The problem

THE search for a solution to stem the agrarian crisis is growing increasingly desperate as neither policy instruments nor technological interventions appear to be working. Whether it is a loan waiver, infusion of massive doses of credit or pushing technologies like biotech, all attempts to stem the crisis on the farm front have failed miserably. Official figures point out that 182,936 farmers have been driven to suicide since 1997, an indicator of just how critical the crisis is. Ironically, the bulk of these suicides occurred when the economy was galloping at an unprecedented growth rate. The economy was doing fine, it’s just that the people weren’t.

Suicides are but a symptom of the malaise that has hit the farm sector. While this current issue of Seminar analyses the various dimensions of the state of agriculture, it is time to take stock of the situation on the ground – farmers with limited resources who are tasked to feed a billion-plus nation using a production system that was ushered way back in the mid-1960s, are now grappling with a crisis of unprecedented proportions.

The green revolution helped the country to achieve self-sufficiency in food grain production, which was no mean feat. The technology, however, was implanted on unsound conditions and the results have been disastrous. The natural resource base of the major food bowls across the country has been severely eroded and production levels have either stagnated or declined for most crops. This clearly shows that while industrial agriculture does have the potential to boost yields in the short run, it also leaves behind a trail of devastation.

Apart from the heyday of the green revolution, the rate of growth in agriculture has generally lagged behind overall growth of the national economy. The stagnation that set in during the decade and a half period beginning 1980, when the growth rate hovered around 3%, dropped to a mere 2% for the period 1995-2005; later this further nosedived to 1.5%. Yet the 11th five year plan envisages a 4% rate of growth in agriculture – a difficult mission by all counts.

The growth in productivity of most of the important food crops like rice, wheat, coarse cereals and oilseeds was negative for the period 1996-2004. When the food demand is projected to touch 240 million tonnes in 2010, production stood at less than 220 tonnes during the year 2007-08; India indeed is at the brink of losing the status of being self-sufficient in food grain production.

Even as the contribution of agriculture to GDP has fallen from 37% in 1983 to around 19% currently, the share of workforce engaged in agriculture has hardly come down. The numbers engaged in farming remain disproportionately high with the average holding size standing at 1.06 hectares in 2002-03, a size where industrial agriculture is unviable. As has been the experience worldwide, small farms can be viable when they grow different varieties of crops per unit area, a concept that is alien to the green revolution model of cultivating monocultures.

The first impact of growing monocultures has been on biodiversity. At the beginning of the 20th century, over 30,000 varieties of rice were cultivated across the country. Today more than 75% of the rice comes from just 10 varieties. Prior to the green revolution, as many as 41 varieties of wheat and 37 of rice were grown in Punjab. Today three varieties each of wheat and rice dominate. Likewise, a loss of biodiversity has been reported from most parts of the country where monocultures were introduced.

Due to an increasing demand for land for industrialization and urbanization, not only is the area under cultivation shrinking, the area irrigated is also declining mainly on account of a falling groundwater table and diversion of prime crop land. The country is barely self-sufficient in producing cereals, while meeting the domestic demand for pulses and edible oils require an additional 20 million hectares of land. Yet diversion of farmland for non-agricultural uses is being actively promoted. Shrinking farmlands and reduced size of landholdings is forcing farmers to produce more by adopting intensive agriculture practices. This in turn is putting severe pressure on the natural resource base; in many cases the devastation is irreversible.

The figures are damning. More than 10,000 million tonnes of fertile top soil is being eroded every year. As per the figures of the Department of Land Resources of the Ministry of Rural Development, nearly two-thirds of the country’s agriculture land is degraded or sick. The deterioration of soil health is worse in the frontline green revolution states and granaries of the country.

In January 2009, the Department of Agriculture of the state of Haryana warned that important nutrients like nitrogen, phosphorus, iron and zinc are heavily depleted in around 250,000 hectares of prime crop land, which in turn will impact yield of wheat. The situation is no different in neighbouring Punjab, which bears the burden of producing 20% of the country’s wheat and 12% of its rice. Almost 40% of the soil in Punjab – a whopping 1.7 million hectares – is degraded due to soil erosion, rising water table, salinity, overuse of chemicals, and so on. In Maharashtra, around 10.5 million hectares of crop land are under moderate to heavy chemical deterioration due to salinity. The report card on soil health for the rest of the country is just as dismal.

Sick soils have lost their ability to respond to inputs like fertilizers, a major reason for stagnating productivity. This decrease in response indicates that the organic carbon content and microbial activities in the soil, which are critical for crop development, have declined. While dying soils should have evoked concern decades ago, all that the government has come up with is a centrally sponsored scheme on management of soil health and fertility in June 2008. With an outlay of Rs 4.3 billion, the scheme aims to promote the usual technological interventions that in the first place caused the problem: external input-intensive farming.

Along with declining soil health, the issue of water scarcity and misuse is a cause of concern. With the bulk of water for irrigation being mined from beneath the ground, we are facing depletion of aquifers. Of the 7,928 blocks in the country, 673 have over-exploited their groundwater while 425 are in the dark zone, i.e., the aquifers are almost dead. The most badly affected states are Punjab, Rajasthan, Tamil Nadu, Maharashtra, Haryana, Andhra Pradesh and Gujarat, incidentally among the main food producing states.

Farming is also facing competition from industrial estates for the use of water. Barely 40% of the country’s agriculture is irrigated while the rest depends on unpredictable rains to produce crops. This limited area, however, accounts for more than half of the total value of output of the agriculture sector. Irrigation also has the potential to increase crop yield by 30% and therefore its importance for ensuring food security cannot be stressed enough. However, water for irrigation is being diverted to meet the demand of industries across all major river basins of the country. Attempts are also being made to privatize irrigation facilities.

Intensive application of chemical fertilizers on farm lands is resulting in a leaching of nitrates – chemicals that pollute surface and groundwater leading to serious health impacts. The groundwater in 11 states has nitrate concentration higher than the permissible limits. Coupled with indiscriminate use of other chemicals like pesticides and herbicides, the rate of pesticide poisoning and cancer rates among farmers has reached alarming proportions.

Not only do fertilizers, pesticides and other chemicals cause adverse health impacts, they also increase the cost of cultivation. Subsidies for most inputs that drove the green revolution have been scaled down with the exception of fertilizer subsidy, 38% of which in any case is cornered by manufacturers. With increased participation of the private sector in the production of critical inputs for farming, their costs have gone up. As groundwater aquifers drop steadily, farmers invest more money to dig deeper. Cost of power for energizing pump-sets has gone up. Nevertheless, public investment in agriculture has almost dried up in the last two decades. All this and more has increased the cost of cultivation by leaps and bounds.

The prices of most agriculture commodities, on the other hand, have fallen or remained static since trade liberalization in agriculture, especially after our accession to the WTO in 1995. For instance, during the period 1996-97 to 2003-04, agriculture commodity prices relative to non-agriculture prices have fallen by 1.7% every year, adversely affecting the income levels of farmers.

While there has been an upturn in agriculture prices in the last three years owing to a global food crisis, which forced a reluctant government to upwardly revise procurement price for several commodities, it appears unlikely that the increase will be sustained in the future. This is because once the food crisis is over and production levels for essential foods improve, the terms of trade in a liberalized market scenario will bring domestic food prices down. In any case, announcing a higher procurement price does not always lead to enhanced income for every farmer – barely 30% of the farmers in the country benefit from this policy. The majority of marginal and small farmers who do not produce for markets are therefore being further impoverished.

The marketing of agriculture commodities is in most situations a tough proposition for farmers. Despite more than 7,500 regulated markets and 21,000 rural periodical markets, the price received by farmers is a fraction of that paid by the consumer. Worse, about 72% of the fruit and vegetable production in India goes waste because of lack of proper retailing and adequate storage capacity. Food processing industries are rarely to be found in rural areas.

To ensure that farmers get a fair price for their produce as also enable government agencies to procure sufficient quantities to meet the food security concerns of the country, the government announces what is known as the Minimum Support Price (MSP) for 25 commodities which serves as a ruling price for the public sector agencies engaged in procurement. While fixing the MSP, the various costs involved in the cultivation process are worked out by running trials at approximately 18,000 locations across the country. A nominal amount over and above the cost of cultivation is offered as procurement price to farmers.

However, neither is this failsafe methodology nor is it fair. While working out the cost of cultivation, a farmer is considered an unskilled worker – lower than a Group D government employee – which depresses the assumed wage rate. In case the land is leased-in, the rent is taken into account but no such considerations are made for farmers who cultivate their own land. Many state governments instead of quoting the prevailing market rate of rent for land, declare what is known as statutory rent which is way lower. Some states have outsourced the crop trial experiments to private parties who have been accused of not carrying out the exercise properly.

Commissions and parliamentary panels have regularly recommended that farmers ought to be paid 50% over and above the cost of cultivation, unfortunately to no avail. All this and more plague the process of working out a MSP that could help farmers receive a fair price for their produce. On the procurement front too there are glaring lapses. Even as a MSP is declared for 25 commodities, actual procurement is done for a select few. This forces farmers to turn to private traders who usually pay much less than the MSP.

This brings up the crucial issue of income from farming. While the real income of the country as a whole was growing at the rate of around 4% every year for more than a decade, it grew at less than 0.5% for rural India. No wonder a family of five in rural India had to subsist at an average income of Rs 2,115 a month while the consumption expenditure was Rs 2,770 during the year 2003, as per the National Sample Survey Organization (NSSO). The NSSO further points out that as many as 49% of rural households were indebted with an average debt of Rs 12,585 during the year 2003, one-third of which was owed to moneylenders who charge usurious rates of interest. The vicious circle of debt and loss of assets – mainly land – is driving thousands of farmers to commit suicide every year. In fact, more than 40% of farmers want to quit farming.

Decreased real income levels have also impacted food grain consumption. For the year 2002-03, this stood at 155.7 kg per capita, which is less than the figures during 1933-38. During the period 1993-94 to 2004-05, caloric intake in rural India declined by 5%. In fact, two-third of the country is consuming less than the recommended nutritional intake and malnutrition in India is higher than even Ethiopia. It came as no surprise when the National Family Health Survey of 2005-06 pointed out that almost half of the children under the age of five years – a staggering 60 million – are stunted, which is an indicator of malnourishment, and 43% are underweight. In fact, every third malnourished child in the world is an Indian. Every year, 2.5 million children die in India, half of whom could be saved if only they were well nourished.

In this grim scenario where farm productivity and farmers’ income have taken a hit, domestic reforms and liberalization policies, and bilateral/multilateral trade agreements are additional dimensions that confront the farm sector. Beginning with economic reforms in 1991, a steady process of dismantling safety nets for farmers and making agriculture more market oriented has taken precedence over ensuring the country’s food security and protecting livelihoods of farmers. Trade liberalization has not enabled India to expand export of agriculture and food products, which stands at a meagre 1.4% of global trade.

Agriculture imports, on the other hand, have gone up manifold, which has further depressed domestic prices and hit income levels of farmers. Ironically, India is importing commodities like pulses, vegetables and edible oils, which have traditionally been grown by dry land farmers. These also are commodities that are comparatively less expensive to produce in India than in the countries from where they are imported.

The experience of developed countries where the population engaged in agriculture has slowly shifted out to other occupations, primarily to the manufacturing and services sectors, is routinely cited as an example that India ought to emulate. This is an extremely narrow view of the practice of agriculture in a country where a billion plus inhabitants need to be fed.

The agrarian crisis, which did catch the eye of the nation during the Union budget of 2008-09, has now been overshadowed by the financial meltdown. According to the Federation of Indian Export Organizations, four million jobs are likely to be lost in the textile, garment and handicraft sectors by April 2009. If one factors in other sectors like gems and jewels, chemicals, engineering and auto component, around 10 million jobs are likely to be lost. These are jobs that are generally held by people who have migrated from rural areas after quitting farming. This will now force them to migrate back to their villages where they have nothing to fall back on. Someone should have kept in mind that opportunities for economic engagement are limited in the rural areas and therefore pushing a farm exit policy for marginal and small farmers would be fraught with danger.

The above by no means covers all the dimensions of the current agrarian crisis. In policy-making circles there are discussions on ushering in a ‘second’ green revolution, and an ‘ever’ green revolution. That is why there is an urgent need to draw a balance sheet of the green revolution so that we know why and what went wrong so as not to repeat the same mistakes in the future.

Agriculture is and will remain the backbone of our rural economy. It will continue to employ the bulk of our population, as it should. All that is required is promotion of sustainable agriculture that is in harmony with nature, and desisting from policy prescriptions that depress farmers’ incomes and force them out of farming. Our farmers have delivered much more than what was expected of them in the past and they alone have the ability and will to ensure that the nation remains food secure, not the corporations making forays into this sector. It takes time to dismantle four decades of mistakes and application of flawed technologies. However, a beginning must be made. The sooner this happens, the better it would be for the country’s food sovereignty and farmers’ livelihoods.

BHASKAR GOSWAMI