Punjab and Haryana are unable to get out of paddy-wheat cycle; why is that?

Experts say low returns and post harvest losses and management inefficiences among major roadblocks for crop diversification 

By shagun
Published: Wednesday 28 June 2023
A protest by farmers last week Procurement of sunflower seeds at a minimum support price (MSP) of Rs 6,400 per quintal. File photo: CSE

The Haryana and Punjab governments have been encouraging cultivation of crops such as maize, cotton, sunflower and mung bean (moong) as a push for diversifying from the water guzzling paddy crop and breaking the paddy-wheat cycle. But low returns for these produce are putting a dent in the crop diversification plans.

Last week, scores of farmers had blocked the National Highway-44, which connects Delhi with Chandigarh, for 33 hours. Their demand: Procurement of sunflower seeds at a minimum support price (MSP) of Rs 6,400 per quintal.

The farmers were getting a price much lower in the open market — Rs 4,000-5,000 per quintal. The protest was called off after the state government assured the farmers an ‘appropriate price’. 

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Meanwhile, maize prices in Punjab have fallen to around Rs 1,000 per quintal, much below the MSP of Rs 1,962 per quintal announced for marketing season 2022-23. In Haryana too, the prices have fallen below 50 per cent below MSP and farmers are facing huge losses. 

Similarly, an MSP of Rs 7,755 per quintal was announced for moong. Farmers, on the other hand, were getting only around Rs 6,000 per quintal. 

At the same time, farmers are getting a little above the MSP of Rs 2,125 per quintal for wheat. Currently, more than 85 per cent of the gross cropped area in the state is under paddy and wheat — 3.5 million ha under wheat and 3 million ha under paddy. 

Low returns for other crops is the major reason that has discouraged farmers from diversifying. Cultivators prefer to stick to conventional crops that have assured and better returns. 

Every year, the government announces MSP for different crops, but effectively, only two or three crops like paddy, wheat and at times soybean are purchased at the announced prices by the government. The rest are bought by private traders, who have no legal binding to purchase at MSP or above. 

Gurvinder Singh, director of Punjab’s agriculture department, told Down To Earth the state government is working on an agricultural policy under which assured prices of crops other than paddy and wheat are being considered. 

“We will either tie up with private procurers or procure the crops ourselves, but we are trying to give an assured market and price for crops like mustard, maize, moong and cotton,” he said. 

In the ongoing marketing season, the department has decided to procure moong at MSP through Punjab State Cooperative Supply and Marketing Federation Ltd or Punjab Markfed and will do the same for maize in 2024, Singh added. 

Crop diversification efforts also get sidetracked in a crisis situation, when there is a focus on replenishing rice and wheat stocks to ensure food security in the face of a poor or erratic monsoon. 

The first recommendations for diversifying the cropping pattern of Punjab away from the dominant paddy-wheat cycle came in the late 1980s. A committee under economist SS Johl was constituted. 

Also read: Plant treaty: Ways to benefit custodians of agricultural biodiversity in focus

The report by the panel came out in 1986 and recommended that at least 20 per cent of the area under the paddy-wheat crops should be diversified into other crops to sustain Punjab’s resources in the long run. 

Over the years, different governments at the central and state levels have come up with their own policies in this direction. But these policies have not shown results. 

The cultivation of cotton in Punjab saw its lowest-ever acreage at 175,000 hectare (ha) as of last week, as against the target of 300,000 ha for this Kharif season.

“Farmers find cultivating the paddy crop lucrative and so, its area has been increasing. The efforts for crop diversification have not worked,” said Devinder Sharma, agriculture policy expert. 

Even if MSP is assured for crops like maize, governments should look into its competitiveness in terms of its per acre output when compared to rice and wheat, he opined. 

Maize farmers on an average receive Rs 900 per quintal, said a June 2021 policy paper on diversification of cropping systems in Punjab and Haryana by four different institutes of Indian Council of Agricultural Research (ICAR). 

The realised price difference between rice and maize is a key factor in the latter not being able to play a role in crop diversification. 

The paper did a competitive analysis regarding the rice and wheat cropping systems and observed that even if MSP is provided for both crops, rice has a marginal advantage over maize. To procure maize from 100,000 ha instead of rice, there will be additional expenditure of Rs 89.35 crore in Punjab and Rs 24.56 crore in Haryana. 

However, this cross subsidy could easily be diverted due to savings in water, electricity and pollution costs due to rice residue burning, the authors said. Along with MSP and assured procurement, policies like free electricity and subsidised submersible pumps also give impetus to the dominant crops. 

During the ongoing Kharif sowing season, some farmers DTE spoke to in Punjab said they started the sowing of paddy much before the scheduled dates because of uninterrupted power supply in the fields.

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Differential pricing

Experts are also of the view that governments can pay differential prices to farmers. 

“If we want to save our groundwater and electricity, then we will have to match the ecosystem services provided by farmers who are diversifying into other crops with compensation. The government should be willing to pay that price and in fact, a pilot project should be started in Punjab,” Sharma said. 

Though the net returns are equal for maize in Punjab compared to rice, the existing mindset and operating environment focus more on the gross returns, the paper added. 

Further, the absence of an organised network and proper marketing channels also mar diversification prospects. The paddy-wheat system has an organised post-harvest network, as well as a rural credit, despite its various shortcomings. 

But the current policies towards diversification were mostly delinked from these realities. 

“For instance, in the absence of institutional credit, rural-credit through the informal channels of arhtiyas or commission agents is available for paddy and not basmati or horticulture crops as they are considered risky due to the absence of guaranteed procurement,” wrote researcher Ranjini Basu in a 2022 paper Fraught with Contestations: Crop-Diversification under Agrarian Distress in Indian Punjab

Therefore, any far-reaching transition plan for sustainable and equitable crop-diversification in the state needs to factor in these aspects of surplus production management, Basu said. 

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Lack of storage space for different kinds of produce also hinders any attempts at diversification. Farmers don’t require much storage facilities for paddy and wheat, as almost all the surplus paddy and wheat is procured by the state governments.

However, alternative crops, especially fruits and vegetables, require large storage facilities, specifically cold storage. 

Post-harvest losses for fruits and vegetables were around 20 per cent, according to the central government think tank NITI Aayog’s report on the task force for agricultural development in Punjab. 

These losses, along with postharvest handling and management inefficiencies like a lack of grading, standardisation and scientific packaging, were major bottlenecks to the adoption of high value crops in the state, the report said. 

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