Monday, 5 June 2017

Agriculture in distress in India

  • More than 50% of workforce is employed in agriculture in India, most of them underemployed.
  • Agriculture constitutes 17% of GDP.
  • Country will develop only when large part of its workforce is gainfully employed in other sectors.
  • Many schemes have been launched to improve appalling inefficiency of agriculture, but is an herculean task.
  • Agriculture growth is 2% per annum where as GDP growth was around 7%.
  • In 1960's agriculture has done commendable job [Green Revolution] of feeding country's large populace.
  • Little has changed in the past 50 years of agriculture, since 1960's.
  • Every variable of agriculture namely land holding, soil, water, farming technology, and markets is in crisis, today.
  • An estimated 3.18 lakh farmers committed suicide between 1995-2015.
  • 55% of agriculture is monsoon dependent. Only 45% of cultivable land is irrigated.
  • Droughts often leads to small farmer suicides.
  • 60% of irrigated land is ground water dependent and its water efficiency abysmal. Shift from flood irrigation to micro irrigation systems will be helpful for conserving water and saving on irrigation costs.
  • With free irrigation and electricity, maintenance of these systems deteriorated effecting farming. Maintenance fee should be revived for making these irrigation systems sustainable. Solar powered pump sets will be helpful.
  • Average land holding have halved from 2.5 hectares in 1970 to 1.2 hectares today. Majority of the holdings are less than one acre. Almost 70% of farmers hold 30% of cultivable land. Small holdings make them good only for subsistence agriculture.
  • Half of the land holdings are ravaged by erosion and alkalinity. Excessive usage of urea and pesticides has compromised soil fertility. Organic farming should be promoted for soil conservation.
  • Labor component is 40% of total cost of inputs. Farm mechanization will reduce this expense and dependence on manual labour.
  • Meager cold storage facilities in case of excess produced.
  • While input prices are steadily increasing, output prices are falling, making farming risky and unviable proposition in India.
  • Agriculture loan waivers by states makes them compete with each other  and pull down national economy. About Rs.3 lakh crores is needed if all farmer loans are to be waived in the entire country.
  • Modi has promised for doubling of farmer income by 2022. Nothing much has been done in the past three years. To achieve this, an investment of Rs.3 lakh crores is needed. Reduce costs by farm mechanization and reduce dependence on manual labour. 
  • Food processing industry is at its nascent stage.
  • The country desperately needs another revolution in agriculture for the farmer to breakout of his vicious cycle of misery and for us to become a modern economy.
What ever can go wrong, has gone wrong with rural India

My View:
On one hand centre and RBI warns states to be cautious of their own finances before announcing populist measures, it is Modi who announced farm loan waiver for UP farmers during election campaign, few days before start of polling, without which BJP wouldn't have won UP elections 2017. Modi opened Pandora's box and farmers in all states are pressurizing state governments to waive their loans and till then they are reluctant or refusing to pay up outstanding loans. Only left parties argued that if banks can have NPA's and black money continues to be stashed abroad, why can't farmer loans waived. Unless land reforms are implemented to pool lands to holdings of viable size of 20-50 acres with easy lease enforcement, agriculture may not become viable. Quality inputs, easy credit, warehousing & cold storage and effective marketing must be organized for higher farm productivity and income enhancement. If government is serious about well being of farmers, correction of policy distortions, promotion of organic farming for sustainable agriculture etc. the vicious cycle of farmer indebtedness and suicides will never end.

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