Raising farmer income is a key priority for India

The issue of raising farmers’ income and equitable distribution of opportunity in the agriculture ecosystem was discussed threadbare at the Mint Leadership Roundtable held recently in Delhi. The series will also see discussions on other aspects of raising India’s per capita income in Mumbai and Bengaluru.

Prof. Ramesh Chand, member of Niti Aayog, started the proceedings with a keynote address where he pointed out that the role of agriculture in India needed to be reimagined. He stated that while the share of agriculture in India’s gross domestic product (GDP) was just about 19%, labour employment was 45% and increasing—a big departure from what one would expect when development was happening.

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“We need to reimagine the role of agriculture in the economy. In field crops, which are grown on 94% of our land, growth hasn’t even been 2%. So, the segment that is driving growth is not benefitting all farmers. Our efficiency in most commodities is declining, and for most crops, the real cost of production is rising,” said Chand.

“The government is also pushing for natural farming and lesser use of chemicals, but it’s very labour-intensive. But if we combine natural farming with mechanized farming, the gap in production can get considerably bridged,” he said, adding that the fiscal burden of agricuexlture is worrisome and that the role that policies are playing to support agriculture should be done by the markets.

Chand was supported by most experts about diversification being the biggest driver of growth in agriculture. However, concerns were also raised on the majority of agricultural land in India being occupied by field crops such as paddy and wheat, and their poor growth over the years. Diversification to other crops such as maize and oilseeds, and also horticulture was mooted.

But at the heart of any move towards diversification had to be research that was market-led and consumer-led, Mekhala Krishnamurthy, associate professor of sociology and anthropology at Ashoka University, said. Also, environmental factors such as the depletion of water tables in areas of paddy fields and the degrading of soil quality were other factors to be considered for diversification. 

Ganesh Sundaraman, chief operating officer, agribusiness, ITC, said the key priority before the country today is to raise the income level and change lives of the millions of farmers who have fragmented 1.5-2-acre farms and are well below the average in terms of income.

Switching to pesticide-free farming and organic farming is another long-term agenda that needed attention, the experts suggested. To maintain soil quality, rotation of crops such as paddy with a legume (done earlier) could be reintroduced, said Rajashekar Reddy Seelam, founder and managing director of Sresta Natural Bioproducts. Better storage facilities to check wastage, collectivization of land, better coordination between corporates and startups, and keeping the farmer at the Centre of any decision-making were the other important suggestions made by the experts.

Understanding a farmer’s livelihood is complex for decision-makers, pointed out Ajay Jakhar, chairman of Bharat Krishak Samaj, particularly because in India it wasn’t possible for farmers to improve their incomes to such a point that they could lead dignified lives. Apart from giving them equal opportunities, human capacity needed to be improved, Jakhar said.

Given the risky nature of the business, a safety net needed to be created for farmers, the experts said. With MSP (minimum selling price) and subsidies having outlived their usefulness, the money needed to be used in a different form. At the farmer level also, a lot of behavioural changes were needed because, in the past five decades, people have moved to mono-cropping or two crops. To mitigate risks, they will have to diversify.

Sanjeev Kanwar, managing director, Yara South Asia, pointed out that 10 years from now, India is poised to become a $10 trillion economy. It means agriculture, which currently contributes about $400-500 million of GDP, will need to contribute at least $1.5 trillion. A business-as-usual approach won’t work in such a scenario, Kanwar said, adding that we would need to tackle the challenges of water scarcity, soil health, and the nutritive value of crops to get there.

Agriculture research funding, which has seen a dip over the years, also needs to be improved. Concentrating on the smallest of states—and not only Punjab—and celebrating their achievements was a suggestion put forward by the panel.

More involvement of states when it came to reforms and not merely making it an expectation of the Centre is a must, according to Chand. Every policy decision taken at the Centre provides the same opportunities for all states, but there was a reason few states were achieving 6-7% growth while some states were registering negative growth, Chand said. Quoting the examples of Andhra Pradesh and Maharashtra, which produce 18% and 10% of the fruits in India, respectively, and are also top producers of vegetables and fisheries, he said it wasn’t that the Centre was facilitating them; the states were proactive. 

Talking about the three now-repealed farm laws, Amit Kapur, joint managing partner at JSA Advocates & Solicitors, said the dialogue with farmers should have come before the laws were shaped and not after. Farmers need to be taken into confidence and not be dictated to. If all the states are brought together for a national dialogue and re-engagement with farmers is initiated, Indian agriculture can be reformed, he stated. 

Along similar lines, Roshan Lal Tamak, executive director and chief executive officer (CEO) of the sugar business at DCM Shriram, spoke about the need for a listing of national priorities for agriculture. A national agriculture council with all states on board where they could share their learnings and experiences and discuss issues could help immensely, he said. The government developed a great land leasing act in 2016 for aggregation of the land, but it wasn’t implemented properly by the states, he pointed out.

Regulation and not over-regulation, and intervention through rationalization would be key going forward. Water should not be free and nor should there be over-subsidization of fertilizer, opined the experts. Farmers need to be given freedom to make decisions, but the government should be there to support and govern them.

Shraman Jha, CEO of Hindustan Unilever Foundation, pointed out that increasingly, women are taking the lead role in agriculture, especially with males migrating for jobs in most parts of India.

Lastly, like in any other sector, the role of startups and corporates could not be ruled out. They needed to collaborate to help farmers and play a bigger role in reimagining agriculture in India. The fear among farmers of losing their land either to the government or to corporations had to be dealt with much more sensitively. Services for farmers or people who want to take up farming should be available at the right price point including the latest technologies and tools, said Subhadeep Sanyal, a partner at Omnivore.

The cost of the Internet of Things (IoT) and monitoring, etc., was quite high and unless there was collectivization of some form, it would be very difficult to pass on the benefits to the farmers. Apart from playing a role in market linkage, startups could also play a role in arresting crop wastage through better use of technology.