Grain Drain

The spectre of foodgrain imports stares India in the face, as agricultural growth plunges to an all-time low and the Government fails to come up with timely remedies. Will the Rs 25,000-crore injection work?

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FOOD FOR THOUGHT: Agricultural growth has reached a dangerous plateau

Yet, when Planning Commission members trooped in to make a presentation to Prime Minister Manmohan Singh on the agricultural strategy for the Eleventh Plan recently, it turned out to be one of the grimmest meetings ever on the subject. The Commission is usually cautious with its usage of words and describes even the biggest of crises in the mildest terms. But flashing in front of the prime minister was a chart that stated: “Foodgrain situation is quite alarming.” It showed that the annual per capita foodgrain production had declined from a high 207 kg in 1995 to 186 kg last year—a level crossed way back in 1975. The average annual rate of growth of agriculture in the last five years was 1.87 per cent—possibly the lowest since Independence. Compare that with the 5-per cent growth in the mid-1980s, described as the golden period, and you would understand why this is now turning out to be the worst of times for agriculture.

"The farming sector is fast heading for a total collapse if no rapid remedial measures are taken." M.S. SWAMINATHAN, CHAIRMAN, NCF

In the last decade, there have been signs of stagnation everywhere. Overall land under foodgrains has remained at 120 million hectares and is showing signs of dropping further. Public investment in agriculture as a percentage of GDP has dropped from 3 per cent to around 1.7 per cent. Addition to irrigation was very low compared to previous decades. Groundwater tables have dropped rapidly and shortage of water for farming has reached crisis levels. Worse, there has been no technological breakthrough that can boost the yields of major foodgrains to produce a second Green Revolution.

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FIELD TRIP: The farmer is the worst hit 40% of the farmers want to opt out of their current profession.

For Manmohan, who has just completed three years in the saddle, things could not have been worse. The ruling Congress party had already suffered a string of electoral setbacks in the Assembly elections. And a major downturn in a sector that employs over two-thirds of India’s people was not what any doctor would have ordered. Not to mention the adverse impact of a rise in food prices any shortage will cause. So the prime minister moved with unusual alacrity to stem the rot. On May 29, the National Development Council, for the first time, convened a special session on food and agriculture that was attended by most chief ministers.

In his inaugural speech Manmohan said bluntly: “The rates of growth of agriculture in the last decade have been poor and are a major cause of rural distress. Farming is increasingly becoming an unviable activity.” He announced, among other things, a mega Rs 25,000-crore assistance plan to states to give a push to agricultural productivity. There was a resolution to boost the growth rate of the sector to 4 per cent. But experts are not impressed. They saw the new measures as too little and too late. Here’s why:

AT LAND’S END

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STANDSTILL: There has been no technological breakthrough in recent years Over 60% rural households own less than a hectare of land.

To boost agricultural production, one of the major factors is availability of land. But as Sital and millions of Indian farmers are realising with growing despair, it is a finite resource. There are just 120 million hectare available for foodgrain production in the country—a figure that has not increased for over two decades now and has in fact begun to drop. In the past decade or so, there has been a major diversion of land meant for wheat and rice cultivation into commercial crops such as oilseeds and cotton. Rapid urbanisation and industrialisation, too, are taking up sizeable chunks of land meant for agriculture. This could partly explain the rising protests over the setting up of SEZs by using land meant for agriculture to set up industries. It is estimated that 7.5 lakh hectare of agricultural land are being diverted to other uses every year.

"We need to think not only of increasing productivity, but also of the uplift of the farmers." RAMESH CHAND, PROFESSOR, NCAP

Meanwhile, the ownership of land is highly skewed. Even 15 years ago, over 60 per cent of the rural households owned less than one hectare. Since then, with the growth of population, there has been further fragmentation of land into smaller holdings. While the contribution of agriculture to the GDP has declined from 38 per cent in 1975 to around 19 per cent now, 68 per cent of India’s workforce is still dependant on agriculture as a means of livelihood.

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INDIA LIMITED: Land is being directed to other uses

Consolidation of agricultural holdings is yet to become a reality, with the Government so far shying away from allowing corporate India to enter the sector in a big way by amending existing laws. Instead the buzzword is contract farming, which involves an agreement between the farmer and a sponsor that can be a corporate entity. Under the terms of the contract, the farmer provides a commitment to deliver a specific quantity of a commodity at quality standards determined by the purchaser. The sponsor on its part pledges to support the farmer’s crop and to purchase the commodity.

LAND
THE CRISIS	THE CONTROL
Land available for foodgrain cultivation has been dropping steadily and now is 120 million hectare Fragmented holdings of land—the average size of holdings declined from 2.63 hectare in 1960-61 to 1.06 in 2002-03, making it difficult for farmers to come out of the poverty trap Restrictive and outdated land laws that do not give farmers flexibility Over-dependence on agriculture for employment due to slow growth of non-farm sector in villages	Contract farming as a major initiative to involve corporate India Optimum use of land, consolidation of holdings, support to small farmers to grow high value crops, and land policy reforms such as legalisation of land leasing throughout the country Public investment in agricultural infrastructure to make crops more remunerative to farmers and make agriculture viable Diverting labour to activities like food processing

The Government has now proposed the setting up of a contract farming mission as part of the Eleventh Plan.

This could address and resolve issues arising out of such an arrangement. The Government also plans to set a target of involving 10 per cent of the farmer workforce in contract farming in the next four years. And it is working out a dispute resolution mechanism to ensure that the contract is enforced in a fair manner.

Planning Commission Deputy Chairman Montek Singh Ahluwalia calls for “out-of-the-box thinking” in responding to the crisis, for as he says, “business as usual is clearly not good enough”. Contract farming is an idea whose time has come.

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