Tractorization and Governance

“Navarathri” is one of most fertile marketing and sales period for Tractors and Farm Equipments in the country. In tamilnadu, we celebrate this period through “Golu”, exhibition of dolls and toy models depicting real life scenarios. Meant to be socializing time, it has been memories personally for me, as some of the best stories have been traditionally handed down.

 It was one such story that was narrated to me that has stood in my mind for long…. Today, I use it to introspect on Corruption. The context will evolve itself…..

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One day the guards presented a man in King Akbar’s court. He had been caught taking bribes. Akbar wanted to know where he had been working. “In the granary,Your Majesty,” was the reply. “Put him in prison,” said Akbar.

And Birbal said, “A corrupt man will take bribes whatever position he may hold.”

 A courtier got up and said, that he knew of one job where a man couldn’t take any bribe. “He can have the job of counting the waves in the river, Your Majesty. He cannot take any bribes there,” said the courtier. Both Akbar and Birbal agreed. The corrupt man was asked to sit by the river Yamuna and count its waves all day. 

After a few days, Akbar asked Birbal if any further complaint had been heard against the man punished for bribe-taking. The courtier said he had not heard of any complaint, so Akbar and Birbal disguised themselves as fishermen to see how the wave-counter was faring. 

The next day, they rowed out in a boat towards the shore where the man was sitting with a notebook in hand noting down the number of waves in the river. As they inched closer to him, they shouted, “Hey, who are you? What are you doing here?”. “Do you know you have interfered with work being done by order of the king?” replied the wave-counter. 

 I have been appointed to count the waves in the river. Now you have come and disturbed me. You will be punished for this,” he replied. “You have to pay a fine of 100 gold coins,” he added. “Be kind, Sir, we are just poor fishermen,” they pleaded. “Then give me at least 50,” he bellowed. At this point, King Akbar threw off his disguise and said, “A 100 lashes is what you will get!” 

 Then he said to Birbal, “You were right Birbal. Once corrupt, always corrupt….”

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This story is similar to our subsidy story for tractors. Let us look at the state-wise cut  

Delhi              - “Fake Farmers” in Loan Scam – Rs. 22077 Crore @ 5% - Oct 2010

Guwahati       - Chief Minister's Samagra Gramya Unnayan Yojana (CMSGUY)– Rs. 650 Crore - Feb 2018

Gujarat          -          Agriculture Department faces Rs. 80 Lakh Tractor Subsidy Scam Charge – Oct 2014

Andhra Pradesh-      Heavy Political Influence over distribution of Tractors – May 2017

 Odisha           -          OAIC faces the charge of Rs. 100 Crore Tractor Scam – Dec 2012

Madhya Pradesh-     Tractor Loans to “Ghost Farmers” – Oct 2015

Telangana      -          TRS Ministers and Business Barons govern distribution of tractors – Apr 2015

Uttar Pradesh   -             Massive tractor scam hits UP; over 5,000 ‘stolen’ vehicles resold after pocketing insurance claims – Mar 2018

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The time period between 2007 – 2017, will have seen every state in the country go through churns of corruption and mismanagement.

Yet, a lot is left desired in terms of support that needs to be given to farmers on counts of :

(a)   Warehousing and Stocking of Produce – An increase of 1.5 Million Tonnes every day is felt

(b)  MSP – Earlier we thought this would work in terms of ensuring farmer earnings. Yet this is far from what it sought to be

(c)   Water and Irrigation – Average Annual Precipitation is about 4000 BCM ( Billion Cubic Meter ). 47% of this water runs off into the ocean, and is not channelized. Ground water depletion is very heavy

(d)  “Tractorization” rather than mechanization has led to about 70% of the usance, dominantly earning from Non-Agri Purposes. Viz., while for records a farmer may provide his land to prove “agri” for benefits purposes, the true income is from Non-agri or Non-agri related trading.

(e)   Role of Middlemen in Agri Marketing – In 2014, when a survey was conducted, for every Rs. 100 spend about Rs. 15 – 18 would reach the farmer. Today the situation has improved to about Rs. 30 – 35. The flip side is Middlemen have become stronger. Who’s need is it to keep them ? Can they be channelized better ? Can it be Inclusive growth for Farmers ?

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We can go on and on… and yet one simple thing strikes as we look through all these pieces…. GOVERNANCE.

(A)   A Government which could work so much on passing benefits to the farmers, have not been able to put good governance systems to ensure effective usage.

a.      If a farmer has to acquire subsidy of say Rs. 150000, bribes for permits have been reported with price tags between Rs. 50000 – Rs. 100000/-

b.     If a Direct Benefit to Customer methodology has been launched with Aadhar validation mechanisms – it has failed to identify concentration of subsidies in one family. Subsidies today exist in the name of every member of a family ….

c.      If subsidy distribution was fair and transperant, we would not have dealerships announcing 1+1 tractor with discounts, in lieu of discount.

d. While SMAM (Central Government) focussed on composite mechanization (Tractor + Implement), the State Governments through their subsidies focussed only on Tractors, and did not worry about its usage.

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 (B)    If financiers were ushered in state to state, to ensure adequate availability of finance, the government should also have worked on a positive framework.

a.      RTO which register tractors, are not aware of the Subsidy provided on the tractors.

b.     Custom Hiring Centers utilization and mapping is not adequate. Rotation of Rosters and ensuring income for all registered is not working out. Private participation in this area has just begun.

c.      Capping of Market share of financiers should have been looked at. This would also include regulating the number of financiers authorized to fund. Many farmers have been impacted due to financiers who are very aggressive and have suddenly shut shop due to over aggression / collections / arrears management.

d.     Financial education and effective ways to unravel financial terminologies / offerings should have been in-built through existing NGOs to ensure Financial Literacy.

 

(C)   Dealerships / Distributors, even in the current age, have mechanisms to produce duplicate invoices / bills.

a.      If subsidy is not available for a customer, a credit of 6 months is provided for the amount of Subsidy and sale is booked. Invoice is provided to financier stating “No Subsidy”. Within 6 months, about 4 -5 different applications with same Engine Number and Chassis Number is put up. One of the applications will get the permit. A new invoice is generated on that date, in whose name permit is granted. Financier is never aware of the subsidy loop / liability.

b.     Many financiers are not even communicated of a lock-in period for machines funded under subsidy.

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It is mind boggling to see the different avenues / areas in which money is made, and as I rummaged through my notes, I found myself muttering “You were right Birbal. Once corrupt, always corrupt….” . This month of October is where it culminates - The season, the sentiment, crop wise timing.... ideal to rake in the moolah.... Wondering - what should we do make a difference ? Can we at least ensure that the farmer gets a reasonable receivable every month ?

We are not lone is this battle for corruption. Every nation has corruption. Yet, corruption in many countries has taken a Win-Win perspective, and ensures every person in the chain earns. Can we make a difference ? While I realize I rationalize on the wrong side of ethics, it worries me more to see a segment / class of people suffer, because this ethic is grossly violated by people who can make a difference.... This Dussehera / Navarathri, can we in our spheres at least ensure that the farmer gets his due ?

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