The Hindu Business Line : AP agriculture - Government must go on mission mode

Opinion - Agriculture
Agri-Biz & Commodities - Insight
States - Andhra Pradesh
Columns - Public Policy Note
AP agriculture - Government must go on mission mode

Bhanoji Rao

The farm scene in Andhra Pradesh needs some some real reforms, quickly

At the end of September 2004, the then new Government of Andhra Pradesh set up `The Commission on Farmers' Welfare' to look into the agricultural crisis in the State, manifest most glaringly in farmer suicides. The Commission was chaired by Prof Jayati Ghosh of JNU and the membership was drawn from reputed academic and public personalities of Andhra Pradesh. The Commission submitted its report on December 11, 2004.

The Report as well as the Executive Summary begin with the observation that agriculture in Andhra Pradesh is in an advanced stage of crisis. The causes identified were reduced protection to farmers and exposing them to market volatility, private profiteering in the absence of regulation, reduced public expenditure, weakening of important public institutions, and inadequate growth of non-agricultural employment opportunities.

AP measures

By mid-2004, the Andhra Pradesh Government had instituted a number of positive measures. These included the provision of relief for families of farmers who had committed suicide; setting up of help lines to alleviate farmer grievances; provision of free power for all agricultural connections; six-month moratorium on credit recovery by commercial banks; sharply increased focus on institutional credit; exemption of registration fees and stamp duty for loans up to Rs 1 lakh for small and marginal farmers; initiating steps to reform the National Agricultural Insurance Scheme; regulation of production and sale of seeds; setting up of seed and fertiliser testing labs in all districts and revival of public sector seed farms; measures to alleviate the special problems of cotton farmers; fresh attempts at land redistribution; and new investments in the irrigation sector.

Commission recommendations

The Commission recommended important interventions: Correcting spatial inequities in access to irrigation; bringing all cultivators, including tenant farmers, into the ambit of institutional credit; shifting policies to focus on dry-land farming through technology, extension, price and other incentives; encouraging cheaper and more sustainable input use, with greater public provision and regulation of private input supply and strong research and extension support; protecting farmers from high volatility in output prices; and diversifying into more value-added activities and non-agricultural activities.

All these would imply a significant increase in the Government's role and the State spending on agriculture. Within the framework of the six identified areas, there are several detailed recommendations, many of which have been guiding the policies and programmes of the Government over the past two years.

`Low wages'

The Commission found the wages paid to be very low and only 10-15 days of work was available per worker per month, or around 30-40 days per agriculture season. It noted that in many places, wage rates had effectively been reduced by the expedient of asking for "half-day" work rather than full day and the full wages (still much below the minimum wages) were paid only for 12 hours of very arduous work such as ploughing.

The gender gap in wages was very large, with women usually receiving only half to two-thirds the wages paid to men for similar work. Even during the harvest season, the wage rates were as low as Rs 25-50 for women and Rs 30-60 for men.

The Commission found that the low wages and high work participation of women were also associated with children working alongside their mothers, contributing to the dubious distinction of AP having one of the highest rates of incidence of child labour in the country. The employment problem is aggravated by the fact that 90 per cent of the rural labour in the State is either illiterate or educated only up to primary level; the potential for skilled employment is very limited.

On the one hand there is the problem of finding enough work for those who depend on their labour power alone and do not have any land.

On the other, the need to provide supplementary earning opportunities for those who have access to land and have some farm income.

The Commission recommended that to make dairying a viable on-farm activity, especially for small and medium farmers, there must be some public intervention in the form of marketing assistance and assured fodder supply.

For other livestock and poultry production too the major problem is marketing, which prevents small cultivators from embarking upon, or benefiting from, such activities.

`At least 100 days of employment'

Thus, to meet the employment challenge, the Commission recommended the provision of at least 100 days of employment at minimum wages by enacting an Employment Guarantee Act and suggesting that opportunities for rural non-farm employment must be increased.

Missing in all the recommendations of commissions, past and present, is a rational calculation of how many people agriculture can support and what policy interventions are needed to take care of the rest who must depend on their own capabilities and hence whose skills need upgrading.

As per the 2001 Census, Andhra Pradesh had 76.2 million people. The working population amounted to 34.9 million, distributed as follows: 7.9 million cultivators (22.5 per cent of the total), 13.8 million agricultural labourers (39.6 per cent), 1.6 million in household industry (4.7 per cent) and 11.6 million in other sectors and occupations (making up 33.2 per cent).

The net cropped area is around 11 million hectares (2001 data), cultivator population 7.9 million and an estimated net domestic product from agriculture of Rs 37,202 million (2001-02).

Therefore, the net product per hectare works out to Rs 3,382. It is too little to canvass for providing a hectare of land to the landless.

The net product per cultivator is Rs 4,709, too meagre to justify the presence of close to eight million cultivators.

One must anticipate further increases in landlessness and a swelling of landless workers, seeking jobs.

Expenditure on health, education

It is not as if the Commission ignored the problem of building the capabilities of the present and potential work force.

It recommended an increase in the public expenditure on health and education too. Yet, there is need for a lot more to be done.

(The author, formerly with the National University of Singapore and the World Bank, currently holds several honorary/visiting positions. He can be reached at bhanoji@gmail.com)

More Stories on : Agriculture | Insight | Andhra Pradesh | Public Policy Note

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Retail opportunity

AP agriculture - Government must go on mission mode

Infrastructure Financing — Accountability is not axiomatic

Health expenditure in India

Is there a bubble in real-estate?

Doha Round: Has multilateral trade slipped over edge?

Health insurance

Service cost