Our documentary is titled Déjà vu because the discussions on “opening up” of agriculture to free market, end of MSP, contract farming, minimum government control etc. that India is having today took place in America 40 years ago.
Even words used by Prime Minister Modi about how these reforms would bring prosperity, how big companies are really ‘good citizens’ and wealth creators are similar to what President Ronald Reagan said in the US. Nothing is thus new, and that’s why the movie is called Déjà vu. “What India is witnessing and is being told, we already heard here and are living through the consequences. It is Déjà vu,” American farmers tell us in the film.
Last October what hit me the most was accelerating cases of farmers’ suicide in America. Here we were, thinking America is the land of opportunities, of milk and honey…who could have imagined that American farmers too are committing suicide! I thought there is no better way to understand this than to chronicle the American farmers’ story.
So, there we were, four brown people in the middle of COVID travelling in the freezing months of January and February through Iowa, Kansas, Wisconsin, the ‘whitest of white America’ in a Toyota, meeting farmers. These were places that voted for Donald Trump. This was Trump country. But while we hear of white racism and xenophobia, we got heart-warming response. We spoke to Black American farmers too and they all welcomed us because they wanted to speak.
Changes that are happening in India have happened in America with disastrous consequences for the small farmers; but not for the big corporates. Urban America has no clue about the rural decay that exists. Rural America is almost like a third world country. We found American farmers aware of what is going on in India. They are keenly watching how things progress in India.
They regret not being able to organise protests back in their time when big changes were happening.“When a neighbouring farmer is in distress, we are able to come together, provide food and other supplies and assistance but when it came to coming together and launch a mass movement, we failed,” they told us. They are immensely inspired by how Indian farmers have come together and are refusing to give up. Here was a first world community telling us, ‘we want to learn from India how to protest and how not to give up’. That was a most heart-warming experience for us.
I agree with Devinder about the eye-opening experiences on the ground. For one, where are the jobs in the city? Bengal has gone through the experience of large migration of people to cities; we (Bengalis) know what happens when hordes of people come to a city; this idea (of pushing people off agriculture to the city) is a non-starter.
The other argument that when you open up agriculture to market economy, there will be price discovery etc., let me remind you what Arun Jaitley had said, that opening up agriculture would destroy the small farmers. In a free market where there is an inherent power imbalance between small farmers and the big companies (there is no way the farmers can hold their own).
Average farm income in the US for the last eight years has been negative. In the beginning of the reforms, there was a brief period of bonanza. The big agro business came in with food processors and meat packagers etc. but these big guys depressed prices and pushed out the small farmers. In the US the ‘small farmers’ are identified by sales not by land size. The small and medium farmers accounted for around 50-55% of all sales during the start of reforms, but today it is down to 20-25%. Even now numerically there are more small farms, just like in India. But their survival rate is low and their farm income is negative.
MSP NOT GOING AWAY?
Although the Indian government is saying MSP is not going anywhere (MSP tha, MSP hai aur MSP rahega), these changes do not happen in a day; it is a process, you attack one thing first then another, sometimes sector by sector.
The US (before the open markets) had something called ‘parity pricing’ meaning the ‘farm gate’ price had to be such that farmers maintained the same standard of living as their urban counterparts. It was based on the cost of production. In the dairy sector for example, there was a fixed floor price compulsory for any buyer. Not just for government procurement but anybody who wanted to buy milk had to pay the “market floor price.” For food grain producers, as soon as the harvest was over, there would be huge pressure to sell because there were input costs and other loans one had to pay back. So, they tended to sell at whatever price they could fetch.
To buffet against this issue a grain reserve loan was created, a ‘Commodity Credit Corporation’ was set up, which would give non-recourse loans to farmers; it stipulated, ‘I am going to value your production at parity price or a percentage of the parity price and give a loan for that amount at a nominal rate.’ That helped the farmers store the grain somewhere and pay their input cost and have money in hand. Three – four months later when the loan would be due, if they could get a higher price, they could sell it at higher price and pay the loan or keep the money and the grain would goto the national granary.
In the 1980s under Reagan these were the first structural things to be attacked. The political leadership had then told farmers “get big or get out”. The same thing is being said today in the most heartless conditions. Sonny Perdue, Secretary of Agriculture under Donald Trump, visited Wisconsin where largest number of farmers’ suicides are happening in America and said, “Get big or get out.”
Is this the kind of policy we are supposed to follow in India?
MONOPOLY WOULD KICK IN
This notion of free market is an illusion. You create a free market and bring in all these players but the concept of ‘positive feedback’ in engineering terms says that the handful of those who have power would take over, monopoly would kick in very soon. That is what happened to agriculture in America as soon as it opened up to free market.
The big corporates have taken over. They have an overwhelming control over pretty much everything from input to output. 80 percent of meat packaging is controlled by big corporation, seeds 65-70 percent. John Deere has almost complete monopoly over agriculture machinery.
Contract farming in America is mainly happening in poultry and livestock. Farmers grow animals in what they call concentrated animal feeding operation (CAFOs). They grow the animals in CAFO and send for meat packing. The livestock, chicken, pigs etc are owned by the big corporates. They send you the animals and you enter into a contract that you have to grow the chicken at this price and so on.
CAFOs are extremely costly, and ecologically harmful. You have to take a loan to build your own CAFO meaning you have to take the risk of investment. If a chicken is not raised properly and does not meet standards as per the contract, they will not pay you, and you are ruined. There are cases after cases like that. 75 percent of the poultry farmers live below poverty line.
Another kind of contract farming is absentee landlords. In India, we hate it but it dominates American grain sector. Bill Gates owns the land but he will not farm himself so he will hire a guy with a machinery to farm. In a sector, say poultry, there maybe four or five big guys that exist in the market but in a given area there are sometimes not even one…It is a cartel system. Forget about price discovery you are forced to sell at whatever price you can get.
FORCED TO QUIT FARMING TO BECOME JANITORS
So called free market very quickly turns into monopoly which is a bonanza for the corporate sector but destroys small farmers. They are quitting agriculture not because they are getting a great job elsewhere, they are actually becoming a janitor or committing suicide or retiring in poverty.
Joel Greeno, one of the ex-dairy farmers in Wisconsin talks about the devastation of the town. The idea behind opening up agriculture was that farmers would become professionals, make more money, be businesspersons, recalled economist John Ikerd.
But Joel Greeno revealed, “The only businesses in town today are two bars, one gun shop and a funeral home. Entire state of Wisconsin used to have a 143,000 operating dairy farms, now there are only 6000 left at last count”. This other farmer had 45 cows, each of whom he knew by name. It is heart breaking how he had to give them up one day because big dairy businesses had depressed the prices so much that small farmers simply could not survive.
John Ikerd, Professor Emeritus of Agricultural & Applied Economics, University of Missouri, was one of the most enthusiastic guys during the Nixon regime, talking about productivity, efficiency, getting big which he thought would feed everybody, bring food sovereignty, make for a prosperous countryside.
Then in the 1980s he turned around after he saw first-hand, the disastrous impact on both small farmers and ecology. You’d see this in the film, he was in tears talking about how he presided over something that has brought disaster. He is now thinking of alternatives, as are all other farmers.
One of the farmers told us about Al Almanza, the former Deputy Under Secretary for Food Safety, USDA. Under his tenure rotten meat was brought into USA from Brazil by a multinational company, JBS. There was a big hue and cry over it, and he stepped down. He retired with full benefits and then went on to join JBS as the Global Head of Food Safety and Quality Assurance. This is what political connection does with money.
It is a misconception that MSP means government procurement. It is a floor price, like in Banking there is a Repo rate. It is a floor, price can only go up from there. If economists think opening up would get farmers better price,then what is the problem in setting a floor price? After all, by your own admission farmers would be getting more than that.
NEO-MIDDLEMEN IN AMERICA
Devinder spoke about the constant decline of the farm gate price but on the flip side, the input prices are going up. Cost of equipment has skyrocketed. If technology were to make output prices lower, it should have lowered input prices too. But that did not happen. Let me also debunk another myth, that opening up would make food cheaper for the consumers.
Between 1970 and 2020 food prices on an average has gone up by 212 percent and the income of the bottom population has grown only by 24 percent. How does that make food cheaper? On top of that the quality of food has deteriorated. We could have cheaper and better-quality food, had it not been for these big guys in the middle. There is a lot of angst against middlemen in India, but in America the big agro businesses are the new middleman – the Cargills and the Walmarts – they take out the profits from the farmers.
Many farmers talk of these corporates and say they are engaged in mining operations. A farmer is a forward-looking person, he looks ten years into the future and tries to keep his land fertile, take care of livestock. But the big businesses, in pursuit of profits and efficiency, carry out farming at a given area for a certain period and then move out.
The local farmer is destroyed, the economy is destroyed, and the small towns are destroyed but the big guys have made out with a bonanza and gone to a new place, just like mining.
It is a myth to say that this model of farming is for the benefit of the consumer, it is rather pitting consumer against the farmers, while nobody is benefiting. Consumers are paying higher price for worse quality of food and farmers’ income is going down while input costs are going up.
BIG GUYS SIPHONING OFF THE SUBSIDIES
The subsidies are also funnelling money to the top guys. Firstly, most of the subsidy goes to the few big guys at the top. 70-80% of the subsidies goes to top 10% of the farmers.
Whatever little subsidies the small farmers receive goes into the input cost. The fertilizer guy would be like, “Oh the farmer is getting subsidies, I can jack up my fertilizer price.” “My seed price,” says the other.
The money government gives are channelled back to the big corporations who are hands in gloves with the government anyway. The public money ultimately goes into the hands of the big corporate.
Source : National Herald April 18,2021 (Bedabrata Pain is a National Award winning Film-maker & Scientist whose recent documentary film “Déjà vu” highlights the stories of small farmers in America as to how they fared after the opening up of US farm sector 40 years ago. One of the inventors of CMOS digital image sensor technology, Pain has been a scientist at NASA and Caltech for over 15 years, till he quit to become a film-maker. Views expressed are personal)