With Sharad Pawar in govt, it’s a golden chance for Maharashtra to frame an agriculture policy

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December 9, 2019 12:29 AM

Maharashtra’s farmers have been in the news quite often, and for the wrong reason: high incidence of farmers’ suicides.

Maharashtra, Maharashtra  agri policy, Maharashtra Contingency Fund, Shiv Sena, NCP, Congress, IPU, FPO, Common Minimum ProgrammeOne of the key problems in Maharashtra’s agriculture is the low irrigation ratio


If the tumultuous developments that took place in Maharashtra’s politics over the last three weeks make anything clear, it is that everyone swears to help peasants first. Devendra Fadnavis’s 80-hour government sanctioned Rs 5,830 crore from the Maharashtra Contingency Fund to give relief to farmers affected by unseasonal rains. One wonders what happened to crop insurance, if the money had to finally come from the state exchequer. The Shiv Sena-NCP-Congress coalition declared that it would announce something bigger for farmers very soon. But, before doing that, it wants to first map and assess various schemes linked to farmers. That is a wise decision. And, given that Sharad Pawar is at the helm of affairs, it is a golden chance for Maharashtra to frame an agricultural policy that can be a lighthouse for many other states of India.

Maharashtra’s farmers have been in the news quite often, and for the wrong reason: high incidence of farmers’ suicides. While a little less than 10% of India’s population resides in Maharashtra, it accounted for 41% of farmers’ suicides in the country, as per the latest data. Although suicides are a very complex sociological phenomenon, it perhaps reflects the high levels of stress in Maharashtra’s agriculture. Early action is needed basically on two fronts: (1) issues of irrigation and water use management; and (2) building globally competitive value chains for major agri-commodities of the state, from farm to fork.

One of the key problems in Maharashtra’s agriculture is the low irrigation ratio, which stood at just 19% for triennium average ending (TE) 2014-15, compared to 48% at the all-India level (see graphic). Ironically, during TE 2002-03 to TE 2014-15, irrigation ratio increased only by one percentage point.

As of June 2017, the irrigation potential created (IPC) by Maharashtra’s water resource department (WRD) stood at 50.4 lakh hectares, while the irrigation potential utilised (IPU) was only 39.5 lakh hectares, or 78.4% (Economic Survey of Maharashtra, 2018-19). Massive public investments are needed to decrease the IPC-IPU gap, but that seems like a distant goal given the high leakages in the irrigation projects. The NABARD-Icrier study on ‘Getting More from Less’, by Gulati et al (2019), has estimated that the capital cost of major and medium irrigation (MMI) schemes in Maharashtra was the highest in the country, at Rs 13.5 lakh/hectare of IPC; the all-India average cost was Rs 4.5 lakh/hectare of IPC. The cost per hectare of IPU is even higher, at Rs 20.4 lakh/hectare. Given the alarmingly high capital cost in public irrigation, it is important to ensure transparency and accountability before any more money is put into it. Else, that money will also disappear as water disappears in sand.

But, ensuring better use of irrigation water is perhaps even more important than investing more in MMI schemes. A water-guzzling crop like sugarcane (remember, one kilogram of sugar needs 2,300 litres of water) occupies less than 4% of the cropped area, is entirely irrigated, and takes away 65% of the state’s irrigation water. On the other hand, cotton, which occupies roughly 18% of the cropped area, is just 2.7% irrigated. No wonder, most of farmers’ suicides take place in the cotton belt. The policy direction is quite clear: Contain area under sugarcane and bring it under drip irrigation, saving almost 50% of irrigation water, and channel that to other crops, especially cotton, and fruits and vegetables, where value generation per drop of water can be very high. Maharashtra’s cotton yield stood at 339 kg/hectare, much lower than the all-India average (457 kg/hectare) in TE 2017-18. Gujarat’s cotton area is about 60% irrigated, compared to less than 3% in Maharashtra, and that makes a Gujarati cotton farmer much more globally competitive than a Maharashtra farmer. Also, HT-Bt cotton, which is already being grown on 15-20% of Maharashtra’s cotton area “illegally”, without any formal approval, needs to be immediately declared legal.

The second key issue is matching cropping patterns with the emerging demand of high-value agriculture. In Maharashtra, agriculture is quite diversified, with cereals accounting for 34% of the cropped area, followed by oilseeds (18.5%), cotton (17.6%), pulses (16.3%), fruits and vegetables (6.1%), and sugarcane (3.8%). In terms of gross value of output, crops like cotton and fruits and vegetables account for 8% and 17%, respectively (see graphic).
Horticulture holds promise for Maharashtra, with some very successful stories, like that of grapes and pomegranate exports that linked farmers producer organisations (FPOs) to export markets. Onion, which is on the boil today, also calls for investments in modern storage facilities, and processing into dehydrated flakes that can reduce wastages. Maharashtra is the largest producer of onions, with one-third of India’s production.

Maharashtra has already opened up private mandis to ensure competition and fair trade, but more needs to be done to build efficient, commodity-specific value chains that connect FPOs to the best markets, be it organised retailers, food processors, or exporters. The state needs to embark on a special drive, promoting contract farming, and opening the land lease markets.

The livestock sector, too, deserves more processing plants for value added products that will help farmers realise better prices for their produce. Value addition in more organised value chains could be the mantra for the state’s agricultural transformation.

The Common Minimum Programme, worked out between the Shiv Sena, NCP, and the Congress, has lifted the hopes of the farming community in the state getting a better deal. But, to realise these hopes on the ground, one needs a good strategy that recognises constraints on the supply side (especially, water), and also taps the potential on the demand side through FPOs-run specific commodity value chains. Maybe, setting up a high level special task force under Sharad Pawar’s directions could see this potential actually realised for farmers.

Gulati is Infosys chair professor of Economics, & Jose is Research associate, ICRIER.Views are personal

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