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Small farmers under WTO regime
By Engr Mehwish Zia and Syed Haider Abbas Zaidi
April 26:Small farmer
implies that category of farmers who own holding
of less than five acres. Their number in the
country exceeds 60 million and in Punjab they
constitute 45 per cent of the farming community of
the province.
Due to the continuing division of land holdings
their number during 1971 and 1991 has increased by
49.59 per cent. Reduction too, is going on due to
this lot selling their land to big or large
farmers or adopting other professions as the
earning from it is not enough for them to survive.
Economists and experts have classed them as the
"endangered species" needing protection, lest they
vanish altogether. The number of suicides reported
from this category is 380, mostly in Upper and
lower Sindh. About 80 suicides took place in
Punjab.
Enforcement of the WTO regime from January 1,
2005, will affect the minimum support price (MSP)
for foodgrains. Here an attempt is being made to
examine the chances of survival of small farmers
after the enforcement of thr WTO regime. Current
status of small farmer: A study of "small farmers:
their problems and remedies", drew the following
picture:
The average holding of a small farmer is put at
3.86 acres with five or six family members and an
annual cash receipts of about Rs48,624. However,
his expenditure is around Rs59,417 which compels
him to borrow about Rs10,793 from the informal
sector or arhtias at an interest rate of 24 per
cent.
The yearly burden in the form of interest on the
accumulated debt burden comes to Rs 1,897 per acre
and the accumulated debt at Rs10,105 per acre.
Today the outstanding debt of this category of
farmers is put at Rs930 crore in Punjab alone with
bleak repayment position. The short-term loans of
up to 70 per cent are outstanding and more than 13
per cent have mortgaged their land.
To find the reasons of indebtness their behaviour
was compared with the farmers holding more than 15
acres. Though, per capita income of this category
is one-fourth to that of their larger counterparts
but the expenditure per head in small farmer's
family is about 5 per cent more than that of the
large farmer.
Tendency to outshine the rich neighbour is the
main cause of troubles among small farmers in
Punjab, the study concluded. Accruing benefits
from the subsidies like "free water" to the
category of farmers under discussion are marginal
as per the findings of the anjab Agriculture
University.
This category does not own tubewells and gets
water from those tubewell owners who get free
electricity but charge money for sharing water
under the pretext of maintenance cost and part of
the capital cost incurred on installing the
tubewells. The prevalent rate is between Rs100 and
Rs200 per hour for a 5-HP tubewell.
Diversification and value addition: This category
of farmers is advised to go for diversification
and value-addition as a remedy to their ailment
but none bothers to find out the availability of
infrastructure for this purpose.
Considerable time and effort of these farmers go
in the post-harvesting activity. They have little
option except to concentrate on food grain
production which covers more than 85 per cent of
their land.
A bold realisation on the part of the government
is needed to enable the farmers to go in for
value-addition. This will require doing away with
the rigid system of control over the food grain
procurement and its movement, particularly the
compulsion of marketing of the food grains through
the committees.
The agricultural produce should be allowed to be
sold in the fields like other cash crops whether
to retail or bulk purchase by some intermediary
agency who will undertake the value-addition
measures jointly with the small farmers'
societies. The cost of savings by avoiding the
post-harvest activities will be substantial and
the combined effect of the two measures will
provide relief to this already distressed
community.
Post WTO scenario: While analysing the impact of
the WTO on agriculture one has to consider the
specific situation of that part of the sector
where farmers do not have any exportable surplus
due to their small holdings. Hence, one is tempted
to conclude that this category will not be
affected by the measures introduced by the WTO
provisions and counter-measures that may be taken
by the national government will provide the needed
level of protection.
Reduced domestic support: Under the provisions of
the WTO agreement, if the product specific and
non-product specific aggregate measure of support
(AMS) exceeds 10 per cent in the case of a
developing country, then it would have to be
reduced by 13.3 per cent.
Comparing the prevailing MSP and the international
food grain rates: The MSP for wheat is Rs 610 per
quintal, while its international price is Rs430
per quintal, the AMS reduction cannot be held for
long.
This will be the only lifeline available to small
farmers so the condition of the endangered species
is bound to become worse in the WTO environment.
Will he survive is the question whose answer
currently is in the negative. He will have to pack
up and fade away from the scene.
The DAWN |
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Pakissan.com; Advisory Point
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