Gov­er­nance: Time to cash in

Cash crops have the po­ten­tial to make the goal of dou­bling farmer in­come a re­al­ity

Gfiles - - CONTENTS - The writer is Sr. Vice Pres­i­dent, ITC Ltd. The views ex­pressed are per­sonal.

Cash crops have the po­ten­tial to make the goal of dou­bling farmer in­come a re­al­ity

IN­DIA is un­der­go­ing a pe­riod of prodi­gious change, things are be­ing looked at from a whole new per­spec­tive and ru­ral In­dia, is to­day, at the heart of many govern­ment poli­cies and ini­tia­tives. In all this, the Prime Min­is­ter’s pas­sion­ate ap­peal of dou­bling farmer’s in­come as­sumes a game chang­ing role. To my mind, this can be­come even more at­tain­able if we look at the tremen­dous po­ten­tial that cash crops have to of­fer. My fo­cus here is on cot­ton, tobacco and jute, cash crops that have good de­mand and a ready mar­ket. In times, when farm­ers mostly have small tracts of land, with the right in­ter­ven­tions, cash crops can in­deed pro­vide the plat­form for ex­po­nen­tially in­creas­ing their in­come. In In­dia, cot­ton pro­vides liveli­hood to 6 mil­lion farm­ers di­rectly and an ad­di­tional 40-50 mil­lion peo­ple are em­ployed in the cot­ton trade and its pro­cess­ing. In­dia is the largest pro­ducer of cot­ton in the world pro­duc­ing 6.2 mil­lion met­ric tonnes in 2017-18; of this, 5.3 mil­lion met­ric tonnes were con­sumed lo­cally. De­spite be­ing the largest pro­ducer, In­dia has the low­est yields of cot­ton in the world. Since cot­ton is a wa­ter in­ten­sive crop, drip ir­ri­ga­tion that pro­vides max­i­mum ben­e­fits with min­i­mum wastage is the need of the hour, if yields are to be sub­stan­tially in­creased. High den­sity plan­ta­tion as against the rel­a­tively spa­cious plant­ing (spe­cially in hy­brid mod­els), pro­vid­ing seeds that re­duce du­ra­tion of the crop thereby re­duc­ing pres­sure on scarce mois­ture in the rain-fed ar­eas along with pro­vid­ing su­pe­rior and stronger seeds that can with­stand pest at­tacks (a ma­jor prob­lem fac­ing cot­ton farm­ers) can go a long way in ad­dress­ing prob­lems re­lat­ing to cot­ton farm­ing in In­dia and in­creas­ing farmer in­come. In­dia is the sec­ond largest pro­ducer and ex­porter of tobacco in the world with an es­ti­mated an­nual pro­duc­tion of 800 mil­lion kg. It pro­vides liveli­hood to 46 mil­lion peo­ple. How­ever, it oc­cu­pies a mea­gre 0.24 per cent of the coun­try’s to­tal arable land area. Tobacco also con­tin­ues to face the wrath of the state de­spite the fact that no other crop can pro­vide sim­i­lar re­mu­ner­a­tion to farm­ers in the re­gions where it is grown. In 2004, a study by the Cen­tral Tobacco Re­search In­sti­tute (CTRI) con­cluded that no sin­gle crop is more re­mu­ner­a­tive than FCV tobacco. This study re­placed tobacco with Ben­gal gram, black gram, red gram, paddy and sug­ar­cane. This re­place­ment by other crops caused a mas­sive loss of ` 225 crore to the farm­ers as com­pared to the value re­al­i­sa­tion in the pre­vi­ous year.

Tech­no­log­i­cal ad­vance­ments along with syn­ergy be­tween the govern­ment and en­trepreneurs is the need of the hour if jute is to ex­pand its foot­print and be­come a vi­able al­ter­na­tive to plas­tic

Tobacco needs to be seen as a cash crop and no more. If its pro­duc­tion is re­duced, there is less to ex­port and the In­dian farmer loses out. On the con­trary coun­tries that have dealt with tobacco purely as a cash crop like Zim­babwe and Malawi to name a few, have wit­nessed tremen­dous in­crease in the tobacco farmer’s in­come, which has in turn ben­e­fit­ted their over­all econ­omy. In 2018, Zim­babwe wit­nessed record tobacco pro­duc­tion at 240 mil­lion kg; its grower earn­ings in­creased from $559 mil­lion in 2017 to $700 mil­lion in 2018. These are ex­pected to reach $1 bil­lion in the near fu­ture. Here it is per­ti­nent to note that such re­sults were pos­si­ble only be­cause of the govern­ment’s sup­port in al­low­ing farm­ers to in­crease hec­tarage un­der tobacco cul­ti­va­tion and en­cour­age­ment of con­tract farm­ing which en­sures that farm­ers get the nec­es­sary in­puts and at the right time. In Malawi too, ow­ing to favourable govern­ment ini­tia­tives, it pro­duced 171 mil­lion kg of tobacco and earn­ings from it were pegged at $212 mil­lion in 2017. If we look at the to­tal ar­eas of In­dia, Zim­babwe and Malawi we re­al­ize that In­dia has a far greater po­ten­tial while the smaller coun­tries are al­ready pro­duc­ing at near op­ti­mum lev­els.

JUTE pro­vides di­rect em­ploy­ment to 0.37 mil­lion work­ers in or­gan­ised mills and in di­ver­si­fied units, in­clud­ing the ter­tiary sec­tor and al­lied ac­tiv­i­ties, and sup­ports the liveli­hood of around 4 mil­lion farm fam­i­lies. If we look at the av­er­age pro­duc­tion of raw jute dur­ing 2011-2015, it stood at 11,395 thou­sand bales while the av­er­age land area un­der raw jute cul­ti­va­tion for the same pe­riod stood at 893 thou­sand hectares. In­dia has a to­tal of 89 com­pos­ite jute mills that pro­duce 1,566 thou­sand tonnes per an­num. In­dia ex­ports 204 mil­lion tonnes of jute per an­num and the av­er­age for the pe­riod 2011-15 stood at 1,861.7 crore per an­num. To­day, jute needs to be looked at from a fresh per­spec­tive, where it needs to be the ma­te­rial of choice for re­plac­ing plas­tic for pack­ag­ing. In fact, jute also called the ‘ golden fi­bre’ meets all the stan­dards for safe pack­ag­ing, be­ing a nat­u­ral, re­new­able, biodegrad­able and eco-friendly prod­uct. Plas­tic items take any­where be­tween 450-1000 years to de­com­pose and with land­fills tak­ing up more and more space, the clear and un­prece­dented dan­gers to the en­vi­ron­ment are for all to see. The jute in­dus­try, how­ever, faces chal­lenges and is bogged down by the fi­bre’s as­so­ci­a­tion with the old style sack­ing for grain rather than the more aes­thetic uses that its be­ing put to in the home and else­where. The lack of ex­po­sure of the in­dus­try and fail­ure to look be­yond old-style sack­ing, the in­dus­try’s in­abil­ity to take ad­van­tage of the global shift to­wards nat­u­ral prod­ucts are the chal­lenges that face this im­por­tant cash crop in In­dia. In ad­di­tion, it is im­por­tant to state that the qual­ity of fi­bre is a hin­drance for the in­dus­try to ven­ture into house­hold ac­ces­sories and fash­ion­able items that have a huge lo­cal and in­ter­na­tional de­mand. There­fore, tech­no­log­i­cal ad­vance­ments along with greater syn­ergy be­tween the govern­ment and en­trepreneurs is the need of the hour if jute is to ex­pand its foot­print and be­come a vi­able al­ter­na­tive to plas­tic. In con­clu­sion, it is vi­tal that we look at cash crops as an in­come booster for the farmer. The state needs to in­no­vate and over­come cer­tain fixed opin­ions re­lat­ing to them espe­cially with re­gard to tobacco. I’m con­fi­dent that the best is yet to come as far as cash crop­ping in In­dia is con­cerned.

Coun­tries that have dealt with tobacco purely as a cash crop like Zim­babwe and Malawi have wit­nessed tremen­dous in­crease in the tobacco farmer’s in­come, which has in turn ben­e­fit­ted their over­all econ­omy

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