Third tranche of Sitharaman’s COVID-19 package announcements

Third tranche of Sitharaman’s COVID-19 package announcements poses threat to farm sector

Economy
Reading Time: 7 minutes

Finance Minister Nirmala Sitharaman didn’t break from her pattern of promoting credit provisioning and liquidity infusion as “fiscal stimulus” under the Rs 20 trillion package for COVID-19 – as announced by Prime Minister Narendra Modi on May 12th evening – during the third tranche of her announcements. In the first and the second tranche, Sitharaman’s COVID-19 package announcements remained confined within the scope of providing liquidity to banks and financial institutions to help businesses, farmers and small enterprises grow their business. It seems the “Atmanirbhar Bharat” (self-reliant India) envisioned by Modi is a country that will go global with immense per-capita debts.

In the third tranche of Sitharaman’s COVID-19 package announcements, she dealt with the farm sector mostly, and without proposing anything remotely identical with a fiscal stimulus, she confined her scope of measures within the liquidity and credit template that the Modi regime has been using since the beginning of the pandemic outbreak and the subsequent lockdown. After announcing half-hearted and hollow schemes for small businesses, farmers, urban poor and migrant workers, in the first two tranches, the third tranche of Sitharaman’s COVID-19 package announcements consisted of 11 points, out of which most were those schemes announced during the Union Budget 2020-21. She also announced some administrative and legislative reforms to ensure greater leeway to big global corporations to plunder India’s farm sector.

The third tranche of Sitharaman’s COVID-19 package announcements under the farm category, which includes agriculture, dairy, fisheries, animal husbandry, horticulture, etc, are given below.

Farm infrastructure development

Rs 1 trillion will be provided to the agriculture sector for upgrading the infrastructure so that the value chain can be improved, and farm produce can connect with global markets. This is neither a fiscal stimulus nor a liquidity injection, rather, it’s more of an existing programme of the Indian government that aims at upgrading the farm infrastructure so that the procurement of harvests from the farmers become an easy job for the corporate entities, who are keen to enter India’s farm sector. How this will help the rural poor exactly during the lockdown, when even major construction work won’t take place, is not clarified.

Assistance to micro food enterprises

The micro food enterprises (MFEs), the micro-level enterprises that sell health food products, wellness products, organic products, etc, will be given cluster-based assistance of Rs 100 billion. So, in case a state or a region has any particular speciality in health food, wellness products, organic products, eg, bamboo shoots of the northeastern region or red chillies of Andhra Pradesh will form one cluster each, then there will be a cluster formed of all MFEs. The priority will be given for those run by women or dalits and tribal people.

The sole reason of providing this Rs 100 billion is to develop their infrastructure to help them grow on a global scale. However, in that case it’s not clarified by the finance minister whether the scheme will recapitalise them or provide them with an easy credit? Because if it’s a credit scheme then in the present global scenario, none of these small businesses will be able to make it big in the post-COVID-19 world as the parochial economic policies of Donald Trump, the US president, will triumph and isolationism will grow in the US, which is one of the major markets of such products.

Pradhan Mantri Matsa Sampada Yojana scheme reiterated for fishermen

The Union Budget announced a scheme for the fishermen called Pradhan Mantri Matsa Sampada Yojana (Prime Minister’s Fishery Resource Scheme or PMMSY) during the budget. The same scheme was reintroduced by Sitharaman during her third tranche of announcements. According to Anurag Thakur, the minister of state for finance, there will be a total allocation of Rs 200 billion for this programme, which will be used to provide credit to fishermen and aqua miners, helping them in financing their boats and also to insure themselves and their boats.

According to Sitharaman’s estimates, the PMMSY will provide employment to 5.5m and double their income with an additional 7m tonnes of fish. She said the fishermen will get support during the no-fishing months of the year as well. The modality of the scheme isn’t announced in detail. It’s clear that reintroducing a scheme that was announced during the Union budget, Sitharaman is trying hard to discombobulate the masses. It’s of no help for the fishermen who lost income during the lockdown period.

Animal vaccination and dairy sector

To prevent foot and mouth disease among the cattle, the Modi regime has issued Rs 133 billion since January 2020 for cattle vaccination. According to the government, there are 530m cattle in India, the largest livestock in the world. There will be a vaccination programme to ensure the dairy products can be exported to foreign countries.

For the dairy sector too, Sitharaman announced a package that’s essentially confusing and thereby, extremely hollow. Rs 150 billion will be spent on dairy infrastructure improvement to ensure that there is a larger procurement from the dairy farmers. Under this Rs 150 billion, there will be incentives for those who will establish plants and processing units.

Herbal plantation and beekeeping

The third tranche of Sitharaman’s COVID-19 package announcements promised Rs 40 billion for herbal plantation in an additional 1m hectares with a promise of Rs 50 billion income for farmers. This will be also pushed through the credit line and there will be 800-hectare-long corridors on both sides of the Ganges for herbal plantation.

A package of Rs 5 billion, which is already in an existing programme of the Modi regime, was refurbished for 200,000 beekeepers as credit. Sitharaman said this will also reduce India’s dependence on wax importing.

Supply chain management

One of the key features of the third tranche of Sitharaman’s COVID-19 package announcements is the proposal to provide 50% subsidy for the transport of perishable crops from the fields to the markets, along with 50% subsidy on storage. Modi announced a similar scheme under the name T-O-P (as it dealt principally with tomato, onion and potato). The same scheme is now expanded to include all form of perishable crops.

This scheme will run for a period of six months on a pilot basis before it’s made a regular one. However, its financial implications, how the farmers can avail the subsidy and who all will be eligible, ie, the number of beneficiaries, weren’t disclosed by the finance minister.

Apart from the above points mentioned in the third tranche of Sitharaman’s COVID-19 package announcements, there were some reform measures discussed too. These reform proposals actually open up India’s farm sector to the aggression of foreign corporations.

Relaxations in the Essential Commodities Act, 1955

Sitharaman claimed that many provisions of the Essential Commodities Act, 1955 (ECA), which act as a barrier against black marketing and hoarding of food grains by unscrupulous elements, are now obsolete. Without giving any reason, other than an abundance of food grains – ironically when the migrant workers are starving to death – Sitharaman said the Act will be amended.

According to Sitharaman, items like cereals, pulses, edible oil, oil seeds, potato, tomato, etc, will be de-regularised and their stocking will be allowed for those who are in the value-chain. There will be some guidelines about storing and some upper-limits too, but the stocking and hoarding of such food items will be legalised. Sitharaman informed that these commodities may be brought back under the ECA temporarily during natural calamities and pandemics. The government won’t interfere unless the prices surge abnormally, the upper threshold of which isn’t defined by the finance minister.

The ECA never became a barrier for the farmers, but for the stockists and traders. The push to dilute the provision that acts against hoarders and stockists, who would otherwise create an artificial shortage to shoot up prices, is opening the door of the agricultural market wide open for speculative traders and blackmarketers. The farmers won’t get adequate price for their produce, but by hoarding without any check, the value-chain members, ie, the corporates and the usurers, will make a kill.

Inter-state agricultural trade

Sitharaman proposed removal of inter-state agri product trading barriers. She also promised the linking of e-trading for farmers to sell their crops.

This move will immensely harm the farmers, as, on one hand, cheap products from other states can pose a serious threat to the local farmers’ produce, and, on the other hand, the corporate houses drooling to establish their fiefdom in agriculture in association with the feudal landlords, will be able to buy from the farmers of any state and stockpile the crops in any other state of their choice. It will become a haven of blackmarketing and stockpiling.

Modi’s big patrons like Mukesh Ambani and Gautam Adani will be happy as their retail and food product businesses will profiteer at the cost of the poor farmers and the common people, who will be deprived of their right to food. This will allow the likes of Ambani and Adani to buy harvests from the poor farmers at a throwaway price from any part of the country and then take it away to another state. Eventually, this will create an immense food shortage and help to establish absolute corporate hegemony over India’s food distribution system. The basic Right to Food will be done away with.

Pre-sowing assured price guarantee

During the third tranche of Sitharaman’s COVID-19 package announcements, it was declared that the Modi regime will bring in a law under which the farmers will be getting an assured price guarantee for their produce at the pre-sowing stage. Corporate buyers will provide them with an assurance on the price they will pay for the crops and also the quantity they will buy. Sitharaman claimed this will prevent suicide deaths of distressed farmers.

Actually, this is an official introduction of contract farming at the behest of global monopoly-finance capital-controlled corporations. It will eventually take away the freedom of the farmers to sell their crops or to decide what to produce. This contract farming model will create a severe food shortage for Indians, as neither the farmers will be able to store for their family’s needs nor the crops will reach the local markets if they can fetch a better price in foreign markets.

Moreover, the farmers, especially the small and marginal ones, will be entrapped in a complex web of debts in the form of crop advances, which will render them as bonded slaves for the big corporate houses. Minimal government interference due to the full play of the market forces will mean the farmers will lose the little freedom and political importance they have in India.

The susceptible farmers will be lured to this trap with the bait of a better price and financial security. The farmers who don’t get right prices for their crops will be easily entrapped for a lifetime in this evil scheme by the corporate-feudal nexus that the Modi regime represents. In the long run, the farmers will find themselves in the same position like the indigo cultivators of the 18th century Bengal, who were extremely exploited and persecuted by the British East India Company under a similar corporate-controlled contract farming model.

The third tranche of Sitharaman’s COVID-19 package announcements didn’t show any ray of hope for the poor. The relaxation of the agriculture laws, interference in the state subject and removal of checks and barriers, which are blamed for being obsolete, will bring catastrophic outcomes. The farm sector will be shackled by the global monopoly-finance capital-owned corporations and their Indian lackey crony-comprador capitalists. Under the garb of helping the poor, the Modi regime is mortgaging them, their lands and their rights to the big corporate capital. This is the biggest attack on Indian sovereignty and clearly shows that Modi’s vision of “self-reliant India” actually turns India into a modern corporate-feudal fascism-led slavery state, where the farmers and workers have to reel under the juggernaut of neo-liberal economy’s oppression. The government’s obnoxious agenda must be halted before it ruins the lives of the farmers and workers completely.

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An avid reader and a merciless political analyst. When not writing then either reading something, debating something or sipping espresso with a dash of cream. Street photographer. Tweets as @la_muckraker

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