An uncertain Hobbesian life

Of India’s 121 million agricultural holdings, 99 million are with small and marginal farmers, with a land share of just 44 per cent and a farmer population share of 87 per cent. With multiple cropping prevalent, such farmers account for 70 per cent of all vegetables and 52 per cent of cereal output. According to National Sample Survey Office data, 33 per cent of all farm households have less than 0.4 hectares of land. About 50 per cent of agricultural households are indebted. In Sultanpur district, Uttar Pradesh, cultivation cost per hectare for wheat has increased by 33 per cent in five years. Such farmers face an uncertain Hobbesian life: poor, brutish and short.

Rain-fed agriculture has been practised since antiquity in India, with Indus Valley farmers growing peas, sesame and dates. Greek historian Herodotus had noted in The Histories : “India has many vast plains of great fertility. Since there is a double rainfall, the inhabitants of India almost always gather in two harvests annually.” With the British era came the zamindars, the ryots and penury. As Tirthankar Roy notes in The Economic History of India , 1857-1947 , “from 1891 to 1946, diminishing returns coupled with growing land-shortage and yield deceleration led to an acute crisis, particularly in Bengal.” India’s marginal farmers have been worse off for centuries.

Our policymakers recognised this dependence on rain and formulated policies focussed on supporting canal-fed crops and improving agricultural productivity. This they coupled with incentive structures, pricing regimes and input subsidies. A bewildering array of schemes was launched — Small Farmers Development Agency (1971), Integrated Rural Development Programme (1980), Swarnjayanti Gram Swarozgar Yojana (SGSY, 1999) and the Mahatma Gandhi National Rural Employment Guarantee Act. Skewed by a bureaucratic approach, these schemes focussed on creating yearly jobs and roads, while resisting decentralisation and localised decision-making. Individual symptoms were mitigated, while long-term food security and ecological sustainability were ignored.

The Drought Prone Area Programme (1974) was “concerned with drought proofing rather than livelihoods and growth-focussed development.” The National Policy on Farmers (2007) focussed on improving farmer income through better risk management and an improved price policy. Implementation, sadly, was lacking, with less than 30 per cent of small and marginal farmers borrowing from institutional credit systems.

The Rashtriya Krishi Vikas Yojana (2011) allocated Rs.10 lakh to each district to prepare and implement the Comprehensive District Agriculture Plan with the participation of local panchayats. The discussions were mostly chaired by the local minister or district collector, with little reflection on farmers’ needs. Best practices were mostly ignored.

Farmers in arid regions were encouraged to plant high-yielding wheat instead of Malwi Ghehu, a local wheat variety, while relying on declining groundwater. Sixty one per cent of irrigation is now from groundwater, with the proportion of districts with semi-critical and overexploited groundwater rising to 33 per cent. The proportion of districts in the critical, semi-critical and over-exploited category rose from 5 per cent in 1995 to 33 per cent in 2004, according to statistics available from the Central Ground Water Board.

Punjab is well past unsustainability, with 110 blocks out of 137 falling under the “over-exploited” category. The Punjab State Farmers Commission (2013) recommended a substantial crop diversification to cotton, pulses and vegetables, decreasing area under paddy cultivation by 40 per cent over five years. Of the Rs.5,300 crore suggested for diversification to dryland crops, the Centre allocated only Rs.500 crore.

A shift back to dryland agriculture, particularly in western India, is much needed. Rajasthan, despite low rainfall, is buffering by integrated farming — having subsidiary farm enterprises such as dairy, poultry, sericulture and goats. States with little rainfall such as Haryana can be encouraged to shift back to oilseeds and coarse cereals. Rice cultivation could be increased in rainfed Odisha and Assam, while incentives to promote wheat and rice are realigned.

With conventional irrigation mostly tapped, drip irrigation is an obvious solution. By accommodating irregular field sizes and unlevelled topography, water application efficiency (greater than 70 per cent) can be kept high, lessening soil erosion. Yield can be increased up to 230 per cent, while fertilizer efficiency rises up to 30 per cent. However, the high initial cost has been a significant barrier. With individual loan sizes too small for transaction costs, banks have been reluctant to provide loans. Bundling farming households through subsidy schemes like SGSY can help structure such transactions. Tamil Nadu offers a 100 per cent subsidy for small and marginal farmers for taking up micro irrigation up to a maximum of 60,000 acres. With high monetary ceilings in irrigation projects, drip irrigation can be mostly funded through a revolving subsidy fund, which is based around local self-help groups.

Even with existing subsidies, sanction delays can cause installation delays, with suppliers reluctant unless the full cost is paid. Banks could be encouraged to advance full loans to government-authorised self-help groups, without insisting on sanction and release of subsidy. Subsidy adjustment can occur later, while repayment periods are kept between 10-15 years.

The Indian Council for Agricultural Research (ICAR) has been primarily focussed on breeding higher yielding varieties for rice and wheat, while mostly ignoring coarse cereals. Funding for research for ICAR and State Agricultural Universities (SAUs) has been dismal. Most SAUs are in overdraft, with little accreditation and a growing dependence on ICAR.

A restructured funding scheme, with a focus on Research and Development in 10-12 crops in dryland agriculture can be encouraged. The Kelkar Committee in Maharashtra had suggested that funding to SAUs could be increased by at least Rs.100 crore, to upgrade research facilities and set up agriculture labour training schools. Mechanisation needs to be encouraged as well.

Even the National Mission for Sustainable Agriculture has been hit by a funds crunch. This mission would have focussed on mitigating risks associated with climate change and ensuring food security, with a focus on organic farming and System of Rice Intensification propagation. Such initiatives need to be encouraged.

The Working Group on Marginal Farmers (2013) recommended that marginal cultivators could be encouraged to join Farmer Producer Organisations (FPOs). Such organisations can be provided interest subvention on loans for a five year period and exempted from the agricultural produce market committee cess. Procurement from small and marginal farmers should be prioritised particularly through regulation for multi-brand retail. Enhancing their investment credit and matching their working capital requirements should be a priority. FPOs could be extended collateral free loans of up to Rs.25 lakh, along with creating a Credit Guarantee Fund for financial institutions to lend to such institutions.

To foster these shifts, comprehensive ground-up regulatory and social action is essential. A shift to drip irrigation can be instituted by mandating it for all sugarcane plantations and fruit orchards. Combining this with micro-irrigation and horticulture incentives might create demand on-ground. Agriculture can be further customised through soil test labs at the ground level that provide advice to farmers on a personalised basis, while promoting greater water efficiency. Taxes on agricultural machinery should be removed and agro-based industries fostered, with commodity parks created at the district level. Such social and governmental action can help the marginal farmer peer beyond penury.

(Feroze Varun Gandhi is a Member of Parliament, representing the Sultanpur constituency for the BJP.)