Agriculture remains India's strength, but what about farmer? Experts debate

BS Manthan: Experts discussed the future of agriculture in India and whether the sector remains profitable for its participants, especially small farmers

At the second edition of BS Manthan, Business Standard’s annual thought leadership summit, industry leaders discussed the future of agriculture in India. While Ramesh Chand, member of NITI Aayog, contended that agriculture has been and will remain India’s strength, CSC Sekhar, professor at Institute of Economic Growth (IEG) and Ajay Vir Jakhar, chairman of Bharat Krishak Samaj, argued that there is an urgent need to address the issues of small and marginal farmers.

 

In a panel discussion moderated by Business Standard’s Sanjeeb Mukherjee, Ramesh Chand said that “agriculture was, is and will remain India’s strength” due to its labour advantage. He credited country’s farmers, especially those with small landholdings, for promptly responding to global signals and adopting modern technology.

 

 

CSC Sekhar, who is also the honorary director (former), Agricultural Economics Research Centre at University of Delhi, said that though agriculture has been India’s strength and continues to be so, the small and marginal farmers, who comprise 90 per cent of the sector, are battling low income issues. “A lot needs to be done on policy and implementation angles,” he said.

 

Farm income variations

 

According to Ajay Jakhar, around 650 million Indians are involved in the agriculture sector but 60-70 per cent of them earn less than Rs 10,000 a month. Jakhar, who is UN Food Champion at the UN Food Systems Summit, compared this to the income of government employees who, along with salary hikes in pay commissions, get additional benefits like medical cover and pension.

 

“At mid-level, a government employee’s salary starts at Rs 35,000 and it may increase to Rs 1 lakh per month. And on the other hand, you have farmers who will have a salary of Rs 10,000 a month,” he said.

 

On farm income, Chand argued that there is a big variation across the country. Citing Punjab’s example, Chand said the income of a farmer is more than that of a non-farmer in the state. “While there are problems with the agriculture sector there (Punjab), it is the model in terms that agriculture can be transformed in a way where the income of a farmer is higher than that of a non-farmer,” he said.

 

Is agriculture profitable?

 

Chand cited the remarkable growth rate agriculture has achieved in the past decade. “In the last 10 years, the growth rate of agriculture is the highest, which is around 4 per cent. There used to be a target of 4-5 per cent growth rate but it was never achieved before,” he said.

 

Jakhar, however, argued that agriculture is non-profitable, especially for small farmers. Either the government finds alternate employment opportuNITIes for farmers or supports them through healthcare, education costs and public transport, he said.

 

“We don’t need to focus on cash transfers (direct payment). It is not going to change the livelihood (of farmers),” said Jakhar. To address this, Jakhar said India needs to have an agriculture policy, which has not been there for 30 years now.

 

Sekhar concurred, saying that direct payment to farmers is no longer a good option. “A few years ago, direct payments appeared to be a good option. But now with an increase in cost of cultivation, it has shot up substantially,” Sekhar said, adding that a better option could be deficiency payment, which is the difference between the market price of a crop and a minimum support price.