Crop diversification has been touted as a promising solution to replace the unsustainable agricultural practices currently being undertaken within the Trans-Gangetic Plain Region. Policymakers, academic forums, and government committees in Punjab have extensively discussed this concept over the last few decades.

In 1986 and 2002, the Johl Committees recommended shifting at least 20 per cent of the net cropped area from dominant crops like paddy and wheat in Punjab to other crops for ecological sustainability and to prevent groundwater depletion.

In 2013-14, the Centre launched a crop diversification programme for Uttar Pradesh, Haryana, and Punjab, aiming to diversify 5 per cent of the paddy cultivation area in all the three States. In the 2023 budget, the Punjab government allocated ₹1,000 crore for implementing a special scheme on crop diversification.

While the term ‘crop diversification’ has been widely used as a tool to promote sustainable agriculture, its adoption in general has overlooked the larger economic and financial picture. Although farmers in Punjab recognise the negative impact of monoculture and paddy cultivation on their land, they continue to grow paddy due to easy access to information, services, and a stable market that offers assured procurement.

Monetary factor

However, their main concern is not just the lack of alternative crop options and their market availability, but the level of compensation associated with these alternative options.

According to The Energy and Resources Institute (TERI) calculations based on the Commission for Agricultural Costs and Prices (CACP) data for 2019-20, the gross return for paddy in Punjab amounts to ₹51,000 per acre. However, gross return on alternative crops such as soyabean amount to one-third of that. It is less than half in case of Arhar and Bajra, and about 45 per cent less in the case of maize. Even in a situation where the yields of these crops attain ‘best in India’ status, they will still fall short of achieving paddy’s level of gross return.

Under a proposed crop diversification plan wherein the objective is to bring down paddy area to 50 lakh acres (from current 77 lakh acres) in Punjab, while increasing the area for crops like maize (12 lakh acres), pulses and oilseeds (5 lakh acres), and millets, agroforestry and others (5 lakh acres), farmers would require annual compensation exceeding ₹2,400 crore to substitute the gains from paddy cultivation.

Additionally, the FY 2023-24 budget revealed that the State’s debt is projected to exceed ₹3,27,050 crore during the current financial year. Despite a 20 per cent increase in the agriculture sector’s allocation to ₹13,888 crore, it is well understood that Punjab is in need of strategic financial restructuring. This raises a crucial question: How can we ensure economic viability in Punjab’s agricultural landscape?

There are three equations to this puzzle that need addressing: (i) filling gaps within the value chain, (ii) enhanced focus on research and development, (iii) institutional and governance-based changes.

The adoption of crops like bajra, maize, and soyabean offer operational advantages due to their ease of cultivation and minimal fertilizer requirements. These crops are also environmentally beneficial as they require less water than paddy and contribute to soil health rejuvenation.

However, the processing aspect of these crops is currently lacking in the value chain. There are only a few operational processing industries in the region, and most of them are underutilised. To promote their development, it is important to create a favourable business environment, such as offering tax holidays for industrial establishments.

In line with the new Industrial Policy in Punjab, both MSME and large industries in key sectors will receive 100 per cent property tax exemption for 10 years, along with other fiscal incentives. While this policy is a positive step, the government should ensure its effective implementation throughout the State.

R&D thrust

A focused approach towards research and development is also crucial for agricultural progress. Punjab Agricultural University (PAU) is a highly regarded research centre, but it has a limited number of scientists dedicated to alternative crop development like maize and soyabean.

To significantly expand research capabilities and promote crop diversification, substantial investments in human resources are necessary. Local scientists claim that their developed seed varieties of maize and soybean can yield up to 25 quintals per acre and 14 quintals per acre respectively.

However, to ensure widespread progress, the State’s research and development efforts should extend beyond plot-level demonstrations and focus more on marketing the effectiveness of these varieties and scaling up their adoption.

Lastly the government should look to establish federations like ‘Punjab Maize Federation’ or ‘Punjab Soyabean Federation’ to institutionalise the development and progress of different alternative crops. This decentralisation of decision-making power can alleviate the burden on the State’s governance-based management system and enhance the development and implementation of crucial alternative crops.

The paddy-heavy cropping pattern currently provides stable income for farmers in the State. To ensure the sustainability of natural resources, farmers need technology-market-government support for alternative crops. While prioritising the financial and economic viability of Punjab’s farmers is crucial, internalising environmental and health benefits and emission costs through appropriate policy measures would be essential.

Sharma is Research Associate; Anand is Senior Fellow, TERI. The writers are also Members of the Food and Land Use Coalition (FOLU)