Let farm reforms take root

Devinder Sharma
Food & Agriculture Specialist

Punjab, the food bowl, has broken all previous records in wheat productivity. From 50.64 quintals per hectare achieved last year, the average wheat yield has risen to 51.71 quintals. With such high crop productivity and with 98 per cent cultivable area under assured irrigation, Punjab farming should be an epitome of rural prosperity. But there is hardly a day when newspapers don’t carry reports of farmers committing suicide. With 10,000 suicides reported in the past decade, Punjab has, in fact, turned into a hotbed of farm suicides.

Let us look at America. In 2018, the average farm incomes had nosedived, with the US Department of Agriculture (USDA) estimating the ‘median’ farm income to be in the negative. It stood at minus $1,553 (or minus Rs 1.07 lakh). In other words, the average farm household was living in debt, with the debt margin increasing substantially for half the households existing below the ‘median’. What made it still worse was that 2018 was not an exceptional year, the downward trend in farm incomes had continued for six years in a row. No wonder, the National Farmers Union and Farm Women United in the US have time and again expressed concern at the growing stress, and increasing depression among farm workers.  

Let’s come back to Punjab. A recent study entitled ‘Levels of Living: Farmers and Agricultural Labourers’ by Punjabi University has shown that 85.9 per cent of agricultural dependant households are living in debt. The average debt that a farming household carries is Rs 5.52 lakh. The burden of debt is more for the farm workers, wherein the average debt per household is roughly Rs 68,330. The high productivity achieved was not translating into higher incomes. Like in the US, the burden of debt increases for the household with smaller farm size. The burden for small farmers being so severe that even the promised loan waiver of Rs 2 lakh is unable to provide succour. Otherwise, there is no reason why the spate of suicide in Punjab should not come down by a significant margin. 

The question that arises, and is invariably ignored, is why indebtedness should be mounting in a frontline agricultural state which has very high yields of wheat, rice and maize — among the highest in the world? Why is it that despite putting in hard labour, keeping crop pests at bay, keeping an overnight vigil from stray animals, protecting the standing crop from weather anomalies, and producing an abundant and top quality harvest fail to get farmers the rightful price? Why is it that despite the crop yields improving year after year, more and more youngsters are not only quitting farmin, but also are leaving the country? In 2018, an estimated 1.5 lakh students had gone abroad for studies, and it is well-known that a majority will not return. Looking at the growing trend, a number of institutes in Punjab have started offering free IELTS courses to their students. 

This surely is an outcome of the continuing neglect of farming. For several decades, agriculture distress has been growing not only in the more progressive Punjab and Haryana, but also across the country’s rural landscape, and clearly much more severely. With farming turning uneconomical and a losing proposition, what do we expect the younger people to do? And if all that the policy makers are suggesting as the possible way out is to borrow the failed prescriptions from the US or for that matter the EU, the rural youth feels stranded and lost. If the US agriculture is in itself faced with a terrible farm crisis, leading to negative farm incomes, and with EU agriculture somehow gasping on massive federal subsidies, there is no reason why the policy prescription to revitalise Indian agriculture cannot be more grounded, based on naturally available strengths. 

Among the tasks cut out for the new government, agrarian distress and unemployment definitely take precedence. But if the thrust of the policy imperatives being suggested is to bring in more market reforms, primarily ensuring that the sales of tractors, automobiles and FMCG products pick up in the rural areas, farm distress will only aggravate. Some mainline economists and the dominant industrial lobby groups are demanding land acquisitions to be made easier, dismantling of the APMC regulating mandis and phasing out of MSP in the next three years, among other things. Much of the emphasis is on incorporating the US farm economy design, which relies on private markets and strengthening corporate control of agriculture. 

If these policies had worked, there was no reason why US family farms would be in crisis. Why should the number of dairy farms, for instance, come down from 70,000 in 2007 to 40,000 in 2017? Why should dairy farmers be committing suicide at an alarming rate? This is happening at a time when the world’s biggest commodity trading centre — Chicago Mercantile Exchange — is located in the US, and the world’s biggest organised retail chain, WalMart, has completed over half a century. But neither commodity trading nor the entry of private markets could rescue agriculture. Some studies point out that in the 1930s, a US farmer would save 70 cents for every dollar of produce sold. After the entry of organised retail chains, the net income has dropped to 4 cents per dollar. If the BigAg prescription had worked, US agriculture wouldn’t have been crying for a still bigger social security net. 

Considering that small farmers in India are the backbone of a healthy food system, sustaining millions of livelihoods, and provides a trigger for a vibrant rural economy, the new government should not get attracted by a borrowed economic design that has outlived its utility. As India gets ready to mark the 150th birth anniversary of Mahatma Gandhi, the government will do well to draw a roadmap for reviving agriculture based on Gandhian principles. Taking people out of agriculture to become dehari-mazdoor in cities is not the way forward. What India needs is a production system by the masses, and not for the masses. Making agriculture economically viable and environmentally sustainable is what the Mahatma had dreamt.