The story of Indian agriculture is riddled with inconsistencies. Be it for inputs or farmlands or pricing or futures, at every stage, hurdles and policy inconsistencies tend to distort the market. No wonder more people now move away from farming.
This transformation is supported by the fifth Economic Census (2005) carried out by NSSO which shows rise in non-farm activities and associated employment. The Census indicates that about a fifth of the non-farm rural workforce is employed in agricultural establishments, while four-fifth worked in non-agricultural establishments.
While this shift is welcome as it signifies a more growth-oriented economy based on manufacturing and services, given India?s dependence on agriculture, the need is to make farming more efficient.
The crisis starts right from the time a crop is planted on land, which itself is getting scarce. Between 2003-04 to 2007-08, total land under agriculture dropped from 183.19 million hectare to 182.44 million hectare. Though marginal, given the spread of India?s farming, any drop could lead to large fluctuation in output and price. Besides, input availability and price are not sufficient to meet demand. Every year, millions are spent on subsidisies, but yields don?t rise in tandem.
Annually, only 30% of the total 245-250 lakh quintals of seed used in farming is certified by accredited agencies, the remaining met either through use of old seeds or purchase of uncertified seeds. The result is clear: India?s per hectare yield of paddy, wheat, maize and groundnut is lower than world average. In paddy, India?s per hectare yield is lower than even Bangladesh, a country less in size than an average Indian state. In wheat, the country?s per hectare yield is lower than Argentina, Canada and Egypt.
The dilemma spreads through the entire supply chain. Pricing of farm produce is often a political tool between states and Centre, given that almost 60% of India works in fields. As agriculture falls in the Concurrent List, both states and Centre play a game of one-up-man ship in pricing. Inadequate storage and warehousing facilities complicate it further.
Tonnes of grains, fruits and vegetables rot every year because of lack of adequate storage, a prefect scenario for an army of middlemen and wholesalers. Ultimately, the end consumer pay through his nose, while the farmer is inadequately compensated. The concept of market-driven prices is put to test because of meddling by states and Centre. Policies on export and import of farm commodities is again riddled with inconsistencies. As the subsequent pages show, agriculture in India needs a total relook and overhaul, focused more on action than on words if it has to face the fast growing challenges from climate change and globalisation.