Beyond weather gods

Policy missteps to blame for farmers' plight

At a time when agriculture is passing through a bad patch, as reflected in widespread rural distress, the prognosis of the 2017-18 Economic Survey of a likely further drop in farm incomes due to climate change is a cause for disquiet. Based on analysis of climatic trends, the Survey has concluded that agricultural incomes could dip in the medium run by 15-18 per cent on average and up to 20-25 per cent in unirrigated areas, which comprise over half the farmland. This translates into an income loss of over Rs 3,600 per year for hard-pressed farm households. Yet, efforts to promote climate-resilient agriculture and adapt existing farm practices to steadily altering weather conditions have been rather lax. The Survey, thus, rightly stresses the need for mitigating the vulnerability of Indian agriculture to climate change through the rapid extension of efficient drip and sprinkler irrigation technologies and replacing untargeted subsidies in power and fertilisers by direct income support.

Apart from climate change, a host of other factors — referred to only in passing in the Survey — have contributed to aggravating farmers’ woes. The significant among these include unabated shrinking of land holdings, persistent degradation of vital natural resources (such as land and water), lack of adequate diversification of farming towards high-value agriculture, and the rural youths’ disinterest in farming. The effects of these factors on the performance of agriculture are already discernible. As pointed out in the Survey, the real agricultural gross domestic product (GDP) and real agricultural revenues have remained almost static in the past four years. Though the Survey seeks to hold two consecutive poor monsoons partly responsible for this, the reality is otherwise. Rural distress was not as conspicuous during the back-to-back drought years of 2014 and 2015 as in the subsequent couple of years of bumper harvests.

Clearly, other factors, including misguided government policies, especially those concerning agricultural pricing, have also played a major role in worsening the farm sector’s plight. The government’s price management, in particular, has been focused more on containing food inflation for the benefit of consumers than in safeguarding farmers’ interests. The fact that the wholesale prices of most farm commodities have been ruling below the official floor prices bears this out. The need, therefore, is to strike a fine balance between the interests of consumers and producers. It requires better farm marketing systems, free of existing inefficiencies and deficiencies of the markets run by the Agricultural Produce Marketing Committee. The dominance of intermediaries and cartels in agricultural trade needs to be restrained to give way to fair, transparent and competitive marketing.

The Survey applauds the government’s commitment to double farmers’ incomes by 2022. But for this, the agriculture sector needs to grow at a rate several times higher than the 2.1 per cent projected for 2017-18. The Survey has, therefore, done well to counsel the government to provide opportunities to farmers to diversify their income generating avenues and mitigate production as well price risks by incorporating agriculture’s allied sectors like livestock and fisheries in farming systems. Equally imperative is the need for greater deployment of science and technology in agriculture. This requires a substantial step-up in investment in agricultural research and, more so, in the field of technology transfer. Otherwise, rejuvenation of the farm sector may remain elusive.