The agricultural sector paid the maximum price post-independence in terms of GDP growth forfeited. Following the extortionist British colonial government policies towards agriculture, independent India adopted the misguided Soviet economic model of growth since the 1950s. This model was both unsustainable and ill-advised, as evidenced by the low GDP growth rate till the 1990s in the USSR. It led to the eventual disintegration of the USSR into 15 independent nation-states. Many other command and control economies eventually moved to a market economy. It was fundamentally unsuited to Indian circumstances since the model relied on extracting resources from agriculture (surpluses) and fuelling industrial growth through the dictates of the state that is placed at the “commanding heights” of the economy.  India on the other hand had just taken over a depleted agrarian economy. 

 

Years of colonial rule and extortionary taxes on agriculture by the British broke the back of agriculture, leaving it with little or no surplus. This policy of the British towards Indian agriculture was a deliberate retaliation to the first war of Independence in 1857, that was thought to be funded by rich agrarian landowners. The British realised that this funding source needed to be cut-off for their long-term colonial hold over India. They systematically targeted and crippled Indian agriculture and drove it to ruin. 

 

Meanwhile, in the Soviet Union, Tsarist policies created a surplus in agriculture and hence it could be used to fuel industrial growth. Independent India had no surplus to divert from agriculture to the production of capital goods. As a result, it suffered not just lower growth, but widespread agrarian distress, food shortage, and continued rural poverty. Agriculture even today employs 45 percent of the workforce but contributes hardly 18 percent of GDP.

 

Agriculture should have been a growth sector, it has a relatively low ICOR (Incremental Capital Output Ratio). India is endowed with warm weather and fertile soil that can help grow at least three crops in a year unlike many other countries. We have the largest arable land area in the world. Through the Green Revolution, we proved that with just 20-30 percent of our farmland (in western UP, Punjab and Haryana) and with the right combination of seeds, fertilisers, pesticide, and credit, India can generate enough to ensure food security. The Green Revolution in just a few states transformed a food-importing country to a food-surplus country! If the same techniques had been replicated across the country with appropriate technology and policy framework, the country would have become a market leader.

 

Policy recommendations in two critical areas  

 

We are just highlighting here two areas which can contribute significantly to the sector; for which the Farm Bills pave way.  

 

1. Deploy resources to fund climate-smart varieties of crops and impart capabilities for farmers to grow the same on a large-scale

 

Problem Identification: 

India is the world’s second largest producer of rice and most of the states cultivate paddy. However, certain states like Punjab and Haryana that grow rice significantly started facing depletion of groundwater. These states have become risk hotspots as paddy cultivation relies excessively on irrigation wherein the fields are flooded for major part of the year. Further, states like Andhra Pradesh and Tamil Nadu are also moving towards a similar situation. Over 90 percent of the rice cultivation in these states relies on irrigation.

Policy Prescription: 

Indian Council of Agriculture through its various constituent institutes has identified many high-yield varieties of rice. Recently, the National Rice Research Institute has released four new varieties of rice, two of which are immune to drought and other climate change challenges. A programme to provide necessary funds to spearhead transition to rice varieties that are nutrient rich yet require less water for cultivation is the need of the hour. Further, the farmers would require necessary support to transit to newer varieties. 

Starting with the states that have excessive reliance on paddy cultivation, the Government should encourage private sector entities to spur large scale production of such ‘climate-smart’ varieties of rice. It should simultaneously have a programme for ensuring adequate seedlings.

These steps will benefit greatly in that it will lead to reduction in depletion of groundwater. It will help India become a net exporter of rice. The government should take care to make our produce globally competitive within the regulatory regime of WTO. 

2. Deploy drip irrigation techniques inspired from Israeli technology

Problem Identification:

With each passing season, the water scarcity issue gets exacerbated and requires immediate policy intervention on multiple fronts. Agriculture being a water guzzler, faces the brunt of water scarcity adding to the farmers’ distress as we have driven them to intensive cultivation. India is said to have the largest irrigated area in the world, and this consumes 80 percent of water in India, largely due to flood irrigation. This method of irrigation is starting to be replaced by Israel’s path breaking drip method of irrigation since the 1980s, however the progress has been slow. The drip method directly supplies water to the root of the crop through a carefully set-up network of pipes and emitters. India is the highest adopter of this technology, thanks to the knowledge transfer it receives under the Indo-Israel Agriculture project. However, the drip irrigation method accounts for merely 4 percent of gross irrigated area and about 15 percent of its total potential of 2016-17. Further, this method has been adopted only in a few states. The on-farm efficiency of the drip method of irrigation is estimated to be over 90 percent as opposed to 35 percent in flood irrigation.

 

Policy Prescription:

A major deterrent in the adoption of the drip irrigation method has been the capital investment required in setting up the network of pipes. This capex needs to be subsidised as in the long run it will be beneficial. (It is pertinent to note that the cost-benefit analysis done in various surveys has proved that the drip method is economically sustainable even for small and marginal farmers). There can be different subsidy programmes for water-scarce vis-à-vis water abundant areas. The existing policy of cap of subsidy for five hectares under the National Mission on Micro-Irrigation should be done away with. Further, bank loans for setting up wells, pumps, etc. can be prioritised for farmers that adopt drip irrigation. 

The drip irrigation method should first be promoted for water-intensive crops like banana, sugarcane, etc. The Government should determine appropriate economic pricing for electricity, canal water, etc. which would incentivise farmers to adopt drip irrigation. It should mandate public sector and cooperative banks to introduce special loans for electricity pumpsets, etc. for faster adoption of drip irrigation by farmers. It should impart necessary training to farmers. It should leverage the Indo-Israel Agriculture Project to learn more about other technologies such as precision agriculture to enable better and more effective adoption of drip irrigation. There are multiple non-tariff barriers raised against Indian agricultural products in the form of sanitary and phytosanitary measures. These are unfair to Indian agricultural exports and therefore needs to be part of our foreign policy strategy.

Conclusion

The overall policy framework needs to be multi-pronged involving technology, financial support, and market related support. Only through the sustained execution of such a strategy can we really pull out Indian agriculture that is even today languishing in doldrums despite seven decades of developmental efforts. This would be central to uplifting the economic status of a large majority of Indians, who even today rely on agriculture for their livelihoods. This will also help achieve atmanirbhar in agriculture.

Sources:

https://theprint.in/india/governance/nudge-didnt-work-agriculture-ministry-now-has-a-plan-to-force-paddy-farmers-to-diversify/344974/

 

https://www.thehindubusinessline.com/opinion/tap-drip-irrigation-to-save-water/article27688289.ece

 

 

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