Rational Expectations: How to win over Punjab’s farmers

By: |
November 9, 2020 6:45 AM

Pay them to switch to new crops, indeed make it easier for farmers across the country to get better technology and access to markets

So, if the Centre wants to take its plans forward, it needs to find ways to shift farmers to different crops—in the case of Punjab and Haryana, this is critical for the water-table as well—and to more high-yielding ones.So, if the Centre wants to take its plans forward, it needs to find ways to shift farmers to different crops—in the case of Punjab and Haryana, this is critical for the water-table as well—and to more high-yielding ones.

Are you growing apples or wood, a New Zealand agriculture scientist asked Harichand Roach after he saw his 15-acre orchard in Kotgarh in Shimla district—the ‘delicious’ variety was first introduced here 100 years ago—a couple of decades ago. At that time, India’s apple trees were majestic, at heights of 30-40 feet, but grew more wood than apples. Roach converted his orchard to more modern varieties that were 10 feet tall but grew more apples that were also easier to pluck.

Even better varieties are now available, and Kunal Singh, who has 6 hectares in Kotkhai in Shimla district, found this raised productivity by a third and doubled the price for his produce; India’s average productivity (see graphic) is still a fourth that of the US. Importing the plant material, however, remains complicated, as does finding new markets.

PM Narendra Modi has taken the first step in reforming markets to release farmers from the tyranny of APMC-mandis, but if farmer incomes are to truly rise—and they can given India’s abysmal yields —farmers need easy access to top-class seeds/planting material; finding ways to give farmers a greater share of the retail price is also a big challenge.

In this context of helping farmers get better-quality planting material, the government’s treatment of Monsanto is the perfect example of what not to do. Monsanto’s seeds transformed India’s cotton-farming—that is what allowed Gujarat, when Modi was the CM, get a 10%-plus farm growth for over a decade—but the central government tried to declare its patent (given by India’s patent office!) as illegal and put all manner of price restrictions on it. As a result, Monsanto has refused to bring in the next generation of seed technology to India.

Indeed, while Punjab CM Amarinder Singh is batting for the continuation of the MSP-based procurement of wheat and rice, in the past, he has pushed for ways to move more of Punjab to citrus—he visited Israel to get collaborations in citrus, dairy and drip-irrigation a few years ago—but ironically the central government never helped. Weaning off farmers would take a few years till the citrus trees were ready to fruit, Singh used to argue, so the Centre needed to give him money to import top-quality plant material as well as to pay farmers in the interim period. This is much the same point Kunal Singh makes in the case of new plant material for apples.

So, if the Centre wants to take its plans forward, it needs to find ways to shift farmers to different crops—in the case of Punjab and Haryana, this is critical for the water-table as well—and to more high-yielding ones. Making good the income-gaps in the way the Punjab CM used to suggest is not going to be cheap, but the Centre has the money, it just refuses to reform enough for the funds to be released. It wastes lakhs of crore rupees each year buying extra grain for the PDS system and on subsidised fertilisers—ironically, the latter is actually hurting soil productivity—so gap-payments are not really that hard to make; the important thing is to have a plan on how much of acreage has to be shifted each year and to assiduously work the plan.

Though it is early days, the good news is that several input suppliers are getting together to look at comprehensive solutions rather than, as in the past, just trying to sell their own products. There is, for instance, little point just having higher-yielding seeds if the right amounts of fertiliser and pesticides are not used; and rather than today’s flood-irrigation techniques, drip irrigation will help improve yields dramatically.

Better Life Farming, for instance, is a partnership between Bayer, the World Bank’s IFC, Tata Trusts, Yara for fertilisers, Netafim for drip irrigation—India uses 2-3 times more water than China and Brazil per tonne of grain—Axis Bank for financing and big buyers like DeHaat, Big Basket and AgriBazaar; reducing middlemen helps farmers get a larger share of the retail price. An experiment with 20 farmers doing chilli farming in Varanasi in Uttar Pradesh started in 2015 with some of these partners and doubled farm yields and trebled incomes; even farmers from the country’s chilli capital Guntur, Bayer officials say, visited the farms to see how yields doubled once the project scaled up.

A similar experiment with tomatoes in Jharkhand saw yields rising to 20 tonnes an acre, or five times the regional average. And during Covid-19, when grape growers in Maharashtra were stuck with their produce, AgriBazaar was roped in to buy the grapes to sell on its digital platform. Better Life plans to cover 3 lakh farmers by the end of the year and despite the Covid restrictions, it found that it was able to connect to one lakh farmers every day to give advice on growing their business in a sustained manner.

While the government strategy is mostly related to subsidies, this is really missing the point. Yara’s experiment with sugarcane farming in Bijnor saw fertiliser costs rise about a third but with yields rising a fifth, the cost-benefit ratio was as high as 14.4 to one; in the case of potatoes, it was 8.5 to one and 16.1 to one in the case of bananas. Indeed, that is also why, while knockoffs of Monsanto’s new-generation cotton seeds are available at a much higher price than the older-generation ones (where the government has put a cap on prices), farmers are quite happy to use them as the jump in profits is far higher than the costs. Freeing fertiliser prices, for instance, will make it viable for firms to add critical nutrients that, in turn, will boost crop yields.

Interestingly, while most economists and politicians are focussed on the World Bank’s Ease of Doing Business (EoDB) for manufacturing activity, not as much attention is paid to the same organisation’s Enabling the Business of Agriculture. India is ranked 52nd of 101 countries with a score of 62.33. As the report points out, it takes 397 days to register a new cereal variety and 804 days for a new fertiliser. Till agriculture’s EoDB is not fixed, India can never hope to double farmer incomes; given how many people are dependent upon agriculture, that is unfortunate. Indeed, as the recent stock limits imposed on onions makes clear, the government is still not fully committed to genuinely freeing the sector or to move to policies that are radically different from those of the last 70 years.

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