a strong share in the seed business. In fact, in the current year, the state agencies themselves began selling seeds of the MNC companies. Even banned groundnut seed varieties, like JL-24, MTV-6 types, were supplied to the peasantry.

Besides, the state government is taking no action on the traders who have supplied adulterated seeds, fertilisers and pesticides. The government pesticide’s testing centres are nominal, and these freely hand out certificates for adulterated and banned varieties. If any happen to get exposed, there is an immediate cover-up due to the trader-politician-MNC nexus. While the government is threatening stiff jail terms for theft of electricity, it turns a blind eye towards these rapacious dealers. And if by chance, due to people’s pressure, a company is black-listed, it immediately re-appears with a new name, with the assistance of government officials. In fact, the adulterated product owner can be given a maximum punishment of just a fine of Rs. 500.

Such then is the mafia style nexus between the politicians, traders and MNC/producers. It is this combine that is minting fortunes on the devastation of the peasantry. Now, the Naidu government plans to systemise and increase this loot by introducing his New Agricultural Policy.

In line with the Central government’s New National Agricultural Policy the AP state government has also set forth its new policies.

Naidu’s ‘Vision 2020’ is not a product of his brain, but a scheme of the imperialists. One well-known economist, Michael Richardson said in 1995 that : "In the Vision 2020 only the politicians will give promises about the future, but nothing will be done at present. This is a good vision to cheat the masses." One part of this Vision 2020 is the ‘Green 2020’ relating to agriculture.

The Chandrababu Naidu government released a 16-point Agricultural Plan in June 1998, called the ‘Karshak Parishath.’ This plan had not yet incorporated all the World Bank directives and comprised much of the traditional rhetoric on agrarian development. As relations with the World Bank matured (specifically after the gigantic $0.5 billion loan, chiefly for the rural areas), he released a 21-page second manifesto in November 1999 — called the ‘Working Paper on Agriculture.’ In this working paper he stated that 160 lakh acres of non-cultivable land should be handed over to corporate agencies. In the same paper, it was stated that the state government proposed to promote commercial crops instead of food grains, and plans to introduce heavy machinery into agriculture.

The third manifesto, entitled ‘Agricultural Policy’ was released in June 2000, by which time his relations with the World Bank had been tightly cemented. In this, the government proposed to form an Agricultural Initiation Committee and the forming of a separate commission for the agricultural sector. It also stated that the aims proposed in the ‘Working Paper’ should be completed before 2005.

In fact all the schemes of Naidu, were nothing but a carbon copy of the World Bank’s ‘Economic Memorandum of India’ (dated April 29, ’91). The main points of the Agricultural Policy laid down here were :

In AP a few more policies were added to these. They were : (a) Allotting Rs. 100 crore for price stabilisation, (b) Establishing research centres for the main crops, (c) the government coming into agreements with seed and pesticide companies, (d) Giving structural loans to every farmer in the coming five years (e) Conducting agricultural exhibitions in revenue divisions, (f) forming peasant clubs in every village, (g) Giving importance to watershed planning in dry areas, (h) Implementing a crop insurance policy, taking the village as the unit, (i) Implementing the ‘Rytubandhu’ policy.

These ‘policies’ are nothing but an admixture of populist rhetoric (not to be implemented) with a conscious plan to tie agriculture in AP with imperialist schemes (to be implemented). Much of it is propaganda hype of the TDP government, in which Naidu has developed an expertise.

The list of projects have been so intriguing, that no one really knows the particulars of some of the projects announced by the state government and funded by the World Bank. For example, in 1998, the Naidu government announced a project entitled the ‘Andhra Pradesh Economic Restructuring Plan (APERP) with a gigantic budget of Rs. 3,346 crores. The multi-purpose project was designed to develop education, primary health, roads, nutritious food, people’s commerce, water resources for agriculture, etc. In this huge project, the share of the World Bank was Rs. 2,172 crores. But, upto now, no one remembers this project, nor does anyone know where the money has actually gone and with which budgets it has got inter-mixed.

A 6% yearly increase in agricultural production is the motto of the Vision 2020, which the TDP repeats like a mantra. The agricultural minister says that the agrarian economy will stabilise once the agriculturist begins exporting .... and when agricultural commodities become competitive in the international market.

All such talk is mere nonsense. How can one expect quality products from agriculture which, on the one hand, is devastated by adulterated fertilisers, pesticides and seeds, and on the other, handicapped by poor irrigation, power cuts, low voltage, floods, droughts etc. Besides, while the AP government is cutting subsidies, the imperialist countries give their agriculturists huge subsidies. Over and above this, the peasant in AP has to pay out the interest on usurious loans. So, infact, framing export-oriented agricultural policies leads only to bankruptcy of the peasantry and huge profits for big business and the MNCs. Also, corporate agriculture will lead to the destruction of sections of the small and even middle peasantry, transforming them into daily labourers. It will only benefit the big landed interests.

To deflect attention from its own responsibility, the TDP is making much noise at Delhi pretending concern for the AP farmers. The ruination of not only the poor (by drought, floods, etc) but now even of vast sections of the middle and rich peasants is threatening the very existence of the TDP vote base. With all its local gimmicks having got exposed the TDP is trying to shift the blame onto the Centre.

But, the fact is that, not only are both in the same government, but both have also been aggressively implementing the WTO/World Bank dictated economic reforms, which have resulted in the present crisis of the agriculturist in AP and the rest of the country. The noise at Delhi, and the few sops handed over to the state by the Centre, is only subterfuge to prevent the peasants breaking out into outright revolt. The fact that the FCI has enormously reduced purchasing grains, and is harassing the farmer by reducing grades, rejecting vast amounts as unfit, etc., is part of a scheme to wind up the FCI, privatise grain distribution and handover the task to multinationals like Cargill. Cargill has already made its entry into grain distribution in the country. This is the essence of its present policies which Naidu knows, will slowly unfold later.

This year the FCI opened about 124 centres, mostly in the towns at far off distances from the producer, making transportation inconvenient and costly. To make a sale to the FCI more inconvenient, payments this year were made by cheque, thereby ignoring the vast sections that do not have bank accounts. After overcoming these encumbrances, if the peasantry finally brought his produce (covering the long distances) to its depots, the FCI has been rejecting it as sub-standard. They introduced a series of stipulations which are not even used in Punjab or Haryana. The peasant is then forced to sell his produce to the rapacious trader waiting nearby — who buys it at excessively depressed rates. For example, till end October 2000, 10.5 lakh quintals of maize entered the market centres of Nizamabad, Warangal, Kamareddy, Khammam, Siddipet, Karimnagar, Jammikunta and Jagitial. But the FCI bought only 59,010 quintals. Utilising this situation the big traders paid out merely Rs. 300 per quintal to the peasantry instead of the government rate of Rs. 445. No doubt a small cut of this profit went to the FCI officials.

Even in paddy we see a nexus between the FCI and the miller/trader. Even assuming the miller buys the Grade ‘A’ paddy at the MSP rate of Rs. 540 per quintal, that means for three quintals he pays Rs. 1620. 3 quintals of paddy give about 2 quintals of rice. The cost to the miller therefore comes to Rs. 810 per quintal. But the government is buying the rice at Rs. 950 per quintal. So even at MSP rates the miller is making big profits of Rs. 140 per quintal. The actual profit is much higher as the millers purchase the paddy at rates well below the MSP rate. Such then is the anti-peasant, pro-trader policy of the FCI.

Now if we turn to the state government’s role we see a similar treachery of the so-called Market Committees (MCs), formed with ruling party MLAs(who were not given berths in the ministry) and their henchmen. The MCs have the responsibility to see that the peasantry is paid the Minimum Support Price (MSP) by the traders/millers at the market yards. But the reality was that none of the commodities that reached the market yards — paddy, groundnut, green gram, maize, bajra, castor — was paid for at the MSP rates. At the market yards the traders and commission agents formed into syndicates and fixed low prices in order to fleece the peasantry. These syndicates were then linked up with the MCs to form a mafia, that ruthlessly robbed the peasantry.

Chandrababu Naidu’s gimmicky announcement of a Rs. 100 crore price stabilisation package, to diffuse the rising discontent of the peasantry, was yet another fraud. Firstly, the amount is a pittance compared to the thousands of crores of purchase reaching the market. Secondly, not a paisa of this was released to the state government purchasing agencies, such as Markfed, Oilfed etc. Thirdly, the peasantry could not sell at MSP rates. So, where did this Rs. 100 crores will disappear ? Most probably, into the pockets of the MCs, traders and other hangers on.

But this was not the only Naidu’s media-hyped gimmick. His much propagated Kuppam Pilot Project and ‘Rytubandhu’ Plan were similar farces.

The TDP set up a Pilot Project in Kuppam of Chittoor district (Chandrababu Naidu’s home district) — along Israel oriented techniques. This project was propagated as a TDP model involving an expenditure of just under Rs. 10 crores. A massive Rs. 57 lakhs was invested in each acre that came under the model. In the three years since the model was initiated the total produce per acre has been only Rs. 85 lakhs — just a little over the original investment. Besides, according to some studies, the project has been harmful to the environment, destroys the fertility of the land, is useless for multi-season crops, creates harmful foodgrains, removes the natural nutrient contents of the soil and destroys the self-sufficiency of the peasantry.

The other gimmick to pacify the peasantry was the so-called ‘Rytubandhu’ or ‘farmer relief’ plan. According to this plan, when prices in the market are unfavourable, the farmer can stock their produce in the market yards for three months and can collect, as loan, 75% of its value. Sounds good on paper, but the government allocated a mere Rs. 34.4 crores for this plan. Not surprisingly, this amount would be swallowed by the market mafia, utilising fake ‘peasant’ accounts, thereby throwing the peasantry further into dependency on the trader/usurer scum.

So, for all the TDP gimmicks, they are out to destroy the agriculturists and hand over the agrarian economy to foreign agri-business. This is resulting in more and more farmers taking to suicide. In just the one month of October 2000, 45 farmers committed suicide in AP. One can well imagine what dire straits the farming community has been pushed to, when they destroy themselves with the pesticides meant for the insects. The tragic conditions become even worse when they leave behind a wife, little children and elderly parents. It is a nightmare and horror for the whole family. The tragedy of the dead is compounded ten-fold with helplessness of the living. And in this situation the vampire Naidu has the audacity to say that farmers are committing suicide for the meagrely ex-gratia payment their families receive, so that too must be stopped immediately. While Naidu spends his time allocating crores of rupee for IT, business schools, express roads, film cities and tourism (it allocated a huge Rs. 2,300 crores for 19 projects, to place Hyderabad on the international tourist map), the vast agricultural population is being pushed to as low inhuman death.

The crisis of the green revolution and the economic reforms in the agrarian sector have descended simultaneously onto the backs of the AP peasantry. This has hit hard, not only the poor peasants, but also vast numbers of middle peasants and even a section of the rich peasantry. Also, with growth only in the hi-tech sphere and no job opportunities for the rural populace, the burden on the land is increasing to breaking point. Oceans of humanity migrate each year in search of jobs. A bankrupt peasantry, a devastated populace of poor and landless peasants, and a traumatised rural population is Naidu’s package to AP’s agrarian economy.

No stunts of the TDP nor the NGO-style reforms nor the World Bank doles can change the situation. All these are geared only to extend the market for commodities in the rural areas by destroying self-reliant existence. This growing market economy, with declining purchasing power is ruining a vast populace as never before. The only answer to the present situation is through radical transformation, where land is redistributed to the tiller and the peasantry is taken forward, organised into self-sustaining-mutual-aid teams and cooperatives.

The AP peasantry has a great history of struggle from the great Telangana uprising, to Srikakulam to the present CPI(ML)[People’s War] organised upsurge. Suicides is no answer. The answer lies in taking up arms to gain justice and for a new bright future.

— Oct. 2000

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