Indian Agriculture: Emerging Issues and Policy Perspectives

Indian Agriculture: Emerging Issues and Policy Perspectives[1]

Srijit Mishra 

Introduction

The summer of 2014 got drenched with the elections euphoria, but for Indian agriculture all eyes are set on the prospects of a good monsoon. Is there a possibility of an El Nino? Will it lead to a drought like condition and have an adverse impact on agricultural production? How will this impact those dependent on agriculture for their livelihood? What about farmers' suicides? These questions remind us of the larger agrarian crisis and its interrelated dimensions of an agricultural developmental crisis. The former is about declining share of the overall pie towards agricultural sector, poor returns to cultivation, and nutritional deprivation while the latter is about inadequate and inappropriate planning that led to a deceleration in the growth rate of production and productivity, and an increase in risk and vulnerability. This also calls for alternative policy thinking.

Agrarian Crisis

The share of agriculture and allied activities in gross domestic product at constant 1999-2000 prices decreased from 41 per cent in 1972-73 to 14.6 per cent in 2009-10 while during the same period the share of employment in the sector declined from 73.9 per cent to 53.2 per cent. This means that the average returns per worker in agriculture and allied activities as a proportion of average returns per worker in non-agricultural activities has declined from 24.5 per cent in 1972-73 to 15.0 per cent in 2009-10.

There is an increasing marginalisation of holdings as indicated through agricultural census. Between 1970-71 and 2010-11 the distribution of operational holdings indicate that the share of marginal (0-1 hectares, ha) increased from 51 per cent to 67.1 per cent while that of others declined - for small (1-2 ha) from 18.9 per cent to 17.9 per cent, for semi-medium (2-4 ha) from 15 per cent to 10 per cent, for medium (4-10 ha) from 11.2 per cent to 4.2 per cent and for large (10+ ha) from 3.9 per cent to 0.7 per cent.

A situation assessment survey conducted for the agricultural season of 2002-03 indicates that average monthly household income compared to expenditure is lower for small (Rs.1,659 and Rs.2,482), medium (Rs.2,493 and Rs.3,148) and semi-medium (Rs.3,589 and Rs.3,685) holdings while it is higher for medium (Rs.5,681 and Rs.4,626) and larger (Rs.9,667 and Rs.6,418) holdings. What is more, even after increasing the returns by one-third to account for the drought, per capita per day returns to farmer households was less than Rs.8. Assuming a 6 per cent annual average growth rate, which is much on the higher side, the per capita per day returns in 2013-14 would double to Rs.16. This explains the poor returns to cultivation. With nearly half the population being still dependent on agriculture, the non-farm opportunities remain limited.

The 2013 Global Hunger Index puts India at a rank of 63 from among 78 countries, which is lower than some of the Sub-Saharan countries and all the other South Asian countries. The per capita per day availability of foodgrains, as indicated in the State of Indian Agriculture 2012-13, has reduced from 510 grams in 1991 to 463 grams in 2011. This is also reflected in the per capita per day calorie and protein consumption as the national sample survey estimates of 1993-94, 2004-05 and 2009-10 suggest. Such an outcome is also because of a shift in the cereal production and their consumption from millets to rice and wheat. There have been recent initiatives to increase the millets production and their consumption.

The manifestation of the agrarian crisis has been identified with farmers' suicides. However, it is symptomatic and its absence does not necessarily preclude risks. A comparison of suicide mortality rates (SMRs, suicide deaths for 100,000 persons) between farmers and non-farmers suggests that at the all India level the difference in the rates diverged the most in 2004 (18.8 and 13.6) and then there was a secular decline in the gap till 2008 (16.9 and 14.7) to diverge again in 2009, a drought year, and then started converging again from 2010 to 2012. However, a closer look at the six states with relatively higher incidence of farmers' suicides indicate that for the recent three years (2010 to 2012) the rates are diverging in Andhra Pradesh, Maharashtra and Kerala and converging in Chhattisgarh, Karnataka and Madhya Pradesh. The turnaround in Chhattisgarh is because it has stopped reporting farmers' suicides and instead increased reporting of a category called self-employed others. In addition, West Bengal did not report profession-wise suicides data for 2012. Thus, the convergence that one observed at the all India level is more on account of inappropriate and incomplete reporting. In any case, one has to look up other aspects to identify possible changes.

Agricultural Developmental Crisis

Using triennium ending data divided to three sub-periods, 1981-82 to 1993-94, 1993-94 to 2004-05 and 2004-05 to 2010-11, an analysis of growth rates computed through a double-kinked exponential curve suggests that the growth of agriculture and allied activities in the first period (3.3 per cent) was statistically significantly higher when compared with the second period (2.7 per cent) and there has been an increase in the growth rate in the recent period (3.0 per cent). An analysis in terms of value addition points out that the growth rate in the first period was statistically significantly higher than the second period for cereals (3.3 per cent and 1.0 per cent), pulses (1.5 per cent and -0.03 per cent), oilseeds (6.1 per cent and 0.5 per cent), cotton (4.1 per cent and 1.0 per cent), milk (5.0 per cent and 3.7 per cent) and meat (5.1 per cent and 2.9 per cent); the growth in the third period was higher than the second period for all the above except for milk (3.5 per cent) and it was statistically significantly higher for pulses (2.5 per cent), oilseeds (4.8 per cent) and cotton (13.7 per cent).  The trends observed till 2010-11 have continued till 2013-14, but for a setback in 2012-13 because of delayed onset and deficient rainfall.

Conventionally, in monsoon India, the farmer was exposed to either yield or price shocks that were supposed to move in opposite directions counterbalancing each other. Today, the possibility of yield risk increases because of unavailability of power that in turn affects water availability at a crucial time, or because of spurious seeds or due to an increase incidence of pest attack or because of weather changes. Further, because of global integration, price volatility has increased and price shocks could be because of higher subsidies in the United States or the European Union. And, with these changes the two risks do not counterbalance each other and the farmer can also be exposed to both the shocks in the same season.

 

Over the years, the farmer is increasingly relying on the market for inputs. The link between ground realities and publicly funded research and extension is waning and the farmer depends on the input-dealer leading to a supplier-induced-demand. What is more, the private provisioning of inputs without any regulation to address the sale of spurious products or other market irregularities increases farmers' vulnerability. Further, with changes in technology, the farmers' current knowledge become redundant and there is deskilling.

Adequate, affordable and timely availability of credit would be essential for any enterprise, but this has been eluding the Indian farmer. In addition, agricultural credit is about doing the same things again and again and not linked to horizontal or vertical expansions. Thus, any shocks are likely to make debt non-serviceable and this would make the farmer ineligible for subsequent loans from formal sources. This would increase the reliance on informal sources at a greater interest burden.

Input-intensive cultivation practices bring in risks that go beyond weather and market uncertainties. There can be inappropriate fertiliser applications having an adverse impact on soil health resulting in yield fatigue or pesticides having harmful impact on livestock and human health or depletion of groundwater among others. A way out being propagated is an expansion of the same, that is, to bring more areas under the input-intensive approach - the look east policy being touted under a second green revolution or an evergreen revolution. The argument put forward in favour of this or other technology-driven approach is that there is no alternative (TINA).

Alternative Policy Thinking

In practice, multiple alternatives exist (MAE, an acronym that sounds as mother in some vernacular languages and we refer to it as mother earth depicting the multiple alternatives that she provides) that is context-specific. It differs across locations and evolves over time. It questions the one-size fits all approach. Such thinking takes advantage of the variability of the natural resource base and the diversity in the production systems. As each crop has a different life cycle, the diversity spreads out the vulnerability from each episode of unforeseen climatic events. In addition to an integration of different crops, the system is also integrated with livestock production. These could lead to low external input sustainable agriculture (LEISA). The application or propagation of this approach is knowledge centric.

Comparing knowledge-centric MAE to technology-driven TINA, one can state the following.

• MAE is bottom-up where different knowledge providers will not only have to keep the local specifics in mind, but will have to work in tandem with the users. TINA is top-down where the provider of the technological-fix, as a solution to some presumed problem, is considered hierarchically superior to the user of that technology.
• MAE is context-specific, requires an understanding of the system dynamics and evolving of effective structures to manage them. TINA is crop-specific and involves application of inputs/technology to enhance production.
• MAE focuses on the production of a complex system with an important emphasis on risk reduction. TINA focuses on a single crop or livestock with an emphasis on improving productivity.
• MAE understanding of efficiency is from a system perspective. TINA looks into efficiency in the technological and economic sense that is normalised per unit of input.
• MAE involves marginal lands with the crop-livestock system spread over a larger area and in that sense is extensive. TINA is mainly in areas with better soils and with access to water (preferably through irrigation) and input-intensive.
• MAE is about integration of mixed and multiple crops with livestock. TINA is about specialisation that espouses mono-cropping.
• MAE production on private lands is dependent on commons. TINA production is in owner-operated lands.

Despite these differences, MAE like TINA, cannot happen on its own. To promulgate it, one needs the support of appropriate knowledge, resources and adequate leverage with marketing opportunities and information technology. It also requires constant monitoring and evaluation.

One of the recent initiatives in-line with MAE is the interventions in comprehensive pilots through the Revitalizing Rainfed Agriculture Network (RRA-N) comprising of a number of civil society groups spread across the country. The comprehensive pilots are spread across different agro-ecological conditions and focuses on integrating knowledge-centric interventions on water, soil, seed, livestock, fisheries, credit and institutions among others. They also collaborate with the local-level line departments and other government functionaries, as that is very essential to scale-up within the pilot area. The interventions that started in Kharif 2012 have attracted the attention of the Planning Commission, the Department of Science and Technology and the Food and Agriculture Organization. This requires greater research engagement that will delineate the specificities in each comprehensive pilot and identify the similarities across comprehensive pilots to facilitate their application beyond the pilot areas.

To sum up, Indian agriculture has been going through a crisis that is agrarian as also agricultural. A way out of this is to explore context-specific knowledge-centric approaches. This, to borrow a term, has the potential for an inclusive, sustainable and food-secure India.

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[1] This is a slightly edited and hyper-linked version of a write-up that has been published in Yojana, June 2014, pp.58-60 (the PDF version of the issue is available in Google drive). It draws from some of my recent works. They include: Technology, Development, and Farmers' Suicides in India: A Misplaced Debate, Visiting Fellows Seminar, Asia Research Centre, London School of Economics and Political Science, 20 March 2014; Agriculture in India: Performance, Challenges and Opportunities (with S Mahendra Dev and Vijaylaxmi Pandey) in Ashima Goyal edited The Oxford Handbook of the Indian Economy in the 21st Century, Oxford University Press (OUP), New Delhi, 2014;  Rainfed Agriculture: for an inclusive, sustainable and food secure India (with A Ravindra and Ced Hesse), IIED Briefing Paper, April 2013; Persistence of Crisis in Indian Agriculture: Need for Technological and Institutional Alternatives (with D Narasimha Reddy), in Dilip Nachane edited India Development Report 2011, OUP, New Delhi, 2011; and Agrarian Crisis in India (co-edited with D Narasimha Reddy), OUP, New Delhi, 2009 among others.

Some earlier related blogs on this theme are:

India's best dramebaaz

Farmers' suicides and crisis in Indian agriculture

Remarks on rural credit for globalising farmers

Opinions and priorities for agriculture in India

The farmers' strain

Farmers’ suicides and crisis in Indian agriculture

Nearly a quarter million farmers’ suicides have been recorded in India in the last 15 years, ie 45 farmer suicides per day or almost one every 33 minutes. The suicide mortality rate (SMR, suicide deaths per 100,000 persons) of male farmers has been greater than that of male non-farmers (see Figure 1). The SMR for male farmers peaked to 19.2 (almost 40 per cent higher than that of non-farmers) in 2004. Subsequently, it has been declining (except for 2009, a drought year) and is to be at 16.1 in 2011.  Despite the continuing high incidences of farmers’ suicides, the declining trend gives a hope that the farm sector is perhaps getting back and other data also show that the farm sector was doing relatively well in recent years.

Calculated using a method described in an earlier work by the author and based on data from the National Crime Records Bureau and Census of India.

While acknowledging, the relatively better performance of agriculture in recent years, the decline in the incidence of farmers’ suicides is also because of the reporting of farmer suicides in some other category that led to recording zero farmers’ suicides in the state of Chhattisgarh, which had been reporting more than 1,000 farmers’ suicides per annum prior to 2011. Then, of course, there is the overall underreporting of suicides because of social stigma and the fact that suicide continues to be criminal offence under the statute books of the Indian Penal Code. Keeping aside our apprehension on data for a different exercise, SMR for male farmers in 2011 are 290 for Kerala, 49 for Maharashtra,  42 for Andhra Pradesh, and 37 for Karnataka and more than three-fifths of the farmers’ suicides in the year were reported from these four states.

Following the classic work of Durkheim on suicides, almost a hundred years ago, it goes without saying that a high incidence of suicides among a particular sub-group of population is indicative of a socio-economic problem. Of course, its absence does not deny the absence of a crisis among farmers in other regions/states. The crisis in Indian agriculture is pervasive and much more spread out than the spread of famers’ suicides.

Besides farmer distress, the social crisis is observed in food and nutrition insecurity, and social conflicts that has also taken the form of extremism in some parts of the country among others. The economic crisis in agriculture is said to be on account of technology fatigue, stagnating productivity, declining fertilizer use efficiency, low growth with high input usage, subsidies surpassing investments, and increasing cost of cultivation. To add to it there is the ecological crisis reflected through soil degradation, falling water tables, destruction of friendly predators and parasites, biomass loss in commons, and increasing risks from climate change.

This crisis is as much because of inadequate and inappropriate planning as much it is because of an emphasis on means rather than ends. To address this crisis, the government has responded with a number of programmes. The major response was to expand the green revolution areas beyond the irrigated areas to other areas that are largely rainfed.  This comes with the assumption that the technology and science meant for irrigated water abundant areas should be transferable to other areas. The current response, unfortunately, is suggesting more of the same which has already brought about the crisis.

Further, such an argument stems from the perspective of making food available at a macro level and it is this that subsumes the issues of accessibility and affordability to the public distribution system and not by strengthening the local production system, but by imposing a production system that is largely mono-cropping in nature. This also compromises the risk taking ability inherent in a system that thrives on diversity and mutual dependence. For instance, a good foliage cover will provide fodder for livestock, who in turn will provide manure to the soil that in turn will help the plant grow. Similarly, cultivation of multiple crops could also mean that all the crops need not be vulnerable to a particular unforeseen climatic fluctuation, but it could have adverse implications in a mono-cropping system.

A very nice initiative of the Government of India is the Rashtriya Krishi Vikash Yojana initiated since the 11^th Five Year Plan. The logic behind this initiative is that the planning from agriculture should start from the village level and then be aggregated to block, district, state and nation, respectively. In short, it should be bottom-up, and, I would say a novel initiative. But, the problem is that this initiative also comes with a message from the Prime Minister that we should be able to achieve 4 per cent growth per annum in agriculture. In real terms, this means that there should be production growth. Independent, of the fact that this is impossible and not even required because our population growth is about 1.6 per cent per annum.  What is more, this imposition from top comes with a plan that moves from state to district to the village.

So, we have a bottom-up thinking being implemented through a top-down structure. This top-down structure is entrenched in many of our institutions. Scientists and technocrats, more often than not working in silos, would come up with ideas that is to be the input the farmer will use. The agricultural administration facilitates the provisioning of these inputs that are largely tied through some subsidy schemes. This top-down structure unfortunately means that generation and dissemination of knowledge is a one-way process. The farmers become passive recipients and are not active participants in the process.

Another much talked about initiative is the farm debt waiver of 70,000 INR in 2008 (17.5 billion USD; the approximate exchange rate then is 1 USD=40 INR). This, of course, is a fiscal decision and government in many parts of the world have been taking such decisions and I would leave it at that. However, it needs to be mentioned that this is book-keeping exercise that helped the banks do away with their non-performing assets. For the farmers who benefitted (there are many who didn’t), it would reduce the mental burden and also make them eligible for fresh loans. It is the fresh loans that would help them get back to the agricultural activities. However, the market-dependent input-intensive production where rate of increase in cost is greater than net returns, debt-servicing would be a casualty, particularly in bad years. This also increases the risks in the agricultural production process.

Many a times proponents of the input-intensive argument would suggest that the criticisms are well taken, but there is no alternative, TINA. This is not correct. Actually, like mother earth, multiple alternatives exist, MAE. The alternatives focus on diverse and integrated production systems that are better adapted to climatic variability and take into consideration the local specificities. It needs to be mentioned that the alternative being proposed is not a blind call to tradition. It does borrow some of the positive aspects from tradition, but it is based on science and is knowledge-centric. This means that to propagate this alternative will require an investment that has a different logic. In particular, investments that enable peoples’ capabilities to make them active participants will be crucial, as they are the real wealth of nations.

(This write-up is based on related recent work that the author has been associated with and meant for spring 2013 edition of the Newsletter of the Association of Indian Economic and Financial Studies, AIEFS, http://www.aiefs.org/. It was first written on 2 April 2013 and has been slightly edited for this blog.)

Cash Transfers is Not the Answer to Food Security

It is being taunted that cash transfers will sort out all problems and bring about efficient and effective targeting of many welfare schemes. One would not dismiss the merits outright, but would like to state that this argument is based on the assumption (rather a presumption by policy makers) that nothing is wrong in the real sector.

This does not make sense when there is food shortage. Providing cash transfers to poor consumers (who could also be producers) will not enable them to buy the requisite food as and when they went.  Thus the solution misses the fundamental aspect that a financial/monetary solution cannot be applied to a problem that requires intervention in the real sector.

In day-to-day discourse one hears the example of cash for bicycles being given to girl students in Bihar as an incentive to make them attend schools. Yes, this is a direct transfer, but one that is tied with a real thing, a  bicycle.Similarly, if welfare schemes are to be successful in addressing food security, it has to be tied with the availability of food. Chattishgarh, not an example of governance in many other spheres, has done good in addressing this through the public distribution system.

An effective public distribution system, no doubt, reduces leakages from the system, and would help improve access to food. Nevertheless, the question of food security or food shortage is broader - not enough is being produced. The irony is that the producers of food (either as cultivators in small farms or labourers). who do not get enough returns also happen to be the consumers of food.

The net returns from input-intensive cultivation is decreasing because of increasing costs.  Nevertheless, this has been propagated by a thinking that there is no alternative (TINA). There are alternatives but it is not like one-size fits all. Usage of low-external input sustainable agriculture by taking into consideration local specificity make many alternatives exist (MAE; which literally is a variant of mother is some Indian languages). Like mother, it can adapt to different situations and open up different possibilities. They will differ from region-to-region, and from crop-to-crop, among others. Whatever it is, it ought to be locally grounded to make the alternative cost-effective and increase returns.

Choice of multiple crops at the farm/household level will address a variety of food requirements necessary for better nourishment. This reminds me of wadi (orchard) projects in tribal pockets of Thane adjoining Mumbai. Such interventions along with water harvesting structures facilitated production of cereals with fruits and some seasonal vegetables. This stopped out-migration and improved nutrition intake of the households. Similar  initiatives are replete across the country. Some of them are even integrated with livestock management, fishery, and poultry  among others. The oft-quoted example given in recent years is the  community managed sustainable agriculture in Andhra Pradesh. If scaled up effectively this can address the food security concerns.