There is a crisis in agriculture largely because the three major factors that influence its economic viability have become unfavourable to farmers. First, the cost of production is going up because of rising input costs. Second, the risks involved are increasing due to erratic monsoon and market behaviour.
Third, the return from farming is on the decline as pricing and procurement are unfavourable. Even crops like pulses, which we need badly to overcome protein hunger, are not being purchased at the minimum support price (MSP) announced. Chilli growers in Andhra Pradesh are facing a similar predicament.
The import-export policies are also not always in the interest of farmers, as in the case of natural rubber in Kerala this year. Thus, a whole series of ecological, technological, social and economic factors is multiplying the problems of small farmers, already facing risks triggered by climate change.
Here are a few questions whose answers would help address their problems. We had tried to answer them in the National Commission on Farmers (NCF) report, submitted to the Indian government 10 years ago.
It suggested a National Policy for Farmers. But the recommendations are yet to be acted upon, especially in case of pricing, procurement and public distribution.
What are the principal factors involved in the ongoing farmers’ unrest?
“A farmer doesn’t have the right to fix the price for his own produce”
There was a time when people used to say “Uttam kheti, madhyam byapar (farming is the best occupation and business comes second)”. I know many aged farmers, who, in the 1960s and 1970s, quit government jobs to do farming because the yield then was good and so was the price of their produce. However, with the passage of time, as families grew larger, input cost went higher, crop risk increased, prices of produce plummeted and imports started getting greater attention, farmers got trapped in a vicious cycle of poverty.
Today, farmers in the country face a financial burden of Rs 12,60,000 crore in the form of institutional loans. This does not include the money borrowed from local moneylenders. While farmers hope to repay the loan after harvesting season, issues like crop failure and dismally low selling price become a double whammy. This explains why about 150 million farmers have turned away from agriculture and every day about 2,000 people give up farming in India. This is in addition to more than 500,000 farmers who have already committed suicide. Even the Swaminathan Committee’s report mentions that about 40 per cent of the country’s farmers are eager to switch from agriculture to non-farm activities. Looking at all this, it seems that the adage—agriculture is the backbone of Indian economy—is true only in school textbooks.
There are reasons for us to be sceptical about new laws that are being formulated for agriculture sector. For example, the government has set a target of reducing agriculture’s contribution in India’s GDP to 6 per cent by 2020. It means that small and marginal farmers will be removed from the agriculture sector by 2020. Neither any policy has been formulated nor has any thought been given into providing alternate livelihood options to these farmers.
In the 1960s, 10 gram of gold was priced at Rs 111, while one quintal (100 kg) of wheat was Rs 41. Today, 10 g of gold costs more than Rs 30,000, while the MSP of one quintal wheat is Rs 1,600. To cite another example, price of six quintals of wheat was then at par with the salary of a Grade-A government employee. Today, a government employee under the same category can buy 50 quintals of wheat with his one month’s salary.
Of late, farmers have been realising that politicians have reduced them to mere voters, who are only needed during local and national elections. Their concerns and the issues related to agrarian societies continue to be overlooked. That is the reason a farmer does not have the power to fix the price for his agricultural produce. It enrages him. Today, every farmer wants an assured income and a remunerative price for his produce, which, the government has failed to provide.
Why has loan waiver become the method of alleviating farmers’ sufferings? Is it a feasible option?
“Loan waiver does not guarantee farmers a sustainable income”
Farm loan waiver has never been able to alleviate farmers’ suffering in India because it covers only a section of the farming community—the defaulters—and it does not guarantee farmers a sustainable income from farming. If a one-time loan waiver can bail out debt-ridden farmers, then the Rs 71,680-crore Agriculture Debt Waiver and Debt Relief Scheme of 2008 must have stopped all the sufferings faced by farmers long back.
Instead, the National Crime Records Bureau (NCRB) data indicates that farm suicides have increased massively over the years. The real problem is lack of adequate income from farming which is causing accumulation of debts. Analysis based on cost of cultivation survey data published by the Commission for Agricultural Costs and Prices (CACP) from 1972-73 to 2013-14 shows that farmers have not earned any profit from most food grains and non-food grain crops in major growing regions since the mid-1990s. Farmers had always faced crop losses, but their intensity and frequency increased post 1990s. It is continuing even today. This fact has been highlighted in the Situation Assessment of Survey of Farmers, conducted by the National Sample Survey Office during 2002-03 and 2012-13.
Some 10 years ago, farmers used to receive about Rs 5 for selling 1 kg of onion, tomato or potato. Even today, they get almost the same price for these commodities in a normal market condition. But in the meanwhile, their household expenditures have increased markedly, further accentuating their sufferings. Steep rise in cost of cultivation in the last two decades has severely affected profit margin.
As a first step towards resolving the crisis, the MSP for different crops should be fixed at least 50 per cent above the cost of cultivation, as recommended by the Swaminathan Committee. Secondly, procurement infrastructure should be improved for all major commodities, without which MSP will not be useful to farmers. Thirdly, the practice of fixing minimum export price (MEP) for different agricultural commodities should be abolished forthwith so that the excess supply can be exported.
Fourthly, the government should introduce a law giving farmers the “right to sell at MSP”. Fifthly, the MSP announced every year should be linked to the wholesale price index (It is the price list of goods that are sold in bulk and traded between organisations instead of consumers. It is the measure of inflation in India) to negate the effect of inflation.
Lastly, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) must be linked to farming work to reduce the cost of cultivation. These initiatives can definitely address farmers’ distress and not one-time farm loan waiver.
How can the problems related to adverse cost-risk-return structure of farming be addressed?
“We need to create competitive markets for farmers where they can sell directly”
Profitability of farming nee-ds to be increased. Policymakers need to put special efforts to regulate seed, pesticide and fertiliser prices so that malpractices or higher prices charged by the middlemen can be curtailed.
It is also important to increase competition among input suppliers by eliminating monopolistic practices so that they supply inputs on the farmer’s doorstep at a reasonable price. The other intervention is to promote judicious use of fertilisers and water by implementing schemes, such as Soil Health Card and Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). This will help curb input costs and increase profitability. There is a need for increased fund allocation and administrative support to Price Stabilization Fund (PSF), given that the farmers are now exposed to highly fluctuating global market. Market reforms like direct marketing and electronic National Agricultural Market (eNAM) should be encouraged to create competitive marketplaces for farmers to sell directly to consumers and large retailers. Increased market infrastructure, road and rail network to connect rural areas need to be emphasised to reduce logistics costs and make farmers’ produce competitive with international markets. Information gaps need to be bridged so that farmers know where the potential markets are and which technology is best to cater to the emerging markets. Government’s extension machinery is non-functional in many states.
The Agricultural Technology Management Agency (ATMA) needs to be revived at the district level to meet information needs of farmers by using state-of-the-art technologies like cloud-based mobile information system. Ad-hoc policies like loan waiver will harm more than benefitting the farmers. There is a need for long-term and stable policy environment for reducing costs, increasing productivity with assured price through policy intervention.
The younger generation does not appear to be interested in taking up farming. Why so?
“The next generation is not interested in joining agriculture as it has become a loss-making enterprise”
Agriculture sector is in distress due to various reasons. While its impact on farmers is clearly evident, what remains ignored is that fact the younger generation in the rural India have fallen victim to this agrarian crisis. This is the reason, inspiring the country’s youth to take up farming has become the biggest challenge not only before policymakers but also for farming households.
Nowadays, it is a well-proven fact that agriculture is a loss-making enterprise. Therefore, the next generation is not interested in investing time or energy in learnimng the skills required for agriculture. The rural youth are getting higher education and expecting jobs based on some other skills in urban areas. Farming communities are also not willing to see the young family members toiling in the fields. Thus, psychological and social transformation is one of the major reasons behind the youth staying away from agriculture.
Even the Union government and the state governments have started looking at the agriculture sector as a development activity instead of focusing on it as the largest private sector economic activity. Hence, not much investment is happening in the sector. There is also a stagnation in the production of crops and on-farm activities. Unfortunately, as farmers are relinquishing agriculture, we do not have sufficient infrastructure for off-farm activities. Agribusiness sector is still in its infancy. Supply chain of agriculture commodities is handled by unskilled and uneducated human resources, which is one of the stumbling blocks for increasing farmers’ share in consumers’ rupee. There is no scheme to attract the youth towards agriculture, though there is an opportunity in processing and marketing of agricultural produce. Agricultural research and education is failing to address the challenges before the agriculture sector and create competent agriculture scientist and skilled human resources to drive the sector.
Are farm technologies and public policies conducive to sustainable agriculture, which I call Evergreen Revolution?
“There is a major shift from small-ticket subsidies to big-ticket subsidies, which is depriving small farmers of their due share”
Currently, technology and economic policies are not in favour of “Evergreen Revolution” as envisioned by M S Swaminathan. As he puts it succinctly in the NCF report, the progress of farming in India has to be measured in terms of increased income and well-being of farmers rather than increased production or productivity.
Public investment in agriculture is declining. Currently, it accounts for less than 3 per cent at the national level, despite the fact that more than half of the country’s population depends on agriculture directly or indirectly. Hence, the support services, which farmers were supposed to receive, are getting reduced. Small and marginal farmers, who form about 85 per cent of the country’s total farmer population, are bearing the maximum brunt.
There is a major shift from small-ticket subsidies (small implements and irrigation equipment in the range of Rs 50,000 to Rs 100,000) to big-ticket subsidies (tractors, harvesters, polyhouses in the range of Rs 50 lakh to Rs 30 lakh). Even on agriculture credit front, small-ticket credits are declining and big-ticket credits are increasing. These deprive small farmers their due share and make their production costlier.
Escalating production cost is not taken into account and prices are always fixed in favour of buyers. Even the Market Intervention Scheme (MIS) and Price Stabilization Fund (PSF) are often used to help consumers rather than producers. Hence, the net income of farmers has plummeted. On the other hand, public policy shifts have led to privatisation of services like education and health, which has increased the cost of living. This general decline in wealth creation in farming has had a cascading effect on farm labour.
The only way to address this rural poverty is to move to a “farmers income security model” where the government performs a balancing act between cost of cultivation, market price, cost of living, subsidies and other support services through an institutional approach like the Farmers’ Income Commission.
The ecological crisis and risk in agriculture are also increasing because of the models of agriculture being promoted. It is time we moved into agro-ecological approaches and replaced chemicals with more renewable sources of nutrients. The entire world is now focussing on soil health and soil microbial properties. Still, most of the agricultural research institutes and universities have not updated their courses to help students gain modern understanding of soils. This becomes highly critical in the backdrop of changing climate and increasing risks in agriculture.
Similarly, there is a shift towards water-intensive crops and an excessive emphasis on genetically modified (GM) crops without understanding their implications on biosafety and intellectual property rights. There has been no improvement in GM-related laws since 2009, when a moratorium was imposed on the release of Bt Brinjal. Several chemical pesticides, which are banned globally, are still in use in India. We need to put restrictions on their use. A shift towards ecological farming is the only way to ensure “Evergreen Revolution”. The government should study independent experiments conducted across the country, which have proven the potential of this shift, and bring changes into the mainstream agriculture programmes that support farming and farmers.
Is there adequate anticipatory and translational research for helping farmers meet the challenges associated with climate change and market behaviour?
“Better use of subsidy amount will encourage farmers to boost their production and reduce climate risks”
Monsoon-dependent agriculture is at the core of the Indian economy as it ensu res food and livelihood secu rity for a large population. However, the Indian sub-continent is one of the most vulnerable regions in terms of climate change impacts on agriculture and the farming community. The discontent among the farming community remains stubbornly buoyant and the crisis is growing over time in scale and complexity due to production risks and market uncertainties associated primarily with extreme weather events. Since the impact of climate change-induced variability is complex and has local-level causes and effects, the solutions are not simple and require locally-adapted practices and services with real-time decision making by the farming community.
Both the National Action Plan on Climate Change (NAPCC)—with eight accompanying missions—and the State Action Plan on Climate Change (SAPCC) are in place. The National Innovations on Climate Resilient Agriculture (NICRA), an exclusive trans-disciplinary and multi-institute flagship programme led by the Indian Council of Agricultural Research (ICAR), was launched by the Union Ministry of Agriculture in 2011 to enhance crop resilience to climate change through research and technology demonstration. Such programmes have further expanded their research and capacity reach through collaborations with other national and international programmes, such as Climate Change, Agriculture and Food Security (CCAFS).
Climate resilience in Indian agriculture is governed by stress-tolerant crop varieties and livestock breeds, enhanced carbon sink in soils, precise weather forecasts, access to market intelligence for timely decision making by farming community and efficient water, energy and input use.
Recently, the Union government has given renewed focus on development of climate-resilient crop varieties and livestock breeds. Its investments in soil health, PMKSY, solar and wind energy and crop insurance schemes are the new safety nets for farmers in the event of weather uncertainties. However, there is a need to strengthen these efforts by creating a portfolio of practices, services (including value chain and markets) and ensuring convergence of schemes of different ministries, besides creating climate-smart villages. States, such as Haryana, Bihar, Maharashtra, Punjab, Madhya Pradesh, Karnataka and Odisha have already moved towards it.
There is a need for capacity development in frontier areas to bridge the knowledge gap (linking with Skill India). It is important to understand that under a given bio-physical (soil, climate) and socio-economic (farmers’ income, market access and infrastructure) scenario, what technology is performing better over other. Rather than blanket recommendations for each state, government needs to recommend technologies for specific situations. While bio-physical conditions may be the same within a specific geography, the adoption of technology depends on farmers’ socio-economic conditions and hence, generalised prescriptions will not help all the farmers. In short, we need customised prescription of technologies for identical group of farmers.
Finally, there is a need to rethink subsidy schemes and make better use of subsidy investments to pay for efficiency and ecosystem services. This will not only encourage farmers to use best-bet technologies and services to boost their production, income and reduce climate risks but also contribute to Intended Nationally Determined Contributions (INDCs) by arresting global warming as per the Paris Agreement. Therefore, a realistic evaluation of constraints and opportunities for addressing transboundary challenge of climate change is critical for improvising ecological, technological, social and economic factors affecting farming community.
This story was first published in the July 1-15, 2017 issue of Down To Earth magazine.