Peasants getting ruined as the Central Government defends the capitalist traders headed by the monopoly corporations

While the Manmohan Sigh government and the Congress Party continue to pretend that they are working for the “aam aadmi”, both the working class and the peasantry are being impoverished and ruined at a rapid pace.

It is by now common knowledge that wage and salary earning workers are extremely angry about the insufferable rise in the prices of food and other essential commodities.  What is less known or less clear to many people is that the peasants who produce the food crops are not prospering either.  On the contrary, peasants of our country are facing acute distress.

Take the case of those who grow potatoes.  Responding to the high prices that prevailed in the previous season, peasants in many regions took to planting potato this year.  As a result, there was a bumper crop.  The price being offered by capitalist traders is as low as Rs 50 to 100 per quintal

(Rs 0.50 to 1.00 per kilogramme), while the production cost as estimated by farmers’ associations is Rs 500 per quintal!  The end result is that potato growers have been seen dumping their produce on the roads in Punjab, Bengal and other places.

Recent months witnessed election campaigns in Uttar Pradesh, Uttarakhand and Punjab — three major potato growing states. All capitalist parties shed tears for the plight of potato farmers. But the “solutions” offered by these parties were not designed to guarantee livelihood for those who grow potatoes.  The Congress Party leader Rahul Gandhi, for instance, promotes Foreign Direct Investment in retail trade as the way to prosperity for the peasants!

Rahul Gandhi was hiding the fact that a large number of companies involved in retail trade and in the production of potato chips have used the crisis facing the peasants to buy up large quantities of potatoes dirt cheap. It is inevitable that in 2012-13, farmers will reduce the acreage of potato crops, after this year’s bitter experience. This will most likely result in shortage of potatoes next year and higher prices for the crop. The trading companies which are hoarding potatoes this season will reap windfall profits next year by once again selling their stock at sky high prices.

Another example is the case of chillies.  Chilli growers in Guntur District of Andhra Pradesh were paid Rs 7,000 per quintal for their crop in 2010.   Encouraged by this price, peasants in Guntur district increased the acreage under chillies from 65,000 hectares in 2010 to 88,000 hectares in 2011. The benefit of this increased output has gone to the capitalist trading companies, which have used the bumper crops to beat down the prices that farmers hoped to earn.  This year, the maximum price earned by any farmer is only Rs 5000 per quintal, almost 30% lower than the previous year.  This has led to widespread protests, with peasants demanding that the government steps in and ensures purchase of their produce at remunerative prices.

The government of the “aam aadmi” refuses to comply with the desire and demand of the vast majority of the workers and peasants of the country, which is for a universal public distribution system.  The central government is not only refusing to extend public procurement and distribution to cover all food items, it is out to curtail and destroy even the existing limited PDS covering rice and wheat.

The suffering experienced by peasants who grow paddy as their main crop exposes the truth about the central government’s concern for the common man.  Paddy is one of the few crops which is procured by the central government through the Food Corporation of India.  However, in the year 2011-12 paddy farmers suffered losses because they had produced a bumper crop!  The central government and its agencies openly declared that they would not raise the procurement price too much because there was a bumper crop. Paddy has been procured at Rs 1080 per quintal this season, at a price only 8% higher than last year.  This does not even compensate the peasant for the increase in the cost of production, let alone the rising cost of all articles of mass consumption.

The condition of many peasants who grow wheat is no better. Despite unseasonal rains, there has been a bumper crop of wheat this season. The officials of the procurement agencies in Punjab and Haryana are openly admitting that they do not have adequate storage facilities. Reports have come in of freshly procured wheat lying in open places in Punjab and Haryana for lack of storage facilities.

Cotton is another revealing case study.  Seven million (70 lakh) peasant families cultivate cotton in our country, over an area of about 12 million hectares. The main cotton producing states are Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Rajasthan and Punjab. There has been a failure of the cotton crop this year. In such conditions, the Government of Maharashtra declared “relief” to cotton farmers in December 2011, to the tune of Rs. 2000 crore, after a prolonged agitation by the peasants.  Six months later, the farmers say they have not received a single rupee of this so-called relief.

On 4th March, 2012, the Central Government imposed a ban on the export of cotton, in response to the demand of the Confederation of Indian Textile Industry (CITI).  CITI had claimed that the industry would go into the red if cotton prices were not allowed to fall. As soon as the government imposed its first blanket ban of export of cotton other than by land route, the price of raw cotton fell from Rs 4,200 to 3,400 per quintal. Many families were forced to make distress sales.  Suicides among cotton growing peasants are already on the rise this year.

On 30th April, 2012, the Central Government lifted the ban on cotton exports. This enabled the capitalist traders, who had stocked up raw cotton from the peasants in distress sales over the past two months, to make a windfall gain.  They could sell their cheaply procured cotton in the export markets.  Thus the Central Government does the bidding of the big corporate interests, creating extreme insecurity and widespread ruin for the peasants.


Various parties and agents of the capitalist class repeatedly try to fool the peasants of our country that capitalism and the drive towards the globalisation of Indian capital will bring prosperity and protection for those who till the soil.   Life experience is revealing the opposite to be true.  The global market is under the control of capitalist trading monopolies, and this control is being intensified as a result of the course being pursued by the central government in our country. 

Peasants must not look for their salvation towards the capitalist class, its parties in parliament or the governments they control. The interests of the peasants and the interests of the monopoly capitalist trading companies are diametrically opposed to each other.  They cannot be harmonized with one another. Parties that run governments in the existing system of capitalist democracy are committed to serve the interests of the biggest capitalists, and not of the peasants.

It is the interests of the workers and peasants that can be harmonized. The peasants of our country must join hands with the working class to push for the demand for a universal modern Public Distribution System, supported by an all-sided public procurement system. Elimination of any role for private profiteering in food trade, by establishing social ownership and control, is a necessary first step in reorienting the economy to ensure prosperity and protection for all the workers, peasants and working people of all kinds. 

The best interests of peasants will be served by rallying around the program to establish workers’ and peasants’ rule, the necessary condition for reorienting the economy to provide for all those who work.


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Defeat Privatisation    May 16-31 2012    Political-Economy    Economy     Rights    

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