Demonetization has left deep scars on the economy and, despite assurances from the government, the journey to normalcy may be slower and more painful than expected. The denudation of India’s vast informal economy, almost entirely dependent on cash, has put the marginalized and economically vulnerable – farmers, daily-wage labourers, street vendors , small businesses, tiny industries, shops, and countless other basic industries and services that employ more than 90 percent of Indian workers – at risk. They collectively account for almost half the economy. That’s some $1 trillion, or more than the GDP of Indonesia.
Forced to stand in long lines at banks and outside machines and suffocated without the liquidity they need for daily wages and purchases, those who inhabit the bottom of the economic pyramid, are actually paying a heavy price. There is a general feeling that by cancelling 86 percent of circulating currency when 70 to 80 percent of transactions are cash-based, the government has burned down its economic house in order to eradicate the pest of corruption.
The farm sector has taken the worst scalds. The government’s decision triggered a nationwide cash crunch that sent farm prices crashing to rock-bottom levels, bringing misery to millions of farmers.
Above-normal monsoon rains in most parts of central and northern India had fields sprawling with crops with farmers expecting to make up for the loss suffered after two successive drought years.
The Rs ₹17 lakh-crore agricultural and food markets, from the mandi to the neighbourhood grocer, are going through a very painful phase. Demonetization has vacuumed liquidity from this virtually cash-only economy that provides livelihood to half the population. .Business is forecast to revive only after people in 7,500-plus mandis and 600,000 villages are adequately re-stocked with new currency.
The cries of Indian farmers can hardly be neglected by the leaders of a country where two-thirds of people still live in the countryside and are heading to cities in droves to escape the wrath at their farms. When India became independent, the contribution of agriculture to the economy was 50 per cent; now, it is 15 per cent. Employment in the agro sector was to the extent of 88 per cent; now, it is 66 per cent. Rural wages have fallen to their lowest.
With agriculture becoming unremunerative over the years, and with the farm incomes steadily declining, a majority of the farmers want to quit farming if given an alternative. Parched fields, failed crops and emaciated cattle have helped drive up the number of suicides by distressed farmers unable to repay their loans. Tens of thousands have left their farms in search of menial jobs, with many joining the ranks of the unemployed poor in the cities. A survey by the New Delhi based think-tank Centre for the Study of Developing Societies (CSDS) has shown that 76 percent farmers want to leave agriculture. This is because farming has becoming an economically unviable proposition
.Some estimates suggest that 30 Indians move from a rural to an urban area every minute. India is urbanizing rapidly as young people from the countryside flock to cities in search of jobs and economic opportunities The total population of farmers has declined by 15 million farmers (‘main’ cultivators) between 1991 and 2011 and 7.7 million between 2001 and 2011 on account of heavy migration. On average, that’s about 2,035 farmers losing ‘Main Cultivator’ status every single day for the last 20 years. And in a time of jobless growth, they’ve had few places to go beyond the lowest, menial ends of the service sector.
A report of the Institute of Applied Manpower Research (IAMR) — a part of the Planning Commission — puts it this way: “employment in total and in non-agricultural sectors has not been growing. It speaks of an “an absolute shift in workers from agriculture of 15 million to services and industry.” Many within the sector also likely moved from farmer to agricultural labourer status swelling the agrarian underclass.
While the rural areas are being emptied, moving the population into the urban areas is leading to the collapse of the cities. It is expected that by 2035, roughly 50 percent of India’s population will be urban based. Secondly, the population shift from rural areas along with prime farmland being diverted for non-agriculture purposes will create a food deficit thereby leading to an unforeseen crisis on the food security front.
Women have suffered heavily in the process. Female farmers are particularly vulnerable, to agricultural decline. There has been an increase of 38% and 13% from 2001, respectively, in women as main and marginal agricultural labourers from being cultivators. The total number of female farmers has declined 14% from 2001 (41.9 million) to 2011 (36 million). This includes a 10% decline in the number of main cultivators. There has also been a 20% decline in the number of marginal female cultivators.
The agrarian crisis of which farmer suicides are a tragic consequence is a mega calamity, rooted in one fundamental cause, the drive towards corporate farming’ driven by the predatory commercialization of the countryside .The rise of big agriculture has led to an alarming reduction in the varieties of food being grown and has made farmers hostages of the corporations that sell seeds and pesticides. This has been compounded by the rise of genetically modified crops, which is yet another case of humans’ manipulating nature without thinking of possible long term complications for the health of both the people and the farms.
Humans have an innate drive to work the land and produce food for their families and communities. Farmers take significant risks to satisfy that drive, and if they are unsuccessful, they develop a deep sense of failure. Farmers are motivated to hang on to land at almost all cost. When he was young he could walk out to his fields any time during the planting season “and your feet would sink into” the moist earth. “The soil was slippery and oily and it would stick to your legs and feet and you would have to scrape it off.” Now, he said, picking up a clump of hard earth that has to be ducked with a tiny shovel, the soil is like a stone — it is not living anymore.
India’ first Prime Minister and the greatest visionary Jawaharlal Nehru had said in 1947, “Everything can wait, but not agriculture.” Indeed the first five year plan focused on agriculture. Now, after 70 years, things are not what were dreamt by the first prime minister. The benefits of addressing the problem were understood long ago. An old Indian quotation poetically illustrates: “Tireless farmers, learned men and honest traders constitute a country. Wealth, large and enviable, and produce free of pests make up a country. The hallmark of an ideal land is where people voluntarily pay all taxes.” India needs an economic movement that starts in villages, not one that bypasses them.
Short on empathy and a sense of responsibility, our leaders see even grave crises only through the lens of their own privilege.
Moin Qazi is the author of the bestselling book, Village Diary of a Heretic Banker .He has worked in the development finance sector for almost four decades .He can be reached at firstname.lastname@example.org