Farm lessons from China and Israel

Experts from Israel, a global leader on water management, say that till India breaks away from free power for agriculture, there is no incentive for farmers to save water

All in a low-level equilibrium trap of poverty, except a few in the northwest that have much larger holdings and are supported by huge subsidies.
All in a low-level equilibrium trap of poverty, except a few in the northwest that have much larger holdings and are supported by huge subsidies.

If I say that Indian agriculture has the potential to double or even triple its output say in the next 15-20 years, many people will laugh it away. But the reality is that many countries have done it, and we can do it too, provided our agri-food policy framework takes a dramatic turn, from being subsidy-led to investment-driven, from being consumer-oriented to producer-oriented, and being supply-oriented to demand-driven by linking farms with factories and foreign markets, and finally, from being a business-as-usual to an innovations-centred system. At least, this is what we can learn from a comparative study of Indian, Chinese and Israeli agriculture in a just-released book ‘From Food Scarcity to Surplus- Innovations in Indian, Chinese, and Israeli Agriculture’ by Ashok Gulati, Yuan Zhou, Jikun Huang, Alon Tal, and Ritika Juneja (Springer Nature, 2021).

China, for instance, produces three times more agri-output than India from a smaller arable area (119 million ha vs India’s 156 million ha). The average holding size in China was just 0.9 ha in 2016-18, which is even smaller than India’s 1.08 ha in 2015-16. So, there is no doubt that smallholders can do wonders if they are given the right incentives, good infrastructure and research support, and right institutional framework to operate. As a result of all this, the absolute poverty headcount ratio of $1.9/day at 2011 purchasing power parity (PPP) definition was only 0.7% in China against 13.4% in India in 2015, as per World Development Indicators.

All the three countries, India, China and Israel, started off their new political journey in the late 1940s, but today China’s per capita income in dollar terms is almost five times that of India, and Israel’s almost 20 times higher than India. Agriculture contributes 8% of overall GDP in China vis-à-vis about 17% in India, and only 1% in Israel. Over a period of time, people have moved out of agriculture. China has about 26% of its workforce in agriculture, Israel less than 1%, and India is still stuck with 42% of its workforce in agriculture.

China, as many would know, started off its economic reforms in 1978 by taking up agriculture first. The country dismantled its commune system of landholdings and liberated agri-markets, allowing farmers to get much higher prices for their produce. As a result, during 1978-84, farmers’ incomes in China increased by almost 14% per annum, more than doubling in six years! This gave political legitimacy for further reforms as masses gained, and generated demand for industrial goods, sowing the seeds of the manufacturing revolution in China, led by Town and Village Enterprises (TVEs).

In India, the 1991 reforms basically bypassed agriculture. There was only some indirect effect when tariffs on manufactured goods were reduced. But Indian agri-food policies remained more consumer-oriented with a view to ‘protect the poor’. In the process, they never allowed farmers to enjoy the best prices they could get from free markets within India or abroad. Export controls, stocking limits on traders, movement restrictions, etc, all cwere effected at the hint of any price rise. The net result of all this was farmers’ incomes remained low and so did those of landless agri-labourers. Today, Indian agriculture is saddled with more agri-labourers (55%) than cultivators. All in a low-level equilibrium trap of poverty, except a few in the northwest that have much larger holdings and are supported by huge subsidies.

Israel offers something unique, which the whole world has to learn. How to turn a desert to cultivate high-value crops for exports (citrus fruits, dates, olives, etc) by using every drop of water, recycling urban waste-water for agriculture, using de-salinisation of seawater, etc. Water accounting in Israel is something exemplary. Our prime minister and several states CMs have often visited Israel and brought back the same message: save water and use every drop to produce more crop. But when I talk to Israeli experts, they categorically say that until India breaks away from the policy of free power for agriculture, there would be no incentive for farmers to save water. Can we learn something from Israel on this, as my biggest worry is how we are depleting our groundwater table?

Remember the famous proverb, “we do not inherit the earth from our ancestors; we borrow it from our children”. The accompanying infographics show how we are robbing the precious groundwater rights of our children. And this is alarming in a state like Punjab where almost 80% of blocks are over-exploited or critical, meaning the withdrawal of water is much more than the recharge.

As the wise man of Punjab, Prof SS Johl, often remarked, this is a disaster in the making, and business as usual scenario will lead to desertification of Punjab. The reasons are well known—paddy cultivation on more than 3 million hectares. Paddy-wheat cycle in Punjab, which was a boon at one time is increasingly becoming Punjab’s bane. How did we come to this situation where we are depriving our children of Punjab’s sweet groundwater? Free power, highly subsidised urea, open-ended procurement, have become a deadly cocktail, eating away the natural wealth of Punjab.

Out of the box thinking is needed to break this regressive cycle for a brighter future for Punjab and our children. It is a hard nut to crack, but it is very much possible provided our policymakers have a 5-7 year vision to transform this belt into a belt of high-value fruits, vegetables, dairy, poultry, fishery, and even pulses and oilseeds, in line with the emerging demand pattern. Can the Centre and Punjab government join hands to deliver a better future for our children?

The author is Infosys chair professor, Icrier

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