Mohan Guruswamy | India's agriculture: The failure of the success

India’s agriculture has come a long way since we awaited shiploads of American grain over half a century ago 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 all about this. But what is really interesting is that the farmers who are protesting the loudest and most vigorously are those from the farming tracts that benefit the most from the Minimum Price Support procurement and from the sugarcane belt of Uttar Pradesh where cane prices are fixed by the state. These form the bulk of the wealthiest and most well-off cohort of farmers in India.

The pitiable condition of the majority of India’s farmers who cultivate small patches of land in the mostly rain-fed areas of India has generally gone unnoticed, both by the social media and the political class. The protesting farmers are not agitating for the assured procurement at MSP for all farm produce and all over the country.

The story of India’s agricultural takeoff began as the nation was forced to import a record 20 million tonnes of grain in 1964-66.  The annual wheat production has grown from 11.28 million tonnes in 1962-63 to almost 110 million tonnes for wheat and 122 million tonnes for rice 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 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 India, 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 per cent 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 exports constitute 10 per cent of our total 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 per cent is from surface water and 62 per cent from groundwater. India has the world’s largest groundwater well-equipped irrigation system.

There is a flip side to this great Indian agriculture story. The Indian subcontinent boasts nearly half the world’s hungry people. Half of all children under five in South Asia are malnourished, which is more than even sub-Saharan Africa.

More than 65 per cent of 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 hectares. 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 the rural population, or 42 per cent of total population.

Now we come to the crux of today’s farmers’ ferment. There is a clear bias in the government’s procurement policy, with Punjab, Haryana, Coastal Andhra, Telangana and western Uttar Pradesh 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, the Food Corporation of India has become the preferred buyer for farmers. The government policy has resulted in mountains of foodgrains coinciding with starvation deaths.

The gains of rural prosperity and MSP procurement have resulted in a few regions of concentrated rural prosperity. In 2020, of the production of 265 million tonnes of foodgrains, 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 fertilisers and free power has quadrupled from Rs 73,000 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 well-off farmers. These people are now protesting for more.

These huge subsidies come at a cost. Public investment in agriculture, in real terms, had witnessed a steady decline for the last 20 years. Almost all the investment into creating additional irrigation potential has come from private sources, mostly in the form of more tubewells, usually powered by free electricity. Free power has also meant huge pressure on the 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 expenditure on infrastructure and habitations, to create a demand for alternate labour. Instead of distributing benefits to the agriculture sector by MSP procurement and fertiliser subsidies, the Government of India should progressively move towards a transfer of benefits regime based on acreage under crop and nature of the land, to ensure a more equitable distribution of the state largesse.

Finally, the entire governmental machinery geared to controlling food prices to satisfy the urban population should be dismantled. If farmers buying a motorcycle or even a tractor have to pay globally comparative prices, why should the farmers make food available to the industrial sector and urban consumers at the world’s lowest prices?

Why should Bharat have to feed India at its cost?