Mohan Guruswamy | Indian agriculture: failure of success …



Indian agriculture has come a long way since we waited for shipments of American grain over half a century ago to feed our people. India is now producing more than enough for our national appetite. The question now is how to make farming an economically attractive profession. The farmers’ movement is supposed to be all about this. But what is really interesting is that the farmers who protest the loudest and most vigorously are those in the agricultural areas who benefit the most from the purchase of minimum price support and the sugar cane belt of the ‘Uttar Pradesh where cane prices are set by the state. These form the bulk of India’s richest and well-to-do cohort of farmers.

The miserable condition of the majority of Indian farmers who cultivate small plots of land in the predominantly rainfed areas of India has generally gone unnoticed, both by social media and politicians. The protesting farmers are not agitating for the assured supply to the MSP for all agricultural products and throughout the country.

The story of India’s agricultural take-off began when the nation was forced to import a record 20 million tonnes of grain in 1964-66. Annual wheat production increased from 11.28 million tonnes in 1962-63 to nearly 110 million tonnes for wheat and 122 million tonnes for rice in 2020.

This level of production created an abundance problem.

Despite its declining share in GDP, agriculture plays a vital role in the Indian economy. Over 58 percent of rural households depend on agriculture for their primary livelihood. The 2011 census indicates that there are 118.9 million cultivators and 144 million agricultural workers in India, or 24.6% of the total workforce of over 481 million. Read this with the fact that agriculture now contributes only 13.7 percent of GDP.

With 157.35 million hectares, India has the second largest agricultural area in the world. India has around 20 agro-climatic regions and the top 15 climates of the world exist here. Therefore, it is a large producer of a wide variety of foods. India is the world’s largest producer of spices, legumes, milk, tea, cashews and jute; and the second largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds. Agricultural exports represent 10 percent of our total exports and are the fourth major exported commodity.

The irony is that only 58.1 million hectares, or only a third of agricultural land, are actually irrigated. Of this total, 38 percent comes from surface water and 62 percent from groundwater. India has the largest well-equipped irrigation system in the world.

There is a flip side to this great story of Indian agriculture. The Indian subcontinent has almost half of the world’s hungry people. Half of all children under five in South Asia suffer from malnutrition, which is even more than in sub-Saharan Africa.

Over 65 percent of agricultural land is made up of marginal farms and small farms of less than one hectare. In addition, the average size of farms has decreased. The average size of farms in operation has almost halved since 1970 to reach 1.05 hectares. About 92 million households, or 490 million people, depend on marginal or small farms according to the 2001 census. This translates to 60 percent of the rural population, or 42 percent of the total population.

Now we come to the heart of the hustle and bustle of today’s farmers. The government’s procurement policy is clearly biased, with Punjab, Haryana, the Andhra coast, Telangana and western Uttar Pradesh accounting for the bulk (83.51%) of the markets. The food subsidy bill fell from Rs 24,500 crore in 1990-91 to Rs lakh 1.75 crore in 2001-02 to Rs lakh 2.31 crore in 2016 to Rs lakh 5 crore in 2021.

Instead of being the buyer of last resort, the Food Corporation of India has become the farmers’ buyer of choice. Government policy has resulted in mountains of food grains coinciding with starvation deaths.

Gains in rural prosperity and MSP supply have given rise to a few areas of concentrated rural prosperity. In 2020, out of the production of 265 million tonnes of food grains, up to 91.42 million tonnes were purchased with MSP, while only 40.5 million tonnes were distributed. This leaves huge mounds in the warehouses. Obviously, there is a limit to what can be bought. This always raises the question: why MSP sourcing, which means the highest prices, should only benefit a few regions?

The total subsidy provided to agricultural consumers in the form of fertilizer and free electricity has quadrupled from Rs 73,000 crore in 1992-93 to Rs 3.04 lakh crore now. While the subsidy was launched to reach lower-level farmers, it mostly benefited wealthy farmers. These people are now protesting for more.

These huge grants come at a cost. Public investment in agriculture, in real terms, has declined steadily over the past 20 years. Almost all of the investment in creating additional irrigation potential has come from private sources, mainly in the form of more tube wells, usually supplied with free electricity. Free electricity has also put enormous pressure on the depleting groundwater resources.

By 2050, India’s population is expected to reach 1.7 billion, which will then be almost that of China and the United States combined. In the four decades starting from 1965 to 1966, wheat production in Punjab and Haryana increased nine-fold, while rice production increased more than 30-fold.

These two states and parts of Andhra Pradesh and Uttar Pradesh can now not only produce enough to feed the country, but also leave a large surplus for export.

With subsistence agriculture and agricultural labor being the main vocation, the priority should be to increase public spending on infrastructure and housing, to create demand for alternative labor. Instead of distributing benefits to the agricultural sector through the purchase of MSPs and fertilizer subsidies, the Indian government should gradually move towards a benefit transfer regime based on the area cultivated and the nature of the land, in order to ensure a more equitable distribution of government largesse.

Finally, the entire government food price control apparatus to satisfy the urban population should be dismantled. If farmers who buy a motorcycle or even a tractor have to pay globally comparable prices, why should farmers make food available to industrial sector and urban consumers at the lowest prices in the world?

Why should Bharat feed India at his expense?



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