Agricultural Distress

AGRICULTURE/ GOVERNANCE

Topic: General Studies 2 & 3:

• Agricultural issues and Issues related to direct and indirect farm subsidies and minimum support price 
• Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Agricultural Distress

The COVID-19 crisis is affecting rural India especially at a time when agriculture is already in a distress situation.

Agricultural distress Causing Migration

• According to the 2011 census, 3.5 million migrants moved within the last one year due to economic reasons. 
• The corresponding numbers for the 2001 and 1991 census, were, respectively, 2.2 and 1.4 million.

Do You Know?

• Majority of the migrant workers send 25 to 50 per cent of their monthly income to their families back home.
• In Bihar, these remittances accounted for 35.6 per cent of gross state domestic product in 2011-12, up from 11.6 per cent in 2004-05

Issues with Agricultural Sector

1. Increasing Rural-Urban gap

• In 2008, the rural-urban gap was at 45% in terms of average revenue — versus 10% for China and Indonesia. 
• The rural monthly per capita expenditure declined 8.8% from Rs 1,430 in 2011-12 to Rs 1,304 in 2017-18
• In 2013-2019, the average agricultural GDP growth rate (driven by livestock) was 3.1%, much lower than the average GDP growth rate — 6.7%
• The average growth of the crop sector, which accounts for two-thirds of the agricultural sector GDP, was 0.3 per cent.

2. Declining Landholding Size

• Average landholding size of a household has shrunk to 1.1 ha in 2016 (Source: NABARD)
• A farm household needs to have at least 1 ha of land to make ends meet, whereas the proportion of those owning less than one ha is 82.8%
• 37% of farm households owned land parcels of smaller than 0.4 ha
• Another 30% of farm households holdings which between 0.41 and 1.0 ha. 
• Only 13% agricultural households owned landholdings bigger than 2 ha.

3. Irrigation has stagnated, with less than half of Indian farmland irrigated.
4. Rural India suffers from “urban consumer bias”: Government has kept food prices very low to spare urban consumers of price rise
5. Budget cuts have affected key agri-programmes such as the Rashtriya Krishi Vikas Yojana,  the Backward Regions Grant Fund as well as irrigation schemes (Integrated Watershed Management Programme)
6. Degradation in agricultural quality

• Rise of monocultures based on the intensive use of chemical pesticides has reduced soil productivity
• The level of water tables fell by 65 per cent in 10 years.
• Nearly 30 per cent of India’s land has been degraded due to deforestation, intensive farming, soil erosion and groundwater depletion.

7. Increasing indebtedness of farmers

• Over half of the farmers are indebted
• The average loan amount outstanding for a farm household in India in 2017 was Rs 47,000. 
• More than 3,20,000 farmers committed suicide between 1995 and 2016 (NCRB data)

8. Rural Poverty

• NSS data show that rural poverty rose about 4 percentage points between 2011-12 and 2017-18 to 30 per cent 
• Whereas urban poverty fell 5 percentage points over the same period to 9 per cent.

Way Forward

• The issue of migrant workers during the crisis should open the eyes of policy makers about the need to make agriculture sector a priority
• Agricultural sector should witness more investment to reduce the rural-urban gap
• Need for agro-ecological transition as it is more bio-diverse in nature, makes the system more resilient, strengthen food security and provide a safety net for farmers

Connecting the dots:

• Ashok Dalwai Committee on doubling of farmers’ income
• Zero Budget Natural Farming
• Second Green Revolution