The Gist of Kurukshetra : Transforming Agriculture for Farmers’ Prosperity - August - 2017

The transformation of some sectors of Indian economy following economic reforms in early 1990s lifted growth rate of total economy from 4.2 per cent during 1971 to 1991 to close to 7 per cent after 1991. This helped in doubling per capita income at constant prices (2004-05) in just 17 years as compared to 37 years before 1991. However, agriculture sector, which comprised over 40 per cent of Indian economy and 59 per cent workforce in year 1991, did not experience any permanent change in its growth rate. GDP of agriculture and allied sectors doubled in about 23 years before 1991 and it took same number of years to double again. Even recent years show that agriculture growth is stuck around long run average of 2.9 per cent whereas non-agriculture growth hovers around 8 per cent. The higher growth rate in non-agriculture sector has been accompanied only by a small shift of farmers to non- farm occupations. Consequently, the income of cultivators (farmers) has remained low and the gap with non- farm workers has enlarged.

Agricultural activities generated net income of Rs. Ten thousand per cultivator per month in year 2015-16 which is less than one-third of the income of non farm worker. If farmers income continue to rise at same rate as witnessed during the last two decades, it will not reach even Rs. 20 thousand mark in real terms in next 20 years. Therefore, special focus is needed to raise income of farmers at a faster rate like “Doubling Farmers Income by 2022.

Use of certified quality seed distributed by various agencies is quite low. Fertiliser use in most of states is sub optimal. More than one crop is grown on less than 50 per cent of area under cultivation. Improved technology has not yet reached large number of farmers which is evident from the fact that more than 30 per cent area under cereals is Linder traditional varieties. The main reasons for this are poor extension, missing link with supply chain of quality seed and quality plant propagation material and low availability of institutional credit in many states.

Despite large investments in irrigation, more than half of cultivated area does not have access to irrigation. High value crops like fruits and vegetables, which have much higher productivity as compared to other crops are raised on less than 10 per cent area.

Indian agriculture is missing the state of the art technology and modern method of farming. Advance world is moving towards precision farming using sensors and other scientific tools for exact practices and application of inputs. It saves costs, reduce environmental effect and yield more and better quality produce. We still continue to use flood method of irrigation, broadcasting fertilisers, and indiscriminately spraying chemicals. Application of advance science at farm level requires skill, knowledge, investments and improvement in human capital in farming. This warrants renewed commitment and higher participation of public and private sectors in agriculture.

Prices at farm level can be raised in two ways. First, by ensuring MSP and second by creating competitive market. In many states, the farmers get 10-20 per cent lower price than MSP even for paddy and wheat where a large part of marketed surplus is procured by the government. Ensuring MSP in such cases will raise 'farmer income by 13-26 per cent. It is important to mention that green revolution happened in those states only where farmers got remunerative prices. Recently, it has been demonstrated in Madhya Pradesh. The recent move by government of Uttar Pradesh to ensure MSP to its farmers is sure to bring green revolution and much higher income to farmers in U.P, in the next 5-7 years. Similar scope exists in Bihar, Jharkhand, Odisha and Assam ,where farm harvest prices of cereals often rule lower than MSP.

The centre came out with a proposal to adopt Model APMC Act in year 2003 which was prepared in consultation with the stales. The objective was to dismantle excessive regulation and control over markets, facilitate direct sale purchase, create more options for sellers, dismantle market collusion by "local traders, and attract competition and investments in agricultural markets. However, the adoption and implementation of Model APMC law by states remained patchy, diluted and insignificant. Some states did not change the Act. Those which changed the Act did not notify rules, and where notification was done, it was restricted to tiny fraction of produce. Thus, agricultural markets remained deprived of new commerce, modern infrastructure and formal sector participation, and modern value chains. Consequently, traditional capital, large price spread, price crashes at harvest time and spikes in lean period, with little value addition, remained the order of the day. This is leading to loss of faith in market and demand for MSP for every agricultural commodity.

Renewed efforts have been started by NITI Aayog in year 2016 to bring comprehensive reforms in agriculture marketing. E-NAM is another important initiative of Government of India to use pan-India electronic trading portal for bidding and network the existing APMC mandis to create a unified national market for agricultural commodities. Central Government provide financial assistance of Rs. 75 lakh for each market under E-NAM. Even small reforms in marketing show big return in terms of price realization by farmer.

Along with crops, we need to tap potential of livestock which contribute 25-30 per cent of farmers income. About 1 crore and 10 lakh cows and buffaloes of breedable age never calved. Age at first calving is 34 months. Calving interval is large. Better management of herd and feed and healthcare are needed to raise growth of livestock.

Food processing in rural areas has an important role to procure raw material and provide employment. In recent years, the industrial output has grown at a very high rate in rural areas but employment growth has been below 1 per cent. The reason is that, the type of industry which is growing at high rate is not employment intensive, and the industry which is employment intensive (food processing) has a very low growth rate (about 3 per cent per year).
Substantial increase in farmers income will materialise only if states own this goal and extend their support to the reform agenda to ensure that agriculture marches to next stage of development and it is not left behind, when we move to New Age India as it happened with the first wave of reforms started in 1991.

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Courtesy : Kurukshetra