The biggest problem of the Indian economy is its lopsided structure. More than 50 per cent of the country’s workforce is employed in the agriculture sector, most of them underemployed, while it constitutes only 17 per cent of our GDP. The country will never develop unless a large part of this workforce is gainfully employed in other sectors. Prime Minister Narendra Modi realised this at the beginning of his premiership and this is the core from which all his policies and schemes flow. Skill India was introduced to equip this workforce for other jobs; other schemes like Make in India, Startup India and Mudra will create more opportunities in other sectors.
Many schemes have been launched to improve the appalling inefficiency in agriculture, but it is a herculean task. In the last five years, agriculture has had an average annual growth rate of 2 per cent while the economy grew at above 7 per cent. This is because little has changed in agriculture for nearly half a century since the Green Revolution of the 1960s which achieved the very commendable goal of feeding the country’s huge population. Over 50 years later, foodgrains production is the only thing looking up—India harvested 273 million tonnes of cereals this year, its highest yield ever. The paradox is that every variable involved in the pursuit of pushing up foodgrains yields, from land holdings, soil, water, farming technology and markets, is in crisis. An estimated 3.18 lakh farmers committed suicide between 1995 and 2015, virtually a suicide every half-hour. Over 55 per cent of agriculture in India is still monsoon-dependent. Droughts often lead to farmer suicides as subsistence cultivators do not have the savings to cushion them from failed monsoons and the clutches of loan sharks.
If that wasn’t horrible enough, a plethora of inter-dependent problems are gnawing into the rural vitals of the world’s fastest growing economy. Nearly 60 per cent of overall irrigated land is from groundwater and water efficiency is abysmal. Our farmers use 2-3 times more water to produce one tonne of grains than their counterparts in Brazil, China and the US. Yet, our fixation with large canals and big dams ensures groundwater gets just 5 to 7 per cent of irrigation funds.
Meanwhile, average plot sizes in the country have halved, from 2.3 hectares in 1970 to 1.2 hectares today. Nearly half of the total land holdings are ravaged by erosion or alkalinity. Allocations for fertiliser subsidies are galloping at over 11 per cent per year. Farm mechanisation will make agriculture more costefficient—the labour component makes up as much as 40 per cent of the total cost of inputs now. Farmers don’t have access to cold storage facilities to store excess produce. And athough the government has opened food processing to FDI, the industry remains in its infancy.
Tragically, no government so far has tried to address the structural faultlines in agriculture, resorting instead to bandaid solutions like loan waivers. Uttar Pradesh became the latest to waive farm loans of over Rs 36,000 crore in March. It threatens to spark off competitive loan waivers in other agri-stressed states like Punjab, Haryana, Tamil Nadu, Telangana and Andhra Pradesh.
Our cover story, put together by Editor (Special Projects) Ajit Jha, looks at what ails our farmers and also a raft of solutions, from land banks to cold chains and a shift from flood to drip irrigation. It also assesses the formidable challenge agriculture poses for the Modi government. The prime minister has set an ambitious target for doubling farm incomes by 2022. This presently looks like a wild promise because just to realise this, the agriculture sector will have to grow at nearly three times the present rate, from 4.1 per cent to over 14 per cent. The country desperately needs another revolution in agriculture for the farmer to break out of his vicious cycle of misery and for us to become a modern economy.