Farm challenges

 The relationship between climate and agriculture is closely interconnected with worldwide processes. Even a minor alteration in climate can have detrimental impacts on agricultural productivity and the production of agricultural goods.

he relationship between climate and agriculture is closely interconnected with worldwide processes. Even a minor alteration in climate can have detrimental impacts on agricultural productivity and the production of agricultural goods. While the contribution of agriculture to India’s economy has been decreasing over time, approximately 75 per cent of India’s population relies on rural incomes. Furthermore, India’s ability to ensure adequate food supply depends on the cultivation of cereal crops and the enhanced yield of fruits, vegetables, and milk to satisfy the needs of an expanding population with increasing incomes. Nevertheless, the Indian agricultural sector encounters difficulties due to severe weather phenomena such as floods, droughts, heatwaves, and others, which have severely impacted overall productivity.

Therefore, it is crucial to enact policies that focus on enhancing overall agricultural productivity, expanding diversification, and encouraging sustainable agricultural practices. India’s agriculture sector encounters a multitude of challenges. The adverse consequences of climate change include the occurrence of extreme weather events such as droughts, floods, heatwaves, and coastal inundation. These events have resulted in a decrease in crop yield, reduced productivity in livestock, and have caused millions of people to fall into a cycle of poverty and food insecurity. In India, a rise in temperature of 1.5° C and a decrease in precipitation of 2 mm result in a reduction in rice yield ranging from 3 to 15 per cent. Soil fertility is reduced due to the excessive use of fertilisers and chemicals, which leads to soil degradation and erosion. Consequently, the soil becomes more vulnerable to pests and diseases.

The overall productivity has stagnated as a result of insufficient nutrients in the soil. In addition, the implementation of inappropriate land use practices and the burning of crop residues during harvest season have contributed to soil erosion, resulting in significant and lasting impacts on agricultural productivity and sustainability. In India, the lack of adequate agricultural infrastructure, such as storage facilities, pack houses, and efficient supply chains, contributes to higher post-harvest losses. Moreover, the absence of fundamental infrastructure such as road and rail connectivity impedes the farmers’ access to markets and contributes to increased production expenses. The Indian agricultural sector continues to rely on primitive agri-technologies for the production of agricultural goods. The limited availability of modern technologies hampers the ability to widely adopt innovative agricultural practices.

In numerous rural regions, the absence of banking institutions and financial establishments poses challenges for farmers in securing loans and credit facilities. Furthermore, the combination of exorbitant interest rates and restricted availability of formal credit impede the productivity of farmers. This, in turn, prevents them from embracing contemporary farming methods, effectively managing market risks, and promoting sustainable agricultural practices. In the Indian context, landholdings are fragmented, meaning that the average size of land owned by individuals is relatively small. This poses challenges in adopting modern farming techniques and achieving economies of scale. Insufficient mechanisation is evident in the agricultural sector, where traditional methods and tools such as sickles and wooden ploughs are still predominantly utilised. There is a need to transition from traditional approaches to contemporary methodologies in order to enhance production on a large scale.

Inadequate agricultural marketing infrastructure results in farmers being dependent on local traders and intermediaries to sell their produce, often at prices that do not reflect true value. As per the Ministry of Agriculture and Farmers Welfare, if adaptation measures are not adopted, rainfed rice yields in India are estimated to decrease by 20 per cent in 2050 and 47 per cent in 2080 scenarios. Similarly, irrigated rice yields are projected to decrease by 3.5 per cent in 2050 and 5 per cent in 2080 scenarios. Climate change diminishes crop yields and decreases the nutritional quality of produce. Moreover, the occurrence of severe events such as droughts and flash floods has a detrimental effect on the consumption of food and nutrients, thereby exacerbating the overall impact on the welfare of farmers.

The State of Food Security and Nutrition in the World (2020) report says India still struggles to feed its undernourished population despite producing an estimated 314 million metric tonnes of food in 2021-22, which falls short of achieving food security and meeting the Global Goals for Adaptation. In order to satisfy the increasing need for food due to a growing population and higher income levels, India will have to almost double its food production by the year 2050. In order to surmount these ever-changing obstacles, the Government of India has devised strategies to enhance the adaptability of agriculture to climate change. The National Mission for Sustainable Agriculture (NMSA) is a component of the National Action Plan on Climate Change (NAPCC).

Its objective is to develop and execute strategies to enhance the adaptability of agriculture to the impacts of climate change. It is imperative to prioritise the development of adaptation strategies that specifically target climate-resilient agricultural practices. These practices should focus on enhancing agricultural productivity to meet global and food security objectives, enhancing the resilience and adaptability of agricultural systems to climate change, and reducing greenhouse gas emissions to mitigate climate risks. India must adopt a multidimensional approach to address challenges related to climate change by implementing a diverse set of adaptation strategies, in addition to adopting climateresilient practices. Technologies for Adaptation refer to the utilisation of technology to decrease susceptibility or improve the ability to withstand the effects of climate change. In the field of agriculture, technologies for adaptation refer to the process of identifying and evaluating agricultural practices and technologies that improve overall productivity, food security, and resilience in specific agro-ecological zones and farming systems.

Multi-stakeholder engagement and collaboration are crucial for improving the effectiveness of policies and facilitating the widespread adoption of agricultural adaptation technologies. Cooperation and collaboration among various stakeholders at different levels are necessary for the smooth dissemination of these technologies. Capacity building is crucial for the government to improve its ability to adapt to and address the negative impacts of climate change in any policy. As per the OECD, it is crucial to enhance absorptive capacity, which refers to a system’s capability to effectively handle immediate climate-related consequences. This encompasses strategies like implementing early warning systems to assist farmers in adapting their practices and establishing crop insurance schemes to provide compensation for any incurred losses. Infrastructure capacity development is crucial for enhancing overall productivity, and it is imperative that the infrastructure is designed to be climate resilient.

The government should implement policies aimed at constructing and enhancing current storage facilities in order to mitigate post-harvest losses. Simultaneously, it is crucial to establish basic infrastructure such as road and rail connectivity to enhance farmers’ access to markets, thereby facilitating the connection between farmers and consumers. Soil management is crucial for agriculture to cope with climate change, improve soil durability, and support sustainable farming methods. The government should enforce diverse soil management techniques to achieve these goals. Cover crops are cultivated specifically to provide soil coverage during periods of inactivity, effectively mitigating soil erosion. Furthermore, implementing crop rotation in a methodical manner can enhance the equilibrium of soil nutrients and decrease the need for fertilisers and chemicals, thus augmenting the content of organic matter in the soil and improving its overall health. Water management is crucial in conjunction with agricultural policies and investments to ensure the development of climate-resilient agriculture production systems.

Utilising a blend of regulatory, economic, and collective strategies is necessary to effectively address groundwater sustainability. This is crucial because aquifers are the largest water reservoirs worldwide and play a vital role in supporting irrigated agriculture in important production areas. Water policies encompass water allocation systems that can effectively manage water demand and supply in response to variations in precipitation. Policy formulation involves the development of strategies and guidelines to address adaptation principles at various levels, including local, regional, national, and international. These policies aim to ensure that the factors that contribute to successful adaptation are replicated across different scales. Past experiences with agricultural adaptation technologies have revealed specific requirements for effective policies and recommendations to facilitate the successful implementation of these technologies in adapting agriculture to climate change.

Financial inclusion is essential for addressing the substantial lack of funding for climate adaptation. To bridge this gap, it is crucial to gather financial resources from private sector investments. Inclusive financial systems play a vital role in directing finance to the most vulnerable individuals and last mile workers, including farmers. Establishing Farmer Producer Organisations (FPOs) can enable farmers to enhance productivity, allocate resources towards farm mechanisation, and take advantage of economies of scale. Moreover, agricultural-focused non-banking financial companies (NBFCs) and financial technology (Fintech) can assist farmers in fulfilling their extended credit requirements, thus promoting their income expansion. Although these strategies are in place, the benefits of adapting to climate change also contribute to mitigating its effects through various methods.

These benefits encompass enhanced energy efficiency, decreased urban energy and water usage resulting from greening and recycling initiatives, sustainable farming practices, and the preservation of ecosystems and their associated advantages. To effectively tackle the challenges in India’s agriculture sector, a comprehensive strategy is needed, encompassing technological advancements, optimal utilisation of resources, policy restructuring, and enhancing capabilities. India can bolster agricultural productivity and guarantee food security by implementing these adaptation strategies, thereby making a significant contribution to the attainment of the Sustainable Development Goals.

P GARGI RAO

Source: The Statesman, 13/06/24

Unified Portal for Agricultural Statistics (UPAg)

 The Indian government has introduced the Unified Portal for Agricultural Statistics (UPAg), an online platform developed by the Ministry of Agriculture and Farmers’ Welfare. It is hailed as a significant leap forward in managing agricultural data. The UPAg Portal is intended to serve as a public resource, streamlining access to credible, granular, and objective data while reducing search costs and inefficiencies for users.

The UPAg Portal’s core function is to generate crop estimates and integrate with other agriculture-related statistical systems. It aims to combat challenges like non-standardized and unverified data, ultimately supporting data-driven decision-making in India’s agriculture sector.

What benefits does the UPAg Portal offer to users?

Users will experience reduced search costs, easier access to credible data, and the opportunity to make data-driven decisions in agriculture.

How does the UPAg Portal aim to address challenges in the agriculture sector?

It intends to provide real-time, standardized, and verified data on agricultural commodities, combating issues like non-standardized and unverified data.

What role does the UPAg Portal play in generating agricultural statistics?

The platform is designed to generate crop estimates and integrate with other systems generating agriculture statistics such as price, trade, procurement, and stock.

How does the UPAg Portal align with the principles of e-governance?

The initiative aligns with e-governance principles by bringing smartness, transparency, and agility to India’s agriculture sector.

What are some of the other initiatives mentioned in the article that the Ministry of Agriculture and Farmers’ Welfare is working on?

The ministry is concurrently working on initiatives like the Krishi Decision Support System, farmer registry, and crop survey to enhance data accuracy and digital data governance in agriculture.

Why India needs a Green Revolution 2.0

 

Varieties that can withstand extreme temperature and rainfall variations, while yielding more using less water and nutrients are the need of the hour given temperature surges.

The Indian economy, especially agriculture, is a “gamble on the monsoon”. That famous early-20th century statement by then viceroy, George Curzon, perhaps, needs rephrasing today. More than the monsoon, it is temperatures that are emerging as a greater source of uncertainty for farmers. Access to irrigation can, to some extent, compensate for a failed monsoon or two. The fact that the country produces more foodgrains now during the rabi (winter-spring) than in the kharif (post-monsoon) season is testimony to the role of irrigation in drought-proofing. But what can farmers do with mercury spikes in February and March? These threaten rabi harvests, which were hitherto considered assured and immune from rainfall vagaries. While rabi crops were always vulnerable to spring thunderstorms and hail, the risks from them pale in comparison to that on account of shorter winters and advanced onset of summers.

The impact of temperature surge was seen  in March 2022, when the wheat crop had just entered its final grain formation and filling stage. The heat stress led to early grain ripening and reduced yields. This year, February recorded the highest-ever maximum temperatures, thanks to the absence of active western disturbances that bring rain and snowfall over the Himalayas, whose cooling effect percolates into the plains. Currently, both minimum and maximum temperatures are ruling 3-5 degrees Celsius above normal in most wheat-growing areas. The next couple of weeks or more are going to be crucial. So long as the maximum remains within 35 degrees, there should be no danger of March 2022 repeating itself. But it only highlights how much of a “gamble on the mercury” agriculture has become.

Climate isn’t the only risk farmers are confronting. Even as the prospects for wheat are uncertain, prices of onion and potato have crashed. Mustard, too, is trading below its minimum support price with the arrival of the new crop — a far cry from the situation a year ago when edible oil inflation had peaked following Russia’s invasion of Ukraine. The dual risks from climate and prices may not be new; the difference lies in their frequency, volatility and intensity. Farmers, scientists and policymakers have to adapt to this reality. Green Revolution 2.0 has to be about varieties that can withstand extreme temperature and rainfall variations, while yielding more, using less water and nutrients. This should be accompanied by better crop planning and market intelligence: Farmers must know what to plant, how to manage their crop at various stages under different stress scenarios, and when to sell. Agriculture for today and tomorrow cannot be the same as it was yesterday.

Source: Indian Express, 6/03/23

What are Primary Agricultural Credit Societies?

 The Union Budget has announced Rs 2,516 crore for computerisation of 63,000 Primary Agricultural Credit Societies (PACS) over the next five years, with the aim of bringing greater transparency and accountability in their operations and enabling them to diversify their business and undertake more activities.

What are Primary Agricultural Credit Societies (PACS)?

PACS are village level cooperative credit societies that serve as the last link in a three-tier cooperative credit structure headed by the State Cooperative Banks (SCB) at the state level. Credit from the SCBs is transferred to the district central cooperative banks, or DCCBs, that operate at the district level. The DCCBs work with PACS, which deal directly with farmers.

Since these are cooperative bodies, individual farmers are members of the PACS, and office-bearers are elected from within them. A village can have multiple PACS. PACS are involved in short term lending — or what is known as crop loan. At the start of the cropping cycle, farmers avail credit to finance their requirement of seeds, fertilisers etc. Banks extend this credit at 7 per cent interest, of which 3 per cent is subsidised by the Centre, and 2 per cent by the state government. Effectively, farmers avail the crop loans at 2 per cent interest only.

A report published by the Reserve Bank of India on December 27, 2022 put the number of PACS at 1.02 lakh. At the end of March 2021, only 47,297 of them were in profit. The same report said PACS had reported lending worth Rs 1,43,044 crore and NPAs of Rs 72,550 crore. Maharashtra has 20,897 PACS of which 11,326 are in losses.

Why are PACS attractive?

The attraction of the PACS lies in the last mile connectivity they offer. For farmers, timely access to capital is necessary at the start of their agricultural activities. PACS have the capacity to extend credit with minimal paperwork within a short time.

With other scheduled commercial banks, farmers have often complained of tedious paperwork and red tape. For farmers, PACS provide strength in numbers, as most of the paperwork is taken care of by the office-bearer of the PACS.

In the case of scheduled commercial banks, farmers have to individually meet the requirement and often have to take the help of agents to get their loans sanctioned. NABARD’s annual report of 2021-22 shows that 59.6 per cent of the loans were extended to the small and marginal farmers.

Since PACS are cooperative bodies, however, political compulsions often trump financial discipline, and the recovery of loans is hit. Chairpersons of PACS participate in electing the office-bearers of DCCBs. Political affiliations are important here as well.

Where is computerisation needed?

Dr Hema Yadav, director of Pune-based Vaikunt Mehta National Institute of Cooperative Management pointed out that while SCBs and DCCBs are connected to the Core Banking Software (CBS), PACS are not. Some PACS use their own software, but a compatible platform is necessary to bring about uniformity in the system.

Computerisation of PACS has already been taken up by a few states, including Maharashtra. The Maharashtra State Cooperative Bank has plans to directly lend to PACS in districts where the DCCBs are either financially weak or have lost their banking licence. In such a scenario computerisation of PACS would help.

Written by Parthasarathi Biswas

Source: Indian Express, 8/02/23

PDS has had a spectacular run. That may not last

 2020-21 was one of Indian agriculture’s finest moments, as memorable as 1967-68 that inaugurated the Green Revolution. While much of the country was locked out of economic activity in Covid-19’s first and second waves, farmers not only harvested their standing rabi crop from late March 2020 but also planted aggressively for the next two seasons. Agriculture was the only sector to grow 3.3 per cent in 2020-21, even as the economy overall contracted by 4.8 per cent. According to the Centre for Monitoring Indian Economy’s Mahesh Vyas, the farm sector added 3.4 million jobs in 2020-21 and 11 million from 2019-20 to 2021-22. During these three years, the rest of the economy shed 15 million jobs.

But 2020-21 and the year that followed were also remarkable for a related phenomenon – of India’s public distribution system (PDS) truly coming of age and delivering at a time of crisis. Sales of rice and wheat under various government schemes totalled 92.9 million tonnes (mt) in 2020-21 and 105.6 mt in 2021-22. This was as against an average offtake of 62.5 mt during the first seven years after the implementation of the National Food Security Act (NFSA) in 2013-14 and 48.4 mt in the seven years preceding the legislation.

The accompanying charts show the offtake of rice and wheat both at the all-India level and for the three poorest states as per the NITI Aayog’s National Multidimensional Poverty Index — Bihar, Jharkhand and Uttar Pradesh (UP). All three registered significant increases in offtake levels post-NFSA between 2013-14 and 2019-20: Jharkhand (from 1.2 mt to 1.9 mt), Bihar (4 mt to 5.6 mt) and UP (7.5 mt to 9.5 mt). These have further risen post-Covid, to 3.1 mt for Jharkhand, 9.8 mt for Bihar and 17.3 mt for UP in 2021-22.

 Graphics: Ritesh Kumar

The NFSA legally entitles up to 75 per cent of India’s rural and 50 per cent of the urban population — translating into some 813.5 million people — to receive 5 kg of grain per person per month at highly subsidised rates of Rs 2/kg for wheat and Rs 3/kg for rice. In the wake of the Covid-induced economic disruptions, a new Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) scheme was launched giving NFSA beneficiaries an extra 5 kg grain per person per month free of cost. PMGKAY was implemented for eight months (April-November) in 2020-21 and 11 months (May-March) of 2021-22.

NFSA along with PMGKAY has led to a massive jump in grain offtake through the PDS. More importantly, this increase has largely taken place in the poorer states. UP, Bihar and Jharkhand together accounted for 21.6 per cent of national grain offtake in 2012-13, which was pre-NFSA. That stood at 28.6 per cent in 2021-22, higher than their combined 27.8 per cent share of India’s population based on the 2011 Census.

To put the numbers in context, only a handful of states — Kerala, Tamil Nadu and Andhra Pradesh — had well-functioning PDS till the early 2000s. In the late-2000s, Chhattisgarh initiated reforms to curb diversion/leakages by entrusting the running of fair price shops to cooperatives and local bodies (as against private licensees), making timely allocation and supplying grain directly to PDS outlets (bypassing middle-level distribution agencies), and using IT to track dispatches right from procurement centres to points of sale.

Chhattisgarh’s example was emulated by Odisha, followed by Madhya Pradesh and West Bengal — all by 2015-16.

These success stories paid off politically as well. The Bharatiya Janata Party secured successive wins in the 2008 and 2013 Chhattisgarh Assembly elections under Raman Singh, who earned the sobriquet “Chawal Waale Baba (rice monk)”. Mamata Banerjee’s Trinamool Congress was re-elected with an enhanced majority in the 2016 West Bengal polls; ensuring near-universal access to the PDS and rice at Rs 2/kg played a key part in that.

The three poorest states are the latest entrants to the list. UP particularly has seen its grain offtake soar from 9.5 mt to 17.3 mt in the last two years. Out of the 17.3 mt (10.7 mt wheat and 6.6 mt rice) distributed in 2021-22, 7.8 mt comprised free grains under PMGKAY. Most analyses of the BJP’s recent UP elections victory attribute it to the Narendra Modi-Yogi Adityanath “double-engine” government’s focus on not just expanding the reach of the PDS, but also last-mile delivery of grain to the intended beneficiaries.

In sum, the PDS delivered both when and where it mattered. Covid-19 will go down as India’s first major national disaster not to record widespread starvation, unlike the 1943 Bengal or 1966-67 Bihar famines. People in the poorest states got something to eat amid massive job and income losses. The PDS, indeed, turned out to be the only effective social safety net during the pandemic. Some states went beyond rice and wheat. Kerala leveraged its PDS network to supply free food kits to all ration card holders through the 2020 lockdown till around August 2021. These monthly kits — containing items (from coconut oil, pulses, sugar and salt to tea, coriander, turmeric, chilli powder and soap) over and above regular PDS grain — again helped the Pinarayi Vijayan-led Left Democratic Front win a fresh term in the April 2021 state polls.

But that road to success is today hitting a speed bump, which may also create political challenges ahead of the 2024 national elections. The expansion of the PDS, especially post-NFSA, was underwritten by the superabundance of rice and wheat in government granaries. Those overflowing godowns could soon be history. Official wheat procurement is likely to halve this time from last year’s record 43.3 mt, because of a poor crop singed by the abnormal spike in March temperatures. Rice stocks are far more comfortable, though the precarious supply situation in fertilisers raises questions about the prospects for the coming kharif season.

Looking ahead, the Food Corporation of India’s stocks can probably sustain the pre-2020-21 annual offtake levels of 60-65 mt – enough for NFSA, but certainly not schemes such as PMGKAY. The golden chapter of the PDS — including delivering votes to ruling parties — was scripted in an environment of low global commodity prices and surplus domestic foodgrain production. That party is over, even as food inflation is back. The PDS was originally meant to protect ordinary people from extraordinary price rises. Whether it can do that at a time of renewed global inflation remains to be seen.

Written by Harish Damodaran , Samridhi Agarwal

Source: Indian Express, 27/04/22

Revealing India’s actual farmer population

 

Harish Damodaran, Samridhi Agarwal write: It may be closer to 40 million than the consensus range of 100-150 million. This has great implications for agricultural policy.

The last Agriculture Census for 2015-16 placed the total “operational holdings” in India at 146.45 million. The Pradhan Mantri-Kisan Samman Nidhi (PM-Kisan) scheme has 110.94 million beneficiaries who got their Rs 2,000 income support installment for April-July 2021. And now, we have the National Statistical Office’s Situation Assessment of Agricultural Households (SAAH) report for 2018-19. It pegs the country’s “agricultural households” at 93.09 million. In short, India officially has anywhere from 90 million-plus to almost 150 million farmers.

This wide variation has largely to do with methodology. The Agriculture Census looks at any land used even partly for agricultural production and operated/managed by one person alone or with others. The land does not have to be owned by that person (“cultivator”), who needn’t also belong to an “agricultural household”. The SAAH report, on the other hand, considers only the operational holdings of agricultural households. Members of a household may farm different lands. While the Census treats each of them as separate holdings, the SAAH takes all these lands as a single production unit. It does not count multiple holdings if operated by individuals living together and sharing a common kitchen.

Accounting for only “agricultural households”, while not distinguishing multiple operating holdings within them, brings down India’s official farmer numbers to just over 93 million. But even this figure is an exaggeration, given the SAAH’s own rather expansive definition of “agricultural households”. The latter covers households having at least one member self-employed in agriculture and whose annual value of produce exceeds Rs 4,000. Such self-employment needs to be for only 30 days or more during the survey reference period of six months (in this case, the two halves of the July 2018-June 2019 agricultural year).

What we have done is take the SAAH figure of 93.09 million — which is, at best, an upper limit — and estimate from it the agricultural households that are significantly farm income-dependent. They would, in our view, constitute “serious”, “full-time” or “regular” farmers.

The SAAH report gives data on agricultural household income from farm and non-farm sources, both state-wise and across different land-possessed/operational holding size classes. Non-farm income includes that from wages/salary, business, leasing out of land and pension/remittances. For farm income, we have factored in net receipts from crop production as well as animal husbandry (dairying, poultry, goat/sheep rearing, piggery, beekeeping, aquaculture, sericulture, etc).

We would categorise “full-time/regular” farmers as those households whose net receipts from farming are at least 50 per cent of their total income from all sources. The farm income dependence ratios have, accordingly, been worked out for all states and across holding sizes (from below 0.01 to 10 hectares and above). The SAAH report also has state-wise estimates of agricultural households for each land-possessed size class. By taking only those size classes in which the dependence ratios are higher than (or close to) 50 per cent, and adding up the corresponding estimated number of agricultural households, we are able to arrive at the total “full-time/regular” farmers for each state.

Using the above methodology, the number of “full-time/regular” farmers has been calculated for all states (see table; a more detailed note with charts is available at the CPR website). Andhra Pradesh, for instance, has 31.59 lakh agricultural households. But the 50 per cent farm income threshold is crossed only for households possessing more than two hectares of land. They number just 7.46 lakh, or 23.6 per cent of the state’s total agricultural households. India’s “serious” farmer population, in turn, adds up to 36.1 million, which is hardly 39 per cent of the SAAH estimate. The 36 million-plus number — or, say, 40 million — is also close to a previous 47-50 million estimate of “serious full-time farmers” made by one of us (https://bit.ly/3CLmc7S).

If the actual number of farmers deriving a significant share of their income from agriculture per se is only 40 million — as against the official, also popular, consensus range of 100-150 million — a host of policy implications follow. To start with, one must recognise that farming is a specialised profession like any other. Not everyone can or needs to be a farmer. “Agriculture policy” should, then, target those who can and genuinely depend on farming as a means of livelihood.

Minimum support prices, government procurement, agricultural market reforms, fertiliser and other input subsidies, Kisan Credit Card loans, crop insurance or export-import policy on farm commodities will matter mainly to “full-time/regular” farmers. Even PM-Kisan would be more effective if directed at these farmers, whose quantum of income support can be enhanced to encourage them to remain in or expand their agriculture business.

Secondly, land size matters. The SAAH report reveals that the 50 per cent farm income dependence threshold is crossed at an all-India level only when the holding size exceeds one hectare or 2.5 acres. This is clearly the minimum land required for farming to be viable, which about 70 per cent of agricultural households in the country do not possess.

It links up with the final point: What should be done for this 70 per cent, who are effectively labourers and not farmers? Their problems cannot be addressed through “agriculture policy”. A more sustainable solution lies in reimagining agriculture beyond the farm. Crops may be produced in fields, but not everyone needs to engage in cultivation. The scope for value-addition and employment can be more outside than on the farm — be it in aggregation, grading, packaging, transporting, processing, warehousing and retailing of produce or supply of inputs and services to farmers. All these activities legitimately fall within the realm of agriculture, even if outside the farm. Agriculture policy should aim not only at increasing farm incomes, but also adding value to produce outside and closer to the farms.

This column first appeared in the print edition on October 4, 2021 under the title ‘Counting the kisan’. Damodaran is National Rural Affairs & Agriculture Editor, The Indian Express and is currently on sabbatical as Senior Fellow with the Centre for Policy Research. Agarwal is Research Associate with CPR.

Source: Indian Express, 4/10/21

Challenges like climate change call for farm research to take centre stage, just like during the Green Revolution

Agriculture and climate change are too important to be left only to generalist bureaucrats, economists and activists.

Indian agriculture’s major challenge in the initial decades after Independence was to increase crop production and yields at any cost. Today, it’s about boosting farm incomes, while simultaneously ensuring production that is cost-competitive, resource-use efficient and climate-smart. The release of a new herbicide-tolerant rice variety by the Indian Agricultural Research Institute (IARI) that can be directly sown, instead of requiring transplantation, is therefore welcome. Farmers transplant and grow paddy in flooded fields mainly to control weeds, which cannot emerge under water that acts as a natural herbicide. The IARI variety contains a mutated gene making the paddy plant “tolerant” to Imazethapyr, a herbicide effective against a wide range of weeds. This chemical when now sprayed will kill only the weeds, while the paddy can be cultivated without any nursery preparation, transplanting, puddling and flooding. Farmers would save about 30 per cent water, Rs 3,000-per-acre labour costs and 10-15 days’ time from direct seeding, compared to conventional transplantation.

The IARI variety — there’s a need for many more of these — highlights the importance of investing in public agricultural research. The first challenge that India confronted, of feeding its population and achieving a modicum of grain self-sufficiency, couldn’t have been met without the high-yielding semi-dwarf varieties bred during the 1960s and 1970s. The same goes for today’s challenges, especially from climate change. Average temperatures are rising, winters are getting shorter and the number of rainy days is falling even with overall “normal” monsoons. Growing crops and rearing animals under such circumstances — of extreme hot and cold or prolonged dry weather and intense downpours — is becoming increasingly tough, with farmers also facing problems of depleting water-tables, soaring energy costs and emergence of new pests and diseases. Coping with these stresses requires new breeding approaches (including gene modification and editing) and low-input, high-output agriculture technologies.

All this also means putting farm research on centre stage just like during the Green Revolution. Agriculture and climate change are too important to be left only to generalist bureaucrats, economists and activists. Research, unlike subsidies and welfare schemes, may not yield political dividends or pay in the short run. But the returns from farm research — IARI varieties alone account for over 95 per cent of India’s Rs 32,000-crore annual basmati rice exports and nearly half of its total wheat area — are more sustainable.

Source: Indian Express, 30-09-2021

Agriculture policy should target India’s actual farming population

 How many farmers does India really have? The Agriculture Ministry’s last Input Survey for 2016-17 pegged the total operational holdings at 146.19 million. The NABARD All India Rural Financial Inclusion Survey of the same year estimated the country’s “agricultural households” at 100.7 million. The Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) has around 111.5 million enrolled beneficiaries, with an average of 102 million-plus getting payments during 2020-21.

India’s official farmer population, in other words, is anywhere between 100 million and 150 million. But how much of this comprises actual farmers? Agricultural households, as per NABARD’s definition, cover any household whose value of produce from farming activities is more than Rs 5,000 during a year. That obviously is too little to qualify as living income.

A “real” farmer is someone who would derive a significant part of his/her income from agriculture. This, one can reasonably assume, requires growing at least two crops in a year. The 2016-17 Input Survey report shows that out of the total 157.21 million hectares (mh) of farmland with 146.19 million holdings, only 140 mh was cultivated. And even out of this net sown area, a mere 50.48 mh was cropped two times or more, which includes 40.76 mh of irrigated and 9.72 mh of un-irrigated land. Taking the average holding size of 1.08 hectares for 2016-17, the number of “serious full-time farmers” cultivating a minimum of two crops a year — typically one in the post-monsoon kharif and the other in the winter-spring rabi seasons — would be hardly 47 million. Or, say, 50 million.

The above figure — less than half or even a third of what is usually quoted — is also consistent with other data from the Input Survey. These pertain to the number of cultivators planting certified/high yielding seeds (59.01 million), using own or hired tractors (72.29 million) and electric/diesel engine pumpsets (45.96 million), and availing institutional credit (57.08 million). Whichever metric one considers, the farmer population significantly engaged and dependent on agriculture as a primary source of income is well within 50-75 million.

The current agriculture crisis is largely about these 50-75 million farm households. At the heart of this is the absence of price parity. In 1970-71, when the minimum support price (MSP) of wheat was Rs 76 per quintal, 10 grams of 24-carat gold cost about Rs 185 and the monthly starting pay for a government schoolteacher was roughly Rs 150. Today, the wheat MSP is at Rs 1,975/quintal, gold prices are Rs 45,000/10g and the minimum salary of government schoolteachers is Rs 40,000/month. Thus, if 2-2.5 quintals of wheat could purchase 10g gold and pay a government primary schoolteacher’s salary in 1970-71, the farmer has to now sell 20-23 quintals for the same. Fifty years ago, one kg of wheat could buy one litre of diesel at MSP. Today, that ratio is upwards of 4:1.

The absence of farm price parity didn’t hurt much initially when crop productivity was rising. Pre-Green Revolution, wheat and paddy yields in Punjab averaged 1.2 and 1.5 tonnes per hectare, while trebling to over 3.7 and 4.8 tonnes, respectively, by 1990-91. The output gains reaped by farmers from planting high-yielding varieties more than offset the lower price increases in their produce relative to that of other goods and services.

Since the 1990s, yields have further gone up to 5.1-5.2 tonnes/hectare in wheat and 6.4-6.5 tonnes for paddy. But so have production costs. In cotton, maize, vegetables, milk and poultry products, farmers experienced both yield gains (from Bt and hybrid seeds technology, drip/sprinkler irrigation, laser levelling, crossbreeding and improved agronomic and feeding practices) and favourable prices (on the back of growing domestic incomes and export demand) during the first 15 years or so of this century. The last five-six years, however, have seen prices of these crops come under relentless downward pressure. This, even as costs — whether of diesel, pesticides and, more recently, non-urea fertilisers — have escalated.

The demand for making MSP a legal right is basically a demand for price parity that gives agricultural commodities sufficient purchasing power with respect to things bought by farmers. It is coming mainly from the 50-75 million “serious full-time farmers” who have surplus to sell and with real stakes in agriculture. They are the ones whom “agriculture policy” should target. Most government welfare schemes are aimed at poverty alleviation and uplifting those at the bottom of the pyramid. But there’s no policy for those in the “middle” and in danger of slipping to the bottom.

An annual transfer of Rs 6,000 under PM-Kisan may not be small for the part-time farmer who earns more from non-agricultural activities. It is a pittance, though, for the full-time agriculturist who spends Rs 14,000-15,000 on cultivating just one acre of wheat and, likewise, Rs 24,000-25,000 on paddy, Rs 39,000-40,000 on onion and Rs 75,000-76,000 on sugarcane. When crop prices fail to keep pace with escalating costs — of not only inputs, but everything the farmer buys — the impact is on the 50-75 million surplus producers. They have seen better times, when yields were on the rise and the terms of trade weren’t as much against agriculture.

Any “agriculture policy” has to first and foremost address the problem of price parity. Should this be ensured through MSP-based procurement, paying the difference between MSP and the market price, or simply per-acre transfers? Would farmer interest be even better served by the government guaranteeing a minimum “income” rather than “price” support? These are details that can be worked out once there is clarity on the number of farmers for whom crop prices actually matter.

Subsistence or part-time agriculturalists, on the other hand, would benefit more from welfare schemes and other interventions to boost non-farm employment. Even within farming, the opportunities for them aren’t in regular crop agriculture. A one-acre farmer can rear five cows and sell 30 litres of milk daily from three at any given time. The same small holding can, alternatively, house a broiler farm with up to 10,000 birds and six batches being sold in a year.

Whether it is crop, livestock or poultry, agriculture policy has to focus on “serious full-time farmers”, most of them neither rich nor poor. This rural middle class that was once very confident of its future in agriculture today risks going out of business. That shouldn’t be allowed to happen.

Written by Harish Damodaran

This column first appeared in the print edition on April 19, 2021 under the title ‘Get farmer numbers right’. The writer, national rural affairs and agriculture editor for The Indian Express, is currently on sabbatical with the Centre for Policy Research, Delhi

Source: Indian Express, 19/04/21

Gucchi

 The Jammu and Kashmir Government recently sought GI tag for Gucchi mushroom. The Gucchi mushrooms are highly expensive and are full of health benefits. 500 grams of Gucchi mushrooms cost Rs 18,000.

Recently, GI Tag was provided to Saffron of Jammu and Kashmir

About Gucchi mushrooms

Gucchi mushroom is a species of fungus belonging to the family Morchellaceae. They are pale yellow in colour with large ridges and pits on their cap. They are raised on a large white stem. The Gucchi mushrooms are locally called “Thuntoo”.

The Gucchi mushrooms prefer soil with limestone base. They also grow in acid soils. The Gucchi mushrooms are usually found in early spring.The time of fruiting of the mushrooms varies locally from February to July. In Canada, they appear only after June.

Expensive

The Gucchi mushrooms cannot be cultivated commercially. They grow in the conifer forests of Uttaranchal, Himachal Pradesh and Jammu and Kashmir. It takes months for the villagers to collect these mushrooms, dry them and bring them to the market. The Gucchi mushrooms grow in clusters on logs of decaying wood, humus soil and leaves. They may not grow in the same spot the next season. This makes the process of collection more tedious. Due to these reasons, the Gucchi mushrooms are highly expensive.

The Guchhi mushrooms cannot be cultivated commercially for their nature of germination. They germinate and grow in low temperature soil. They usually appear after fires. The fruiting of Gucchi mushrooms require alkaline conditions produced by wood ash mixed with water. These criteria make commercial cultivation of Gucchi highly challenging.

Health Benefits

The Gucchi mushrooms are rich in vitamins, potassium and copper. They are also rich in Vitamin-D. further they are rich in antioxidants that prevent health issues such as heart diseases and diabetes.

Why MSP is not a solution

 A key debate after the enactment of three farm-reform laws and the subsequent protests is around the issue of federally-fixed minimum support prices (MSPs), a system guaranteeing farmers assured prices for their produce through procurement. MSP is an obligatory, not a statutory exercise. Farmers have demanded a legislation to prohibit sale of any farm produce below these minimum prices. If the government agrees to this, it is likely they will end their protests against the three new farm reforms.

But a law making MSPs the legal floor price defies economic logic. The government sets MSPs for 23 crops, but it is effective only in case of rice and wheat because it buys only these two commodities in sufficiently large quantities. MSPs are an assurance that the government will intervene if market rates fall below that threshold, thereby helping avoid distress sale. This policy was salutary when India faced acute food shortages. Farm policies to deal with surpluses will fundamentally have to be different from measures adopted to overcome a previous era of scarcity. A law barring purchases of the other 21 crops below MSPs by any private trader will also, immediately, fuel high inflation. Every one percentage point increase in MSPs leads to a 15-basis point increase in inflation. Higher MSPs could also upend the Reserve Bank of India’s inflation targets, hurting economic growth. An MSP mechanism that ignores demand and global prices creates market distort-ions. If it is not profitable for traders to buy at MSPs, then the private sector will exit the markets. In such a scenario, the government cannot be a monopoly buyer. Mandatory MSPs will render India’s agri- exports non-competitive because the government’s assured prices are way higher than both domestic and international market prices.

MSPs have also incentivised foodgrains over other crops, giving rise to imbalances of water and land resources and shifting land away from crops such as pulses and oilseeds, necessitating costly imports. Surplus cereals can’t be exported without a subsidy, which invites the World Trade Organization (WTO)’s objections. WTO rules cap government procurement for subsidised food programmes by developing countries at 10% of the total value of agricultural production based on 1986-88 prices in dollar terms. There is no argument that farmers need support, but policies that are less distortionary are in the interest of both farmers and consumers.

Source: Hindustan Times, 3/12/20

Managing flood of foodgrains is the nation’s problem today

 

Every mandi yard must have silos, automatic cleaning and weighing machine (that issues electronic receipt) and an elevator to store the grain in the silo. state procurement agencies and even private players can be roped in.

The nation is sitting on a mountain of foodgrains. Huge sums have been spent on procurement and the carrying cost is humongous, too. Punjabi farmers were applauded when food scarcity in the country was banished under then Prime Minister Lal Bahadur Shastri’s slogan- Jai Jawan, Jai Kisan. Not famine, but a flood of foodgrains, is the nation’s problem today.

The farmers are apprehensive that the government may abdicate its responsibility of buying grains at the minimum support price (MSP). This apprehension stems from the fact that the Shanta Kumar Committee recommended in 2015 that the Food Corporation of India hand over the food procurement operations to the states, knowing fully well that the states did not have the funds to procure the grains.

It is suggested that stocks be pared down to the buffer stock norms in three ways: (a) releases under the open market sale scheme at a discount if needed; (b) exports – the Atal Bihari Vajpayee government had exported almost 8 million tonnes of foodgrains (out of which Punjab Markfed, where I was managing director then, had a share of 2.6 million tonnes), and (c) giving it away as food aid to conflict-ravaged countries such as Yemen, Burkina Faso, South Sudan, Nigeria and Congo (to earn international goodwill).

PROMOTE CULTIVATION OF FRUIT, VEGGIES

Sale and export can generate Rs 150,000 crore, besides saving of around Rs 20,000 crore on the annual carrying cost. The funds so raised should be used as “seed money” for setting up a price stabilisation fund, for other commodities, which carry an MSP. Prices of pulses, maize, oilseeds and cotton should be assured as per the MSP. Many farmers may then shift away from foodgrains and the recurring problem of overflowing buffer stocks will be solved. Second, we need to promote the cultivation of fruits and vegetables by promoting the establishment of cold chains linked to supermarkets, which should be allowed to sell them.

Third, our current imports of onions from Afghanistan shows that Punjab can be the hub for the sale of milk, eggs, chicken, buffalo meat, fruits and vegetables to the Middle Eastern Arab nations through Pakistan and Afghanistan by creating a land route through diplomacy. This will generate a business lobby in our neighbourhood, which can be a counterweight to the hawks in the region.

ADOPT US MODEL OF HANDLING AGRI PRODUCE

The price stabilisation fund should be used for oilseeds, pulse, maize and cotton, besides wheat and paddy and cash crops such as basmati and Durum wheat. These crops need not be procured physically. We can emulate the policy of the United States for handling agri produce - namely the non-recourse loan scheme.

In the US, the federal government announces support prices but the farmers are encouraged to store their foodgrains in silos at harvest. They are provided non-recourse loans by the commodity credit corporation. The amount of loan is equal to the quantity stored and multiplied by the support price.

The farmer is given three years to liquidate the stock. If the market price is higher than the support price, the farmer sells the grain and repays the loan with a nominal interest, keeping the profit. To prevent speculation, the loan can be recalled if the prices hit a trigger – 175% for grains and 140 % for corn. If the prices do not touch the support price, the farmer can default on the loan and surrender the grain. There is no other penalty. That is why it is called a non-recourse loan. The policy has worked well since 1933, when it was initiated for cotton and corn.

The policy can be implemented in India by using the electronic negotiable warehousing receipt system, which late Ram Vilas Paswan had inaugurated in 2017. All farmers (including small and marginal ones) can store their crops at harvest and get a tradable receipt. On storage Nabard/ RBI should provide the farmer a loan.

MAKE PROCUREMENT PROCESS MECHANISED

To make the scheme transparent, the procurement operation must be mechanised. Every mandi yard should have silos, automatic cleaning and weighing machine (which issues an electronic receipt) and an elevator to store the grain in the silo. The scheme can include state procurement agencies and even private players. Across the country, 980 warehouses have been registered with the Warehousing Development and Regulatory Authority, while there are 64,000 warehouses storing 20,000 tonnes of commodities. Four registered warehouses operate in Punjab. In a regulated warehousing system, the regulatory authority could be government, as is the case in the US and Tanzania, or private as in South Africa.

Implementing the system would be a painstaking and slow task and an overlapping five-year term should be given for it. During this period, the MSP regime must continue and the same should be written into law.

If the farmers manage to secure an MSP on all 23 crops for which it is announced by the Centre and if the farmers or groups of farmers can use the electronically generated warehouse receipt to catch the off season high prices, the goal of doubling farm incomes by 2022 would be achieved.

The only issue that remains to be addressed is the loss of mandi fee and rural development cess. The Union government should compensate the state for five years or so, after which the taxes on food processing and buoyant agriculture subsidiary activities would help balance the budgets. dhanbirbains@gmail.com

The author, a retired Punjab-cadre IAS officer, earned a Master’s degree from Harvard University, specialising in agri-business

Source: Hindustan Times, 3/11/20

Why Punjab’s farmers oppose the new farm laws

 When the establishment ignores the historical context and the emotional component underlying any debate, mass protests can erupt to potentially shape the future. The people of Punjab would not have wanted a confrontation with the Union government, neither would I want to put it so bluntly, but around us, agitated farmers, with a strong common purpose, are energised in a way not seen in many decades. To nullify the possible impact of the three farm acts passed in haste by the Parliament, the Punjab government was compelled to pass its own bills on Tuesday. These broadly attempt to ensure continued procurement of wheat and paddy at the minimum support price (MSP), uphold the powers of the courts in dispute settlement and empower the state to regulate trade of foodgrain.

The three farm acts were preceded by a high-level committee in 2015, headed by Shanta Kumar, which suggested measures to reorient the Food Corporation of India (FCI)’s operations by shifting away from the public distribution system to cash transfers. This negates the very requirement of MSP procurement. The Commission for Agricultural Costs and Prices has been recommending reviewing the open-ended procurement of foodgrain, which is also reflected in the recent RBI annual report that says that the MSP is no solution to farmer’s woes. Similar views were expressed by a Union cabinet minister lately. Therefore, the farmers infer that a path that makes MSP procurement redundant is inevitable and fear it will become applicable after the 2022 assembly elections. To grasp the farmer’s resentment, I estimate the loss that may accrue to Punjab in the most probable way.

The MSP for wheat is Rs 1,925, and for paddy Rs 1,868. But in the absence of government procurement in Bihar and other places, normally crops sell 20 per cent below MSP. Similarly, without assured procurement in Punjab, the losses to the state could exceed.

Rs 15,000 crore. This has generated so intense an outcry that even BJP allies had to go to the extent of breaking long-forged alliances for fear of becoming politically irrelevant. Though it is more likely that the open-ended procurement of wheat and paddy will end.

In other states, procurement per farmer is capped at produce from 5 acres of land. For example, in Rajasthan, it is 25 quintals for moong and groundnut. Eventually, farmers fear that the same limits will be applied in Punjab; about 20 per cent of paddy and 25 per cent of wheat will not be procured and will sell below the MSP. This will lead to a loss of Rs 3,200 crore. Possibly, that is why central government functionaries have repeated that “MSP will continue” rather than clarifying that “procurement at MSP will continue as earlier”. To give them credit, their “truth” corresponds to Yudhishthira’s “untruth” when he stated, “Ashwatthama is dead”.

In adjoining states, central government agencies do not pay mandi fee on procurement. The new farm bills disallow imposition of mandi fee on produce procured outside the mandi’s physical boundaries. Should FCI or private traders trade outside the mandi space, the state will lose revenue of Rs 3,500 crore.Central government agencies do not pay commission to arhtiyas in their price support operations for oilseeds, pulses and cotton. If this practice is extended to Punjab, three-quarters of 24,000 arhtiyas and their employees will lose agency and employment. The annual loss will be about Rs 1,500 crore. Further, in the event of not being paid by the purchaser, they will start charging farmers extra fee under various pretexts.

After reneging on the promise of fixing the MSP by the C2+50 per cent formula, the government settled on the (A2+FL)+50 per cent formula where the derived MSP is far less. There are rumours that to stave off a financial crisis, MSP in the future will be calculated separately for each state depending on their cost of cultivation. If true, in Punjab, the MSP for wheat and paddy will reduce to Rs 1,035 and Rs 1,094 per quintal respectively — the loss could be more than Rs 26,000 crore.

An opportunity has been lost in the lackadaisical handling of the issue. Politics now threatens to complicate the process. I doubt if future historians will recall when Punjab changed course, and how an issue of farmer livelihoods morphed into one of Punjab’s survival. It is time to stop moralising.

This article first appeared in the print edition on October 22, 2020 under the title “A Question Of Survival”. The writer is chairman, Bharat Krishak Samaj

 Ajay Vir Jakhar

Source: Indian Express, 22/10/20