Spotlight on farmers in election year

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.

Between 2008-09 and 2011-12, agricultural GDP – the most widely used measure of farm income – averaged 12%. Between 2013-14 and 2016-17, it rose 9.2%, despite two drought years. Both numbers are higher than the national average.

At a business summit in Bhopal in 2016, three-time chief minister Shivraj Singh Chouhan, who belongs to the Kirar cultivating 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, are considered top 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 calling a krishi mahapanchayat (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, prompting farmers to diversify into commodities, such as chana (chickpeas), urad (black gram), moong (green gram) and soyabean.

Irrigation and a price-support policy took care of production, though, not markets. 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’t good. That year, commodity prices 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. “During Chouhan’s first decade, 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 canal commands (from all sources) from 0.808 mha (million hectares) in 2006 to 2.5 mha in 2012–13,” Tushaar Shah of the Colombo-based International Water Management Institute and co-authors wrote in a study published in EPW (Feb 6, 2016).

IRRIGATION MODEL

Canal irrigation, according to Shah’s analysis, rose in all of the state’s river basins areas rather than just the Narmada. The model was Gujarat. Prime Minister Narendra Modi, Shah says, was the original architect of this strategy (when he was chief minister of Gujarat) which saw Gujarat’s agricultural growth rate average 9% a year between 2000 and 2008.

In the 2008 assembly elections, Chouhan won landslide support from farmers for expanding the reach of irrigation. In 2010, he sacked the irrigation secretary for alleged irregularities, replacing him with Radheshyam Julaniya.

Shah says the state adhered to the four principles of effective canal operation: “rationalised irrigation schedules, tailto-head irrigation, osarabandi (operating canals by strict rotation) and operating canals at full-supply level”.

On ground, output soared. Vegetable output grew nearly 300% between 2011 to 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 soyabean and No.2 in chana (chickpea),” says Rajesh Rajora, the state’s principal secretary for agriculture.

Beneath these achievements, though, a problem of plenty was building up. “In agriculture, even a small excess can cause big problems because traders take 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 and disruptions such as demonetisation, 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 protest the next month, five farmers died in police firing in MP’S Mandsaur. This prompted the government to launch a scheme (Bhavantar) to make up for losses by directly paying the difference between modal prices and the minimum support prices fixed at the national level.

PERSONAL TAKES

Can rural distress coexist with high farm growth? Personal insights from farmers offer a clue. Production volumes are one thing, getting the right price quite another.

The fortunes of Kailash Saini, a 45-year-old small cultivator near Sonkatch in Devas, a district that won a United Nations award in 2012 for water management, mirrors the swing in the state’s farm sector.

Saini praises Chouhan for bringing him prosperity that led him to take up more profitable crops: chickpea and soyabean, apart from wheat. The big boost came from irrigation from a nearby canal. He had a good thing going between 2005 and 2012, acquiring a tiller and buying an additional patch of land. Each year, Saini would take credit from local lenders 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 soybean prices collapsed. “I couldn’t recover even my basic costs for soyabean. I still owe ~70,000 to my creditors,” he says. That year, the state’s farm growth slowed 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 scheme that would have paid him the deficit of ~600.

FARM CRISIS 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

FALLING PRICES A BLOW

Falling prices, that have globally hit a multi-year low, are the main gripe of farmers in this sprawling state of 11 agroclimatic zones.

According to the UN Food and Agriculture 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 exports fell 22.6% — from ~1.37 lakh crore to ~1.06 lakh crore, according to data from the Agricultural and Processed Food Products Export Development Authority (APEDA).

In the past two years, soyabean farmers like Saini have suffered because India has lost out to countries that export genetically-modified soyabean, whose de-oiled cakes are used as animal feed in EU countries. “EU was our main export market. About 28 European countries now allow GM soyabean de-oiled cakes. In these countries, we are losing out,” says a state farm ministry official.

Last year, there was a drought in 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 quintal from the government after selling 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 Pravesh Sharma, former agriculture secretary of the state and a scholar with the New Delhi-based Indian Council for Research on International Economic Relations. Policy, which has long focused on production, he says, has only begun to 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