The government [in Maharashtra] thought that there would be a higher crop yield from Bt cotton. But there is no difference in yield between Bt [genetically modified] and non-Bt seeds [but Bt cost much more].
In Andhra Pradesh and Punjab too, there are suicides by cotton farmers. The price of the crop is low in Gujarat too. Bt has failed totally in Bharuch and Baroda [Vadodara]. In Saurashtra, it is 20 to 25 per cent less.
'No integrated farm policy'
Interview with Vijay Jawandhia
Frontline, Volume 23 - Issue 25 :: Dec. 16-29 2006 INDIA'S NATIONAL MAGAZINE from the publishers of THE HINDU http://www.hinduonnet.com/fline/stories/20061229004911600.htm
VIJAY JAWANDHIA is one of the leading farm activists in Vidarbha. Anyone looking for hard data and analysis on the cotton crisis consults him. A founder-member of the Shetkari Sanghatana, he is also president of the Kisan Coordination Committee, a coalition of farmers' organisations across the country. The Maharashtra government appointed Jawandhia as the director of the Maharashtra State Cotton Federation for one year. Vijay Jawandhia spoke to Frontline about the economics and politics of the growing deprivation of Vidarbha's farmers.
Is it true that cotton prices are falling this year because of a bumper crop?
There is no bumper crop. It is the same as last year's. The government has wrongly estimated the cotton crop. From 360 lakh quintals, the Maharashtra government has already reduced its estimate of the harvest to 250 lakh quintals. The actual crop will only be 160 lakh quintals. The government thought that there would be a higher crop yield from Bt cotton. But there is no difference in yield between Bt [genetically modified] and non-Bt seeds.
Why are cotton prices falling?
Since 1994, international prices have fallen and domestic prices reflect this depression. It was $1.10 for one pound of cotton in 1994 [Rs.2,500 a quintal]. It fell to 40 cents a pound. Today, it is 54 cents a pound [Rs.1,800 a quintal]. Between 1997 and 2003, we imported 110 lakh bales of cotton. The import tariff is only 10 per cent. Textile mills that export yarn do not even have to pay this tariff.
Our political leaders say farmers should compete in the free market and not rely on the government. But, it is not a free market. The prices in the international market are low right now because contries like the U.S. and China give subsidies to their cotton farmers. In the U.S., 20,000 cotton farmers get $4.7 billion in subsidies. China gives Rs. 900 a quintal to its farmers, that is, half the price. How can our farmers compete? That is why they are committing suicide.
Our government should at least intervene to ensure that the prices of cotton lint do not fall below Rs. 80 a kg. Then farmers will be assured of a price of Rs.2,700 to Rs.3,000 a quintal. It does not implement this policy because it is under pressure from the mill lobby, which imports cheap, subsidised cotton.
Do you think the unrest in Wani was reflective of cotton farmers' anger or was it a freak incident?
Wani could be repeated anywhere. The farmers are angry. The government wants to absolve itself of its responsibility to purchase cotton. It does not even maintain the infrastructure. It has disbanded 80 per cent of the procurement staff on voluntary retirement.
When [State Home Minister] R.R. Patil visited Wani, he assured farmers that the State would buy at the support price. What favour is he doing us? That is the government's duty. The support price barely covers our costs.
If he thinks the support price is remunerative, then sugarcane should be sold at the support price so that poor people will get sugar cheap.
Why are cotton farmers in Maharashtra in such a serious crisis, but not those in other cotton-producing States such as Gujarat and Madhya Pradesh?
In Andhra Pradesh and Punjab too, there are suicides by cotton farmers. The price of the crop is low in Gujarat too. Bt has failed totally in Bharuch and Baroda [Vadodara]. In Saurashtra, it is 20 to 25 per cent less. The price has fallen everywhere.
In Gujarat, 60 per cent of the cotton crop is irrigated. Here only 20 per cent is irrigated, so the risks are much more and the cost of technology is high. But there is no crop insurance. Gujarat is also heading towards a crisis. And, not only cotton farmers, but all farmers are in distress.
We are addressing the problem in compartments. There are too many government departments involved and there is no integrated farm policy. Instead of giving subsidies to fertilizer companies, why does the government not give direct subsidies to farmers of non-irrigated lands or use the money to ensure a fair price?
The Maharashtra government feels that the Cotton Procurement Scheme is placing too much of a financial burden on the State. Should this loss-making scheme be wound up?
The accumulated losses due to the procurement scheme, since it started in 1972, are Rs.5,000 crores. The Maharashtra government has a debt of Rs.1.35 lakh crores. On whom is all this money being spent? In comparison, Rs.5,000 crores is a small price to pay to ensure that 24 per cent of our agriculture remains viable. Are not the U.S. and China heavily subsidising their farmers?
If the government wants to withdraw its intervention in regulating cotton prices, then why does it retain total control over the price of sugar? Sugar has a 60 per cent tariff. Moreover, every month, the Central government releases a sugar quota so that prices do not fall below Rs.20 a kg.
Sugarcane farmers are getting more thanthe support price of Rs.850 a tonne. In Uttar Pradesh, they get Rs.1,200 to Rs.1,300 a tonne. In Maharashtra, the healthy sugar mills buy sugar at Rs.1,400 to Rs.1,500 a tonne. In addition, sugarcane farmers get subsidies in various forms such as for canal irrigation, power and lower interest to the factories. Also, the cost of cutting and transporting is paid for by the sugar factory (Rs.300 a tonne). But cotton plucking costs (Rs.300 a quintal) and marketing costs (Rs.100 a quintal) are borne by farmers. This expense itself is 10 times more for cotton than for sugarcane.
Around 24 per cent of the cultivable land in Maharashtra is under cotton and only 5 per cent is under sugarcane. If the government can intervene and protect the interests of sugarcane farmers, then why not in the case of cotton farmers?