What is ailing India’s farmers?

Loan waivers and electricity subsidies will probably work as band-aids. However, to address farmers’ problems, a change is needed at a deeper level.

Oct 23, 2018 11:10 IST India Infoline News Service

Thousands of agitating farmers have continuously been taking to the streets protesting the unending state of agrarian distress. In September-end too, a protest was initiated off by the Bharatiya Kisan Union. It sparked the Kisan Kranti Yatra, wherein farmers began from Haridwar marching towards Delhi. However, these protests turned violent. Delhi police placed barricades and used tear gas shells and water cannons against the hapless farmers. They also imposed Section 144 of the Criminal Procedure Code, which does not allow the assembly of more than four persons.

The farmers who mainly came from the northern belt of Uttarakhand, Punjab, Haryana, and UP had a set of 11 demands, which included lower diesel prices and electricity tariffs, farm loan waivers, and implementing the recommendations of the Swaminathan Commission. The protests also led to a political slugfest with the opposition supporting the farmers and disapproving police action against them.

But, why have the farmers taken to the streets? What are the problems plaguing them? How potent are their demands? What are the possible solutions?

The Problems

Overdependence on agriculture: In what can certainly be regarded as a recipe for disaster, 60% of the Indian population depends on agriculture, which contributes just 14-15% to the country’s GDP. This type of unsustainable development leads to the country’s farmers remaining perennially poor.

Inability to arrest the rising cost of production: Farmers have been unable to make any sort of profit off their produce. This is mainly because their cost of production, which depends on several factors such as the rising cost of phosphatic and potassic fertilizers, seeds, pesticides, irrigation, transportation, and other raw materials, is not in the farmers’ hands and has also been burdening them.
Low yield: Indian soils have been used for growing crops over generations, without any efforts taken to replenish them. Overuse of anything rusts it. Thus, soils have been depleted and exhausted leading to low productivity. Thus, average yields of most crops in India is the lowest in the world. Moreover, this is also dependent on the quality of seeds. Unfortunately, a majority of farmers do not have access to good-quality seeds.

Small size of landholdings: Small and marginal farmers have been rising. The provisional agriculture census 2015-16 claims that over 86% of the cultivated farmland is held by small and marginal farmers. As compared to 1970-71, when India had 71mn landholdings, these have more than doubled to 146mn. Due to this, farmers are dependent on subsistence farming, relying on an almost hand-to-mouth existence.

Lack of Infrastructure: There is lack of significant agricultural infrastructure in place across the value chain. Lack of irrigation and mechanization are other pertinent factors owing to which farmers are left at the mercy of rain gods. However, this is a vicious circle because farmers with small landholdings may not have the means to afford it, which also doesn’t allow him to improve yield.

Considering the problems, how potent are farmers’ demands?

Farmers’ demands have mostly revolved around the government granting loan waivers. As farmers up the ante against the government so close to the general elections, the demand takes on political overtures. What’s more, loan waivers are easy to give. The longer-term alternatives like building irrigation systems or warehouses, properly electrifying villages, and creating markets takes time and efforts. A loan waiver, meanwhile, is quick and gives instant returns, that is, the support of the people. But there is a catch, these loan waivers benefit only those farmers who have access to formal credit, since the government cannot decide the extent of indebtness from informal credit sources. Further, loan waivers punish farmers who repay loans on time. Banks also become suspicious the next time they go about asking for a loan.

Another relevant fact is that farmers get to avail subsidized inputs such as fertilizers, water, and power, apart from subsidized credit and crop insurance. However, this evidently seems to have no effect on productivity. This could imply that most subsidies are frittered away or wasted. Moreover, excessive usage of water and fertilizers could simply worsen conditions.

Possible Solutions?

Loan waivers and electricity subsidies will probably work as band-aids. However, to address farmers’ problems, a change is needed at a deeper level. Even though the government has increased the MSP for kharif crops, to have a real impact on their income, the marketing infrastructure and institutions need to be strengthened.

Further, public investment needs to be shored up. Resource allocation also requires to be increased in research and development for
developing higher-yield seeds, improved logistics, and infrastructure such as water sprinkler systems and solar-powered pumps.
In addition, efforts could be made on reducing the number of people dependent on agriculture for their livelihood through better government policies and boosting supporting professions like chemicals and fertilizers, food processing, crop insurance, etc. Within agriculture, pursuing horticulture and other allied industries may also a more lucrative option.

To conclude, a lot is being written about ways of increasing and doubling farmers’ incomes by 2022; however, the government will have to take concrete efforts to address farmers’ incessant problems, which does not seem to be a task that can be accomplished in a couple of years.

At the end of the day, incentivizing and not subsidizing will lift Indian agriculture’s dismal state.

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