National Council of Applied Economic Research
One of the grimmest projections for the future of the earth as we know is the irreversible degradation of agricultural land caused by depletion of water bodies and climate change rendering it progressively unfit for cultivation within a span of less than a century. Where does that leave the Indian farmer who has been consistently providing food for 1.3 billion people relying largely on inherited wisdom and knowledge with little access to technology or infrastructure over the last several decades?
Crisis in the agriculture sector: Agriculture has traditionally been the backbone of the country in terms of livelihood but the sector has recorded alarmingly slow growth in the last few years. According to recent estimates of the Central Statistics Office the growth of Gross Value Added in agriculture declined from 4.1 per cent in 2016-17 to barely 2.1 per cent in 2017-18. Even the National Commission of Farmers (2006) chaired by MS Swaminathan had pointed out that something “very serious and terribly wrong is happening in the countryside” largely resulting from instability in farm incomes and risks relating to production markets and prices faced by farmers.
Another reason for the crisis in agriculture is a steady decline in the size of landholdings caused by mounting pressure on land assets. Government data shows that small and marginal holdings of less than two hectares currently account for 72 per cent of the landholdings in the country. However arguably the biggest challenge facing the farmer today is that of price fluctuations caused by demand and supply uncertainties and hoarding of agricultural produce by traders. These risks are followed by rising input and capital costs and perishable nature of the produce preventing farmers from stocking till they get a profitable margin or even from insuring their produce against losses
Alarming drop in agricultural growth: The Modi Government’s promise of ‘Sabka saath sabka vikas’ is unlikely to be fulfilled without taking the farmer on board especially since almost 47 per cent of the workforce in India is engaged in agriculture. The World Development Report (2008) also pointed that growth in the agriculture sector is two-three times more effective in reducing poverty than concomitant growth in non-agricultural sectors. However an analysis of the performance of India’s agriculture sector and farmers’ incomes over the last four years offers little source for optimism especially with the agri-Gross Domestic Product falling to 2.1 per cent this year down drastically from 4.9 per cent in the previous year. Can the Modi Government buck this trend to bring the farm sector back on the growth trajectory in just one remaining year of its term?
Poor agricultural performance during the Modi era is also reflected in the shrinking agri-trade surplus which as per the Government’s own figures has plummeted from $25.5 billion in 2013-14 to just $8.2 billion by 2016-17. The draft Mid-Year Review of the Economy brought out by the National Council of Applied Economic Research in November 2017 argues that structural changes in consumption patterns in both rural and urban areas as also rising incomes are exerting price pressures in the agriculture sector. This necessitates productivity growth and efficacious management of post-harvest operations to ensure affordable supplies of agricultural produce.
Reversing the downward slide: Realising the severity of the situation the Government has decided to take contingent measures such as constituting the Doubling Farmers’ Income (DFI) Committee for augmenting both food production and farm incomes while simultaneously spurring growth in the sector. The DFI Committee recommends the creation of self-sustainable models not only in food cultivation but also in corollary agricultural sectors like horticulture and livestock-rearing to improve market linkages for boosting farmers’ incomes. The Economic Survey lists other initiatives in this area including disbursement of credit from institutional sources to complement Government initiatives like the Soil Health Card the ‘Per Drop More Crop’ scheme in the Pradhan Mantri Krishi Sinchai Yojana and the construction of an electronic platform for the National Agriculture Market trading portal which networks the existing Agricultural Produce Market Committee mandis to create a unified national market for agricultural commodities.
Ameliorating the agrarian crisis: Budget 2018: The 2018 Budget dubbed as ‘farm-centric’ by many also highlights the Government’s intentions to mitigate the farmers’ suffering. However it is not clear how the resources would be generated for implementing the ambitious announcement of a minimum support price (MSP) of 1.5 times the input cost of farmers for all the unannounced kharif crops. Other proposals in the Budget aim at upgrading the existing rural haats into gramin agricultural markets diversification through setting up of a fisheries and aquaculture infrastructure development fund and an animal husbandry infrastructure development fund with a corpus of Rs 10000 crore; and 100 per cent tax deduction for farmer producer companies that can in turn assist small and marginal farmers in achieving economies of scale.
However experts warn that even these far-reaching measures may not be sufficient to take the farm sector out of the red or to attain the target of doubling farmers’ incomes by 2022 especially since the paltry 3.1 per cent growth rate of farmer incomes between 2003 and 2013 needs to be scaled up to over 10 per cent to reach this target. The obvious solution lies in augmenting the non-agricultural incomes of farmers emanating from jobs in the rural non-farm and urban sectors.
The most enterprising suggestion is however embedded in the Economic Survey in its emphasis on promoting women farmers by integrating them as active agents in rural transformation by earmarking 30 per cent of the Budget allocation for women beneficiaries in all ongoing Government schemes and by connecting them to micro credit agencies through self-help groups. This is sought to be achieved by offering women farmers enhanced access to resources such as land water credit technology and training to counter the challenge of migration of their menfolk to urban areas. These women are envisaged to perform multiple roles of cultivators entrepreneurs and labourers by deploying their gender expertise in an otherwise male-dominated sector.
Conclusion: The Government thus seems to be working on a philosophy of “when the going gets tough the tough get going” to reduce the travails of farmers — a philosophy that has been most evocatively immortalised in the famous war novel of 19th century America Gone with the Wind when its female protagonist and plantation owner Scarlett O’Hara finds only one dirty carrot in her erstwhile sprawling farm that has been ravaged by the war; and when she grimly resolves “As God is my witness I’ll live through this…I’ll never be hungry again.” Surely it’s time to nurture our impoverished farmers and ensure that even as they keep feeding us they should themselves never go hungry.
(The writer is Editor at the National Council of Applied Economic Research. Views expressed here are personal)
