The recent ‘Kisan long march’ by farmers in Maharashtra caught national attention. The recent Gujarat election results had highlighted the dangers for BJP if it ignored rural India. The temptation among political parties to support short-term measures like higher MSP and farm loan waiver has become an instrument of political manoeuvring as it can draw votes. But what is the long-term solution for India’s farm distress? One can address the solution only if the nature of the problem has been identified in the first place. The five main problems facing Indian agriculture are
- Uncertainty in the water supply
- Lack of remunerative income
- Fragmentation of land holdings
- Lack of access to formal credit and insurance
- Allied infrastructure ( R&D, market access and storage facilities)
These problems have been analysed and some recommendations have been made by the Swaminathan report. Its full implementation and necessary improvisations on the ground are perhaps the solutions to the problem. The article briefly summarises the contents and issues dealt with in the report.
Firstly, the nature of farming profession itself is risky because of uncertainty in water availability for agriculture. As per World Bank, the percentage of irrigated agricultural land in India is 36% (2013). Almost 2/3rd of farmers in India are dependent on monsoon rains. The variation of rainfall in each region is also uncertain.
The Revised Draft National Policy for Farmers, popularly known as Swaminathan report [ pdf ] says the following on this issue:
Jal Swaraj or self-sufficiency in irrigation water availability is the need of the hour. Though the total rainfall in our country is satisfactory, its distribution is highly skewed, with most of the rainfall occurring in 100 hours in a year. It is also important to note that the majority of farmers depend on groundwater for irrigating their crops. This resource, in which farmers have invested their hard-earned savings, is today increasingly depleted with groundwater tables declining. Therefore rainwater harvesting and aquifer recharge have become essential for ensuring the stability of supply.
This can be addressed by expanding the irrigation and water conservation programmes. Completing the existing irrigation projects in time is also important. Use of groundwater is also an option. PMKSY (Pradhan Mantri Krishi Sinchayi Yojana) is one of the initiatives trying to address this problem.
The second main reason for farm distress is the fluctuation of the market prices even though their input costs are fixed. The MSP offered to farmers does not result in remunerative income for the farmers. Therefore it is important to ensure that the farmer gets a higher price for his/her produce. The Swaminathan report says (emphasis added) :
The time has, therefore, come when we should focus more on the economic well-being of the women and men feeding the nation than just on production. It is clear that the human dimension must be the principal determinant of agricultural policies and not just production in physical terms. The aim of this Policy is to stimulate attitudes and action which will result in assessing agricultural progress in terms of the net income of farm families rather than just in million tonnes of farm commodities produced, and which will help to place faces before figures. [..] The MSP should be at least 50% more than the weighted average cost of production.
One of the suggestions, an MSP of 50% higher than the cost of production in the report has been taken for implementation in this year’s budget. In the long run, it will consume more government resources for the sector. Will the country be ready to pay higher taxes? Instead of singing paeans to farmers, the profession needs to be made a remunerative one. At the same time alternative jobs in the non-farm sector, value addition and diversification in Agri sectors will help in increasing income of rural India.
The third main cause for the decline in farm income is fragmentation of land holdings among farmers. Inheritance of land among successive generations of children in farming community has reduced the average size of land holdings. This makes the income of each family limited and reduces the scope for additional investments by the farmer. The Swaminathan report says :
The ownership of land is highly skewed with over 60% of the rural households owning less than one hectare. Farmers owning over one hectare comprise about 28% of rural families. The landless population amounts to 11.24% of rural households.
The problem of diminishing landholding size cannot be addressed without reducing the dependency of rural India on farming. Proposals for setting farmer cooperatives can address the issue partially. Increasing the number of crops or output from the same land maybe another option. However, it depends on water resources at the disposal of the farmer.
Access to credit and insurance have been two main issues. Since the farmers need formal credit to meet their requirements before the sowing season. In addition to this, appropriate insurance schemes are also necessary to protect them from risks. If the insurance schemes are not subscribed, or the schemes are ineffective, then the farmer is pushed into debt. The Swaminathan report says :
Agriculture is a high-risk economic activity. Credit without insurance is an added risk factor. Farmers need user-friendly insurance instruments covering production, right from sowing to post-harvest operations and also to cover the market risks for all crops throughout the country, in order to insulate them from financial distress and in the process make agriculture financially viable. Satellite imagery and agro-climatic analyse can play a significant role in evaluating the extent of crop losses and thus speed up the process of settling claims.
The move to increase the capital of NABARD from 5000 crores to 30,000 crores and the Pradhan Mantri Fasal Bima Yojana are two moves that seem to indicate that the government is moving in the right direction. However, it has to reach every farmer in order to prevent debt traps in future. If formal credit doesn’t reach all farmers, it will drive them towards moneylenders who demand higher interest rates and unfair terms.
Last but not the least, allied infrastructure including R&D (research and development), roads and storage facilities are an important component in order to help farmers sell their produce in time and at a cost that is remunerative. Distress sales and middlemen should not drive farmers towards desperation. E-Nam, PM Kisan Sampada and PMGSY (Pradhan Mantri Gram Sadak Yojana) are part of the solution. R&D collaboration with pioneers like Israel can also be pursued diligently. Regarding R&D the Swaminathan report rightly says :
Science and technology are the drivers of change in farm operations and output. New technologies, which can help enhance productivity per unit of land and water, are needed for overcoming the prevailing technology fatigue. Frontier technologies like biotechnology, information and communication technology (ICT), renewable energy technologies, space applications and nanotechnology provide opportunities for launching an “evergreen revolution” capable of improving productivity in perpetuity without ecological harm.
The challenge of climate change will also require active research and change of strategy to ensure farmers are not adversely impacted. The challenge is huge and complex. It will require continuous efforts from the governments as well as farmers to endure them in coming days. Loan waivers and higher MSPs are partial short-term solutions. They are not a substitute for a sustainable long-term solution.