Why, despite bountiful harvest, India’s farmers are in despair
By Prachi Salve, Alison Saldanha & Vipul Vivek
A plentiful harvest in 2016 but imports drive some prices down 63 per cent. A shortage of cash because of demonetisation. Despite Rs 3.5 lakh crore — enough to build 545 Tehri-sized dams — invested on irrigation over six decades to 2011, more than half of all farms depend on rains. These are the three factors agitating Indians who depend on farming — 90 million families, or 54.6 per cent of countrys 1.2 billion people.
As anger sweeps rural Madhya Pradesh after the death of six farmers in police firing, farm protests roil rural Maharashtra — wholesale markets are shut, produce is being dumped on streets — and governments of the debt-ridden states struggle to respond to demands for loan waivers, an IndiaSpend analysis and reportage from rural Maharashtra explores why farmers are both angry and desperate.
The primary reason farming is unviable is that farms here are now among the world’s smallest (the global average land-holding size is 5.5 hectares). Since 1951, the per capita availability of land has declined by 70 per cent, from 0.5 hectares to 0.15 hectares in 2011, and is likely to decline further, according to Ministry of Agriculture data.
Such “small and marginal land-holdings”, as they are called, now constitute 85 per cent of the number of operational farms in the country and have little access to credit.
Those are the larger issues. Here are the three reasons for the current turmoil:
- After back-to-back droughts, a good harvest, but incomes fall
As 2017 rolled in, news from farms appeared good. After droughts in 2014 and 2015, a good monsoon in 2016 reversed two years of rural economic decline. Agricultural growth, which contracted 0.2 per cent in 2014-15 and grew no more than 1.2 per cent in 2015-16, rose by 4.1 per cent in 2016-17.
Across many states growing pulses, such as Maharashtra, Karnataka, Telangana and Gujarat, markets were flooded with produce, especially tur (pigeon pea), which witnessed the highest growth among all pulses. India is the world’s largest pulses producer.
However, an influx of pulses from Myanmar, Tanzania, Mozambique and Malawi — growing 20 per cent over two financial quarters, from September 2016 to March 2017 — caused the price of Indian tur to plunge.
From Rs 11,000 per quintal (December 2015), the price of tur fell 63 per cent to Rs 3,800-4,000 per quintal — 20 per cent below the minimum support price (MSP) of Rs 5,050 per quintal (including a bonus of Rs 425).
Production of pulses rose 29 per cent, from 17.15 million tonnes in 2014-15 to 22.14 million tonnes in 2016-17. Tur production increased 50 per cent, from 2.81 million tonnes to 4.23 million tonnes, over the same period.
2. How demonetisation — and red tape — left farmers short of cash
On May 18, 30-year-old Prashant Lande waited under a harsh summer sun to sell 800 quintals of tur at the Amravati agricultural produce market committee (APMC). Lande said he refuses to sell his tur to the government procurement centre, although the state buys tur at a higher rate. At the market, Lande could sell his tur at Rs 3,800 to Rs 4,000 per quintal, while the government buying centre offered Rs 5,050 per quintal.
“We don’t sell to the government centre because the process of selling takes one month — from standing in line for the token to the sale to finally when the payment reaches the account,” said Lande. “Our fellow farmers who have sold their produce at the procurement centre on March 22, are yet to receive their payments and it is nearly June!”
It does not help that the effects of demonetisation continue to be felt across the rural economy.
Right after demonetisation, tomato farmers in Karnataka and Tamil Nadu, and onion farmers in Maharashtra and Gujarat, were the worst hit as prices fell by 60-85 per cent. With little respite more than six months later, the experiment has aggravated the circumstances leading to the current farmers’ strike.
“By now we should have begun preparing our fields for the monsoons, but because of demonetisation and the unavailability of cash, we are still struggling to find money for sowing,” said Lande.
At such a time, farmers like Lande turn to credit.
Up to 57 per cent of farm families in Maharashtra are indebted; the figure for India is 52 per cent, according to the National Sample Survey Organisation’s 2013 situation assessment survey of farm households, the latest available data.
This indebtedness has widespread consequences. More farmers committed suicide in Maharashtra (4,291) in 2015 than any other state, rising seven per cent from 4,004 in 2014, followed by Karnataka (1,569) and Telangana (1,400).
Now, after Uttar Pradesh’s new government waived Rs 30,792 crore of farm loans, pressure is building on the governments of Maharashtra, Madhya Pradesh, Tamil Nadu and Karnataka to do the same.
- In an era of climate change, 52% of farmers without irrigation
The basic agri problem is that despite the spread of irrigation — a sector plagued by unfinished projects and corruption – 52 per cent of farms still depend on the vagaries of rain, which is becoming increasingly uncertain in an era of climate change. Extreme rainfall events in central India, the core of the monsoon system, are increasing and moderate rainfall is decreasing.
The droughts of 2014 and 2015 in rural Maharashtra were mitigated by the plentiful rains of 2016, but many parts of the state also endured floods.
On July 1, 2015, Prime Minister Narendra Modi launched the Prime Minister’s Farmer’s Irrigation Programme, with a budget of Rs. 50,000 crores over five years. In 2015-16, less than a third (Rs 312 crore) of Rs 1,000 crores set aside for micro-irrigation was released, reveals a government report. Of this, up to April 2016, no more than Rs 48.3 crore, or less than five per cent, was actually spent, according a micro-irrigation financial progress monitoring report. The government set Rs 1,763 as the 2016-17 micro-irrigation target, but no data on results have been released.
The micro-irrigation programme covers an area of 6,51,220 hectares, or 0.46 per cent of net cultivated area.
Source: ECONOMIC TIMES