Farm policies should cater to local needs

BS Dhillon and RS Sidhu

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THE development models being proposed for agriculture, with some exceptions, are borrowed from developed countries which have a strong industry-based economy, even though agriculture is different from industry and India does not have a similarly developed industrial sector to provide employment opportunities to a large population. The borrowed development models emphasise large-sized farms, migration of farmers to provide labour support to other sectors, direct income transfer, use of capital-intensive machinery and ultra-modern sensor-based technologies, no financial constraint, post-harvest management infrastructure at the farm gate, access to market information, export-driven production and a free market.

Indian agriculture is characterised by small-sized farms and limited financial resources with low level of application of modern technology, poorly educated or uneducated farmers with no knowledge of markets, and the government policy laying greater emphasis on domestic food security with dependence on imports for commodities such as edible oils and pulses. The market is also exploitative.

Unlike industry, agriculture deals with a biological system and its activities and output are largely determined by climate, soil and water resources. The differences with respect to agro-ecology, education, mass awareness, farm and financial resources, technological backstopping and the compatibility of the models with our socio-cultural heritage are also not being given consideration while suggesting the foreign model for agricultural development.

Crops and livestock are living entities and their performance has biological limits. There cannot be unlimited upgrade of their performance. In the industrial sector, there is no such limit and production can be increased as per demand and availability of resources. The law of diminishing returns applies more strongly to agriculture than industry.

Seasonal activity

Agriculture is a seasonal activity and its essential elements are determined by climate and natural-resource endowments. The basic requirements for cultivation of a crop are a congenial climate, suitable soil type, need-based, timely rainfall/irrigation, absence of devastating insect-pests and diseases. On the other hand, industry has limited dependence on such factors.

Heavy rain, windstorms and floods often wreak havoc during the crop growth period, leading to total crop loss. The only option left is to go for an alternative crop which not only needs additional resources but also gives lower returns compared to the ‘first choice’ crop.

The incidence of insect-pests and diseases also poses a threat, sometimes resulting in near-total crop loss over a large area. The recent examples are the epidemics of whitefly (2015) and pink bollworm (2021) in cotton. There have also been epiphytotics of bacterial leaf blight in rice (1980) and Karnal bunt in wheat (1975-76, 1979-80).

Generally, two crops are grown per year. Once a crop is sown, the farmer cannot take any corrective measure during the crop season of 4-5 months, based on new information about market and weather. On the other hand, the industrialist always has the option to control production, if needed, due to any factor.

The crop is harvested during a specified period and a large produce comes to the market, resulting in a glut. Farmers have neither storage facility nor financial capacity to hold back the produce. The glut gives an opportunity to traders to control the market. On the contrary, the release of industrial products is generally regulated as per the market demand. In a nutshell, the market controls the sale price of farm produce (except for assured procurement at MSP of a few crops), whereas it is the network of manufacturers and other stakeholders which determines the price of the industrial product. In contrast to an organised group of a small number of educated and financially sound partners in the industrial sector, a largely unorganised crowd of less-educated, poor farmers from diverse social backgrounds is in no position to dictate their terms in marketing.

In the early 1960s, when India faced severe food shortage, it recognised the importance of agriculture and facilitated technological changes through public investments in research, irrigation, roads, markets, institutions, etc., which paid dividends. India thus became self-sufficient in food. In 1991, India introduced reforms in the industrial and financial sectors to give a boost to industry. However, the industrial sector did not support the absorption of labour as its mode of production was capital-intensive. It led to widening of inequality in income between agriculture and non-agriculture sectors. Agriculture contributes about 16.4% to the GDP (2020-21) and employs about 42.6% of the workforce (2019), indicating lower income of farmers as compared to other workers.

According to Swedish economist Gunnar Myrdal, it is the agriculture sector which helps economic development in the long run. American economist Simon Kuznets suggested that interaction and interdependence between agriculture and industry resulted in overall economic growth. Therefore, the two sectors’ growth needs to go hand in hand.

India has a population of more than 135 crore. More than 60% of the people live in rural areas and are directly or indirectly dependent on agriculture. About 88% of the farmers are marginal and small, cultivating two hectares of land or less. Equally important is the large diversity of agro-ecologies in the country. Even within a small state like Punjab, there are different regions having predominance of cultivation of basmati, cotton, sugarcane, potato and kinnow. Thus, decentralised, regional micro-level planning is needed to develop indigenous models based on agro-climatic conditions, resource endowments, market and other infrastructure, and the skill set of farmers. Models prevalent in other countries must be studied to draw lessons from them.

There is also an urgent need to keep in mind our socio-cultural background while formulating any policy. In our society, there is a strong attachment with farmland and a farmer feels extremely proud to be called a zimidar even when owning less than one acre. How will a farmer accept the models in vogue in industrialised countries which promote deserting farms, migrating to cities and becoming industrial labour? Let’s improve our quality and level of education, strengthen technology and policy backstopping and develop the industrial sector in rural and suburban areas to attract farmers with respectable employment and wages.

Dhillon and Sidhu are former V-C and ex-Registrar, respectively, PAU, Ludhiana

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