NEWS  The distinct characteristics of India’s agriculture require that a reformed state must ensure farmer, consumer welfare.

CONTEXT 

• For at least four decades now, global economic policy making has dogmatically adhered to the notion that a progressively reduced role of the state would automatically deliver greater economic growth and welfare to the people.
• While evidence over many years from all over the world, indicates that it is the state that has played the leading role in provisioning the most critical aspects of life: water, sanitation, education, health, food and nutrition.
• Similarly agriculture with very specific characteristics and also as crucial elements of the socio-historical context, indicates the continuance of intervention by the Indian state in multiple markets, and in making critical investments, to ensure the welfare of both farmers and consumers.

SPECIFICITIES OF AGRICULTURE

• Due to a variety of limiting factors, from uncertainties of the weather to soil fertility and water availability, increasing returns to scale are very difficult to achieve in farming. This underscores the need for the right kind of public investment in agriculture.
• Unlike the economies of scale which allow producers in industry to make profits by cutting unit costs, in agriculture there is no such flexibility specially for small and marginal farmers.
• Instead members of the family are drafted to work on the family’s farm, or in other farm and non-farm work. This phenomenon is quite widespread in India today.
• Of the nine crore rural families who draw their main income from unskilled manual labour, four crore are small and marginal farmers. Thus, through overwork and self-exploitation, peasant farmers are able to cling on to their land.
• Again, production processes in agriculture cannot be organised in an assembly line; they need to begin at the appropriate phase of the climatic annual cycle.
• This means that all farmers harvest their crop at the very same time; 86% of India’s farmers are ‘small and marginal’, too poor to afford warehousing facilities and are, therefore, compelled to bring their harvest to the market at around the same time.

AGRICULTURE-  A CASE OF STATE INTERVENTION

• During a bumper crop, prices fall. It is expected that consumers will be benefitted. But the food grains are hoarded by the traders resulting in loss to the farmers and customers have to buy very expensive commodities.
• Further this forceful situation traps most of the small farmers into the debt trap by moneylenders, thus making it worse.
• In the credit market, usurious interest rates (often as high as 60%-120% per annum) create a debt trap from which it is virtually impossible to escape.
• Further, the repayments due are ‘adjusted’ through exploitative practices in the input, output, labour and land-lease markets.
• This interlocked grid works in tandem with the oppressive caste system, with the poorer, ‘lower’ caste farmers, facing a cumulative and cascading spiral of expropriation.
• All the above reasons provide a strong case for state intervention in multiple agricultural markets.

INDIA SECURED RIGHTS OF BOTH- FARMERS AND CONSUMERS

• The Food Corporation of India and the Agricultural Prices Commission were set up in 1965.
• The idea was that as farm output rises with the Green Revolution, farmers are assured that their surplus would be bought by the government at a price high enough to leave them a margin.
• The crops procured were then made available to consumers at subsidised rates through the Public Distribution System (PDS).
• Thus, government intervention protected farmers during bumper crops and dipped into the buffer stock to protect consumers during droughts.
• This is how India got its much vaunted food security over the past several decades.

STILL PERSISTING CHALLENGES  IN AGRICULTURE

• The Green Revolution which brought prosperity, also sowed the seeds of its own destruction.
• More than 300,000 farmers have committed suicide in the last 30 years, a phenomenon completely unprecedented in Indian history.
• There is growing evidence of a steady decline in water tables and water quality.
• The yield response to application of increasingly expensive chemical inputs is falling, which has meant higher costs of cultivation, without a corresponding rise in output.
• Around 90% of India’s water is consumed in farming, and of this, 80% is used up by rice, wheat and sugarcane.
• Farmers continue to grow these water-intensive crops even in water-short regions primarily because of an assured market — for rice and wheat in the form of public procurement, which still covers only a very low proportion of India’s crops, regions and farmers.

WAY FORWARD

Diversify public procurement:  

• We need to greatly expand the basket of public procurement to include more crops, more regions and more farmers.
• If done right, this single reform would secure multiple win-wins: higher and more sustainable farmer incomes, greater water security and better consumer health.

Follow logic of regional agro-ecology:  

• Huge volumes of water could be saved if cropping patterns are diversified to include a variety of millets, pulses and oilseeds.
• To incentivise farmers to make this change, governments must include them in procurement operations.

Steady markets:  

• The locally procured crops should then be incorporated into anganwadi supplementary nutrition and school mid-day meal programmes.
• This would ensure a large and steady market for farmers, while also making a huge contribution to tackling India’s twin syndemic of malnutrition and diabetes.
• Public investment in specific infrastructure required for millets and pulses, especially those grown through natural farming, would also help expand their cultivation.

Expansion of mandis network: 

• There is a need to expand the present mandis network as today, only 17% of farm produce passes through mandis.
• To provide farmers access within a radius of five kilometres, India needs 42,000 mandis, which are also in need of urgent reform.
• Rather than moving in the direction of weakening or dismantling mandis, we need to make their functioning more transparent and farmer-friendly.

NEED TO STRENGTHEN AGRICULTURE

• Ever since the Second Five Year Plan initiated in 1956, the central plank of Indian economic policy has been to get people off the land and move them into industry and urban areas.
• However, even after all these efforts, the United Nations estimates that in the year 2050, around 800 million people will continue to live in rural India.
• Given this unique Indian demographic transition, agriculture will need to be greatly strengthened.

CONCLUSION

• In a context characterised by grave and growing inequalities, as also a historically skewed balance of power, no reform can succeed that does not strengthen the weak and the excluded.
• Therefore, agriculture can only be reformed by radically enhanced state capacities and qualitatively better regulatory oversight, rather than by opening up spaces for more predatory action by those already entrenched in positions of overwhelming power in the economy.

Reference:

1. https://www.thehindu.com/opinion/lead/plough-to-plate-hand-held-by-the-indian-state/article34275034.ece