Statsguru: 6 charts explain why Punjab stands out on India's agrarian scene

Two weeks ago, as farmers’ protests were intensifying, we showed why Punjab stands out on India’s agrarian scene. Today, as the government is giving mixed signals — ministers holding talks and the prime minister calling it a conspiracy by the Opposition — a new study on agricultural markets that goes deeper into the realities of farm marketing in India offers timely insights.

The research by Shoumitro Chatterjee, Mekhala Krishnamurthy, Devesh Kapur and Marshall M Bouton dwells at the level of an Agriculture Produce Market Committee mandis, which have been the bone of contention as the new farm laws create a market parallel to these very institutions.

Further, the findings cut across three states: Odisha, a largely tribal state with an under-developed mandi system; Bihar, which renounced state-run mandis in 2006; and — importantly — Punjab, where the mandi system has worked the best.

At the mandi level, the study shows that the market is “closer” to the farm gate in Punjab: Farmers sell their produce at the earliest to the buyer. On average, it takes only a week for a farmer in Punjab’s Hoshiarpur district to sell paddy, as against three weeks in Odisha and five weeks in Bihar, as chart 1 shows.

Further, Punjab farmers are more attached to their valuable land. They command the highest rent, up to twice that in Bihar, and five to six times that in Odisha, chart 2 reveals. They are also more averse to selling their land than their Bihari peers, chart 3 shows.

Interestingly, the study by the Centre for the Advanced Study of India (CASI) sheds light not just on water usage, but also on the ownership of water sources. It shows that a third of paddy farmers in Punjab (paddy is the only major kharif crop there) have access to government owned (read free) water source, the highest among the seven districts surveyed. A similar proportion of farmers have their own private water source, again the best, shows chart 4. In the rabi season, it gets better: Two-thirds of farmers in Hoshiarpur have a private water source.

As expected, they also spend the most on diesel (high-input costs), and pump water heavily out of the underground aquifers (high water stress), as chart 5 reveals. Finally, the study gave recent evidence of how Punjab farmers benefit from the minimum support price (MSP) regime, as the average price realised per quintal of paddy is the best among the seven districts, chart 6 shows.

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Source: Shoumitro Chatterjee, Mekhala Krishnamurthy, Devesh Kapur, Marshall M. Bouton, A Study of the Agricultural Markets of Bihar, Odisha and Punjab, Center for the Advanced Study Of India, University of Pennsylvania