Farmers need a reliable shield against risks

BS Dahiya

THough the contribution of agriculture to the national GDP (gross domestic product) has gone down from 50 per cent to 16 per cent, India’s economy continues to be agrarian because agriculture employs around 60 per cent of our population. In the near future, agriculture will continue to be the main sector to provide livelihood to our population. Therefore, agriculture needs modernisation and investment to curb post-harvest losses and make it competitive at the international level. This can be achieved by framing a viable and dynamic agricultural policy. This policy will determine what to produce, where to produce and how much to produce. Animals are an integral part of our farming system. Depending on the agro-ecology of the area, we must decide whether it has to be buffalo, cow, goat/sheep, poultry or piggery.

Consistent net exporter in recent decades

India has consistently been a net exporter of agro-food products in recent decades. Agro-food exports grew at an annual average rate of 11%, from $6.3 billion in 1995 to $47.1 billion in 2013; exports then decreased to $32.9 billion in 2016 due to a mix of lower global commodity prices, sluggish foreign demand, increased domestic consumption, and adverse climate events affecting the domestic production base. Agro-food imports increased from $2.2 billion in 1995 to $24.3 billion in 2016, growing at an even higher annual average rate of 14%. With a higher growth rate of agro-food exports in 2009-13, the trade surplus widened considerably until 2013. It then started to narrow, in line with exports’ decrease versus the consistent increase in imports.

The country has been divided in15 broad agro-ecological zones and 127 agro-climatic zones. There was a time when agricultural production technology was being developed zone-wise, but experience showed that a small village with a landholding of 300-400 hectares represented three to four types of soil. Therefore, there is a need for location-specific technologies.

The time has come for the policy-makers to frame farm policies which are product- and production-oriented rather than market-oriented like the recent farm laws. Since the MSP regime played a key role in achieving the feat of transforming the nation from a net importer to a net exporter of food, it has to be an integral component of the new policies.

Due to various uncontrollable factors, the farmers’ produce gets damaged and they get low prices. Contracting companies can exploit farmers in such a situation. The bulk of our farmers (86 per cent) are small and marginal who can’t survive in a free market situation. Therefore, the government-controlled purchase centres (mandis) need to be upgraded and modernised; the management of these centres should be in the hands of efficient and honest people so that these can compete with the private/corporate markets.

The time is ripe to shift production priorities from wheat and paddy to millets, pulses and oilseeds in a phased manner. Millets are rich in nutrients, require less agri-inputs, lesser exploitation of natural resources, eco-friendly and climate-resilient. The per capita and per-day requirement of food intake to meet the daily calorie needs (2,000 approximately) will be met from three-fourth quantity of wheat/rice. The government should create a favourable environment attractive to the farmers to shift to the coarse cereals through production subsidies, better MSP and total procurement. Let the PDS (public distribution system) make available only those grains which will have a long-lasting impact on national food and nutritional security. There is an argument put forth by some experts that these millets are low-yielding compared to wheat and paddy, so there is a possibility of food shortage. But there is a counter-argument that since we are wasting about 20 per cent of the food produced due to various reasons and if the reduction in production is of the same magnitude then food shortage is ruled out.

Reduce technology gap

Among oilseeds, mustard oil is a major edible oil. The import of edible oils is a big burden on our foreign exchange; it needs concerted efforts to cut down the import by reducing the technology gap. Take mustard: the national average yield is 700-800 kg/acre, where as Rewari district of Haryana produces more than 1,800 kg/acre. The factors limiting production can be identified and the requisite inputs made available in time to the farmers. The outcome of these efforts will have a huge impact on the economy of the farmers and the nation as well. We can learn a lesson from China. China became surplus in wheat, rice and sugarcane; it cut down the production of these crops. It is cheaper to buy these grains from the international market (China wants to buy rice from India). It has preferred production of other crops which are in demand in the international market. We are also surplus in wheat, rice and sugarcane, so it is the right time to change our production priorities. The government can utilise these surpluses by aggressively feeding the PDS and targeting 190 million people under the National Food Security Act who are malnourished, as per the World Hunger Report (2020), without violating the international agreement for support to the producer. The other predominant practice in our system where there is exploitation of both the producer and the consumer is the gap between what a producer gets and the consumer pays. This is heavily loaded against the producer and affects the market prices. Take the example of moong dal. The producer farmer gets Rs 55/kg against the MSP of Rs 72/kg. But the consumer pays Rs 110/kg. Who is making profit at the cost of the farmer? The trader. Also, the MSP fixed by the government is a mockery of the prices. This is why the farmers are on the path of agitation. The world over, experience has showed that the farmers can’t take on the corporates in a free market. That is why they are seeking protection from the volatility of market prices.

Support producers

India is a signatory to the World Trade Organisation (WTO), so there are some obligations which have to be honoured. Across the world, particularly in the rich countries, agriculture is heavily subsidised by the governments. According to the Organisation for Economic Cooperation and Development (OECD), an inter-governmental organisation, there is significant backing for agriculture through producer support as percentage of gross farming receipts. During 2019, it was around 12 per cent in the US; in EU countries, the support was above 20 per cent, and in countries like Japan and South Korea, it was about 50 per cent. But in our country, what the government pays as a percentage of farming receipts is on the negative side (-5 per cent). Moreover, our agriculture is dominated by small and marginal farmers. The developed countries are finding new ways to support their farmers such as factoring in climate change risks and adopting eco-friendly practices for sustainability. Farming is becoming costlier because of increasing cost of all inputs, including labour, and increasing risk because of weather aberrations due to climate change, hence our farmers need to be paid for to cover these risks.

The author is former Director of Research, Haryana Agricultural University, Hisar

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