Solutions to farm crisis
India requires smart, technology-driven solutions to raise farm income.
Even though agriculture accounted for only 15 per cent of the GDP, it has an inadvertent impact on the Indian economy as nearly half of the country's 1.3 billion population depend upon farming. If India has to sustain a double-digit growth, the farm sector has to grow by at least 4 per cent annually. The best India has achieved was 3.6 per cent average growth for about six-seven years, ending 2012. This is the time when the economy too was booming, growing at nearly double digits.
The question is where have we gone wrong and why is it that the agrarian crisis is a recurrent event in India. The answer is simple. Despite big strides in farming, India is yet to develop smart agriculture. While we have projects for smart cities, smart banking, and so on, no attempt has been made to make farming smart by adopting technology. Farmers' income must be substantially improved to ensure that crop failures do not break them and adequate money is generated for exigencies. If farmers' income has to rise, the dependence only on agriculture for income has to change and farmers will have to take to animal husbandry, poultry, fisheries, food processing, agri-related rural industries and so on for augmenting their income. This is because farming by nature is seasonal and, hence, there is already disguised unemployment even in the best of times. As it depends on the vagaries of weather, it makes things worse for farmers in difficult times, making farming a riskiest occupation.
Though India has the largest irrigated area in the world, nearly half of Indian farming is still done in rain-fed areas. As the saying goes, the next World War will be fought on water and, hence, water management and the linking of peninsular rivers must be prioritised so that there is more stability in farm growth, which is essential to ensure that adequate food is available to the large population, irrespective of crop failure in certain years. Despite farming being un-remunerative, farmers are doing yeomen service to the nation in spite of the per capita farm income in India being less than Rs 25,000 annually. Even doubling of per capita income is not adequate to make farming remunerative.
India has not done badly in agriculture in 70 years after Independence – there are no starvation deaths now, thanks to Green Revolution. Today, India is the second-largest in terms of farm GDP after China, as it lately overtook the US. India's farm production is around $360 billion and has the potential to export up to $100 billion as against a mere $30 billion at present as India's farm production is the cheapest in the world and is of high quality. If Indian farming becomes smart through proper support, India can easily overtake China whose farm GDP is around USD one trillion, as India's farm productivity matches that of China's in pockets and India has more fertile area under cultivation. In China, only one-seventh of its land is cultivable as most parts of China are either deserts or mountainous. The Gangetic plains are the richest cultivable area in the world. There are pockets in Bihar where rice yield per hectare matches that of China and, yet, the average rice yield in the state is one-fifth of that of China. This is a dichotomy and the same is true for all other crops in various parts of the country. Our country has the highest yield per hectare in the world in pockets for most of the crops and yet the average farm productivity needs to be vastly improved to realise the full farm potential. This is one aspect of the problem, which needs to be tackled through technology and farmers' education by strengthening the extension system that has collapsed in the last five or ten years.
The second aspect is to prevent wastage, improve marketing and improve the use of products for higher prices through cold storage facilities. As per a parliamentary standing committee report, there is a crop loss of Rs 90,000 crore due to the non-use of pesticides, weedicides, fungicides and if calculated on the basis of MSP, the loss may be around Rs four lakh crore. The loss due to wastage of vegetables and fruits is around Rs 50,000 crore annually. India is the largest producer of fruits and vegetables but there is so much rotting as nearly 40 per cent is lost due to the lack of cold storage and food processing facilities around the place of production. If a cluster of villages is producing high quality of tomatoes, it should be organised for setting up a common cold storage facility like common effluent treatment plants. This will help in not only increasing the shelf life of tomatoes but also provide a better price for farmers who otherwise make a distress sale. This model could be adopted for every other fruit and vegetable to prevent wastage and discover better prices and higher income for farmers.
Likewise, common godowns should be set-up for other crops around the villages producing them. In this connection, encouraging FDI in multi-brand retail will help in setting up a cold storage chain and procuring straight from the farm will assist farmers in accruing better price as middlemen are increasingly phased out. The fear that this will hit Kirana shops is unfounded, as at 8-9 per cent GDP growth, multi-brand retail will double from $700 billion to $1.4 trillion in five to seven years. This means that not only multi-brand retail but Kirana stores too will grow. Also, one must know that 70 per cent sales in multi-brand retail are food products, thereby helping Indian farming tremendously, apart from providing better income to farmers.
Efforts are also needed in providing the right quality inputs including hybrid seeds, plant protection, improving soil quality and increasing the use of organic manure. All these require concerted efforts by both the central and state governments, apart from a change in mindset to make the farm sector smart and technology driven. Drip irrigation and judicious use of fertilisers will result in huge savings in water and fertiliser. Their usage could be reduced by two-thirds, resulting in a huge saving to both farmers and national resources. This is achievable through some tweaking of policies by government, which, so far, has been perceived to be inadvertently encouraging crony capitalism.
(The views expressed are strictly personal)