By Yashwardhan Joshi
Farming in India is becoming uneconomical. Recurrent suicides and now widespread protests by farmers reinforce the assessment that agriculture is no longer a viable venture that can sustain over 65 per cent of the country's population. Normal monsoon or severe drought, bumper crop or poor harvest, the farmer suffers either way.
Drought and subsequent crop failure were already bad for the distressed farming community living under heavy debt. Good rains and bumper crop this year have shown that over-production results in crashing prices. The farmers are distressed, angry and agitated because they are not getting an adequate price for their produce.
They want their loans to be written off. After Uttar Pradesh, Karnataka and now Maharashtra, Punjab has announced partial loan write-offs. With elections due in Gujarat this year end, and in some other states next year, the politics of 'loan waiver' - as debt write-offs are called - will consume the states like no other issue. This politics of agriculture has exposed the uneconomic side of farming. According to M S Swaminathan, hailed as the 'father' of India's Green Revolution in the seventies, surveys have shown that farming today, especially of food crops, is not remunerative. That is why the younger generation is avoiding farming as a profession. An analysis of the government's latest National Accounts Statistics reveal that growing grass and selling it in the market may be more profitable than cultivating crops like wheat, rice, pulses and oilseeds. Between 2011-12 and 2015-16, the total value of cereals and pulses went down nearly 3 per cent, that of oilseeds more than 13 per cent and of sugar by 1 per cent; whereas the value of grass increased about 1 per cent. Output values are declining because cost of inputs like seeds, fertilisers and water is rising faster for the farmer than the price he gets from the sale of his produce. With 86 per cent of land holdings being less than two hectares, it is increasingly difficult for small and marginal farmers to manage crops like cereals, pulses and oilseeds.
This figure could increase to 89 per cent, with average holding size of just 0.6 hectare by 2040 as land gets further fragmented. This portends ill for Indian agriculture. With increasing fragmentation of land, small and medium farmers will not be able to own and maintain bullocks, farm equipment or an irrigation system, and will have to depend on decreasing numbers of larger farms, thus impacting yield negatively.
Then there are economies of scale. Individual output of small and medium farmers will become too small to reap the benefit of markets, forcing the farmer to sell his produce at discounted prices on the farm itself; another blow to his already shrinking income. With most states not allowing leasing of agricultural land, the small and marginal farmer seems doomed to ruin. Agricultural experts, including Swaminathan, have proffered various suggestions and models to lift the farmers from their wretched state and agriculture from the impending crisis. Swaminathan says contract farming could help overcome the problem of fragmented holdings. He also called for a credit-cum-insurance policy that would insulate the farmers from losses from factors beyond their control, and a price stabilisation fund to fix the problem of glut and crashing prices.
Others have suggested changes in inheritance laws to allow agricultural land to be inherited by only one descendent and not fragmented among all siblings; transforming the land tenancy laws, allowing farmers to lease out lands for longer periods without losing ownership; and reducing the perishable and exponentially increasing the processing part to prevent a price crash following a bumper crop. Many have sought a national debate and proactive measures taken to save farmers from economic collapse, a phenomenon that could be economically and socially disastrous for India.
(The author is a writer on current affairs. Comments and suggestions can be send to email@example.com)