Indian Agriculture in Crisis!

The last two years have seen consecutive droughts across the country. While last year’s monsoon rainfall was deficient by 12% compared to the long period average, this year’s deficit was a more alarming 14%. Growth of the agricultural sector in the GDP has been continuously decreasing as well, from a 3.7% in 2013-14 to 1.1% in 2014-2015. The growth this year can be expected to be even lower. In this context, it is important to understand the magnitude of such failure since the sector involves the largest number of people in the country, especially the economically weaker. Research shows that a 1% growth in agriculture can be 2 to 3 times more effective in the reduction of poverty than the same growth in the industry or service sector. For an inclusive and overall development of the country, the government must give due importance to this sector. Even if India secures an overall growth of 8% in the GDP, and agriculture grows this year at an optimistic 1.6% or lesser, little progress will be made towards the eradication of poverty. There are a number of problems that the government must address. Employment opportunities in rural India have dropped considerably. Under-employment and disguised unemployment are common due to little cultivate land and few agriculture unrelated activities. Thus, there is a great labour potential present and underutilized. Real employment of these persons would in itself increase productivity of labour and introduce a source of economic growth. Estimates suggest that even a small increase in the income of the rural poor, constituting a fifth of the total population could increase the demand for manufactured goods and consumer services. This would lead to more employment and higher wages in turn, establishing an excellent model for growth. Inadequate investment in irrigation and progressive withdrawal of support systems for agriculture since the green revolution are also important factors that have led to the severity of the agricultural crisis. Even after 70 years of independence, the primary source of irrigation is the unpredictable monsoon season. Further, after the success of the agricultural revolution, which was characterized by access to credit, know-how on technology and fertilizer use, better seed qualities and public investment in irrigation, the government scaled these benefits down and eventually found them up. The sector was now open to market forces leading to a complete privatization of risks for farmers. To prevent farmers from solely bearing all risks, a number of mitigating steps have been suggested by Mr. Deepak Nayyar, ex-chief economic advisor to the Government of India (1989-1991) and a professor of economics. He suggests complete and effective crop insurance by payment of nominal sums in the form of premiums by farmers. The premium paid may increase with the increase in the size of holdings. Establishing proper storage facilities will also ensure that perishable crop is not left out to rot or immediately sold at low prices. Large scale public investment in irrigation, favourable provisions for credit to farmers at low interest rates and development of rural infrastructure and transportation services are needed to help farmers reap the full price of their efforts. A third problem with the present agricultural scenario is the inefficiency of government policies. A study by the Centre for Study of Developing Societies determined that 70% of the farmers in their sample group had never heard of direct cash transfer or Kisan call centres, 83% were unaware of foreign direct investment and 62% were clueless about Minimum Support Prices. Farmers therefore, often resort to selling their produce at below market price to clear loans and prevent losses due to inadequate storage facilities. There is a clear need for better enforcement of government schemes. While efforts such as ‘Paramparagat Krishi Vikas Yojana’ to aid in fertilizing soil and support organic farming or enhanced water efficiency through the ‘Per Drop More Crop’ schemes must be appreciated, their value only lies in proper implementation. These benefits must reach the poorest of the farmers to open the fortune that lies in the rural part of the country. The agricultural crisis has been worsening for the past three years and may in fact, reach its worst this year. It is imperative that the government realise the importance as well as true potential of the agricultural sector. It must shift focus from the ‘make in India’ lion to the millions of people struggling for daily sustenance.