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'Viability' of agricultural cooperatives vs govt proposed pro-corporate economic model

Dr Gian Singh*
The farmer struggle started from Punjab against the promulgation of three agricultural ordinances by the Union government in June 2020 and the enactment of three bills by Parliament in September 2020 to replace these ordinances is unique in many respects. There is no other example of such a peaceful and democratic farmer struggle.
This struggle which started from Punjab has won the sympathy and participation of various sections of the society by uniting farmers' organizations from different parts of the country. Different people and politicians across the world are appreciating this peaceful and democratic farmer struggle. The United Nations secretary-general has called such a struggle a farmers' right.
The three agricultural laws enacted by the Central Government are about the establishment of private markets for sale and purchase of agricultural commodities, contract farming, and the easing of the Essential Commodities Act, 1955. Establishment of private markets would ultimately result in running away from fixing minimum support price (MSP) of various agricultural products and procurement at these prices by the Central government, depletion of funds for rural development, harming the Agriculture Produce Market Committee (APMC) mandis, undermining the federal structure and the like.
The shake-up would lead to the exploitation of the APMC mandis, the depletion of funds for rural development and the undermining of the federal structure. The contract farming seeks to confuse the farmers with the illusion of guaranteeing the prices of agricultural commodities. The third agricultural law, Amendments in the Essential Commodities Act, 1955, speaks of the protection of the interests of farmers and consumers by making major amendments, while it is clear that these amendments will not benefit the farmers and will definitely harm the consumers.
The farmer struggle is not limited to the repeal of the three agricultural laws only. There are economic, socio-cultural, political and other messages of this struggle. The various aspects of this struggle highlight that for achieving sustained agriculture development in India, the focus should be on making the pro-farmer government agricultural policies and farmers’ own efforts.
One of the few arguments put forward by the country's rulers and pro-government and corporate economists to justify the three agricultural laws enacted by the Central government is that it is imperative to make agriculture up-to-date in the 21st century. The clear and direct message of this argument is that the open market is the lifeblood of all economic problems. To understand the reality of this weed, we have to look at economic history.
Classical economists were against government interference in economic activities. Their view was that supply creates its own demand which leads to neither overproduction nor general unemployment. This is the principle of the market, behind which it is argued that every human being thinks of his own benefit as a result of which the benefit of the whole society is maximized. 
The Great Depression of the 1930s disproved classical economists because the problems of overproduction and high unemployment at that time surrounded open market economies. To overcome this problem, JM Keynes, a well-known economist at the same time, suggested that the government should invest in building infrastructure and strictly monitor and regulate the activities of the private sector.
At the same time, Keynes suggested that in order to create demand in the market, the government should give money to those who are willing to do any work to meet their needs, even if it is unproductive. According to Keynes, such people will be labourers who will spend the entire money provided by the government. 
Implementing Keynes's recommendations helped overcome the Great Depression and led to the emergence of mixed economies in many parts of the world, including the establishment, expansion and development of public sector enterprises, and government’s monitoring and regulation of the private sector operations.
Over time, the capitalist economic system has not only revived, but its degenerate and dangerous form of corporate economic system has come into being. At present, this economic system is operating in most countries of the world. According to studies conducted by Oxfam and other organizations, economic and other inequalities in these countries continues to rise, with the income and wealth of the richest 1 per cent rising steadily and the remaining 99 per cent having high unemployment, poor quality of employment, depletion or loss of resources, low living standards, and the like are forced to face problems.
Nobel Prize-winning economist Joseph Stiglitz, in his book “The Great Divide” describes that the growing inequalities are the result od deregulating the markets, reducing the taxes on the rich people and depriving the masses from educational and health services. Inequalities has been on the rise in India since 1980s.
These inequalities have been growing rapidly since 1991. About 50 per cent of the population dependent on agriculture is being given only 16 per cent of the national income due to which more low income farmers, farm laborers and rural small artisans are born in debt and poverty, working hard in debt and poverty. And leaving a mountain of debt and extreme poverty for generations to come, they either die a miserable death, or commit suicide when all hopes for their lives are dashed.
With the full implementation of the three new agricultural laws enacted by the Central government, their displacement is certain, which will add immensely to the problems they are already facing. Such a government action would not be in the interest of the farmers and other workers dependent on the agricultural sector, nor of the consumers nor of the country. If farmers and other labourers are to be displaced from the agricultural sector, the question arises as to where they will be resettled and given employment.
In the cities already large numbers of working people spend their days in slums, huts, roadsides, bridges and other such places. The ever-increasing use of machines in industries and automatic machines are making workers out of many industrial units. There are very few employment opportunities in the services sector, but the quality of employment is so low that it is very difficult to make ends meet.
Given the country's food needs, the problems of the agriculturally dependent population, the employment opportunities and quality problems in the industrial and services sectors and the interests of the consumers, not only three new agricultural laws have to be repealed by the Central government rather extra effort needs to be made so that the country can make such progress that the working class people can live happily.
In this regard, there is a need to replace the pro-corporate economic development model with a pro-people and pro-nature economic development model. The share of the national income to the agriculturally dependent population needs to be increased to such a minimum so that these people can be proud of being citizens of the country while fulfilling their basic needs in a dignified manner. To increase the income of the farmers, it should be ensured that the minimum support prices of agricultural commodities should be replaced by remunerative prices.
Under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the number of working days and the minimum wage should be increased and the marginal and small farmers should be allowed to work in their own fields under MGNREGS. Agricultural subsidies and grants should be increased. There is a need to make the import and export policies of agricultural commodities pro-farmer.
The government should provide interest free finance for agricultural production. The insurance premium should be paid by the government or the Mandi Boards to protect the farmers from natural calamities. Governments need to provide the necessary funding for research and development to reduce agricultural costs and return to natural agriculture.
In order to diversify the crops in different parts of the country and to protect the environment from pollution, it is necessary to create zones according to agro-climatic conditions and guarantee the procurement of the produce by the government. Governments should ensure guaranteed irrigation facilities throughout the country. Land reforms have to be carried out honestly and strictly by the state governments and non-agricultural use of agricultural land must be curtailed.
Among the various forms of cooperative farming system, cooperative joint farming is considered to be the best. Under this system, farmers cultivate on their own land
There is a need to ensure all round development of villages so as to reduce the tendency of rural people to migrate to cities, provide quality education and health services in rural areas. There is an urgent need to strengthen the federal structure of the country. The farmers' struggle called on the farmers, farm labourers, rural artisans and others dependent people on agriculture to sit together, discuss and improve their social relations to prevent the corporate world from taking over the agricultural sector, highlights the role of cooperation.
Before learning about the needs, potentials and benefits of cooperative agriculture in India, it is important to have a brief overview of the agricultural systems operating in different parts of the world. The current and important agricultural systems in the world include
  1. capitalist agriculture;
  2. smallholder agriculture;
  3. government agriculture;
  4. collective agriculture; and
  5. cooperative agriculture.
In the capitalist agricultural system the land and the means used in production are owned by the capitalist farmers/ companies/ corporations. Under this system, the size of the land is very large and most of the agricultural work is done with machines. Farm labourers are employed to use machines and do some other work. The adoption of modern methods of agriculture under this system and the massive use of capital are likely to result in higher levels of productivity and production resulting in higher levels of surplus commodities to be sold in the market.
The biggest disadvantages of this system are rising unemployment, increasing economic inequalities, disturbing the peace, and the like. Under the smallholder farming system, smallholder farmers usually engage in subsistence farming with the help of family members using traditional farming methods. Under this system employment opportunities are high and economic inequalities are very low, but the surplus commodities to be sold in the market are very low and as a result of low income the standard of living of the farmers is also low.
Under the government agricultural system, land and other means of production are owned by the government. Under this system the size of farms is large and modern methods of farming are adopted. One of the main objectives of such farming is to meet the social needs which include producing new seeds, multiplying them and providing them at subsidized rates for the welfare of the farmers.
Inefficiency and corruption of government officials and employees are the main problems in this system. Collective farming system is the method of farming generally adopted in socialist countries. Under this system, land and other means of production are collectively owned. The system may have more potential than the benefits of government agriculture, but for a variety of reasons, the collapse of socialist regimes in many countries and the lack of motivation for hard workers are major difficulties.
Among the various forms of cooperative farming system, cooperative joint farming is considered to be the best. Under this system, farmers cultivate on their own land. The ownership of the land remains private and all the agricultural work is done by the farmers together. Membership under this system is voluntary. Wages are based on work and profits are based on the size of land holdings. 
The management committee is democratically elected to work under this system. As a result of collection of holdings under this system, modern farming methods can be adopted for large scale farming which has the potential to increase the income of the farmers and raise their standard of living.
Although the co-operative system has been criticized for not producing very good results in government-sponsored cooperative agriculture in the country, we have many examples of the remarkable success of co-operatives in the field of agriculture which include Amul Dairy, IFFCO, KRIBHCO, Lambra Kangri village in Hoshiarpur district, Chakk Kanian Kalan village in Moga district, Balad Kalan village in Punjab, and successful cooperative farming in many other villages besides Bihar, West Bengal, Kerala, Telangana and Gujarat.
All these examples will help farmers, farm labourers and rural small artisans to make their lives easier by adopting co-operative agriculture in the future. A study conducted by Professor Bina Agarwal has revealed that in Kerala, more than 68,000 groups of 4-10 women are engaged in co-operative farming by taking land on contract basis which has transformed those women in various aspects.
According to the study, the productivity per hectare of women's co-operative agricultural holdings in Kerala is 1.8 times that of private holdings (95 per cent male managed) and the net income is five times. Co-operative agriculture carried out by the Dalits of Punjab on contract basis on their share of 1/3 of the Panchayati lands has increased the income of the Dalit families, provide them year-round food, green and dry fodder and vegetables as well as has increased their honour.
Now is the time to bring panchayati, religious places and other common lands under co-operative agriculture. One-third of these lands should be given to Dalits, one-third to women and one-third to lower farmers' co-operative societies without charging any rent as the purpose of income earned through leasing of lands by panchayats and religious places is the welfare of rural people. According to Sikhism, the "mouth of the poor, the ‘golak’ of the Guru" aims to guide co-operative agriculture. Lower farmers can solve many of their problems through co-operative farming by consolidating their lands and other means of production.
If these farmers knew their neighbours or each other, they would have a better chance of success. Co-operative farming will not only increase production and income, but also social values ​​and the main message of co-operatives will go far "one for all, all for one". 
Given the important and selfless role of Dalits, women, farm labourers and rural artisans in the great success of the farmer struggle, the big farmers can play a major role in cooperative farming by these poor sections and it is hoped that cooperative agriculture will succeed in improving the socio-economic well-being and political participation of the working class.
In addition to co-operative agriculture, they can also help in agro-processing, natural agriculture and selling various agricultural products along the roadsides adjacent to their farms, by setting up booths in towns and cities will increase the employment and income of farmers, while providing fresh and better products to consumers. The goods will be cheaper than the market. 
Cooperation will also make great strides in agricultural services such as rental machinery, machinery repair, financing and more. Land reforms will make a significant contribution to the success of co-operative agriculture.
---
*Former professor, Department of Economics, Punjabi University, Patiala

Comments

Kanwarjit Singh said…
Cooperative joint farming should be tried out be tried out, it has the potential to mitigate the agri.crisis.
Unknown said…
Having followed the farm bills and the recent developments, I believe the agriculture sector, including cash crops, could be organized under the cooperative sector. The need of the hour is to promulgate enabling legislation allowing state governments to facilitate and financially support cooperative start-ups. My brief stint at the National Dairy Development Board, Anand, provided me the opportunity to co-author a few of the Operation Flood reports, comprehending the benefits of farmer cooperatives. Migration and study in the United States lead me to the profession of a City and Regional Planning, thereafter working as a government planner directing community development, comprehensive planning, environmental planning, building administration, so on and so forth. A life-time of study and practice in the development discipline tells me that the best development model is Cooperative Development, among which the best known is the Anand Pattern, mentioned by professor Gian Singh. Farmers should own the land and control the factors (or means) of production and distribution so that middlemen can be avoided. The idea is to be able to compete with cooperatives of a similar nature, and private corporations, giving everyone a level playing field. All profits (dividends) are pooled back to the farmers based on their amount of sale of goods. When I was in Anand, it was widely known that AMUL (Anand Milk Union Limited) was able to dispatch Veterinarians on-call to attend to an ailing cow, before you can find a physician on-call for an ailing human.
I. George said…
While the above is correct, the role of the government and it's intentions must be people-friendly. If we set our minds, the Anand Pattern can solve several developmental problems, but vested interests, including corrupt politicians and baboos, could scuttle any well thought-out initiative. Please read: "How India was Stripped of it's Atmanirbharta in the Edible Oil Industry," https://thewire.in/political-economy/india-edible-oil-self-sufficiency

Therefore, we also need a very strong civil society and an alternative politico-administrative machinery to administer community development at the panchayat, block-panchayat and Zilla Panchayat levels. The election victory of Twenty/20 in Kerala is worth studying, but a company directed township, similar to Jamshedpur, may have unanswered questions. But what's clear is that panchayats and block-panchayats do not have to be run by political parties. The best example is how cities and counties (similar to Districts in India) function in the United States. No political party is represented in the these elections. Residents run for elections, a mayor is selected from the winners, and the people run their business as per the municipal, state and federal laws. Business is transparent as it could be. For example, all public work contracts are advertised, the bids are opened in public, and awarded to the lowest bidder, unless a bid is not responsive to the specifications of the bid. No politician from the State dictates how the city or county should run. The rampant political and administrative corruption in India is beyond repair and alternative administrative systems such as the Twenty/20 model or the U.S. model should be established. This can be accomplished only with the help of an informed and active civil society.
BakhshiGS said…
Both the above comments are very relevant and correct. But due to thinking nature society ,lack awareness of our masses ,lack of will power of pro people leaders due to our corrupt political system, lots of fully committed , untried and continuous efforts have to be done.to implement cooperative model . But it will definitely provide relief from agri. Crises and strength the relations within the society. Pro people parties , leaders and persons should put their efforts to educate and convince farmers to adopt this model and pressurize the governments to provide the financial ,market , MSP and other required facilities for this purpose along with free education, health etc.

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