Opinion Op Ed 17 Jun 2017 Why must Bharat feed ...
The writer, a policy analyst studying economic and security issues, held senior positions in government and industry. He also specialises in the Chinese economy

Why must Bharat feed India at its cost?

Published Jun 17, 2017, 1:04 am IST
Updated Jun 17, 2017, 1:04 am IST
The Agriculture Census shows only 58.1 million hectares of land was actually irrigated in India.
Representational image
 Representational image

It was around the mid-1960s when the Paddock brothers, Paul and William, the “prophets of doom”, predicted that in another decade, recurring famines and an acute shortage of foodgrains would push India towards disaster. Stanford University Prof. Paul R. Ehrlich, in his 1968 bestselling book The Population Bomb, warned of the mass starvation of humans in the 1970s and 1980s in countries like India due to overpopulation. Their prophecies were based on a rising shortage of food because of droughts, which forced India to import 10 million tonnes of grain in 1965-66 and a similar amount a year before. Little did they know that thanks to quick adoption of a new technology by Indian farmers, the country would more than double its annual wheat production from 11.28 million tonnes in 1962-63 to more than twice that in 10 years to 24.99 million tonnes. It was 71.26 million tonnes in 2007. Similarly, rice production also grew spectacularly from 34.48 million tonnes to almost 90 million tonnes in 2007. Total foodgrain production in India reached an all-time high of 251.12 million tonnes (MT) in FY15. Rice and wheat production in the country stood at 102.54 MT and 90.78 MT respectively. India is among 15 leading exporters of agricultural products in the world. The value of this is Rs 1.31 lakh crores in FY15.  

Despite its falling share of GDP, agriculture plays a vital role in India’s economy. Over 58 per cent of rural households depend on agriculture as their principal means of livelihood. Census 2011 says there are 118.9 million cultivators across the country, or 24.6 per cent of the total workforce of over 481 million. In addition, there are 144 million persons employed as agricultural laborers.  If we add the number of cultivators and agricultural labourers, it would be around 263 million, or 22 per cent of the population. Estimates by the Central Statistics Office (CSO) show the share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) was 16.1 per cent of the Gross Value Added (GVA) during 2014–15 at 2011–12 prices.  This sums up what ails our agriculture — its contribution to the GDP is fast dwindling, now about 13.7 per cent, and it still sustains almost 60 per cent of the population. With 157.35 million hectares, India holds the world’s second largest agricultural land area. India has about 20 agro-climatic regions, and all 15 major climates in the world exist here. It is thus a large producer of a wide variety of foods. India is the world’s largest producer of spices, pulses, milk, tea, cashew and jute; and the second largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds. Further, India is 2nd in the global production of fruits and vegetables, and is the largest producer of mango and banana. It also has the highest productivity of grapes in the world.

 

Agricultural export is 10 per cent of our exports – it is the fourth-largest exported principal commodity. The Agriculture Census shows only 58.1 million hectares of land was actually irrigated in India. Of this 38 per cent was from surface water and 62 per cent was from groundwater. India has the world’s largest groundwater well equipped irrigation system. There is a flip side to this great Indian agriculture story. The Indian subcontinent boasts nearly half the world’s hungry people. Half of all children under five in South Asia are malnourished, which is more than even sub-Saharan Africa. Over 65 per cent of farmland consists of marginal and small farms less than one hectare in size. Moreover, due to population growth, the average farm size has been decreasing.  The average size of operational holdings has almost halved since 1970. Around 92 million households, or 490 million people, depend on marginal or small farmholdings as per the 2001 census. This translates into 60 per cent of the rural population, or 42 per cent of total population. About 70 per cent of India lives in rural areas and all-weather roads don’t connect about 40 per cent of rural habitations. Lack of proper transport and inadequate post-harvesting methods, food processing and transportation of foodstuffs has meant an annual wastage of Rs 50,000 crores.

 

There is a pronounced bias in the government’s procurement policy, with Punjab, Haryana, coastal Andhra and western Uttar Pradesh accounting for the bulk (83.51 per cent) of procurement. The food subsidy bill has increased from `24,500 crores in 1990-91 to `1.75 lakh crores in 2001-02 to Rs 2.31 lakh crores in 2016. Instead of being the buyer of last resort, the FCI has become the preferred buyer for farmers. This has resulted in mountains of foodgrains coinciding with starvation deaths, and a few regions of concentrated rural prosperity. The total subsidy provided to agricultural consumers by way of fertilisers and free power has quadrupled from Rs 73,000 crores in 1992-93, to Rs 3.04 lakh crores now. While the subsidy was started to reach lower-rung farmers, it has mostly benefited the well-off farmers. Free power has also meant a huge pressure on depleting groundwater resources. These huge subsidies come at a cost. Thus, public investment in agriculture, in real terms, had witnessed a steady decline from the Sixth Five-Year Plan onwards. With the exception of the 10th Plan, public investment has consistently declined in real terms (at 1999-2000 prices) from Rs 64, 012 crores during the Sixth Plan (1980-85) to Rs 52,107 crores during the Seventh Plan (1985-90), `45,565 crores during the Eighth Plan (1992-97) and about Rs 42,226 crores during Ninth Plan (1997-2002). The share of agriculture in total Gross Capital Formation (GCF) at 1993-94 prices has halved from 15.44 per cent to seven per cent in 2000-01. In 2001-02, almost half the amount allocated to irrigation was actually spent on power generation. While it makes more economic sense to focus on minor irrigation schemes, major and medium irrigation projects have accounted for more than three-fourths of the planned funds

 

By 2050, India’s population is expected to reach 1.7 billion, which will then be equivalent to nearly that of China and the US combined. A fundamental question then is can India feed 1.7 billion people properly? In the four decades starting 1965-66, wheat production in Punjab and Haryana has risen nine-fold, while rice production increased by more than 30 times. These two states and parts of Andhra Pradesh and Uttar Pradesh now not only produce enough to feed the country but to leave a significant surplus for export.   Farm outputs in India in recent years have been setting new records. It has gone up from 208 MT in 2005-06 to an estimated 251 MT in 2014-15. Even accounting for population growth during this period, the country would need probably around 225 to 230 MT to feed its people. There is one huge paradox implicit in this. Record food production is depressing prices. No wonder farmers with marketable surpluses are getting restive. India is producing enough food to feed its people, now and in the foreseeable future. Since food production is no longer the issue, putting economic power into the hands of the vast rural poor becomes the issue. The first focus should be on separating them from their smallholdings by offering more gainful vocations. With the level of skills prevailing, only the construction sector can immediately absorb the tens of millions that will be released. The government must step up its expenditure for infrastructure and habitations to create a demand for labour. The land released can be consolidated into larger holdings by easy credit to facilitate accumulation of smaller holdings to create more productive farms. Finally, the entire government machinery geared to controlling food prices to satisfy the urban population should be dismantled. If a farmer has to buy a motorcycle or even a tractor, he pays globally comparative prices. Why then should he make food available to the modern and industrial sector at the world’s lowest prices? Why should Bharat have to feed India at its cost?

 

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