Spotlight on farmers in election year

Madhya Pradesh’s high farm growth came on the back of policies that focused on increasing production, not prices. Now, the state has become a victim of its own successes

DEVAS: Madhya Pradesh (MP), the country’s third-largest state, is an unlikely place for rural angst and violent uprisings. Driven by the output of wheat, oilseeds, soyabean, pulses and vegetables, the state’s soaring farm growth rates make it an agricultural powerhouse.

Between2008-09and2011-12, agricultural GDP – the most widely used measureoffarmincome–averaged12%. Between 2013-14 and 2016-17, it rose 9.2%, despitetwodroughtyears.Both numbers are higher than the national average.

AtabusinesssummitinBhopalin2016, three-time chief minister Shivraj Singh Chouhan,whobelongstotheKirarcultivating caste, chose to talk at length about milestones in agriculture, rather than in the industrial sector.

The state has won the Centre’s Krishi Karman Award – it is given for raising production targets under the National Food Security Mission – five times in a row for record wheat output, the last in 2015-16. MP’s wheat varieties, Sujata, Chandosi and Sarbati,areconsideredtop quality because of their superior gluten that gives them a sweet flavour.

“The chief minister spent his first year (2006) dealing with specific issues in agriculture after callingakrishimahapanchayat(roundtable with farmers) to know firsthand what they wanted,” says Pradeep Joshi, the in-charge of Indore’s Chawni agricultural marketing panel.

Chouhan embarked on a pro-production policy by expanding irrigation, promptingfarmerstodiversifyintocommodities,suchaschana(chickpeas),urad (black gram), moong (green gram) and soyabean.

Irrigation and a price-support policy tookcareofproduction,though,notmarkets. In 2007-08, Chouhan announced a bonus of ~150 per quintal of wheat on top of the Centre’s minimum support price. Successive gluts prompted the government to withdraw it in 2015. The timing wasn’tgood.Thatyear,commodityprices around the world fell.

To know what went wrong it’s important to know what went right.

Rural roads and canal irrigation have been the main drivers of MP’s farm growth.“DuringChouhan’sfirstdecade, the MP government spent a total of ~36,689 crore on irrigation, far less than Andhra Pradesh and Maharashtra had done. Yet, MP tripled irrigated area in canalcommands(fromallsources)from 0.808 mha (million hectares) in 2006 to 2.5 mha in2012–13,” TushaarShahofthe Colombo-based International Water Management Institute and co-authors wroteinastudypublishedin EPW(Feb6, 2016).

IRRIGATIONMODEL

Canal irrigation, according to Shah’s analysis, rose in all of the state’s river basins areas rather than just the Narmada.ThemodelwasGujarat.PrimeMinisterNarendraModi,Shahsays,wasthe original architect of this strategy (when he was chief minister of Gujarat) which saw Gujarat’s agricultural growth rate average9%ayearbetween2000and2008.

In the 2008 assembly elections, Chouhanwonlandslidesupportfromfarmers for expanding the reach of irrigation. In 2010, he sacked the irrigation secretary for alleged irregularities, replacing him with Radheshyam Julaniya.

Shahsaysthestateadheredtothefour principles of effective canal operation: “rationalised irrigation schedules, tailto-headirrigation,osarabandi(operating canals by strict rotation) and operating canals at full-supply level”.

On ground, output soared. Vegetable outputgrewnearly300%between2011to 2014: from 3.6 million tonnes to 14.2 million tonnes, making MP the country’s fourth-largest producer of vegetables.

“We produce 29% of India’s oilseeds and 28% of pulses. We are No.1 in soyabeanandNo.2inchana(chickpea),”says RajeshRajora,thestate’sprincipalsecretary for agriculture.

Beneaththeseachievements, though, a problem of plenty was building up. “In agriculture, even a small excess can causebigproblemsbecausetraderstake advantage of this,” says Kedar Shankar Sirohi, a farm leader who says the government was obsessed with figures on paper rather than with real issues.

With a depressed farm export market anddisruptionssuchasdemonetisation, prices began collapsing in the last one year. In May 2017, food inflation turned a negative 1.05, a five-year low. In a violent protestthenextmonth,fivefarmersdied in police firing in MP’s Mandsaur. This prompted the government to launch a scheme(Bhavantar) tomakeupforlosses bydirectlypayingthedifferencebetween modal prices and the minimum support prices fixed at the national level.

PERSONALTAKES

Canruraldistresscoexistwithhighfarm growth? Personalinsights from farmers offeraclue.Productionvolumesare one thing, getting the right price quite another.

The fortunes of Kailash Saini, a 45-year-old small cultivator near SonkatchinDevas,adistrictthatwonaUnited Nationsawardin2012forwatermanagement, mirrors the swing in the state’s farm sector.

Saini praises Chouhan for bringing himprosperitythatledhimtotake up moreprofitablecrops:chickpeaandsoyabean, apart from wheat. The big boost came from irrigation from a nearby canal.Hehadagoodthinggoingbetween 2005 and 2012, acquiring a tiller and buyinganadditionalpatchofland.Eachyear, Sainiwouldtakecreditfromlocallenders and roll over some of the outstanding to the next cycle.

The arrears didn’t bother him or his creditors because he was doing well. In 2015-16, he suffered a blow because soybeanpricescollapsed.“Icouldn’trecover even my basic costs for soyabean. I still owe ~70,000 to my creditors,” he says. Thatyear,thestate’sfarmgrowthslowed to 1.7% due to drought.

A month ago, Saini says he sold 10 quintal (1,000 kg) of soyabean at ~2,850, about 18% lower than the usual price of ~3,500. He would have benefited had he enrolled in time for the Bhavantar schemethatwouldhavepaidhimthedeficit of ~600.

FALLINGPRICESABLOW

Falling prices, that have globally hit a multi-year low, are the main gripe of farmersinthissprawlingstateof11agroclimatic zones.

AccordingtotheUNFoodandAgriculture Organisation, global food prices in 2016 fell 1.5%, the fifth straight year of decline. In 2016, FAO’s global food price index averaged 161.6 points, about 30% lower than the index for 2011.

Almost on cue, between 2013-14 and 2015-16, the value of India’s agricultural exportsfell22.6%—from~1.37lakhcrore to~1.06lakhcrore,accordingtodatafrom the Agricultural and Processed Food ProductsExportDevelopmentAuthority (APEDA).

In the past two years, soyabean farmerslikeSainihavesufferedbecauseIndia haslostouttocountriesthatexportgenetically-modifiedsoyabean,whosede-oiled cakesareusedasanimalfeedinEUcountries. “EU was our main export market. About28Europeancountriesnowallow GM soyabean de-oiled cakes. In these countries, we are losing out,” says a state farm ministry official.

Lastyear,therewasadroughtin 18 districts and deficient rainfall in another 15. This caused farmers to shift to urad, a pulses variety, because it requires less water than wheat. The area under urad swelled to 18 lakh hectare from 11 lakh hectare.

Urad farmers who enrolled for the Bhavantar scheme got about ₹1,200 a quintalfromthegovernmentafterselling for ~2,400, says Sirohi. That’s a total price of ~3,600 per quintal when urad should sell for a minimum of ~5,500.

“High growth at one point doesn’t translate into prosperity forever,” says PraveshSharma,formeragriculturesecretaryofthestateandascholar withthe New Delhi-based Indian Council for ResearchonInternational Economic Relations.Policy,whichhaslongfocused onproduction,hesays,hasonlybegunto address imperfections in the markets. “This transition will take four-five years.”

WITH A DEPRESSED FARM EXPORT MARKET AND DISRUPTIONS SUCH AS DEMONETISATION, PRICES BEGAN COLLAPSING IN THE LAST ONE YEAR. IN MAY 2017, FOOD INFLATION TURNED A NEGATIVE 1.05, A FIVEYEAR LOW