Relook agri-subsidies to curb agri-pollution

November 23, 2020 6:00 AM

Taxpayers are paying for agri-pollution via subsidies that prop the cropping culture Driving agri-emissions. A `10,000-cr diversification package, over five years, is needed

An important element to correct in the policy matrix is the policy of subsidies on power, fertilisers and procurement.An important element to correct in the policy matrix is the policy of subsidies on power, fertilisers and procurement.

By Jessica Seddon & Ashok Gulati

If you were being forced to consume poison and pay for it, how would you react? Not well, for sure. It sounds abstract, far-fetched, but this is one of the dynamics at play behind air pollution in Delhi and the broader Indo-Gangetic Plain.

People in this highly-polluted airshed are choking, led towards a slow death. As winter dawns, the wind slows, temperatures drop, and suspended particulate matter (PM) accumulates. The already high pollution in Delhi and surrounding cities from congested traffic, dust, construction, waste burning, power generation, etc, gets a top-up from paddy-stubble burning in Punjab, Haryana and Western Uttar Pradesh. This top-up varies daily, from 1% to 42% of total pollution (see graphic). But, it is, in general, a big chunk of the poison, as a growing body of research—using satellite data to ground monitoring to chemical analysis—concurs.

Agriculture’s contribution to air pollution runs even deeper than what happens between crop seasons. The Indo-Gangetic Plain is also one of the world’s largest and rapidly-growing ammonia hotspots. Atmospheric ammonia, which comes from fertiliser use, animal husbandry, and other agricultural practices, combines with emissions from power plants, transportation, and other fossil fuel burning to form fine particles. The precise share of these “secondary particulates” (secondary because they are formed by multiple direct, or primary, emissions reacting in the atmosphere) has not been extensively studied for Indian cities, but findings from China with similar emission patterns suggest that they can account for a quarter to a third of particulate matter pollution even in urban settings.

To be sure, agriculture alone is not the full story. The post-Diwali PM 2.5 levels of 1,970 in Vivek Vihar to 1,073 in Mandir Marg in Delhi (against a safe value of 60) were clearly a cocktail of many sources. It is important to note that agriculture is a victim of pollution as well as a perpetrator. Particulate matter and ground-level ozone (formed from industrial, power plant, and transportation emissions among other ingredients) cause double-digit losses in crop yields. Ozone damages plant cells, handicapping photosynthesis, while particulate matter dims the sunlight that reaches crops. Tony Fischer’s 2019 estimates of the two pollutants’ combined effect suggest that as much as 30% of India’s wheat yield is missing (Sage Journals, Outlook for Agriculture). Earlier, Sinha et al (2015), in Atmospheric Chemistry and Physics Discussions, found that high ozone levels in parts of Haryana and Punjab could diminish rice yields by a quarter and that of cotton by half.

But the irony of agricultural pollution is that taxpayers are essentially paying for it through a system of subsidies that actually motivates the very behaviors that drive the agricultural emissions that they breathe.

Much of the policy attention has focused on how to change the disposal of paddy stubble, but our current system of subsidies is a big reason that there is even stubble on these fields in the first place. Free power—hence “free” water, pumped from the ground—is a big part of what makes growing rice in these areas attractive. Open-ended procurement of paddy, in spite of bulging stocks of grains with the Food Corporation of India, adds to the incentives. Subsidies account for almost 15% of the value of rice being produced in Punjab-Haryana belt.

Similarly, the roots of rising ammonia lie in the way fertiliser is used. And fertiliser, particularly urea in granular form, is highly subsidised. This is one of the cheapest forms of nitrogen-based fertiliser, easy to store, easy to transport, but it is also one of the first to “volatilise,” or release ammonia into the air. This loss of nitrogen, the main point of fertilising in the first place, then leads to a cycle of more and more fertiliser being applied to get the intended benefits for crops. There are ways to reduce the nitrogen loss, and pollution consequences, but they are not as cheap, easy, and subsidised as the basic granules.

We have to stop paying for poison. An important element to correct in the policy matrix is the policy of subsidies on power, fertilisers and procurement. We need to shift the nature of support to farmers from input subsidies to investment subsidies, say for conversion of paddy areas in this belt to orchards with drip irrigation, vegetables, corn, cotton, pulses and oilseeds, that consume much less water, much less power and fertilisers, and don’t create stubble to burn.

A diversification package of, say, Rs 10,000 crore spread over the next five years, equally contributed by the Centre and states, may be the best way to move forward in reducing agriculture-related pollution. States’ savings on power subsidies and from reducing water table depletion could pay for most of the package. The approach to diversification has to be demand-led, with a holistic framework of value chain, from farm to fork, and not just focused on production. The role of the private sector in building value chains will be critical.

On the fertiliser front, instead of massive subsidisation of urea (to the tune of almost 75% of its cost), it would be better to give farmers input subsidy in cash on per hectare basis, and free up the prices of fertilisers completely. This would be in a crop-neutral way that would make agriculture demand-driven and also save the country from high costs of carrying excessive stocks of rice and wheat. Government procurement of paddy from farmers burning stubble in their fields may also be restricted.

Taken together, these measures could double farmers’ incomes, promote efficiency in resource use, and reduce pollution—a win-win for all. The Modi government has already undertaken bold agri-marketing reforms. It is time to reform the input subsidy regime and stop paying for poison.

Seddon is Fellow, Chadha Center for Global India at Princeton University, and Gulati is Infosys Chair Professor for Agriculture at ICRIER

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