India’s agricultural sector is far more important to the country than its falling share in the GDP suggests. About two-thirds of India’s population depends on agriculture for livelihood. Bucking global trends, the agricultural population in India rose by 50 per cent between 1980 and 2011. And in spite of sustained public spending on poverty and hunger eradication, about 300 million, mostly rural, Indians live in chronic poverty and are malnourished.

Even as modernisation in the sector has contributed to higher yields, agricultural income has stagnated over the last two decades. This is due to the increasing use of resource inputs.

The demand for water and energy to grow food is a mounting policy concern. The Prime Minister recognised the urgency of the problem by calling for ‘Per Drop More Crop’. The 2015-16 Budget reflects this by allocating ₹5,300 crore for the proposed Pradhan Mantri Gram Sinchai Yojana, aimed at providing countrywide access to irrigation and improving water-use efficiency.

But it is hard to encourage a market for efficient pumping and irrigation systems when States offer almost free electricity to farmers.

The effect of subsidies Since the introduction of agricultural electricity subsidies in the 1970s, the area irrigated by groundwater has almost quadrupled while that irrigated by surface water has remained unchanged. The aquifers in corresponding States have hit rock bottom lows. The northern states (Punjab, Haryana and Rajasthan) which produce most of India’s rice and wheat are experiencing the fastest rate of groundwater loss in the world. Satellite images show that across the Gangetic Plain, some 54 cubic kilometres of water are disappearing each year.

Moreover, there is no national inventory of groundwater stocks. All we know is that many farmers are bringing up poorer quality water or are having to use more energy to pump from greater depths.

Fertiliser use, also heavily subsidised, increased from 1.1 million tonnes (MT) in 1966/67 to 25.5 MT in 2012/13.

Although this is still less than other major food producing countries, there is a variation in usage of fertiliser across States. While average consumption is 128.34 kg per ha — similar to the US — Punjab, Bihar and Haryana consume 250.19 kg/ha, 212.23 kg/ha and 207.56 kg/ha, respectively.

There’s a cost to it And these inputs don’t come cheap. In 2013-14, the Centre spent ₹67,971 crore (about 0.6 per cent of GDP) on fertiliser subsidies, while electricity subsidies are a growing burden on finances, especially in major food-producing States. In 2014-15, the agricultural electricity subsidy in Punjab alone reached ₹4,454.54 crore.

Reliance on chemical fertilisers, combined with flood irrigation, has degraded soils and leached nutrients. This jeopardises health. Recent estimates suggest that 38 per cent of children under five in India are stunted due to malnourishment.

And there are other side effects. Greenhouse gas emissions attributed to agriculture make up 17.6 per cent of the annual national total. Add emissions related to consumption, including electricity, diesel and fertilisers, and that figure rises to 27 per cent.

Meanwhile, the sector itself is extremely vulnerable to climate change. About 90 per cent of arable land in the country is prone to climate-induced extreme weather events — the early effects are already evident.

Further rises in temperature and the failure of the monsoon are projected to shrink water and land availability. Without greater efficiency, this will reduce food production and hit rural livelihoods and urban markets. So has the government paid enough attention to making agriculture sustainable?

Efforts below par Since the late 1990s, governments have launched several initiatives to improve water and energy efficiency in the sector. But these were often localised, fragmented and blind to the linkages between resources. The National Mission for Sustainable Agriculture, proposed since 2008 to consolidate existing initiatives, has not taken off.

Technologies and practices that can reduce water and energy demand substantially exist. For example, systemic rice intensification is a proven technique that can reduce water demand by 50 per cent in irrigated rice cultivation. Development of surface irrigation sources, improving pump efficiency, solar powered pumps and micro irrigation technologies together offer great opportunities to tame water and energy demand in the sector.

In the past, efforts that focus on a single resource have failed. Decreasing fossil fuel energy (for example, through solar pumping) may not conserve water.

Several States have attempted to reduce electricity subsidies or ration electricity for water pumping. Reform is politically difficult: many farmers, for example, perceive free electricity as an entitlement in the absence of surface irrigation facilities, more so because they receive the same price for their crops as farmers with easier access to water.

To change entrenched practices, we need an alternative approach; one that acknowledges the scarcity value of interlinked resources.

Armed with this knowledge, the government has at its disposal a range of levers with which to influence consumption and production choices.

It should seek to reorient and align policies that affect land use, crop choices, fertiliser use, irrigation practices and energy inputs, so that the respective efforts complement each other to achieve sustainable growth.

Swain is a Fellow at CUTS Institute for Regulation and Competition. Lahn is a Senior Research Fellow in the Energy, Environment and Resources Department, Chatham House, London