Volume 4, No. 7, July 2003

Andhra Pradesh has become the testing ground for several World Bank-sponsored projects encompassing virtually every sphere—agriculture, industry, service sector, especially power, roads&communications, information technology, not to mention the various counter-insurgency tactics of high-profile reforms and brutal repression as part of the Low Intensity Conflict strategy to deal with the Naxalite ‘problem’. Under the stewardship of a trusted, wily satrap whose loyalty to the imperialists and their agency, the World Bank, is unquestionable, the state of Andhra Pradesh has been undergoing a metamorphosis transforming into a backyard of the imperialists. And the people of the state are treated like guinea pigs for the imperialist experiments.

The experiment that had been going on in AP since the past five years and little-known outside the state is the experiment in ‘Corporate Agriculture’. Corporate agriculture, as the name itself suggests, is the conversion of agricultural lands into large-scale capitalist farms controlled by the huge Corporations. It intends to alter the pattern of crops from foodgrains like paddy, maize, jowar, groundnuts, pulses, etc. to cash crops. The philosophy behind the project—the philosophy of the World Bank—is that small landholdings are unviable, that small landholders cannot use modern technology. The main intention of the govt., however, is the take-over of the land of the small and middle peasant and hand them over to the capitalist corporations in the name of improving the productivity.

It is five years since the experiment in Kuppam in Chittore district of perennially drought-prone Rayala-seema region had begun. It received wide media coverage, Kuppam being the constituency of the CM. While the government claims it has been a grand success, farmers counter it saying that it has been a big flop. The government procured the lands from the peasants and handed them over to the Bright Hashita Company (BHC) of Israel. However, the latter cultivated only 170 acres out of the 222 acres given. Meanwhile, the government is planning to extend ‘corporate agriculture’ to 4 more districts; and surveys had been completed in Rangareddy and Vizianagaram districts.

There are three stages in the Kuppam project:

1) Israel’s Demo Project

2) 2KR Project

3) 3KR Project

The fist project began in Chaldiganipalli village in1997. A total of 222.24 cents of land was procured from the peasants and two water tanks were constructed for storing 5500 and 4500 cusecs of water. Land has been cleared of trees and hillocks for this purpose. 17 borewells were dug to pump water into the two tanks. Drips and sprinklers were fixed. Agreements were made with the peasants for three years and extended by another two.

Bright Hashita Company (BHC) of Israel implemented this demo project. Land was procured from the peasants with the assurance that Rs. 30000-50000 would be paid per acre to the leased land but only 3,5,7,9 and 11 thousands were paid each year successively. And now, plans are on to abandon the project by giving the land back to the peasants. The peasants are at a loss now to continue farming on the land.

Since the cultivation is done by the BHC, there is no role, whatsoever, for the peasants in the project. Even the agricultural university in the state has no role in the experiment. The government had not consulted either the agricultural university or the Ministry of Agriculture at any stage of the project. The project was carried out solely by the Rural Development Ministry.

The Israeli technology and experience were applied mechanically without taking into account the completely different conditions prevailing in India. Scientific principles were abandoned in the course of implementing the project. It is a fundamental principle of scientific agriculture to preserve land fertility and retain moisture in the soil. Scientists recommend laying of mud partition between parcels of land to guard against wind flow. And this has been the practice of the peasants since long. It is a common thing to see the criss-crossing of mud boundaries between parcels of agricultural land all over India. Tilling and sowing of seeds are also done against the direction of the wind flow in order to retain the moisture in the soil. This is a well-known principle in watershed management. But the BHC had conveniently bid goodbye to this basic principle, and removed the mud partitions that were blocking wind flow. The Company also tilled the land along the direction of the wind flow and had sowed the seeds in a similar fashion. Consequently, the fertility of the top-soil was washed away. Soil erosion took place and it resulted in the emergence of rocky land. Due to reduced land fertility, the crop output began to diminish from the third year on. Besides, the land was unable to absorb rain water. Some of the land became useless due to water inundation. The peasants were disturbed by the decrease in the fertility of their lands.

Another weakness of the project was the failure to mobilise the resources after they were used up. Most of the resources had dried up in the course of implementation of the project. 17 borewells were dug going as deep as 600 feet. Underground water was pumped out with 50HP motors. This led to the drying up of water resources in the bore-wells upto 250 feet depth in the neighbouring fields and to depletion of water in the project area. Flouting all scientific norms, the BHC did not make any attempt to recharge the underground water. Besides, there is also no usage of bio-fertilisers which are essential for conserving land fertility and environment. It has been the common practice of the peasantry to recycle the agricultural wastes for use. But as these time-tested methods were abandoned by the BHC, lands were laid to waste. Crop output suffered.

In corporate agriculture, the importance given to profits is not given to environment and people’s health. There was a massive use of chemicals and fertilisers in the project land. According to the recommendations of agricultural scientists, 150 kg of DAP may be used per acre, generally speaking, but the BHC used 750 kg per acre. Weedicides were used along with insecticides and pesticides irrespective of whether it was needed or not. 40-50% of the expenditure was used on chemicals alone. As a result, productivity fell, land was contaminated and the danger of poisonous substances being retained in the crops increased. This has hazardous effects on the people’s health.

Peasants generally till 10-15 cm deep in this region. In the Israeli-sponsored cultivation, heavy machinery was used to till upto 40-50 cm deep. This brought the rocky soil to the surface and pushed the fertile top soil to the lower layers thereby leading to loss of soil fertility.

Formerly, peasants used to grow ragi, jowar, bajra, pulses, groundnuts and other foodgrains.Those with wells and borewells grew paddy and sugarcane. However, under the management of the BHC, only vegetables are grown such as onions, potatoes, tomatoes, cucumber, water-melon, beans, carrot, peas, sunflower, etc.

Due to the dependence on vegetables and cashcrops, production of food grains has become unstable. Peasants have become more and more dependent on the vagaries of the market.The prices of vegetables have come down drastically leading to the deterioration of the condition of the peasants. Distress sales has become a common phenomenon as vegetables cannot be preserved for long.

Rs. 9 crore 63 lakhs was spent for developing and cultivating 170 acres of land. The state government gave Rs. 2.44 crores to the B.H.C (Agro) Pvt ltd. towards technical knowhow; Rs. 3.97 crores were spent for basic infrastructure development. Thus the govt granted about 10 crores for this project for cultivating 170 acres or around Rs. 5.66 lakhs per acre which is extremely high by any means. Needless to say, no one in his senses would think of such a costly project any where. Economically, it is totally unviable. Input expenses for crops was Rs.20,000 per acre. Of this, 23% was for chemicals,18.1% for chemical fertilizers, 26% for power and fuel, 8% for seeds, and, including other investments, the expenditure per acre was a massive Rs.52000. Income generated, however, was a meagre Rs.6549. No farmer was given Rs30-40,000 as assured earlier- Rs3000 was given in the first year and Rs.4000 in the second year. Thus, inspite of massive capital expenditure, the income was nominal.

The peasants were also left without any work though they received some money as lease. Of the 167 families whose lands were taken up on lease by the B.H.C, there were 500 members who could do work but only 60 to 70 people could get employment in the project. They had to work as labourers in their own land.

To reduce the production expenditure, labour was reduced to the minimum and heavier machinery was imported from Israel.This resulted in unemployment for the majority.

After 5 years, seeing the futility of the demo project it was decided to give the land back to the peasants.But the peasants are little unaware of the exact contours of their lands as all the physical boundaries were removed. Hence surveys are being taken up again.The government too had come to the conclusion that agriculture by B.H.C is unproductive and hence introduced another project in Kuppam in 1999 covering 54 villages.This is know as 2KR.

In this second stage, contract agriculture replaced the earlier corporate agriculture.The expenditure of the project was Rs.24.45 crores. Rs.8.45 crores was paid to the company by the govt for technical knowhow . The Japanese International Cooperative Society (JICO) supplied drips splinkers and tanks for mixing fertilizers, at a cost of Rs.9 crores .

Under contract agriculture, the peasants were not evicted from their lands but were allowed to till their land and grow any crop except paddy and sugarcane. The peasants were permitted to use the water from the wells. Current motors, drip system and pipes were given freely by the government. Cost incurred per acre was Rs.1.61 lakhs. Seeds, fertilizers and pesticides were given gratis by the government. This meant another Rs.40,000 per peasant. That is almost 2 lakhs per acre.The govt encouraged the cultivation of vegetables, fruits, flowers and sericulture.The productivity had increased but the amount of subsidy per acre is forbidding and hence cultivation cannot be done on a large scale.This project benefited those peasants who already had wells, that is, in the irrigated areas.Dry land farmers were not made part of this project . Small and medium peasants, dalit and adivasi peasants got no advantage. Most of the beneficiaries were rich farmers who registered themselves under different names to reap the benefits. Rs.55,628 was paid to the B.H.C per acre for giving advice.i.e. for consultancy services. Although the company was supposed to buy the produce from the peasants as per the contract, this was not done in the case of most products. Though the crop output had increased, the peasants suffered losses since the marketing problem was not solved. Moreover, with the drying up of govt subsidies at present, this second stage of contract agriculture too has become unremunerative for the peasants.

The government decided to implement this project in 10,000 acres in eight mandals in three years. According to this scheme, 50% of the total expenditure per acre should be borne by the peasants and the rest would be sanctioned by the govt. Despite serious attempts by the govt, peasants are showing the least interest in the project. Till date, not even 10% of the area has come under the project. Rs.46,500 will be the expenditure under the project. Peasants are not ready to bear half the expenditure as stipulated by the government.The total cost of the project is Rs. 46.50 crores.The government says it will get the funds released through the NABARD. Production and marketing blue prints are not yet prepared and peasants remain indifferent.

The Kuppam experiment in corporate and contract agriculture has led to several undesirable and hazardous consequences. The theory that only large-scale farming is viable has been proved utterly wrong. It had failed to increase the productivity in any significant meaure, or where a certain increase in productivity had taken place, it was completely offset by the long-term effect of diminishing the soil fertility and draining of water resources, and so on. By transforming the cropping pattern by replacing the foodgrains with non-foodgrain commercial crops it created a shortage of foodgrains on the one hand, and reduced the returns due to excessive competition from various countries in such agricultural commodities. Though the experiment now covers a small area, it had shown the dangerous implications.

Overall, the World Bank-sponsored experiment, which is being implemented by its stooge Chandrababu Naidu, has disastrous consequences for the agricultural economy of A.P and will ruin the lives of vast masses of the peasantry. Besides, it will also have long-term impact on the ecology. Opposition to this anti-people project is growing . The people of A.P will not allow the lmperialists to convert their state into an imperialist backyard.

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