AGRICULTURE / GOVERNANCE/ FEDERALISM
Topic: General Studies 2,3:
- Issues and challenges pertaining to the federal structure
- Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Farmer’s Protest: Remunerative Cropping Patterns needed
Context: The Farmers’ protests have erupted once again in north India primarily in opposition to the new farm acts, who have been demanding the complete repeal of the laws.
The flashpoint between the agitating farmers and the central government is essentially rooted in the mismatch between the supply and demand for the wheat crop in India.
Genesis of the problem
- Food Insecurity during Independence: The genesis of the current state of affairs stems from policies initiated over half a century ago when India was critically short in foodgrains and had to rely upon imports under PL-480 as aid from the US.
- Setting of PDS to ensure food grain availability: India set up a massive Public Distribution System (PDS) for supplying wheat (and later rice) to people by issuing ration cards that entitled them to a fixed quantum at controlled prices.
- Green Revolution mainly in Punjab & Haryana: Concurrently, high yielding varieties of seeds were produced and popularised by the state agencies along with pushing the use of tube wells and fertilisers with subsidies for electricity and some fertilisers.
- Disproportionate buying from Punjab & Haryana: To feed the PDS, potential surplus producing states (notably, Punjab and Haryana) were cordoned off from the rest of the country under a quasi monopolistic buying by the central government through the Food Corporation of India (FCI) at a farmer remunerative price, labelled as the minimum support price (MSP).
- The result was a resounding success for the production and procurement of rice (common varieties) and wheat. India has become consistently surplus in their production, which was the focus of the PDS and government policy.
- Fear of Private Players: Currently, the so-called support price is politically influenced. With the advent of large corporate players, farmers apprehend that the corporate players will influence the government not to raise the MSPs adequately in their own interest.
- Fear of reduced bargaining power of Farmers: The farmer-state government-central government power equation is likely to be polarised into a farmer/state government versus corporate sector tussle, wherein the peasants’ lobby will be hopelessly powerless.
What is the scenario on the supply side?
- On the supply side, crop rotations have changed in the surplus growing regions. Punjab and Haryana, for example, are now geared for a rice-wheat cycle with the wheat acreage in the former being well above 90 per cent of the total cultivable land in the rabi season.
- Correspondingly, rice accounts for 80 per cent of the total cultivable land in the kharif season, approximately one-fourth of this being under basmati rice.
- Controlled irrigation and general improvements in farming practices along with investments have made this rice-wheat rotation by far the most value creating crop cycle.
- Better varieties of rice (that is, superior basmati etc) in the kharif season that have lower yield, lower water and nutrient requirement but are exportable and highly priced, could possibly be better crop options in the region.
Present Procurement Policy impaired the growth of exports
- Under the current procurement policy, the advantages of producing high-quality grains have been ignored.
- Since the origin of the policy was to feed the PDS system in periods of shortages, the considerations of maximising yield and lowering cost of production dictated the production and procurement decisions.
- These, unfortunately, were not the best products for export.
- The critical concern about keeping prices low for the middle classes in India has, thus, impaired the healthy growth of the agriculture sector.
- Physical quotas and controls on exports came in the way of increasing production of basmati and higher quality of rice.
- Also, there was no initiative for identifying high-quality wheat strains for increasing their production for local and foreign markets
- The only way forward is to shift production from normal rice to basmati and other exportable varieties and to give a boost to wheat for substituting rice via sooji, rava and noodles.
- A boost for infrastructure to increase the production of vegetables in the wheat belt and its transport to southern India, the Middle East and the Far East are the other options for the healthy growth of agriculture.
- The government needs to reduce the institutional costs and move towards a more remunerative cropping pattern.
- The central government needs to be seen as the agency that will ensure stable and remunerative MSP for rice, wheat as also for the prices of their superior variants along with the alternate crops.
- Government must make transparent efforts to push exports consistently and not follow the stop-go policy emanating from price controls for the Indian consumer market.