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Indian Agriculture - Are we heading towards a crisis?

Updated on February 2, 2009

If we look at the figures, growth in food-related agricultural products has either declined or has remained stagnant and since when? It is here since more than a decade. If this continues, we may very soon face a crisis situation and considering that agriculture is the largest contributor to our GDP, this looks very dangerous.

In fact, our country is such that, even several other segments have connection with the agricultural growth, either in the form of input costs or in the wage basket. Some people argue that times are changing and agriculture is seeing positive developments, with the rise in the level of output, but we need to very clearly understand that agriculture is not just about non-food related items like cotton, it is about wheat, rice, and pulses also.

If we have seen growth, that has been only in cotton, oilseeds and sugar cane, but we need wheat, rice, pulses to feed the people of our country and when that is done, growth in other segments can be sustained.

So let us understand what are the problems we are facing in Indian agriculture and how to solve them.

  1. Fragmented Land Holdings.
  2. Loans. Instead of making banks farmer-friendly, government has resorted to funding its election campaign by waiving off debt. Right now, the small farmers still do not have access to banks. The network of banks is poor and not just that, a local moneylender who can lend money for a poor farmer's daughter's wedding a night before her wedding is any day more appealing. There has to be a special program or course for the sales force of banks to bring more and more small farmers in the net.
  3. Third point is irrigation. Times have changed but ways of irrigation have not yet changed. It is a very serious problem which is talked about in Indian agriculture business.
  4. Four is seeds. Many small farmers are continuing with the seeds their grandfathers bought. Naturally, the productivity has to be low. The seeds have become impotent.
  5. Investment, education, and know-how. There is a pathetic level of investment in R&D related to agriculture. Instead of giving subsidies to the fertilizer lobby and then making it an off-balance sheet item, that money should be diverted here. It will work wonders.
  6. Sixth is Inefficient PDS (Procurement and Distribution System). It is perhaps the biggest problem. Even if a farmer comes up with a good harvest, of what use is it, if he does not have access to market? This point reminds me of another thing. While discussing inflation, many people come up with the saying that "global food prices have risen by 45%". To them, I have the same question. So what? Domestic prices have risen just by 6%, so why do not you procure the produce of the farmers at home, who are even giving you at a lower price?

Per hectare productivity of small farmers is higher than that of large farmers despite the fact that large farmers manager to chew away more subsidies. We also need more land reforms to increase per hectare productivity.

The large holdings increase per-person productivity. The small holdings increase per-hectare productivity. The large holdings increase consumption of fuel (diesel), tractors, electricity, fertilizers, pesticide etc. The small holdings give more per hectare even after use of bullocks, less fertilizers etc.

The large holding is good only when population is low for example in United States. Countries like China and even Japan have small land holdings and they have higher per hectare productivity than US who uses a lot more fuel, electricity and fertilizers.

So first thing you should do to fix agriculture is stop supporting corrupt leaders. All of them support policies, which have ruined Indian agriculture. Every year, year after year, it was a train crash in slow motion, and yet all leaders of past 20 years have supported the policies, which have led to a crash even though adverse results were seen from the very first year.

India donates billions worth money and food grain to Africa while keeping our own population of a billion homeless, naked and hungry. We are left with a massive stock of food grain even after showing our 'benevolence' to poor foreign countries to grab a bigger share in international trade of geography-bound commodities. We are not going to feed our population with Infosys or the Nano.

So, what I mean to say is, agriculture is a badly neglected sector, but government and not the industry is to be blamed for this. In fact, industry is just filling in the gap. And many industries, especially manufacturing ones have agriculture sector in their input costs and in some way or the other related to their wage basket.

What I think is the solution is to bring maximum land under cultivation through farmer‑friendly policies and setting up of Word Class Agricultural Institutes. There is vacuum for a second Green Revolution.

Another solution is to bring agricultural land under government control and farmers under state pay. This will guarantee better lives and food security.

Lack of credit is also a big issue. You can get insurance and a price only for something you produce. And to produce, you need new seeds, tractors, electricity, etc. And these do not come free.

So friends from India and abroad, please put in your useful ideas in order to help Indian agriculture come out of this crisis.

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