Pic from the web
This essay I wrote for the book: Handbook of Indian Agriculture 2020 -- Charting the way out of the farm crisis.
At an age when young people are full of hope and aspirations, a 22-year-old young farmer in Barnala district in Punjab too attempted to turn around his small farm into a successful venture. Inheriting a small loan of Rs 8-lakh, and knowing well that farming had already taken an alarming toll in his family, he still decided to take up the challenge. Aware that entrepreneurship comes with associated risks, he still took 8-acres of land on lease at an annual rent of Rs 50,000 a year.
But in 2017, his standing wheat crop was damaged from a freak hailstorm. His dreams were shattered, and he could never recover from the battering he received. Unable to pay back the loan, and with lenders breathing down his neck, he was finally left with no option but to take the fatal route.
Lovepreet Singh was the fifth member in three generations of his farm family to have ended his life. About a year and a half ago, his father, Kulwant Singh, had hanged himself. His grandfather too had earlier committed suicide. That three generations of a Punjab farm family were sucked in by continuing agrarian distress clearly shows how prolonged the farm crisis has been. Not many will believe it, but Punjab, the seat of Green Revolution, has slowly turned into a hotbed of farm suicides. There is hardly a day when newspapers don’t carry reports of farmers committing suicide.
A house-to-house survey conducted by three public sector universities -- Punjab Agricultural University, Ludhiana; Punjabi University, Patiala and Guru Nanak Dev University, Amritsar – had computed the farm and farm workers suicide toll between 2000 and 2015 at a staggering 16,606. Another study by Punjabi University found that one in every three farmers in the State was living below the poverty line. In Maharashtra, 15,356 farm suicides have been reported in six years, between 2013 and 2018, reveals an RTI. At the national level, 11,379 suicides by farmers and farm workers were compiled by the National Crime Record Bureau (NCRB) for 2016, although the report was released three years late. This count was a little lower from the farm suicides tally for 2015, when 12,602 suicides were reported. A year earlier, in 2014, a total of 12, 360 farm suicides were officially recorded. The serial death dance on the farm has continued unabated.
While suicides reflected the acute distress that prevailed on the farm, essentially it was an outcome of the skewed economic policies that deliberately kept agriculture impoverished. Food prices had to be kept low to keep economic reforms viable. Keeping farm gate prices low to ensure affordable prices for consumers and ensuring a supply of cheaper raw material for the industry remained the political priority. In the process, the entire economic burden was very conveniently passed on to farmers. With real farm incomes remaining stagnant or declining over the decades, the match in reality was fixed against farmers.
Fifty years after the advent of Green Revolution, Economic Survey 2016 brought out the unpleasant truth. Accordingly, the average income of a farming family in 17 States of India, which means literally half the country, was a paltry Rs 20,000 a year. In other words, the average income was less than Rs 1,700 a month. At a time when it is not possible to even rear a cow in Rs 1,700 per month, I wonder how these families had been surviving year after year. Also, let’s not forget, the meagre farm income that Economic Survey mentioned was not only based on what the farmer was able to sell, but also included what they saved for household consumption, clearly pointing to the deep agrarian crisis. Several other studies had pointed to declining farm incomes. This is substantiated by an OECD-ICRIER study showing farmers lost an estimated Rs 45-lakh crore by being denied their rightful price in the 16-year period, between 2000-01 and 2016-17.
Now let us look at America. A report in The New York Times published way back in Feb 2010, showed how the US agriculture despite having high crop productivity, using state-of-art technology, and laced with heavy subsidies, had been sliding into depression over the years, forcing an increasing number of farmers to file for bankruptcy and quit farming. To illustrate, it specifically talked of a tragic suicide by a dairy farmer, Dean Pierson, who one fine morning after the milking was complete, took out his small-caliber rifle and shot all 51 cows on his farm in the head. He then sat on a chair and shot himself in the head. Falling prices and rising costs had pushed Dean Pierson into despair, a phenomenon that has engulfed a dominant section of the US farming community, increasingly encountering mental depression. As per the American Farm Bureau Federation, 91 per cent farmers and farm workers are faced with distress. Farm suicide rate is 45 per cent higher than the rest of the society. Such is the acute mental agony that farmers are undergoing that as many as 87 per cent of them fear they have little choice left but to quit farming. With median US farm income remaining in the negative for six years in a row, farm debt in 2019 was expected to rise to $ 418 billion.
With the number of small dairy farms falling by 17,000 in the 10 year period, between 2007 and 2017, the US had lost 30 per cent of its dairy farms. On an average, an America dairy farmer gets only 11 cents for every dollar of milk sold in the market. Over the years, milk prices have continuously been on the decline in America, Europe and Australia/New Zealand. Not only milk, prices of most commodities have remained subdued. Farmers have been finding it difficult to recover their cost of cultivation. Writing in his blog, Mike Callicrate, an American farmer, says the price at which his father sold corn on 2 December 1974, was $3.58 per bushel (equal to 25.40 kg). Forty-four years later, in January 2018, he sold corn at $ 3.56, down two cents from what his father had earned in 1974. “The farmer who planted his first field of corn in 1974 can expect the same prices for his corn as he retires. All the while the prices of seed, land, equipment, fertilizer, and fuel have grown exponentially,” he wrote.
With small farmers cultivating less than two hectares accounting for 86.2 per cent of the farming population, often the agrarian distress in India is blamed on fragmented land holdings. While the argument that these small landholdings are not viable does make economic sense but the larger question that still remains unanswered is how come in the US, where the average landholding is 180 hectares, farming should turn unviable? Or for that matter in Australia, where the average farm size is 4,331 hectares, why should agriculture be in crisis? The other argument I find being commonly articulated is that the continuing agrarian distress is because of lack of irrigation and low crop productivity. While this may appear to be true for the suicide-affected regions of Vidharbha and Marathwada region in Maharashtra, the fact that Punjab, which has 98 per cent assured irrigation and tops the global chart in productivity of cereal crops – wheat rice and maize – belies this explanation. Why it is that even with assured irrigation and higher productivity, Punjab has turned into a suicide prone region?
Although the scale of farming may be quite different, from the tiny smallholdings in India to the sprawling farms in America and elsewhere, agriculture remains a victim of economic policies that have deliberately kept farm output prices low. Whether it is India, America or Australia (or for that matter any other country) the intensive farming model is built on producing surpluses, becoming globally competitive, and in the process slashing farm incomes. Even in the US, from where India borrowed the Green Revolution technology, the high rate of crop productivity has failed to translate into higher income for farmers. Farm incomes have been on the decline despite the US having the largest commodity exchange in the world, the Chicago Mercantile Exchange, and with the multi-brand retail giant Wal-Mart having completed 50 years. Addressing the 2018 Agricultural Economic and Outlook Foreign Trade Forum, Dr Robert Johannson, Chief Economist of the US Department of Agriculture (USDA) had acknowledged: ‘Real farm prices, when indexed for inflation, have fallen sharply since 1960.’
The two unsavoury scenarios I presented above – from two parts of the world – are necessary to understand that neither subsistence agriculture of India nor the high-tech agriculture in America is economically viable. Nor is it environmentally sustainable. Farmers in both the countries, burdened over the years with mounting debt, are faced with acute distress, and are increasingly abandoning agriculture. Small American farmers are faced with extinction, screams a headline in the Time magazine. Outcome of an economic design, this is exactly what the American policy makers had desired. This is very clearly summed up by the US agriculture secretary, Sonny Perdue, when unmindful of the raging farm crisis, he said: “In America, the big get bigger and the small go out.”
This is not what India needs. Blindly aping the economic prescriptions flowing in from the West is not what India requires or can afford. India’s next agricultural revolution has to be based on its domestic priorities. The policy contours therefore have to be desi -- something that gels with the country’s unique and varied agro-climatic conditions, and brings about a turnaround in agriculture that leads to Sabka Saath, Sabka Vikas. In a country where roughly 600 million people are dependent on agriculture, directly and indirectly, and where urban jobs have dried up, with unemployment soaring to a 45-year high, an economically viable agriculture is the only way to absorb bulk of the 1.25 million new job entrants who join the employment queue every year. The huge population in agriculture should not be seen as a burden; it should be viewed as an impeccable strength. Instead of pushing a large section of the farming population to swarm into the cities, joining the ranks of dehari mazdoor, what has to be understood is that an attractive agricultural model, based on local production, local procurement and local distribution, and having backward and forward linkages with rural industries, alone can re-energise the rural economy thereby propelling the Indian economy into a still higher growth trajectory.
At a time when India is celebrating the 150thyear of Mahatma Gandhi’s birth anniversary, it is important to draw a roadmap for a sustainable agricultural revolution drawing from the Gandhian principles. Mahatma had once said that what India needs is a production system by the masses, and not for the masses. Considering that small farmers in India are the backbone of a healthy food system, sustaining millions of farm livelihoods therefore should become the first prerogative. For any vibrant rural economy to be sustained, the first and foremost requirement is to make farming a viable proposition. This is only possible if the dominant economic thinking is willing to look beyond the policy prescriptions which aim at sacrificing agriculture for the sake of economic growth, and have created appropriate economic conditions – by way of steep cuts in public sector investments and by deliberately keeping farm prices low – forcing farmers to abandon agriculture and migrate into the cities.
At the heart of the transformation towards a new agricultural revolution lies a fundamental change on how income security can be assured for small farmers, and how land and water resources are used effectively through a farming system based on ecological principles. It needs a determined desi reform agenda to revitalise agriculture, usher in prosperity for farmers, and bring in a healthy food and agriculture system.
To move away from intensive farming systems that has denuded oils, mined groundwater, contaminated the food chain, and is leading to increasing desertification is the need of the times. Especially at a time when a UN-sponsored initiative — The Economics of Ecosystems and Biodiversity (TEEB) — for agriculture and food, has in a study computed the ecological cost of the entire food and farming systems, from cutting down of forests to making land available for cultivation, from intensive farming systems to global trade in food, and further to food waste going into the landfills, accounting for 47 to 51 per cent of global greenhouse gas emissions. Considering that a shift towards agro-ecological farming systems will reduce GHG emissions in Europe by 47 per cent, as studies have shown, the shift to non-chemical agriculture in India becomes absolutely imperative. Andhra Pradesh has already shown the way, first with Community Managed Sustainable Agriculture (CMSA) and followed-up with Zero-Budget Natural Farming (ZBNF) practices which have already made 5-lakh farmers to make a shift towards regenerative agricultural practices. The proposal to make the northeast a hub for organic agriculture is a step in the right direction. The agro-ecological farming systems need to be gradually expanded to other regions as well in a phased manner. At present less than 1 per cent subsidy support goes for regenerative agriculture, which needs to grow substantially in the years to come. Skill development programmes, backed by appropriate agricultural extension and research have to be launched. But more importantly, the research focus of agricultural universities has to change towards agro-ecological farming systems. This is not easy considering the resistance shown by the top brass of the scientific community.
Considering that a majority of the land holdings are small, collectivisation of small farmers gives them bigger bargaining power, sharing of costs and better access to resources. Whether through Farmer Producer Organisations (FPOs) or through Cooperative farming, small farms have to be aggregated. Drawing from the experience of the milk cooperatives, an equally efficient value chain for food commodities can also be built. Whatever be the approach, the underlying principle has to be on assuring farmers a profitable price thereby ensuring income security. This can be achieved by setting up a National Commission for Farmers Income and Welfare, incorporating the existing Commission for Costs and Prices (CACP), with the mandate to ensure that the minimum income a farmer receives is not less than the minimum income of the lowest government employee in hierarchy. Direct Income Support and Deficiency Payments can be the two approaches to bring about parity in incomes with other sections of the society. At no stage should farmers be left to face the volatility of markets.
An efficient marketing system would depend upon creating an adequate infrastructure for agricultural markets. At present, an APMC mandi covers an area of 500 square kms. This has to be reduced to 80 sq kms as per the recommendations of the Swaminathan Committee. Another report says a total of 42,000 mandis are required if the objective is to provide a market yard in five kms radius. While the APMC network requires corrective measures to weed out corrupt practices, a network of village roads, like in Punjab, needs to be laid out linking them with the agricultural markets. Besides managing the huge surplus that flows in at the time of harvests, the new APMC markets infrastructure must provide a mechanism for a price incentive for good quality produce. The minimum support price (MSP) which benefits only 6 per cent of the farmers should cover the entire farming community. This will require procurement network to be expanded for all the crops for which MSP is announced. Food processing industries can be set up at places from where a sizeable quantity of the particular raw material is procured. For instance, I have never understood why Punjab should be importing wheat atta when it happens to be the biggest contributor of wheat to the central kitty.
Revitalising agriculture will require public sector investments to be significantly enhanced. Against a public sector investment varying between 0.3 to 0.4 per cent of the GDP between 2011-12 and 2016-17, at least 5 per cent of the GDP should flow to agriculture. After all, nearly 50 per cent population remains dependent on agriculture. A part of the public sector investments can go in for creating off-farm employment opportunities. In addition, like the 7,000 small and big steps laid out for ease of doing business, agriculture too needs ease of doing farming norms, at least 5,000 if not more, to be spelt out. Let us not wait for the World Bank to direct us on ease of doing farming norms. Let it be part of the desi reforms being proposed.
Delivering such a transformation will certainly be a challenge, but a new agricultural revolution based on sustainability and economic viability alone has the potential to reboot the economy. And as Nelson Mandela had once said: “it always seems impossible until it is done.”#
Source: My essay on Seeds of the Next Agricultural Revolution in the book: Handbook of Indian Agriculture 2020: Charting the way out of the farm crisis. Business Line. Feb 2020
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