Business Standard

Rajiv Lall: The politics of unsustainable farming

India's future generations will pay the price for pervasive farm subsidies on water, power and fertiliser

Rajiv Lall 

Rajiv Lall

As tempting as it is to write about the more topical question of the Aam Aadmi Party's approach to and electricity policy, I have chosen to stay the course with this cycle of devoted to understanding the confluence of politics and policy in the Indian agriculture sector. Over the past few fortnights, I have sketched out how pressures from competing sets of political constituencies (consumers, farmers, middlemen and so on) and the tussle between Centre and states, have resulted in policies that have distorted our cropping patterns, created hugely inefficient supply and marketing chains, and spawned a sprawling but dysfunctional public food distribution system.

Generally speaking, policy-making in the Indian context has increasingly followed the path of least political resistance. We are hardly unique in this context, but better organised pressure groups have tended to exercise disproportionate influence over policy choices often at the expense of the amorphous "aam aadmi" whose grievances have, in turn, been typically assuaged through albeit at the expense of the one constituency that has no political voice at all: future generations. Our children and grand children comprise the constituency that is the most systematically vulnerable to the ravages of today's political expediency.



Kicking the can down the road, of course, has serious limitations. There is only so much debt we can accumulate before precipitating a fiscal crisis. But although it may be politically painful for the generation that has to face it, a fiscal crisis is not a technically difficult problem to fix. In the case of agriculture, the situation is not so simple. Absent remedial measures, shortages will pose a serious threat to the sustainability of Indian agriculture and to food security within the next couple of decades. And, once it is upon us, a crisis will not be fixed easily. The Management Group has estimated that under a business as usual scenario about half of the demand for in India will be unmet by 2030. This would be calamitous for agriculture which, driven by ground irrigation, accounts for almost 85 per cent of consumption in our country.

Aside from being the largest consumer of water, agriculture is also a hugely inefficient consumer. productivity levels in India are about a third to a half of what they are in China. India is by far the world's largest and fastest growing consumer of ground We had 18.5 million ground structures in 2001. These have now grown to an estimated 27 million, of which about half are tube wells. Our net irrigated area has tripled since 1950 from 21 to over 60 million hectares, with the share of groundwater irrigation growing from 28 to over 60 per cent, and the share of tube wells in particular growing from zero to over 40 per cent.

This has contributed to an alarming depletion of the table. Over the past few years, based on NASA data, our table has on average been depleting at the rate of three to five centimetres per year. The situation is different across different states, but Punjab, Haryana, Rajasthan and Delhi are already well past the threshold of overexploitation. Levels of groundwater extraction in these states are in excess of replenishment rates and, as a result, the annual depletion of their tables is in the range of 30-40 cm per year. Tamil Nadu and UP are now also precariously close to over-extraction. In other words, the heart of our food grain producing regions is already seriously threatened by the prospect of shortages.

The radical shift to groundwater irrigation goes back to the early years of Indira Gandhi's tenure when, following the droughts of the mid-1960s, attention was intensely focused on food security. The promise of high yields from the then newly introduced varieties of seeds was contingent upon the availability of But the large gravity based surface irrigation projects launched by Nehru were hobbled by delays and poor implementation capacity. Given the urgency of the matter at the time, tube well-based irrigation presented itself as the quicker solution. However, tube wells required electricity to be delivered to the farmer. The government thus embarked on a drive to expand the grid infrastructure to deliver electricity to farms (although curiously not to village habitations). It was both logistically easier and politically convenient to supply this electricity through unmetered connections initially at flat rates, but eventually free of cost. And thus were sown the seeds of a culture of agrarian entitlement to free or heavily subsidised electricity (and, hence, also to free groundwater irrigation) that over time has become an important cause of the chronic financial problems of the State Electricity Distribution companies.

There is no doubt that subsidised electricity has worsened the problem of over-exploitation of ground Both Punjab and Tamil Nadu, for example, saw rapid increases to the rate of ground depletion after the introduction of free in the early 1990s. About 70 to 80 per cent of the value of agricultural production now depends on ground irrigation. Not only are yields 30 to 50 per cent higher in groundwater irrigated areas than canal irrigated areas, pump irrigation offers much greater autonomy to individual farmers over usage. It is, therefore, very tough to wean farmers away from the environmentally disastrous course we are on. The problem is made even tougher given that there exists no legal basis for regulating a farmer's use of groundwater drawn from his own property - the rules governing access to groundwater are still based on the 19th century British Common Law principal of absolute dominion which allows a landowner to extract as much groundwater as he pleases from his own property.

Aside from the addiction to groundwater irrigation, another legacy of the is an excessive dependence on chemical fertilisers. While cereal production has grown about five fold since the 1950s, consumption has increased more than 320 times! This rapid growth is, at least in part, attributable to subsidies, which in real terms have more than quadrupled over the past 30 years. It is widely acknowledged that the intensity of use and the subsidy-sensitive disproportionate use of urea in particular, has contributed to the degradation of soils in many parts of the country and to the indifferent growth in per hectare yield of our major food crops over recent years. Ironically, this may be prompting farmers to make even more intensive use of fertilisers as they struggle to maintain productivity and income levels from landholdings that are getting progressively more fragmented.

The enormously successful policy framework of the has outlived its usefulness. The same policies that gave us food security in the 1970s are now threatening to undermine the sustainability of the agricultural sector and have also corroded the financial health of our electricity distribution infrastructure. Yet, these policies remain deeply entrenched and have become difficult to dislodge politically because slowing productivity growth has made farmers less secure and more dependent on the same old regimen of heavily subsidised water, electricity and chemical fertilisers. New strategies both political and economic will need to be deployed to pull our agricultural sector out of this vicious cycle. As the 12th Plan document suggests, we need a fundamental paradigm shift.

The author is executive chairman, IDFC

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Rajiv Lall: The politics of unsustainable farming

India's future generations will pay the price for pervasive farm subsidies on water, power and fertiliser

India's future generations will pay the price for pervasive farm subsidies on water, power and fertiliser As tempting as it is to write about the more topical question of the Aam Aadmi Party's approach to and electricity policy, I have chosen to stay the course with this cycle of devoted to understanding the confluence of politics and policy in the Indian agriculture sector. Over the past few fortnights, I have sketched out how pressures from competing sets of political constituencies (consumers, farmers, middlemen and so on) and the tussle between Centre and states, have resulted in policies that have distorted our cropping patterns, created hugely inefficient supply and marketing chains, and spawned a sprawling but dysfunctional public food distribution system.

Generally speaking, policy-making in the Indian context has increasingly followed the path of least political resistance. We are hardly unique in this context, but better organised pressure groups have tended to exercise disproportionate influence over policy choices often at the expense of the amorphous "aam aadmi" whose grievances have, in turn, been typically assuaged through albeit at the expense of the one constituency that has no political voice at all: future generations. Our children and grand children comprise the constituency that is the most systematically vulnerable to the ravages of today's political expediency.

Kicking the can down the road, of course, has serious limitations. There is only so much debt we can accumulate before precipitating a fiscal crisis. But although it may be politically painful for the generation that has to face it, a fiscal crisis is not a technically difficult problem to fix. In the case of agriculture, the situation is not so simple. Absent remedial measures, shortages will pose a serious threat to the sustainability of Indian agriculture and to food security within the next couple of decades. And, once it is upon us, a crisis will not be fixed easily. The Management Group has estimated that under a business as usual scenario about half of the demand for in India will be unmet by 2030. This would be calamitous for agriculture which, driven by ground irrigation, accounts for almost 85 per cent of consumption in our country.

Aside from being the largest consumer of water, agriculture is also a hugely inefficient consumer. productivity levels in India are about a third to a half of what they are in China. India is by far the world's largest and fastest growing consumer of ground We had 18.5 million ground structures in 2001. These have now grown to an estimated 27 million, of which about half are tube wells. Our net irrigated area has tripled since 1950 from 21 to over 60 million hectares, with the share of groundwater irrigation growing from 28 to over 60 per cent, and the share of tube wells in particular growing from zero to over 40 per cent.

This has contributed to an alarming depletion of the table. Over the past few years, based on NASA data, our table has on average been depleting at the rate of three to five centimetres per year. The situation is different across different states, but Punjab, Haryana, Rajasthan and Delhi are already well past the threshold of overexploitation. Levels of groundwater extraction in these states are in excess of replenishment rates and, as a result, the annual depletion of their tables is in the range of 30-40 cm per year. Tamil Nadu and UP are now also precariously close to over-extraction. In other words, the heart of our food grain producing regions is already seriously threatened by the prospect of shortages.

The radical shift to groundwater irrigation goes back to the early years of Indira Gandhi's tenure when, following the droughts of the mid-1960s, attention was intensely focused on food security. The promise of high yields from the then newly introduced varieties of seeds was contingent upon the availability of But the large gravity based surface irrigation projects launched by Nehru were hobbled by delays and poor implementation capacity. Given the urgency of the matter at the time, tube well-based irrigation presented itself as the quicker solution. However, tube wells required electricity to be delivered to the farmer. The government thus embarked on a drive to expand the grid infrastructure to deliver electricity to farms (although curiously not to village habitations). It was both logistically easier and politically convenient to supply this electricity through unmetered connections initially at flat rates, but eventually free of cost. And thus were sown the seeds of a culture of agrarian entitlement to free or heavily subsidised electricity (and, hence, also to free groundwater irrigation) that over time has become an important cause of the chronic financial problems of the State Electricity Distribution companies.

There is no doubt that subsidised electricity has worsened the problem of over-exploitation of ground Both Punjab and Tamil Nadu, for example, saw rapid increases to the rate of ground depletion after the introduction of free in the early 1990s. About 70 to 80 per cent of the value of agricultural production now depends on ground irrigation. Not only are yields 30 to 50 per cent higher in groundwater irrigated areas than canal irrigated areas, pump irrigation offers much greater autonomy to individual farmers over usage. It is, therefore, very tough to wean farmers away from the environmentally disastrous course we are on. The problem is made even tougher given that there exists no legal basis for regulating a farmer's use of groundwater drawn from his own property - the rules governing access to groundwater are still based on the 19th century British Common Law principal of absolute dominion which allows a landowner to extract as much groundwater as he pleases from his own property.

Aside from the addiction to groundwater irrigation, another legacy of the is an excessive dependence on chemical fertilisers. While cereal production has grown about five fold since the 1950s, consumption has increased more than 320 times! This rapid growth is, at least in part, attributable to subsidies, which in real terms have more than quadrupled over the past 30 years. It is widely acknowledged that the intensity of use and the subsidy-sensitive disproportionate use of urea in particular, has contributed to the degradation of soils in many parts of the country and to the indifferent growth in per hectare yield of our major food crops over recent years. Ironically, this may be prompting farmers to make even more intensive use of fertilisers as they struggle to maintain productivity and income levels from landholdings that are getting progressively more fragmented.

The enormously successful policy framework of the has outlived its usefulness. The same policies that gave us food security in the 1970s are now threatening to undermine the sustainability of the agricultural sector and have also corroded the financial health of our electricity distribution infrastructure. Yet, these policies remain deeply entrenched and have become difficult to dislodge politically because slowing productivity growth has made farmers less secure and more dependent on the same old regimen of heavily subsidised water, electricity and chemical fertilisers. New strategies both political and economic will need to be deployed to pull our agricultural sector out of this vicious cycle. As the 12th Plan document suggests, we need a fundamental paradigm shift.

The author is executive chairman, IDFC
image
Business Standard
177 22

Rajiv Lall: The politics of unsustainable farming

India's future generations will pay the price for pervasive farm subsidies on water, power and fertiliser

As tempting as it is to write about the more topical question of the Aam Aadmi Party's approach to and electricity policy, I have chosen to stay the course with this cycle of devoted to understanding the confluence of politics and policy in the Indian agriculture sector. Over the past few fortnights, I have sketched out how pressures from competing sets of political constituencies (consumers, farmers, middlemen and so on) and the tussle between Centre and states, have resulted in policies that have distorted our cropping patterns, created hugely inefficient supply and marketing chains, and spawned a sprawling but dysfunctional public food distribution system.

Generally speaking, policy-making in the Indian context has increasingly followed the path of least political resistance. We are hardly unique in this context, but better organised pressure groups have tended to exercise disproportionate influence over policy choices often at the expense of the amorphous "aam aadmi" whose grievances have, in turn, been typically assuaged through albeit at the expense of the one constituency that has no political voice at all: future generations. Our children and grand children comprise the constituency that is the most systematically vulnerable to the ravages of today's political expediency.

Kicking the can down the road, of course, has serious limitations. There is only so much debt we can accumulate before precipitating a fiscal crisis. But although it may be politically painful for the generation that has to face it, a fiscal crisis is not a technically difficult problem to fix. In the case of agriculture, the situation is not so simple. Absent remedial measures, shortages will pose a serious threat to the sustainability of Indian agriculture and to food security within the next couple of decades. And, once it is upon us, a crisis will not be fixed easily. The Management Group has estimated that under a business as usual scenario about half of the demand for in India will be unmet by 2030. This would be calamitous for agriculture which, driven by ground irrigation, accounts for almost 85 per cent of consumption in our country.

Aside from being the largest consumer of water, agriculture is also a hugely inefficient consumer. productivity levels in India are about a third to a half of what they are in China. India is by far the world's largest and fastest growing consumer of ground We had 18.5 million ground structures in 2001. These have now grown to an estimated 27 million, of which about half are tube wells. Our net irrigated area has tripled since 1950 from 21 to over 60 million hectares, with the share of groundwater irrigation growing from 28 to over 60 per cent, and the share of tube wells in particular growing from zero to over 40 per cent.

This has contributed to an alarming depletion of the table. Over the past few years, based on NASA data, our table has on average been depleting at the rate of three to five centimetres per year. The situation is different across different states, but Punjab, Haryana, Rajasthan and Delhi are already well past the threshold of overexploitation. Levels of groundwater extraction in these states are in excess of replenishment rates and, as a result, the annual depletion of their tables is in the range of 30-40 cm per year. Tamil Nadu and UP are now also precariously close to over-extraction. In other words, the heart of our food grain producing regions is already seriously threatened by the prospect of shortages.

The radical shift to groundwater irrigation goes back to the early years of Indira Gandhi's tenure when, following the droughts of the mid-1960s, attention was intensely focused on food security. The promise of high yields from the then newly introduced varieties of seeds was contingent upon the availability of But the large gravity based surface irrigation projects launched by Nehru were hobbled by delays and poor implementation capacity. Given the urgency of the matter at the time, tube well-based irrigation presented itself as the quicker solution. However, tube wells required electricity to be delivered to the farmer. The government thus embarked on a drive to expand the grid infrastructure to deliver electricity to farms (although curiously not to village habitations). It was both logistically easier and politically convenient to supply this electricity through unmetered connections initially at flat rates, but eventually free of cost. And thus were sown the seeds of a culture of agrarian entitlement to free or heavily subsidised electricity (and, hence, also to free groundwater irrigation) that over time has become an important cause of the chronic financial problems of the State Electricity Distribution companies.

There is no doubt that subsidised electricity has worsened the problem of over-exploitation of ground Both Punjab and Tamil Nadu, for example, saw rapid increases to the rate of ground depletion after the introduction of free in the early 1990s. About 70 to 80 per cent of the value of agricultural production now depends on ground irrigation. Not only are yields 30 to 50 per cent higher in groundwater irrigated areas than canal irrigated areas, pump irrigation offers much greater autonomy to individual farmers over usage. It is, therefore, very tough to wean farmers away from the environmentally disastrous course we are on. The problem is made even tougher given that there exists no legal basis for regulating a farmer's use of groundwater drawn from his own property - the rules governing access to groundwater are still based on the 19th century British Common Law principal of absolute dominion which allows a landowner to extract as much groundwater as he pleases from his own property.

Aside from the addiction to groundwater irrigation, another legacy of the is an excessive dependence on chemical fertilisers. While cereal production has grown about five fold since the 1950s, consumption has increased more than 320 times! This rapid growth is, at least in part, attributable to subsidies, which in real terms have more than quadrupled over the past 30 years. It is widely acknowledged that the intensity of use and the subsidy-sensitive disproportionate use of urea in particular, has contributed to the degradation of soils in many parts of the country and to the indifferent growth in per hectare yield of our major food crops over recent years. Ironically, this may be prompting farmers to make even more intensive use of fertilisers as they struggle to maintain productivity and income levels from landholdings that are getting progressively more fragmented.

The enormously successful policy framework of the has outlived its usefulness. The same policies that gave us food security in the 1970s are now threatening to undermine the sustainability of the agricultural sector and have also corroded the financial health of our electricity distribution infrastructure. Yet, these policies remain deeply entrenched and have become difficult to dislodge politically because slowing productivity growth has made farmers less secure and more dependent on the same old regimen of heavily subsidised water, electricity and chemical fertilisers. New strategies both political and economic will need to be deployed to pull our agricultural sector out of this vicious cycle. As the 12th Plan document suggests, we need a fundamental paradigm shift.



The author is executive chairman, IDFC

image
Business Standard
177 22