Overreliance on one crop has cost MP farmers dear

Only a comprehensive set of polycentric reforms can mitigate the distress of the Indian agriculturists

Whenever flashpoints are reached, such as the current farmers’ agitation, there is a clamour for immediate palliatives. But what we must not overlook are the profound possibilities of reform that such crises open up.

Take Madhya Pradesh (MP), the epicentre of the agitation. Over the last decade, MP has been India’s leading state in agricultural production. Paradoxically, this has set the scene for the crisis. It is clearly not enough to increase production without a concomitant emphasis on reducing costs, ensuring sustainability, providing a secure market and moving farmers up the value chain.

As any player in the stock market knows, portfolio diversification is the best hedge against market risk. In farming, it is also the safest guarantee of sustainable returns, more so in the present context of climate change. Over the last three decades, soybean has emerged as the single most important crop in MP. This over-reliance on a single crop has cost MP farmers dear. What they face today is a crisis of “over-production”. Farmers want a rise in incomes, not just production. This depends critically on both costs of production and being able to sell what they produce at a reasonable price. Soy farmers have got squeezed at both ends. The major demand for soybean has been from companies that export soymeal, which accounted for almost 80% of output. But over the last seven years, Indian soymeal exports have crashed thanks to a 150% increase in global soybean output. Argentina and Brazil produce almost 50% of world soybean at lower costs and higher productivity. The Indian market has been flooded with cheaper soymeal and edible oil, with India being outpriced by as much as $150/tonne in the global soymeal market.

In many ways, therefore, this was a crisis just waiting to happen, as we have steadfastly refused to reform agriculture in India. The first need is to diversify and never revert to this over-dependence on one crop. India is a land of great agro-ecological diversity. Through monocropping we have converted this into our biggest weakness, hugely magnifying the risks of farming. There are many parts of the country facing a massive water crisis. But by procuring only rice and wheat, we continue to incentivise farmers to grow these crops, which take up nearly 50% of our water.

Until we diversify procurement operations to include millets and pulses, farmers will not have the incentive to cultivate these crops, which are much more suited to soil and water conditions in large parts of India. We must include these crops in the mid-day meal schemes so that our children eat more nutritious food, while providing farmers a steady demand for these crops.

We also need to lower costs of cultivation by reducing dependence of farmers on chemical fertilisers and pesticides, prices of which have soared and whose impact has been declining . They also cause immeasurable damage to soil and water, further lowering productivity and increasing costs. The good news is that all over India, farmers are blazing the trail with non-chemical agriculture. However, these attempts need strong government support . The huge and misdirected fertiliser subsidy needs to be increasingly focused on non-chemical options.

Diversification also means support for India’s livestock sector, the fastest growing segment of the rural economy. Recent policy changes, which could jeopardise this potential, should be reconsidered.

As for the perishable segment of fruits and vegetables, they will have no future without massive investment in agro-processing, cold chains etc, so that farmers can move up the value chain. Unfortunately, investment in agriculture is declining at 0.8% per year (at constant prices) over the past seven years.

The farmers’ most fundamental predicament is about water. Groundwater, the backbone of our economy, is facing a grave crisis of sustainability. We need to give momentum to watershed management, recast MGNREGA on watershed lines, enact a new groundwater law and effectively implement the National Aquifer Management Programme. Only this comprehensive set of polycentric reforms can mitigate the distress of the Indian farmer.

DIVERSIFICATION MEANS SUPPORT FOR THE LIVESTOCK SECTOR, THE FASTEST GROWING SEGMENT. RECENT POLICY CHANGES, WHICH COULD JEOPARDISE THIS POTENTIAL, SHOULD BE RECONSIDERED