| Issue 23 Vol I, September 15, 2006 | Archive |
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‘Displacing and looting the farmers’
It is but natural for the exploited farmers and tribals and some sympathetic political elements to resist. Tragically any effort to get justice is thwarted by lathis and guns. Take a few instances. Some weeks back the police in the Kalinga area of Orissa killed 13 tribals in cold blood. Their fault was that they were demanding adequate compensation and rehabilitation for the thousands of acres of land which the Navin Patnaik government was acquiring for Tata Steel. Every state has some similar story to tell. At Kalinganagar, land was acquired from tribals at around Rs 30,000/acre, but sold to Tata Steel at Rs 3.35 lakh/acre. In some other cases in Haryana and Punjab, the land is acquired at Rs 20 lakh per acre and sold to developers at four to five times. Close by agitating farmers in Sangrur district where Trident group is to setup some industry, the agitating farmers are the victims of police brutalities. The Punjab government acquired huge lands and established sugar mills in several places like Patra, Amloh etc and later sold these for cheap to industrialists. Even the market cost of land has not been recovered what to say of machinery. Now the Oswals who got the Amloh sugar mill are asking for more land and the government is acquiring that land without asking a simple question as to what happened to the existing land with them. In Haryana where the Reliance group has been given 30,000 acres of high price land for a song agitation is building up. Ditto in Himachal Pradesh. Remember the protests in Karnataka, Maharashtra, Kerala and Gujarat and in many others states. Also, how many thousands of cases of land compensation are pending in the courts at all levels for years. We have with us the tragic tale of hundreds of oustees from the Narmada valley who are still struggling to survive in the tin sheds. Neither the prime minister nor the Supreme Court could help them. Oustees from Bhakra Dam and Pong Dam, built decades ago still cry for rehabilitation. Let us be clear as more and more special economic zones come up, 150 have been cleared recently, devouring hundreds and hundreds of acres of farm land or when we dig up minerals and setup power projects, settlers shall be deprived of their land, homes and cultural roots. With urbanisation picking up speed, more and more land would be acquired by the state governments all over the country and given to real estate sharks. We should be asking a simple but a relevant question. Why should these land owners, tillers and tribals be deprived of their sources of livelihood which they have used for ages without adequate compensation? These are the rural folks who suffer when cities come to their farmlands. Why should people be sacrificed in the name of development? What kind of welfare state is India? Where does the main problem lie? The government acquisition is at the supposed market price as reflected in the revenue records of sales. But recorded sales often understate the real price to evade stamp duty. At times the recorded price could be just one fourth of the market prices. The farmers are cheated this way. If the private developers and industrialists buy land directly from the landowners, they shall have to pay many times more than what they pay for the government acquired land. This clearly is outright confiscation of land and violation of their fundamental rights. Worst sufferers are the cultivators. We all know that the land records are woefully inadequate, and fail to list people who have cultivated land for decades. They as well as landless villagers get no compensation at all. At top of it the corrupt officials refuse to disburse compensation without their cut. Payments are rarely complete and very often delayed. In case when entire villages are acquired, the villagers lose access to forests, streams and grazing lands. They get no compensation for this. Land owners not only lose their land but also their dignity and they are herded into makeshift camps and whatever money they are able to get is lost quickly as they have no sense to use that money in a productive way. Outside Chandigarh, one can meet these families who once owned lands and are now just refugees. It may not be possible to reduce the human suffering by making acquisition voluntary as big chunks of land are required to setup towns and big industries. Yet acquisition can be made more just and advantageous to the villagers. If industries buy land from willing sellers, displacement will cease to be a major human or economic issue. Since big projects for housing, infrastructure or industry require contiguous land, and some villagers may not sell at any price. Some kind of acquisition as of today becomes a necessity. There is no need to acquire residential area in a village and this should be developed into model village. In fact, the homesteads are only a small fraction of the total area acquired for any project. Villagers in Chandigarh have waged a big struggle for years and got this right. Also, instead of forcibly acquiring land from villagers, industries can be asked to compulsorily lease the land. The villagers should be paid a lump-sum payment upfront plus a monthly rent, increased annually to the cost of living. After say fifty years or so, this lease could be renegotiated. Landowners instead being turned into paupers would own the land and get monthly payment as rent and be proud of the projects as stake holders. They could get jobs in these projects and be equity holders too. A democratic government should not to be a cause of suffering and exploitation and avoid wages of sin visiting it. |
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Controlling the Market Middlemen Market middlemen are essentially required to bring together buyers and sellers and set the produce at the desired place, in appropriate form and at time when needed. Therefore, a large number of middlemen such as transporters, processors, sorters, wholesalers, retailers and agent middlemen; commission agent and broker get into marketing of farm produce. The strategic role is played by commission agent (arhatya), who gets fixed commission from the buyer in lieu of the services rendered. He does not buy the produce and is supposed to watch the interest of farmer-seller in the primary market. The commission on different commodities ranges from 1.5-5%. For wheat and paddy, the most important crops of the Punjab state, the commission is 2.5% ad valorem. The commission agent arranges for unloading the produce, cleaning, sieving, auction, weighment and stitching of filled bags. Of course, he separately charges for labour for the market operations from the seller and buyer as per fixed norms. He also arranges for the payment to the farmers from the buyers. The total commission earned by the Commission Agents was about Rs63 crores during 1990-91 (at the rate of 1.5%). During 2004-05 the total commission has increased to around Rs480 crores (at the rate of 2.5%). The enhanced income of this agency was due to the fact that the Commission Agents got the commission increased from 1.5% to 2.0% in 1991-92 and then again from 2.0% to 2.5% in 1996-97, the increase appears to be illogical and politically motivated. The increase in price directly benefited them, as the commission was ad valorem. For example, the commission was Rs3.38/qtl in case of wheat in 1990-91, which went up almost six fold i.e. Rs19.20 in 2004-05. On the other hand, the price increase was about three times during this period. There was increase in the volume of trade due to increase in production and thus marketed surplus. The market arrivals of food grains and non-food grains went up from 103 lakh tones in 1990-91 to 319 lakh tones in 2004-05. At one level the commission agents did not contribute much to this process of agricultural development. At another level as a number of studies point out that the commission agents indulged in malpractices such as evasion of market fee and other taxes, over-weighment of farmers’ produce, non-payment of due incidentals to labour, deduction of excessive charges from the farmers’ payment, arranging illegal payments to the procurement agencies and deducting from farmers’ sale proceeds, charging illegal commission on high value crops such as cotton, basmati and sunflower. The commission agents also undertake the function of financing the farm sector. Now, the total debt can safely be estimated to Rs9, 000 crores and thus the share of Commission Agents is Rs5, 500 crores. They are known for charging high rate of interest; 24-36% per annum. In good old days when the moneylenders used to charge high rate of interest, it was due to high degree of risk in agricultural production and recovery. Now as commission agents are also moneylenders and the payment of the marketed farm produce is made through them, the risk in recovery is comparatively low. Therefore, the rate of interest should have gone down drastically. But it has gone up. As this agency has become a strong lobby in the food trade in the state, it is very difficult to minimize its role, which has otherwise become almost redundant in view of heavy procurement by the government in Punjab and Haryana. The high rate of commission is indeed a heavy burden on the marketing system, which can be avoided. Direct sale of wheat and paddy to the government agencies on their godowns/ stores and to millers on their mill premises, construction of silo and bulk handling units would reduce the handling cost. Direct payments to the farmers can be made by the procurement agencies. The private traders from within and outside the state would be attracted to buy Punjab food grains such avoidable commission and taxes can be done away with. The institutional sources of finance such as Commercial banks, Cooperatives, NABARD and marketing institutions should play bigger and supportive role to make cheaper credit available to the farmers to minimize their dependence on commission agents. On the whole, mandi taxes levied on food grains in Punjab are: Purchase tax 4%, Market fee 2%, RD Cess 2%, Infrastructure Cess 1%, Commission 2½%, Labour charges ½% and Pucca Arthia if any 1%. Thus, the mandi taxes amount to 12-13% but in other states like Uttar Pradesh, Rajasthan and Haryana, the market taxes are much less as compared to Punjab that is why the private traders hesitate to enter in the grain market in Punjab, even for export. Recently, the state government has decided to reimburse all the mandi charges in case on the receipt of export slip. If this is followed in true spirit, it can attract big grain companies to buy directly from farmers without going through commission agents and adopt contract farming. |
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