AN AGRARIAN BIOPSY
Down To Earth|February 16, 2021
The widespread protests by farmers across India have forced us to probe the fundamentals of the farm economy
RICHARD MAHAPATRA

IT IS a crisis the country needed to experience. Agriculture as an issue had never attracted such attention. Currently, all the pillars of our governance system are engaged in dealing with the fast-spreading farmers’ protests across the country—from the legislative to the executive to the judiciary. Farmers are continuing their protests against the recently adopted farm laws. As more and more people throng the borders of the national capital, there have been over 300 protests from across the country in support of those camping in Delhi. Agriculture is emerging as the axis of polarisation among political parties. Moreover, India never experienced such farmers’ agitations; not even during the extreme agrarian crises like the crippling droughts of the 1960s or even in the early 1990s when India joined the World Trade Organization (wto) regime. These were just episodes of protests; governments declaring reactive policies and programmes; and, periodically waiving off farm loans. But now, the national slogan of “Jai Jawan, Jai Kisan” is prickling the conscience of people. The farmer is emerging as the polarising figure. Among political parties, there is a subtle, but swift narrative being scripted: “Are those protesting the real farmers?” This narrative has an unusual spin as well: “rich” v “poor” farmers in the ongoing debate over farmers’ protests. Nevertheless, farms and farmers—the theatre and the protagonist of an agrarian country—are defining the current political discourse. It is also time we raise some fundamental questions over this very existential occupation.

WHO IS AN INDIAN FARMER?

• 120 million households depend on agriculture

• 54.6% of India’s workforce is in agriculture

• India has more farm labourers than cultivators

In December, 2019 we came to know that there is not an official definition of a farmer in India. At least this is what Agriculture Minister Narendra Singh Tomar’s response in Parliament indicated. Anybody who has a piece of cultivable land is considered a farmer in India. Whether one is cultivating or not is not a parameter to be a farmer. But, this also leads to ambiguity in the exact number of farmers in India. For instance, one piece of cultivable land may be used by two persons. But in official counting based on land ownership, it would mean that only one farmer is the official owner of the land. This is the reason why the number of farmers in the country is different in the population census, in the agriculture census and in various schemes for farmers. However, the National Policy for Farmers—drafted by the National Commission of Farmers headed by M S Swaminathan—has a definitive definition of a farmer. It says, “For the purpose of this Policy, the term ‘farmer’ will refer to a person actively engaged in the economic and/or livelihood activity of growing crops and producing other primary agricultural commodities and will include all agricultural operational holders, cultivators, agricultural labourers, sharecroppers, tenants, poultry and livestock rearers, fishers, beekeepers, gardeners, pastoralists, non-corporate planters andplanting labourers, as well as persons engaged in various farming-related occupations such as sericulture, vermiculture and agro-forestry. The term will also include tribal families/persons engaged in shifting cultivation and in the collection, use and sale of minor and nontimber forest produce.” This definition has not been used for any purpose.

From the perspective of an electoral democracy—the largest one in the world at that—every fourth voter is a farmer in India.

An Indian farmer is one of the smallest in the world. The average landholding in the country is 1.08 hectares (ha); it typically sustains eight persons, according to the Agriculture Census of India, 2015- 16. Smallholders (farmers with less than 2 ha of landholding) now cultivate 42 per cent of operated land and constitute 83 per cent of total landholdings. But a quintessential agriculturist would also define a farmer in India as someone shouldering two major and critical responsibilities: sustaining his/her own food security while also feeding the country, one of the world’s largest consumers of foodgrains.

Agriculture is one of the largest components of the country’s economy, entirely managed by the majority small farmers. In 2019-20, according to the first estimate of national income by the National Statistical Office, the agriculture sector’s total output was R4,219,832 crore. This is the second highest output by a sector of the economy after manufacturing (in all, 11 sectors are considered for calculating the national economy). Of the eight industry types, agriculture is the only sector that grew in 2020-21 despite the novel coronavirus disease (covid-19) pandemic.

Contrary to popular perception, agriculture as a vocation is not on the decline. In 1951, 70 million households depended on it; the number has now gone up to 120 million. In the same period, the number of agricultural labourers has risen from 22 million to 144 million. According to the Economic Survey 2020- 21, about 54.6 per cent of the total workforce in the country is still engaged in agriculture and allied sectors. In other words, every second Indian worker is into agriculture. It is, in fact, an occupation rural India depends on. But there is a caveat: the share of agricultural labourers in the total agricultural workers increased from 40.3 per cent in 1991 to 54.9 per cent in 2011. This means we have more farm labourers than cultivators.

Notwithstanding the impressive size of the sector, its contribution to the national gdp has gradually declined: from 51 per cent in the 1950s to around 18 per cent currently.

THE SHARE OF AGRICULTURAL LABOURERS IN THE TOTAL AGRICULTURAL WORKFORCE INCREASED FROM 40.3 PER CENT IN 1991 TO 54.9 PER CENT IN 2011. THIS MEANS WE HAVE MORE FARM LABOURERS THAN CULTIVATORS

IS FARM ECONOMY IN DECLINE?

• 60 % of operational landholdings are rainfed

• Each farmer has a debt of R74,000

• Just 15% households earn 91% of total farm earning

The 700-odd farmer agitations in the last five years have a different story to tell. Farmers are no longer cheering their productivity; instead, they are demanding a fair price for their produce. This marks a generational switch in India’s approach to farming. In the 1950s-1960s, India focussed on attaining food self-sufficiency thus there was the evident priority of raising production and productivity of crops. Once we achieved this objective, in the 1990s, the focus was on averting hunger through the distribution of foodgrains to the poor and the needy. In all these changes, the financial return to farmers from farming never became a policy focus. Farmers are earning less and less from their harvests, while productivity and production have gone up. Compared with the production at the start of the 1960s, India now harvests 40 times as much tomato, 14 times more potato, eight times more wheat, thrice as much in poultry and meat, 13 times more fish, eight times more milk and almost 40 times more eggs. The scaling up of our food production far surpassed the growth in population. In comparison; the population grew only 2.9 times, from 460 million in 1961 to an estimated 1,325 million in 2017. So, the country’s agrarian scenario has drastically changed: from ensuring subsistence-level production to surplus production for marketing.

A member of an agricultural household earned around R214 a month, according to the Government of India’s Committee on Doubling of Farmers’ Income, which submitted its report in September 2018. But his/her expenditure was about R207. In simple terms, a member had a disposal income of just R7 a month. Even this is not stable.

The Economic Survey 2017-18 warned about the impact of climate change on the income of farmers. “Climate change might reduce farm incomes by up to 20-25 per cent in the medium term,” said the survey. Between 1871 and 2002, there were 23 major drought years. But in 16 years after this, the country has already faced four severe droughts. Since 2015, over 1,000 incidents of crop losses due to unseasonal rains and other related incidents have been reported. Annually, India loses about 2 per cent of its gdp due to natural disasters. The impact of climate change on farm income is more pronounced in rainfed areas, home to 60 per cent of operational landholdings. These areas account for more than 60 per cent of farmers in the country. The Economic Survey 2017-18, in fact, raises doubts on doubling of farmers’ income by 2022, a promise made by Prime Minister Narendra Modi.

These disasters have added to the economic decline of farmers who now, on an average, have R74,000 per capita debt, according to the All India Rural Financial Inclusion Survey done by the National Bank for Agriculture and Rural Development (nabard) in 2018. Over 52 per cent of farming households in the country are indebted currently. This means a farmer neither has the base capital to invest nor the risk capacity to take up agriculture.

THE CONTRIBUTION OF AGRICULTURE TO THE NATIONAL GDP IS DECLINING: FROM 51 PER CENT IN THE 1950S TO AROUND 18 PER CENT CURRENTLY

For India’s farmers, income inequality among themselves is harsher. The lowest among the farmers groups in terms of landholding earns the least. And India primarily consists of small and marginal farmers (those with landholding smaller 2 ha). India’s 85 per cent of landholdings are below 2 ha. According to the Committee on Doubling of Farmers’ Income, the average annual earning of a small and marginal farmer household was R79,779 in 2015-16. Now compare this with the earning of a large farmer household or a household with a landholding larger than 10 ha. Such households earned 7.5 times more than a small and marginal farmer household or, to be specific, R6,05,393/ year. A medium and semi-medium farmer’s household earned R2,01,083, or 2.5 times more than a small and marginal farmer household. It means 85 per cent of farmer households earn 9 per cent of total income while the rest earned 91 per cent.

There is a distinct variation in income levels across states depending on the level of agricultural growth. According to a research paper by Sanjoy Chakravorty, S Chandrasekhar and Karthikeya Naraparaju for the Indira Gandhi Institute of Development Research (igidr), monthly per capita incomes from cultivation was R2,311 in Punjab, while it was just R250 in West Bengal. It is a ninefold difference. More to it, “Monthly expenditures exceeded income in three of the largest states in the country—West Bengal, Uttar Pradesh, and Bihar—and, correspondingly, the average income of households with less than one hectare of land was less than consumption”. “We find that at the all-India level, in 2003, inequality in per capita incomes between landownership groups accounted for about 3% of total inequality in per capita incomes. This proportion increased to 7% by 2013. If we consider only the per capita incomes accrued from cultivation, then in 2003, inequality in per capita cultivation incomes between landownership groups accounted for about 10% of the total inequality in per capita cultivation incomes. This proportion increased to 15% in 2013.” The igidr study summed up: “Land possession was the key variable in determining income from cultivation, which accounted for half of income inequality, and hence was the key variable in explaining income inequality.” Farmers with 0.5 ha do not earn enough to cover their expenditure.

This raises a pertinent issue that has policy ramifications. The Green Revolution in the 1960s focused on increasing productivity and yield. But since then landholding has fragmented significantly. Marginal landholdings have tripled in the last 40 years. It means the old strategy is not reaping the same objectives.

Small farmers take a longer time to increase their income in comparison to large farmers. For example, during 2003- 13, households with over 10 ha of land were able to double income. But a small farmer with up to 1 ha of land could increase income by just 50 per cent during the same period. This means the government has to apply income groupspecific strategy to achieve the target of doubling farmers’ income.

The challenge of making farming lucrative has got tougher. According to government reports, the stagnation in government expenditure has led to reduction in non-farm job creation. So, a majority of small and marginal farmers who do not earn much from cultivation are not able to access alternative sources of livelihoods. This rings the proverbial economic alarm bells.

In recent decades, in an attempt to earn more income from agriculture, farmers diversified their crops. The contribution of crop diversification to the growth of the crop sector has been to the extent of 26.3 per cent, 33.3 per cent and 31.2 per cent in the 1980s, 1990s and first decade of the 2000s respectively. According to the Committee on Doubling of Farmers’ Income, “It may be observed that crop diversification has contributed the most to the growth of the crop sector during the period 2000-01 to 2009-10 in the southern region (48.6 per cent), followed by the eastern (42.1 per cent), western (37.9 per cent) and northern (26.2 per cent) regions, in that order”. Accordingto government data, by taking up highvalue crops, like in horticulture, increases gross returns up to R1.1 lakh per hectare. The switchover to horticulture is more pronounced among small and marginal farmers. In a sense, this is the economy of the poor that has been booming. But, it seems that this is also going to become a loss-making proposition.

The biggest challenge that haunts farmers in horticulture is the sale and postharvest loss. This is already making this boom less lucrative to farmers. This accounts for about 25 per cent to 30 per cent of production. This wastage is due to gaps in the cold chain such as poor infrastructure, insufficient cold storage capacity, unavailability of cold storages in close proximity to farms and poor transportation infrastructure. “At the all India level, the proportions of production that farmers are not able to sell in the market and thus do not get a monetary return for are 34 per cent, 44.6 per cent, and about 40 per cent for fruits, vegetables, and fruits and vegetables combined, respectively,” finds the Committee on Doubling of Farmers’ Income. This means every year farmers lose around R63,000 crore by just not being able to sell their produce for which they have already made investments. Just to make sense of this staggering figure: this amounts to 70 per cent of the investment required for making cold-chain infrastructure essential for avoiding post-harvest losses.

It is no wonder that close to 22 per cent of farmers subsist below the poverty line. According to the Census 2011, every day 2,000 farmers give up farming. Income from farming has already lost the prime spot in the farmers’ total household earnings. In 1970, three-fourths of a rural household’s income came from farm sources. After 45 years, in 2015, it is less than one-third. Most of the households now earn more out of nonfarm sources. In fact, a daily-wage labourer earns more than a farmer.

According to the Tribal Health in India report by the Union Ministry of Health and Family Welfare, the number of tribal farmers is coming down, and more are becoming agricultural labourers. India’s tribal population is over-dependent on agriculture and forest-related livelihood sources. In the past decade, 3.5 million tribal people have quit farming and other related activities. Between 2001 and 2011 census reports, the number of tribal cultivators reduced by 10 per cent, while the number of agricultural labourers increased by 9 per cent. This indicates a declining return from direct farming or people simply do not have the resources to do farming. In the absence of no other alternative, they are joining the informal labour force.

When agricultural economy is in deep crisis, it casts a shadow over both farm and non-farm workforce. A report by the Centre for Monitoring Indian Economy, a business information company in Delhi, shows that the gross value addition in agriculture in 2018-19 was at its lowest in 14 years. In 2018-19, an estimated 9.1 million jobs were lost in rural India and 1.8 million jobs were lost in urban India. Rural India accounted for 84 per cent of the job losses in the country. The Periodic Labour Force Survey 2017-18 report of the National Sample Survey Office found that between 2011-12 and 2017-18, some 34 million casual labourers, including 30 million farm workers, had lost their jobs in rural areas. This was a 40 per cent drop in the farm workforce. Here comes the threat to India’s overall economy. Over 90 per cent of the country’s gdp comes from consumption. Close to 50 per cent of the consumers in the country are either farmers or from households that earn primarily from agriculture. This means a sector that is already in a crisis is holding the fort of the “fastest growing economy” of the world. Will it be able to sustain it? A big no; and, that is the severe warning from a declining agrarian economy for the overall economy.

IS INDIA STILL AGRARIAN?

• Rural population growth rate is declining

• Rural India is more nonagrarian since two decades

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