India is a country of 240 million households and around half of them are involved in agriculture. Unlike what is witnessed in the developed countries we have predominantly small farmers with less than 2 hectares of land each, who rely on rain God to irrigate their land. For the first time in over 100 years we are facing four back-to-back drought years and farmers in Maharashtra, Karnataka, Andhra and U.P are being suffocated to the point of extinction. To this if you add the lop sided arithmetic that while our farmers number just over 50% of the total population, these growers contribute little more than 10% of GDP you will easily understand their plight. India’s farming households have a large potential market, but often receive only a fraction of what you, the consumer, pay.
The land ceiling acts restrict the amount of land a farmer can own. This, along with partitions of farms, generation after generation, has led to fragmentation of the farmland. Most of the farms in our country are today very small and are not enough to support a family with a decent standard of living. So those who were proud farmers two generations back are forced to send their grandsons to work as labourers in the cities and sacrifice the healthy village life for dingy urban slums.
Agriculture growth was projected at 4% in the 12th five-year plan (2012-13 to 2017-18). So far, because of the successive drought years, agri-growth has slumped to about 1.7% annually. A negative growth in food production this year could further aggravate the situation. Modiji and his Neeti Aayog clearly need to bring back focused attention on agriculture and farm distress. This may be required even for BJP’s political survival. Another year of drought and unabated suicides by farmers in many parts of India will come surely come to haunt the NDA in the next election. So, how does one change such an agriculture system into one which can be more productive, more resource-efficient and more profitable?
The solution is multifaceted. To increase productivity, reduce post-harvest losses and meet consumer demand, farmers need to access technology and information; also infrastructure such as waterworks, roads and storage facilities; and markets and financial solutions such as credit and insurance. This requires the collaboration of various stakeholders, from governments, businesses and NGOs to farming and academia.
1. Planning: Plan a profitable crop. The new Soil health card should reach all the farmers and they should be advised professionally about the nutrient application requirement of the farm, without which there is tendency to apply more of the wrong kind of fertilizer to the soil. This excess application is not only destroying the soil, but also making farming unviable. So step 1 is preparing soil and choosing the correct crop.
2. Nurturing: Professional advice for judicious use of inputs like water and pesticides. There is a need to reduce the gap between the best and the worst yield in the village. Later reduce yield difference between the best farm in the village and the yield at the research centre.
3. Cooperative farming: farm labour is becoming expensive, thus arises the need for advanced technology and farm mechanization. For the small farmers it just does not make sense to purchase any equipment of their own because there is not enough work for any size of machinery on any one farm. The solution is to have equipment that can be hired on an hourly basis by the farming community. This is being facilitated by IFFCO, the leading cooperative in India but we need cooperatives in every village.
4. Better targeted subsidies: Massive amounts of public money are spent in subsidies (Rs 75000 crore per year for just fertilizers) which do not actually reach their target demographic. This money could much better be spent doing things that only the government can do, like providing irrigation. Only around a third of Indian farms are properly irrigated. With solar energy being the new Modi thrust area, why can’t we have solar powered pumps for borwells?
5. Minimum Support Price: Governments set MSPs for the produce, which are supposed to be the minimum prices that farmers will get, but they also end up becoming the maximum prices as no trader will want to pay the farmer an amount much higher than the MSP. The bargaining power of the farmer is reduced because they do not have long term storage space for their grains. The states have their own prices which are generally slightly above the MSP. All this makes farming frankly unprofitable or barely profitable. Consequently, they cannot build up any capital to reinvest and improve the productivity of their farms, or save for the draught. In Indian rupee terms India is offering about Rs.1400 per quintal and Pakistan Rs.2000 per quintal of wheat. Ironically, the price offered by the Pakistan government to its farmers approximates the promise Modiji made during his election campaign which is part of the BJP manifesto—50% profit margins over cost of production. Clearly, this is the biggest failure on the government’s part - failure to keep its promise made explicitly in the BJP manifesto.
6. Failure to keep out middle men: Pulses are grown extensively by poor farmers in pockets of southern Rajasthan. The farmers sell their produce unprocessed and normally through a chain of middlemen. As the dal is unprocessed and the middlemen charge huge cuts, farmers receive a tiny fraction of the price paid by the consumer. Moreover, since the farmers are scattered and not unionized, the middlemen and traders are able to dictate the prices, causing further loss to the farmers. Why can’t farmer’s cooperative run their own mills? This will force traders to buy at a higher price, thereby benefiting the farmers. Since the mill will be located in the village, it will significantly cut transport costs. Finally, farmers who are part of the cooperative are able to control the process of dal making and selling and will receive a share of any future profits. If Kurian could do this for milk then why can’t the Amul model be tweaked for our agricultural produce?
7. Government should facilitate linking the farmer cooperatives to market players such as an organized retailer, a processor or an exporter. It should invite private Indian investments and FDI in building food cold chains, food processing, packaging, food storage facilities and hold people accountable for letting food grains rot in the open railway yards. The plan should cover the entire value chain, from production at farm level to the marketing at the consumer end – from field to the dinner plate.
8. Crop Insurance: This is an excellent move by the government of the day and it should reach all the farms. It is necessary to protect the farmers from natural calamities and ensure their credit eligibility for the next season. It envisages a uniform premium of only 2 per cent to be paid by farmers for Kharif crops, 1.5 per cent for Rabi crops and 5% for annual commercial and horticultural crops.
9. Research: We should start by doubling funding for agriculture research. Train the trainers. We must allocate more funds to transfer knowledge to the farmer. We must formulate policies to accelerate and incentivize research, and incorporate technology as a resource-liberating tool to help the farmer. Unfortunately, as production increases, price of produce falls for which we need better post-harvest marketing solutions.
10. We should buy directly from farmers: Besides helping the farmers to get the maximum price we will get it fresh, at a lesser price and the authenticity of the place of production and carriage will be there. If you are in a society then you must get contact of local or nearby farmers and support them by allowing them to supply their fresh farm produce e.g. Fruits, vegetables, cereals, pulses. This will build a great rapport among the smart citizens and the farmers.
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