G Chandrashekhar

What’s keeping the farm sector grounded

G Chandrashekhar | Updated on December 03, 2018

FILE PHOTO   -  Vibhav Birwatkar

It is hit by poor implementation of policies, lack of a holistic approach, and limited understanding of issues facing the sector

The government is under intense pressure following large-scale protests by farmers’ groups. The question is not whether these protests are spontaneous or instigated, but whether the policy-makers have done enough proactively to address the problems raised by growers.

New Delhi is perhaps at its wit’s end as its failure to stem the tide will have serious political ramifications. It is unable to adequately and convincingly explain what it has done for the farm sector over the last four years and the tangible results of the actions.

Without doubt, over the last four years, the government has announced a slew of policies aimed at improving the lot of farmers. Soil health card, crop insurance scheme, irrigation programme, electronic national market, contract farming law, organic cultivation, farm credit and many more initiatives have been announced. In fact, in December 2016, the Ministry of Agriculture published a 100-page booklet highlighting the government’s focus on this sector.

The fact is, despite the numerous initiatives, farmers’ protests have continued to accelerate and had on occasions turned violent. The crux of the matter is that while these policy initiatives are important, they are nothing but enablers and facilitators. For instance, testing the soil and issuing a soil health card. What has been done to create awareness among farmers about micro-nutrient deficiency in soil and scientific use of fertilisers?

While the crop insurance scheme is a welcome development, the way it is implemented has failed to deliver tangible benefits to large sections of growers. Similarly, other initiatives are good on intent but poorly implemented.

Numerous initiatives

It is necessary to recognise that these numerous initiatives by themselves are necessary but surely not sufficient for a major transformation of the farm sector which is mired in legacy issues; and certainly, these initiatives are not effective tools to address entrenched structural problems that continue to stymie agricultural growth and, thereby, farmers’ welfare.

Unfortunately, it seems, within the government circles, the understanding about agriculture-related issues is rather limited. One believes that it was a blunder on the part of the government to have bravely promised, back in February 2016, the doubling of farmer’s income in five years; and after the announcement, everyone is running helter-skelter to explore if it is indeed possible. Across the country, there is wide variation in the income of farmers.

However, to give the devil its due, even if farmers’ income is not exactly doubled in five years as promised, a significant improvement in income from the current levels by itself would be an achievement.

Importantly, there is little sign of accountability for performance. What prevents the government from coming out with an annual ‘agriculture policies monitoring and performance evaluation’ report? The OECD does it diligently every year covering 30 of its member countries.

Under globalisation and liberalisation, farm incomes are a function not only of domestic production, productivity and prices, but also of our foreign trade policy, export-import trade volumes, customs tariffs and currency value.

The failure within the government to make a coordinated approach is palpable. Different ministries — Agriculture, Commerce, Food, Finance, to name a few — continue to be ensconced in their respective silos and there appears to be no meaningful dialogue among them. Policy decisions that lack a holistic approach are most unlikely to deliver meaningful outcomes.

Critically, there is palpable lack of commercial intelligence and research within government circles. Commodity markets are driven by a host of global and domestic factors, including economic growth, geopolitics (through the crude oil route), monetary policy, currency and weather. No wonder, policies are made without informed market outlook and forward guidance.

It is in the government’s interest to have a view on global commodity markets, especially critical agricultural commodities such as wheat, rice, maize, pulses, oilseeds, cotton and sugar. Without the global view and outlook, policy interventions are bound to be reactive, rather than proactive.

Doubling of farmers’ income will remain a grand promise unless the many structural issues of agriculture are addressed on a war footing and in a time-bound manner. These include strengthening the input delivery system, accelerating completion of long pending irrigation projects, infusing multiple technologies in agriculture, building rural agri-infrastructure and building capacity among growers to withstand volatile market pressures.

There is a smug feeling among policy-makers that India is self-sufficient in foodgrains because we are now large exporters. The smugness is dangerous. Indian agriculture is fragile and vulnerable. We are only one bad monsoon away from a farm disaster. Also, our food security is under challenge because of land constraints, looming water shortage and climate change.

The author is a policy commentator and global agribusiness specialist.

Published on December 03, 2018

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