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The Agri-Conundrum

Image Credits: The Financial Express

Neither the bleak winters nor the scorching summers could taint their enthusiasm and will. Thousands have been living in tents at sprawling camps since August of last year campaigning at the borders of our national capital, gathered at various spots including Singhu, Tikri and Ghaziabad, hoping to be heard. With appreciable courage and patience, against all odds, they stood fighting for what means to them the most. They are the Farmers of India.

The farmers have been protesting for months now, seeking a repeal of the three central laws. Witnessing such huge masses march on the streets opposing the legitimization of the bills perhaps comes against the backdrop of the larger, underlying problems faced by the farmers in the agricultural sector.

The history of agriculture dates back in India to the Indus valley civilization. Since then, India has predominantly remained an agricultural economy and at present involves 60% of the Indian population (Statistica Research Department Report). However, the contribution of the agricultural sector to the GDP has plummeted over the past few decades, from more than 50% in the 1950s to around 17% in 2019-20 as evident from the Economic Survey. The agricultural growth has been fairly volatile, ranging from 5.8% in 2005-06 to 0.4% in 2009-10, 0.2% in 2014-15. Such a variance in agricultural growth has impacted the farm's income as well as farmer’s ability to take credit for investing in their landholdings.

With the burgeoning population and prevalence of inheritance laws, the problem of fragmentation of landholdings into smaller and unviable tracts of land has cropped up. This is evident from the fact that approximately 78% of the country’s farmers own only 33% of the total cultivated land. Such subdivision causes low agricultural productivity and logistical issues. A lot of time and labour is wasted moving seeds, manure, equipment and cattle from one land to another. Irrigation becomes difficult and farm mechanization can not be applied. Small scale farmers also have to rely on the middlemen for the transportation of their produce due to which a substantial part of their income is lost as middlemen’s commission. Most farmers do not have the bargaining power, due to the small size of their produce, and therefore agree to the price demanded by the middlemen. Despite legislation for the consolidation of landholdings by almost all states, it has been implemented only in parts of Punjab, Haryana and the U.P as reported by Indian Express.

With around 55% of India’s arable land dependent on precipitation, the amount of rainfall during the monsoon season sways economic activity in the agriculture sector and industries linked to it. Irrigation-agriculture, undoubtedly, increases the production and ensures more income to the farmers. However, inadequate funds from the government, faulty groundwater policy and high costs are the leading causes for its uneven implementation leaving most farmers at the mercy of the capricious monsoon rains.

The government has taken myriad initiatives over the years to assist the farmers and cater to their needs. To prevent suicides among farmers and to respond to the unpredictable nature of farming the Govt. had launched the Pradhan Mantri Fasal Bima Yojana-2016, which ensures crop insurance policy with relaxed premium rates. Likewise, the National mission for sustainable agriculture, PM Krishi sinchai yojana, Micro-irrigation fund, Agriculture contingency fund are some of the notable initiatives. However, the implementation of these schemes on ground zero remains the true challenge. These developmental schemes majorly cover middle and large scale agricultural lords. Many farmers do not have their land to apply for this scheme, they just enjoy a tiny part of the profit from the owner who is covered by the welfare schemes. Moreover, where the production is sufficient, the movement of goods to the area of demand is not done efficiently. The dearth of warehouse facilities, deficiency in the government's interest to directly purchase the produced goods and supply to wherever it is needed is an important cause.

Also, not enough has been done when it comes to mechanizing agriculture. Small and marginal farmers use little or no machine in ploughing, seed sowing, irrigating, pruning, weeding and harvesting. The deterrent being high cost of equipment and the need for higher investment into the same. The country ,moreover, lacks investment in design and development required to set up versatile equipment that can be used in multiple crops. This results in huge wastage of human labour and low crop yield per capita labour force.

These factors have been responsible for making farming, at least for the majority, a not-so-lucrative occupation. For many farmers, agriculture has ceased to be a source of subsistence but the debt burden prevents them from taking the risk of abandoning the sector either. A total of 43.42 million farmer households constituting 48.6 per cent are reported to be indebted to either formal or informal or both sources of credit, as per the report on the ‘Indebtedness of Farmer Households'. This loan burden, particularly at high rates of interest, has been a major reason driving farmers to suicide in different parts of the country.

In the face of these foundational problems, agriculture in India entails uncertainties. The three central laws, firstly, expose the already vulnerable agricultural sector to the might of market forces without guaranteeing, at least in writing, price support from the government. Farmers believe the laws will lead to privatisation of agriculture and will eventually do away with the government-led procurement at declared Minimum Support Price (MSP), APMC/mandi system and other safety measures. Since the law does not mention anything on MSP, it will not only be the government’s discretion to decide the quantum of procurement of wheat and paddy on the declared MSP, but the government will also progressively withdraw from being the principal procurer. Secondly, contract-based farming necessitates predetermined prices for the produce making space for the corporates to eventually dictate the terms of the contract. Engagement in the tactics of buying cheap, forming cartels, hiking market price and then eventually swelling profits would become rife in the economy leaving farmers at the margins. It can however be debated, and rightly so, that this situation still exists in the economy as some small scale farmers are left at the mercy of the bigger ones. But the three bills, in reality, do not seem to solve this problem, if not validate it.

The small and marginal farmers, at the present state, are incapable of negotiating with the large corporates. Replacing the local middlemen with the big corporates doesn’t welcome any affirmative frameshift change in the farmer’s position. Therefore, making such an astronomical leap without combatting the foundational problems and strengthening the sector from its core, in turn, exposes the sector to further uncertainties.


By Ishi Chauhan

Ishi is a first year student of Political Science. She is an avid reader, has a penchant for keeping herself abreast of the contemporary socio- political developments and is fond of thought provoking discussions on the same.