Review incentives to ensure ‘more crop per drop’

Farmers of Punjab and Haryana are not able to move to the next level of agricultural development through diversification towards high-value crops as the old system of incentives for paddy is continuing, even though Punjab and Haryana are more suitable for the cultivation of commercial crops such as maize, pulses, oilseeds, fruits and vegetables. Continuation of paddy cultivation is a low-income trap for the farmers of both states.

A. Amarender Reddy

AGRICULTURAL incentives, intended to safeguard farmers’ incomes while achieving self-sufficiency in food security, are resulting in unintended negative consequences such as distortion of the cropping pattern and inefficient use of natural resources due to ineffective planning and implementation. Incentives provided for paddy production across the country are a typical example of ineptly planned schemes that have led to a flawed production system and excessive use of scarce groundwater, apart from adding to the government’s fiscal burden.

Infocus Agriculture Crop diversification

While incentives are necessary for protecting the incomes of farmers from the vagaries of the weather and volatile market prices, they need to be properly planned, constantly monitored and evaluated for their effectiveness and impact so that the crop output is maximised with judicious use of resources without having significant negative implications for the ecosystem and the stakeholders.

Free electricity for agriculture, fertiliser subsidy and incentives for the adoption of high-yielding varieties of paddy in Punjab, Haryana and western Uttar Pradesh in the late 1960s ushered in the Green Revolution and saved the country from starvation and famine, making India self-sufficient on the food front. By the 1980s, Punjab and Haryana farmers’ productivity soared, thanks to adequate market infrastructure for procurement. However, farmers in these states are not able to move to the next level of agricultural development through diversification towards high-value crops as the old system of incentives for paddy is continuing, even though Punjab and Haryana are more suitable for the cultivation of commercial crops such as maize, pulses, oilseeds, fruits and vegetables. Further, profitability in paddy cultivation, although stable, is not comparable with that of high-value crops. Farmers/areas that shifted from paddy to other crops saw a rise in profitability in recent years. Continuation of paddy cultivation is a low-income trap for the farmers of Punjab and Haryana.

Farmers of Punjab, Haryana and western UP are still incentivised (free electricity to pump groundwater) to cultivate paddy with price guarantee through 100% procurement. Producing paddy in these states is costly due to deeper groundwater levels and higher electricity consumption. Irrigation water productivity — grain produced per unit of irrigation water — is much less in Punjab and Haryana compared to eastern India. However, huge subsidy in the form of free electricity to pump groundwater is encouraging paddy production, thoroughly supported by assured procurement and huge fertiliser subsidies. These out-of-sync subsidies cost the government to the tune of Rs 2-3 lakh crore annually, while encouraging an unsustainable cropping pattern.

In contrast, these incentives are not reaching farmers in states such as Bihar, West Bengal, Odisha and Jharkhand, where the average depth of groundwater is much lower at about 1-2 metres compared to 15-16 metres in Punjab and Telangana. Further, the water footprint for paddy production in eastern states is much less than that of Telangana and Punjab. A recent report by the Indian Council for Research on International Economic Relations (ICRIER) indicated that water applied for paddy cultivation is only 30 cm in Chhattisgarh, 40 cm in Bihar and Jharkhand compared to 180 cm in Punjab and 110 cm in Telangana. Similarly, irrigation water productivity (kg of paddy per m3 of irrigation water) is much higher at 0.75 in Jharkhand, 0.68 in Chhattisgarh and 0.48 in Bihar, compared to only 0.3 in Telangana and 0.22 in Punjab. Thus, it is evident that encouraging paddy cultivation in eastern states is more in tune with the motto of ‘more crop per drop’ compared to central or western states.

A recent report of the Commission for Agricultural Costs and Prices (CACP) suggested that many districts of Punjab, Haryana, western Uttar Pradesh, Rajasthan and Gujarat are not suitable for the cultivation of paddy, whereas some districts of Telangana, Karnataka and Maharashtra are moderately suitable. The report suggests that the majority of the districts in eastern states such as West Bengal, Bihar, Odisha and Chhattisgarh are highly suitable for paddy cultivation.

As a result of input-intensive agriculture practices in some states, the productivity levels are higher. On an average, paddy yields are much higher in Punjab at 63.6 quintals/hectare (q/ha) and Telangana at 51.1 q/ha compared to 28.9 in Chhattisgarh, 29.8 in Jharkhand, Bihar (33.1), Assam (33.1) and Odisha (32.4). Nevertheless, eastern states have better water use efficiency with ‘more crop per drop’ in paddy cultivation and have the potential to double the yield.

In areas with assured irrigation, farmers can be encouraged to grow high-value vegetables and horticultural crops. Pulses and oilseeds such as groundnut and soybean, apart from being short-duration and less water-intensive crops, can help in the natural restoration of soil fertility. Hence, their cultivation can be widely promoted for crop rotation and/or crop mixes across all suitable states and across the country; it may also help in increasing their domestic production and reducing import dependency. Under the ‘one district, one product’ scheme, crop colonies are being promoted to spur farmers to switch to high-value crops by providing basic commodity-specific infrastructure such as processing units and post-harvest facilities in each district.

The author is Principal Scientist, ICAR-Central Research Institute for Dryland Agriculture, Hyderabad