Why should Bharat have to feed India at its cost?
A farmer buying a motorcycle or even a tractor pays globally comparative prices. So why should farmers make food available to the modern and industrial sector at the world’s lowest prices?
India's agriculture has come a long way since we awaited shiploads of US grain to feed our people. India now produces more than enough for our national appetite. The issue now is how to make agriculture an economically attractive occupation?
The farmers’ movement is supposed to be about this. But what is interesting is that the farmers who are protesting loudest and most vigorously are the farmers from the farming tracts that benefit the most from Minimum Price Support procurement and from the sugarcane belt of UP where cane prices are fixed by the state. These form the bulk of the wealthiest and most well off cohort of Indian farmers.
The story of India’s agriculture takeoff began when India was forced to import a record 20 million tonnes of grain in 1964-66. The annual wheat production grew from 11.28 million tonnes in 1962-63 to almost 110 million tonnes and 122 million tonnes for wheat and rice respectively in 2020. This level of production has created a problem of plenty.
Despite its falling share of GDP, agriculture plays a vital role in India’s economy. Over 58 per cent of the rural households depend on agriculture as their principal means of livelihood. Census 2011 says there are 118.9 million cultivators and 144 million agricultural workers across the country or 24.6 per cent of the total workforce of over 481 million. Read this with the fact that agriculture now only contributes 13.7 percent of the GDP.
With 157.35 million hectares, India holds the world’s second largest agricultural land area. India has about 20 agro-climatic regions, and all 15 major climates in the world exist here. Consequently, it is a large producer of a wide variety of foods. India is the world’s largest producer of spices, pulses, milk, tea, cashew and jute; and the second largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds.
Agricultural export constitutes 10 per cent of the country’s exports and is the fourth-largest exported principal commodity.
The irony is that only 58.1 million hectares or just a third of agricultural land is actually irrigated. Of this, 38 percent was from surface water and 62 per cent was from groundwater. India has the world's largest groundwater well equipped irrigation system.
There is a flipside to this great Indian agriculture story. The Indian subcontinent boasts nearly half the world's hungry people. Half of all children under five years of age in South Asia are malnourished, which is more than even sub-Saharan Africa.
More than 65 per cent of the farmland consists of marginal and small farms less than one hectare in size. Moreover, the average farm size has been decreasing. The average size of operational holdings has almost halved since 1970 to 1.05 ha.
Approximately 92 million households or 490 million people are dependent on marginal or small farm holdings as per the 2001 census. This translates into 60 per cent of rural population or 42 per cent of total population.
Now we come to the crux of today’s farmers’ ferment. There is a pronounced bias in the government’s procurement policy, with Punjab, Haryana, coastal AP, Telangana and western UP accounting for the bulk (83.51 per cent) of the procurement. The food subsidies bill has increased from Rs. 24,500 crores in 1990-91 to Rs. 1.75 lakh crores in 2001-02 to Rs. 2.31 lakh crores in 2016 to Rs. 5 lakh crores in 2021.
Instead of being the buyer of last resort, FCI has become the preferred buyer for the farmers. The government policy has resulted in mountains of food-grains coinciding with starvation deaths. The gains of rural prosperity and MSP procurement have resulted in a few regions of concentrated rural prosperity.
In 2020 out of the production of 265 million tonnes of food grains, as much as 91.42 million tonnes was procured with MSP, while only 40.5 million tonnes was distributed. This leaves behind huge mounds in the warehouses. Clearly there is a limit to how much can be procured.
This still begs the question why MSP procurement, which means the highest prices, should benefit only a few regions?
The total subsidy provided to agricultural consumers by way of fertilizers and free power has quadrupled from Rs. 73000 crores in 1992-93, to Rs. 3.04 lakh crores now. While the subsidy was launched to reach the lower rung farmers, it has mostly benefited the well-off farmers. These are the people protesting for more.
These huge subsidies come at a cost. Thus, public investment in agriculture, in real terms, had witnessed a steady decline for the last twenty years. Almost all the investment into creating additional irrigation potential has come from private sources, mostly in the form of more tube-wells, usually powered by free electricity. Free power has also meant a huge pressure on depleting groundwater resources.
By 2050, India’s population is expected to reach 1.7 billion, which will then be equivalent to nearly that of China and the US combined. In the four decades starting 1965-66, wheat production in Punjab and Haryana has risen nine-fold, while rice production increased by more than 30 times. These two states and parts of Andhra Pradesh and Uttar Pradesh can now not only produce enough to feed the country but to leave a significant surplus for export.
Since subsistence farming and farm labour is the main vocation, the priority should be to step up government expenditures on infrastructure and habitations, to create a demand for alternate labour. Instead of distributing benefits to agriculture sector by MSP procurement and fertilizer subsidies, the Government of India should progressively move towards transfer of benefits regime based on acreage under crop and nature of the land, to ensure a more equitable distribution of State largesse.
Finally, the entire government machinery geared to controlling food prices to satisfy the urban population should be dismantled. A farmer buying a motorcycle or even a tractor pays globally comparative prices. So why should farmers make food available to the modern and industrial sector at the world’s lowest prices?
Why should Bharat have to feed India at its cost?
(Views are personal)