Transforming Agriculture
By Dhurjati Mukherjee
Prime Minister Modi, at the recently held 32nd International Conference of Agricultural Economists (ICAE) on ‘Transformation Towards Sustainable Agri-Food Systems’ pointed out that agriculture is the core of the country’s economic policy and small farmers are the biggest strength of India’s food security but strategies need to be evolved to increase their incomes.
Interestingly, though allocation for agriculture and allied sectors in present fiscal has been Rs 1.52 lakh crore, constituting 3.1% of total expenditure of Rs 48.2 lakh crore, this marks only a slight increase from Rs 1.4 lakh crore in the revised estimate for 2023-24. This obviously is not enough if considered in the context of raising farm income, which indeed is vital at this juncture for strengthening the rural sector economy.
Farm policy has not been much of a success because of which productivity has not increased uniformly throughout the country. Moreover, storage capacity is quite inadequate though recently Modi laid the foundation stone of a pilot project for world’s largest grain storage plan for the cooperative sector and said modernisation of agriculture systems is a must for making India a developed nation. The world’s largest plan of 700 lakh metric tonnes is likely to be completed in five years at a cost of Rs 1.2 lakh crore. The pilot project of the mega storage plan is being carried out in 11 primary agricultural cooperative societies (PACS) in 11 states – U.P. M.P., Tamil Nadu, Tripura, Uttarakhand, Rajasthan, Maharashtra, Gujarat, Assam, Karnataka and Telangana.
Though this is, no doubt, a welcome development, what is lacking is the intervention of the Indian Council for Agricultural Research (ICAR) of what crops to grow and where, the type of crop diversification that can be done for better incomes etc. It is well-known that crops grow in agro-climatic regions totally ill-suited for them at huge costs to the exchequer and the environment. Sugar cane is grown in the arid Deccan region, depleting groundwater. The floodplains of Bihar or Assam, ideal for cane where land is submerged for weeks, shun the crop as cane must be crushed immediately after being cut and sugar mills are absent in these places.
Coming to Punjab, the hot bed of Green Revolution, from where farmers are protesting for a legal guarantee for MSP, there is very little initiative to increase incomes through crop diversification. While some farmers grow fruits and flowers, most of them stick to grain though the soil has become degraded with more and more chemicals and fertilisers being used to boost up productivity. Same is the case with Haryana.
During the past decade, between 2011-12 and 2020-21, horticulture, i.e. fruits, vegetables, flowers etc showed 3.5% annual growth without the government’s price intervention. However, crops with strong price support like paddy, wheat and sugar cane averaged 1.4% annual growth. Obviously, demand-driven factors can be much stronger than price support. Since there has been manifest a tendency to consume more vegetables and seasonal fruits, in recent years, even among the low-income groups with increase in purchasing power, it has to be agreed that diversification towards horticulture can lead to increased incomes of farmers. Agricultural scientists are of the opinion that not just incomes, but the shift would also lead to nutritional security as well.
As mentioned in various technical conferences by scientists, price support for two water-intensive crops — paddy and sugar cane – is indirectly taking a toll on India’s water reserves, more so when the country is heading towards extreme water stress. The price support for these crops encourages farmers, even in the drier regions, to grow them with groundwater, upsetting the water table. Agricultural scientists are of the opinion that horticulture provides an opportunity for an easy way towards crop diversification and allowing nutritious food supply. This can increase farmers’ income, conserve the scarce water resources and make available nutritious food locally.
A recent paper by ICRIER titled ‘Saving Punjab & Haryana from Ecological Disaster: Realigning Agri-Food Policies’ by economists led by Ashok Gulati has rightly suggested a transfer of Rs 35,000 a hectare to farmers who shift from paddy to pulses, oilseeds, millets and maize during the kharif season along with procurement of these crops at MSP for five years. It is understood that Haryana is already giving Rs 17,500 a hectare and the Centre needs to double it.
Interestingly, there is hardly any additional expenditure involved. It is the savings on power, canal waters and fertiliser subsidies that used to be given back to farmers in a different form. If this is done, India can save the most fertile plains of Punjab-Haryana from potential desertification. This comes months after farmer unions from Punjab were offered a package by a team of central ministers assuring government procurement for five years to tillers who diversify not pulses, maize and oilseeds.
As the current regime is unsustainable and results in massive groundwater extraction for paddy cultivation and the two northern states accounted or a substantial part of the fertiliser subsidy as they consumed more fertiliser than their counterparts during the kharif season starting in June. It has rightly proposed diversification of 12-14 lakh hectare from paddy cultivation in Punjab and Haryana with government offering upfront incentive of Rs 30,000-40,000 a hectare by repurposing power subsidy offered by the state and fertiliser subsidy given by the Centre.
Such measures, if taken up not just by Punjab and Haryana but other paddy growing states, would ensure that soil does not lose its potential and the right crops are grown at the right place with appropriate technologies. Moreover, there must be a plan for guiding farmers for diversification to add value to their incomes and scientists, specially from agricultural universities, must come out in support. In fact, some districts in the country should be taken up for such planned diversification at minimum cost.
Meanwhile, reports indicate the persistence of El Nino conditions and its impact on crop yields is expected to weigh on the growth of the rural economy, including FMCG sector. The industry is expected to see subdued growth until at least the September quarter, estimates released by research firm, Kantar showed. “Agricultural growth is projected to be at 1.8% in 2023-24. This is a seven-year low.
As per the first estimate of kharif crop released, almost all crops have seen lower releases due to uneven rainfall. It is obvious that poor crop yields erode rural incomes and their purchasing power while this results in inflation. Thus, the concern highlighted, over the years, is the need to increase the purchasing power of the rural population.
The envisaged diversification with emphasis on horticulture and floriculture, if carried out seriously, will increase the incomes of the farming community. But larger government support is called for in tune with that extended to industry. It is known that with a huge population dependent on agriculture, around 45% there is a need for the government to seriously evolve plans to increase the living conditions of farmers of the country in a judicious manner.
Finally, the much-needed farm reforms are long overdue in the changing landscape of Indian agriculture as the spectre of farm shortages have disappeared. Experts have rightly argued the need for focussing attention on basic income support, remunerative prices and environmental concerns, all of which need to be addressed through a well-planned strategy. — INFA