There is some good news coming from the farm sector. The lockdown hasn’t much affected agriculture because of normal rabi crop and government expects around 3 per cent or even more growth in the current fiscal, though overall GDP may witness contraction. However, this is the time when modernisation and diversification needs to be undertaken to ensure increased production and productivity, not just of cereals but also of other crops and vegetables and fruits.
Reports also indicate that wheat procurement touched an all-time record of 38.2 million tonnes so far in 2020-21 marketing year, with Madhya Pradesh surpassing Punjab as the country’s biggest wheat procuring State. Also its 42 lakh farmers have been reported to have benefitted and a total amount of about Rs 73,5000 crore has been paid to them towards MSPs for wheat, according to Union Food & Public Distribution Ministry.
The government’s recent package for agriculture and market reforms, feel experts, is expected to be beneficial. Director, National Institute of Agricultural Economics & Policy Research (NIAP) Dr Suresh Pal, points out that government support and policy reforms should be used “for establishing more compact and efficient supply chains and attracting business sector in agriculture”. However, seed sales may fall by around 25 per cent if farmers run out of credit, which is quite likely.
Keeping this in mind, the Centre unveiled Rs 1-lakh crore fund to build agri infrastructure to raise productivity and make the sector globally competitive. Apart from this, Rs 20,000 crore has been allocated for fishermen, Rs 15,000 crore animal husbandry infrastructure development funds and Rs 10,000 to help micro food units build brands and go global. Moreover, a Central law would be enacted to give farmers the choice to sell produce through multiple channels.
Thus, it’s expected that farmers will no longer be bound to sell their produce only to licensees of mandis. The likely fallout would result in corporatization of food supply chains and give big thrust to contract farming, thereby reducing the political clout of mandi (wholesale market) administrators. The Essential Commodities Act, including cereals, edible oils, oilseeds, pulses, onions and potatoes to be deregulated, would be amended.
Meanwhile, the CCEA approved the increase in minimum support prices (MSPs) for 14 crops which they found to be 50-83 per cent higher than the cost of cultivation. The support price of paddy was marginally hiked by Rs 53 per quintal to Rs 1868 per quintal for the 2020-21 crop year, while rates for oilseeds, pulses and cereals were too raised. Though with increasing costs not much financial benefit may accrue to farmers but the process will help them take a call on which kharif (summer) crop to grow as sowing picks up with the arrival of the southwest monsoon.
States are expected to carry out reforms at the local level to allow farmers to sell their produce outside registered mandis. Though a good monsoon is expected this year, finance may be a problem for States, which are reeling under severe economic stress due to the corona pandemic. However, it’s encouraging to note that in some States, agricultural diversification has taken place and giving reasonable returns to a section of farmers.
The problem is with small farmers, who have very little land and lack financial support. Not only do they have to borrow from private moneylenders but lack access to technology to increase productivity and also diversify into value-added products. There has not been any initiative by most State governments to form cooperatives at the grass-root level with very small farmers so that they could increase productivity through semi-mechanised farming and induction of appropriate technology.
Experts are of the opinion that a shift in cropping pattern will ease pressure on already over-stretched groundwater resources in Punjab, Haryana and many other regions in other States. As is known, paddy-wheat being heavy water dependent crops, farmers have reason to over-exploit groundwater. Some programmes have been taken up by Punjab and other States to wean farmers away from cultivating paddy-wheat on at least one million hectares, which would mean a substantial saving of water. But more needs to be done, not just for water saving but also increasing earnings from diversified crops.
It needs to be emphasized that thrust be given to agriculture and agro-based industries as there is heavy potential in this sector. Though ‘Make in India’ is being reiterated, India lacks the innovative skill or technological expertise to compete in the international market. Alternatively, not only is there potential in diversification in the agricultural sector, the country could be able to gear up exports.
Additionally, if agriculture prospers, this would change the face of rural India. Unfortunately, whatever incentives the government has given to farmers, over the years, these have gone to the big and some medium farmers. It’s imperative that incentives be targeted to small farmers and sharecroppers so they improve earnings. Remember, India’s land holdings are extremely small – 86 per cent of land holdings are less than 2 hectares. Indian farmers therefore, suffer due to lack of size and scale, technology seeds and fertilizer inputs and are unable to take market risks. In meantime, it’s encouraging that more farmers are cultivating vegetables and fruits to increase their earnings.
Thus, there is need for the Indian Council of Agricultural Research (ICAR) to do: open more extension centres at block levels; ensure small farmers get requisite technological support; set up more agricultural universities so that farmers can diversify and cultivate value-added products; make the lab-to-land approach a reality, for which government’s role is critical.
Unfortunately, the question remains why the government hasn’t disbursed surplus land to sharecroppers or taken care of them. Notwithstanding that programmes and incentives are encouraging, extra care needs to be taken to ensure small farmers and sharecroppers can become self-sufficient through integrated and diversified agricultural techniques.
This time round, the government must plug the leakages. Various incentives announced by the government actually don’t reach the intended beneficiaries. There is alleged corruption in rural areas and stories of having to pay bribe to elected representatives or their nominees to be eligible for government subsidies is no secret. Worse, cooperative and rural banks too are not above board.
The lockdown has revealed that ways and means need to be found to halt migration from villages to urban areas in search of employment. While agricultural transformation and modernization is imperative, farming has to be lucrative enough to attract the younger generation. It is worth recalling former President Pranab Mukherjee’s observation: research in agricultural institutes should focus on minimising production cost, enhancing profitability in the entire “field-to-plate” food chain, and introducing greater automation to reduce drudgery. How soon will it become the government’s top priority?