On Friday morning, farmers groups from Punjab, Haryana and Uttar Pradesh continued their protests on Delhi’s borders against three new agricultural laws, contending that they will usher in changes that leave farmers at the mercy of large corporations. But even if the government were to cancel these new laws, the many problems faced by India’s farmers are unlikely to be solved.
The standoff between the farmers and the government reflects deeper structural problems in a key sector that contributes about 15% of India’s Gross Domestic Product. It shows that market forces are not operating in sync with rural infrastructure development, ecological reforms or political will.
At the heart of the protests is the fear that the new laws will result in the dismantling of the system under the government procures key crops from farmers at a minimum support price.
The government, for its part, says that these laws will allow any buyer to purchase crops directly from the farmer, thereby eliminating the middleman. Creating a pan-India open market, the authorities contend, will encourage competition and actually ensure higher prices for the farmers.
But so far, the government has done nothing to guarantee a fixed minimum support price, which is why the protests have continued.
Key challenges
To those who observe Indian agriculture, some key challenges are evident.
First, yield per hectare must urgently be increased to support India’s growing needs. According to the statistics from the Department of Agriculture, Cooperation and Farmers Welfare, the total food grain yield per hectare in India grew at less than 1% in the five years from 2012, from 2,129 kg per to 2,233 kg/hectare in 2017-’18. To realise the government’s aim of doubling farm income in five years, net yield must improve substantially.
Second, there is a huge disconnect between farm and market. On one hand, there are excess buffer stocks of food grain in the warehouses, while on the other, consumers often face a scarcity of staple vegetables like onions.
Third, there is barely any political will to address the enormous ecological challenges being experienced on the ground. No parties have framed policies to address problems like the falling water table, pesticide overdoses and increasing soil erosion.
Fourth, the farming sector is under deep financial stress because the price at which produce is sold does not match the sector’s growing requirements for investment. The falling per-capital land holding with each successive generation is exacerbating the situation.
Fifth, rural infrastructure such as warehouses, cold storage facilities and processing units are insufficient or simply do not exist. This widens the distance between rural farm and urban table, resulting in wastage.
None of these problems are addressed by the new farm laws not would they be resolved by the laws being rolled back. In fact, these challenges have built up over the past decades when the minimum support price system has been functional.
According to the Food Corporation of India website, the foodgrain stock in the central pool has surged from 514.42 lakh metric tonnes in December 2016 to 811.11 lakh metric tonnes in September 2020. A significant quantity of this stock is rotting in the warehouses. This limits the government’s capacity to purchase more grain from farmers.
On the other hand, the anxiety among the farmers that the government will stop procuring grain at the minimum support price without having put an alternative system into operation has given an already distressed farming community a rude shock.
To some, it seems like the government has tried to diagnose a disease through a postmortem. It is like saying, “Let us dismantle the existing system first and look at what can be done with its components later.”
An alternative
At present, Agricultural Produce Market Committees – marketing boards established by state governments – are charged with ensuring that farmers are paid the minimum support price on key crops that they bring to mandis. The government buys this food grain at the minimum support price with the help of middle men known as arthiyas.
To provide an alternative, the government aims to set up 10,000 new Farmer Producer Organisations by 2023-’24 to encourage farmers to come together as shareholders to increase production and to market their crops more effectively. The finance ministry has set aside Rs 1 lakh crore to disburse easy loans to these Farmer Producer Organisations.
It’s clear that the government wants to to draw back from food grain procurement at the minimum support price – a vital part of India’s food security system. This is yet another initiative that weakens the idea of a welfare state.
So how should the states like Punjab, Haryana and Uttar Pradesh proceed if they want to nurture the agricultural economy?
The supplementary guidelines in the government’s farmer producer organisation scheme are excessively wide in their vision. They fail to establish stepping stones to reach a desired destination If they are to be implemented, it is essential to have precision, concreteness and phased roadmap.
Besides, farmer producer organisations can only work when there is a strong infrastructure to hold, store, and process food based on market conditions. This is perhaps a reason that has not had much success in Bihar, where these were tested.
States should swiftly realign their strategies with creative, productive structural changes that can fit within the wider scope of these guidelines and at the same time strengthen the dwindling agricultural sector.
Improving the connection between rural and urban India could help create a market-driven agricultural system.
Small steps could help achieve this. For instance, the midday meals at schools around the country could add extra dal or a vegetable to feed undernourished children. This would encourage farmers to diversify and start growing more pulses and vegetables.
In addition, governments should take steps to invest in food processing and cold storage units closer to villages. They should also consider subsidising machinery and equipment to establishing a strong infrastructural base where farmer producer organisations are located that could be phased out after five years.
Lessons from overseas
Countries such as Cuba ofer important lessons for handling similar situations. After the collapse of Soviet Union, in 1991, the sudden interruption of fertiliser supplies from Russia forced Cuban farmers to discontinue sugarcane farming.
The Cuban government took measures to provide a support mechanism to its farmers to take to organic farming. This eventually became a boon for its largely agricultural economy.
Similarly, Mexico is making heavy investments in cultivating cactus both as a food and a substitute of fuel from its bye-products. This has been instrumental in helping large-scale water conservation and avoiding a food crisis that could emerge from Mexico’s eroding soil conditions with intensive agricultural practices.
The Mexican government has worked with the farmers to encourage them to adopt new crops, while making sure that the farmers are not taking a hit on their basic income.
Such examples of farmer-government partnership provide a reasonable lens to refresh our outlook and to identify practical possibilities for urgently required agricultural reforms in India.
Gurpreet Singh is an agriculture development officer with Punjab’s Department of Agriculture. Amandeep Singh is a supply chain manager with NYX Inc in Michigan, USA.