The Hindu Business Line : When will farmers earn as much as the lowliest government employee?

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When will farmers earn as much as the lowliest government employee?

K. Venugopal

As salaries rise in government jobs, and faster still in the private sector, farm incomes are getting less and less attractive. Consolidation of holdings may be an answer, but creating jobs in services and industrial sectors for more than 10 crore farmers and as many farm workers is mind-boggling. K. VENUGOPAL wonders if the country is ready for this challenge.

A DILEMMA: A farmer wondering if his produce will fetch enough.

A few years ago, a young agriculture graduate went looking for a government job. His father owned half a hectare of farmland some 40 km west of Chennai where the family was growing groundnut. When asked why he was not keen to work on his farm, he came up with the bleak truth: His land would provide his family no more than Rs 4,000 a year after farm expenses; a government job would yield him at least Rs 4,000 a month. There was simply no contest.

The numbers would be no different today; if anything the prospects on the farm may only have got bleaker in relative terms, as salaries have risen in government jobs, and faster so in the private sector given the rapid growth in the manufacturing and services sectors. On the other hand, the pace of growth in farm output has barely matched even the increase in the population dependant on the land. For instance, foodgrain production over the past ten years (1996-2006) has grown at just 0.22 per cent a year, notes the Finance Ministry in its Mid-Year Review of the economy.

More disadvantaged

The story of the young farm graduate is not an isolated instance. It could be the refrain of an overwhelmingly large proportion of farmers in the country. Official data indicate that over 60 per cent of farmers in the country own less than one hectare each. If they grow a coarse cereal such as jowar, bajra or maize, they would be among the more disadvantaged: Only one in eight of them will have access to irrigation, and the average yield they will get at the end of four-five months of preparing for and tending to the crop, will be no more than a tonne each. And given the minimum support price, they should get only a little more than Rs 5,000 for it at the mandi after paying the customary mandi-related charges (arhthia's commission, labour charges, purchase tax, market fee, etc).

Mind you, this sum, which works out to barely Rs 1,000 per month, is gross revenue, not the profit for each farmer. Subtract from it the expenditure on seed, on fertiliser and on any labour hired, there may not be very much left for the farmer and his family.

If they were able to use the land for a second crop, that would sustain them for the rest of the year, but the chances of that are remote. Only a third of all the country's farm land is good for a second crop; for those holding the other two-thirds, the income from the single crop must see their families through the other seven months, unless they find employment elsewhere.

Challenges in farming

The story of S. Nandakumar, 26, the youngest of three sons of a farming family in Murthinayagam village, 90 km from Madurai in Tamil Nadu, illustrates the challenge in farming and a response to it. His father died about 17 years ago leaving the family farm of less than one hectare in the hands of the mother and the three young boys. The elder two boys discontinued school at class five to tend the grapes, bananas and tomatoes that grew on the farm.

In a gesture of accommodation that is not uncommon in village life, they let the youngest sibling study on at the government school one kilometre away. Nandakumar completed his SSLC and hitched along with a cousin to Chennai to do a diploma in chemical technology and win a job in industry. Six years later, Nandakumar is a proud worker at the French multinational Saint Gobain's facility at Sriperumbudur, near Chennai, where he minds a highly automated line that makes float glass.

When he goes home to the village once in four months, Nandakumar finds little to enthuse him. "Farming is not good," he told Business Line. Normally proceeds from the farm range from Rs 30,000 to Rs 50,000 a year. Last year, he recalls, heavy rain spoilt the grape crop. Having spent Rs 40,000 on the crop, the family earned barely Rs 10,000. The family's loss was the local moneylender's gain; the interest paid was Rs 3 each month per Rs 100 borrowed.

Nandakumar's industrial earnings now anchor the family. Returning the accommodation he once got from the family to educate himself, he sends his mother Rs 5,000 each month from the Rs 10,000 he nets from multinational company; he bought a two-wheeler for his brother, and now dreams of building a new house for his family in the farm.

For his younger colleague at Saint Gobain, S. Sasidharan, the family terms were different, but the response was much the same. Despite being the only son of a family that owns seven hectares of productive land growing coconut, tomato and cotton 15 km from Coimbatore, Sasidharan believed his future was not on the farm, and pursued an engineering diploma that won him the job. Two years into it, he earns as much as his family's gross farm revenue. If farm expenses are deducted, and the risks of crop failure taken into account, there would simply be no parity.

Cost of cultivation

Successive governments at the Centre and the States have tried their hand at reducing the cost of cultivation. Most States supply electricity either free or at highly subsidised tariffs; urea fertiliser is made available at a substantial discount and now banks are being arm-twisted to offer credit at rates below what they charge other customers. Yet even if these inputs were available free, the yield from the farm would be far from princely. Besides, there is a cost to hiring labour and that is not coming any cheaper.

If Sasidharan's family had instead been on dry land — almost 50 per cent of the 141 million hectares of cultivated land in the country is not irrigated — growing coarse cereal, it would have needed a holding in excess of 15 hectares to earn a net income equal to his current salary at Saint Gobain. But such farmers would be rare. Just 1.2 per cent of land holdings in the country exceed 10 hectares each. In contrast, the average farm size in the US was 197 hectares in 1997.

Land consolidation

Nine out the every ten farmers (the total number of cultivators is now about 12 crore) will need to give up their land and look at other professions if the farm holdings are to be consolidated into viable sizes of at least 10 hectares each.

That is what has happened in the US, where just 2 per cent of the population now works on the farm as against 21 per cent in 1930 and 41 per cent in 1900.

The spread of education is providing people such as Sasidharan and Nandakumar the passport to an alternative, and far more remunerative vocation. But to transform the lives of more than 10 crore farmers and as many farm workers is a mind-boggling challenge for society, of creating employment opportunities in the services and industrial sector, of managing the shift of workers from the farm — farm labour is already difficult to find in many States at the current wages — and of equipping farm family members with the skills that would fit them in industry and services. Are we ready for it?

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