Agrarian Distress

Farm crisis: Why should Bharat have to feed India at its cost?

There is a flipside to the great Indian agriculture story – mountains of foodgrains coincide with starvation deaths.

It was around the mid-1960s when the Paddock brothers, Paul and William, the “prophets of doom”, predicted that in another decade, recurring famines and an acute shortage of foodgrains would push India towards disaster. Stanford University Professor Paul R Ehrlich, in his 1968 best-selling book The Population Bomb, warned of the mass starvation of humans in the 1970s and 1980s in countries like India due to over-population.

Their prophecies were based on a rising shortage of food because of droughts, which had forced India to import 10 million tonnes of grain in 1965-1966 and a similar amount the year before. Little did they know that thanks to the quick adoption of a new technology by Indian farmers, the country would more than double its annual wheat production from 11.2 million tonnes in 1962-1963 to 24.9 million tonnes in the next 10 years. It was 71.2 million tonnes in 2007. Similarly, rice production grew spectacularly from 34.4 million tonnes to almost 90 million tonnes in 2007.

Total foodgrain production in India touched 251.1 million tonnes in the financial year 2014-2015. Rice production stood at 102.5 million tonnes and wheat at 90.7 million tonnes. India is among the 15 leading exporters of agricultural products in the world, the value of which was Rs 1.3 lakh crores in 2014-2015.

Despite its falling share of gross domestic product (the total value of goods and services produced in a country in a year), agriculture plays a vital role in India’s economy:

  • Over 58% of rural households depend on agriculture as their principal means of livelihood.
  • According to the 2011 Census, there are 118.9 million cultivators across the country or 24.6% of the total workforce of over 481 million.
  • In addition, there are 144 million persons employed as agricultural labourers. If we add the number of cultivators and agricultural labourers, it would be around 263 million or 22% of the population.

As per the estimates of the Central Statistics Office, the share of agriculture and allied sectors, including livestock, forestry and fishery, was 16.1% of the gross value-added (the rupee value for the amount of goods and services produced in an economy after deducting the cost of inputs and raw material that went into their production) during 2014-2015 at 2011-2012 prices. This about sums up what ails our agriculture: its contribution to gross domestic product is fast dwindling, now about 13.7%, and it still sustains almost 60% of the population.

At 157.3 million hectares, India holds the world’s second largest agricultural land area. It 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. And while it may be second in global production of fruits and vegetables, it is the largest producer of mango and banana. It also has the highest productivity of grapes in the world. Agricultural export constitutes 10% of the country’s exports and is the fourth-largest exported principal commodity.

India is the world's top producer of banana, mango and grapes. The country is second in the global production of fruits and vegetables. (Credit: Noah Seelam / AFP)
India is the world's top producer of banana, mango and grapes. The country is second in the global production of fruits and vegetables. (Credit: Noah Seelam / AFP)

According to the Agriculture Census, only 58.1 million hectares of land was actually irrigated in India. Of this, 38% was from surface water and 62% from groundwater. India has the world’s largest groundwater well equipped irrigation system.

Failure of a success story

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% of farmland in India consists of marginal and small farms less than one hectare in size. Moreover, because of population growth, farm size has been decreasing. The average size of operational holdings has almost halved since 1970 to one hectare. 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% of the rural population or 42% of the total population.

About 70% of India lives in rural areas and all-weather roads do not connect about 40% of rural habitations. Lack of proper transport facility and inadequate post-harvesting methods, food processing and transportation of foodstuff has meant an annual wastage of Rs 50,000 crores.

There is a pronounced bias in the government’s procurement policy, with Punjab, Haryana, coastal Andhra Pradesh and western UP accounting for the bulk (83.5%) of it. The food subsidy bill has increased from Rs 24,500 crores in 1990-1991 to Rs 1.7 lakh crores in 2001-2002 to Rs 2.3 lakh crores in 2016. Instead of being a last-resort buyer, the Food Corporation of India has become the preferred buyer for farmers. Such government policy has resulted in mountains of foodgrains coinciding with starvation deaths, with a few regions of concentrated rural prosperity.

The Indian subcontinent is home to nearly half of the world’s hungry people. (Credit: Manan Vatsyanana / AFP)
The Indian subcontinent is home to nearly half of the world’s hungry people. (Credit: Manan Vatsyanana / AFP)

No help from subsidies

The total subsidy provided to agricultural consumers by way of fertilisers and free power has quadrupled from Rs 73,000 crores in 1992-1993 to Rs 3 lakh crores now. While the subsidy was launched to reach lower-rung farmers, it has mostly benefited the well-off. Free power has also put a lot of pressure on depleting groundwater resources.

These huge subsidies come at a cost. Thus, public investment in agriculture has witnessed a steady decline from the Sixth Five-Year Plan onwards. With the exception of the Tenth Plan, public investment has consistently declined in real terms (at 1999-2000 prices) from Rs 64,012 crores during the Sixth Plan (1980-1985) to Rs 52,107 crores during the Seventh Plan (1985-1990), Rs 45,565 crores during the Eighth Plan (1992-1997) and Rs 42,226 crores during the Ninth Plan (1997-2002).

The share of agriculture in total gross capital formation (net investment) at 1993-1994 prices has halved from 15.4% to 7% in 2000-2001. In 2001-2002, almost half of the amount allocated to irrigation was actually spent on power generation. While it makes more economic sense to focus on minor irrigation schemes, major and medium irrigation projects have accounted for more than three-fourths of the planned funds.

Farmers poor in food-rich India

By 2050, India’s population is expected to reach 1.7 billion, almost equivalent to that of China and the United States combined. A fundamental question then is, can India feed 1.7 billion people properly? In the four decades starting 1965-1966, wheat production in Punjab and Haryana has risen nine-fold and rice production more than 30 times. These two states and parts of Andhra Pradesh and Uttar Pradesh now produce enough to feed the country and leave a significant surplus for export.

Farm output in India in recent years has been setting new records. It has gone up from 208 million tonnes in 2005-2006 to an estimated 251 million tonnes in 2014-2015. Even accounting for population growth during this period, the country would need probably around 225 million tonnes to 230 million tonnes to feed its people. There is one huge paradox implicit in this. Record food production is depressing prices. No wonder farmers with marketable surpluses are restive.

India is producing enough food to feed its people, now and in the foreseeable future. Since food production is no longer the problem, putting economic power into the hands of the vast rural poor becomes the issue.

The first focus should be on separating them from their small holdings by offering more gainful vocations. With the level of skills prevailing, only the construction sector can immediately absorb the tens of millions that would be released. The government must step up its expenditure for infrastructure and habitations to create a demand for labour. The land released can be consolidated into larger holdings by easy credit to facilitate the accumulation of smaller holdings to create more productive farms.

Finally, the entire government machinery geared to controlling food prices to satisfy the urban population should be dismantled. If a farmer has to buy a motorcycle or even a tractor, he pays globally comparative prices. So, why should he 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?

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