States as policy labs for farming

The Economic Survey claims farmer incomes in India could decrease by 25 per cent due to climate change. Now is the time to act

Published: 16th April 2018 04:00 AM  |   Last Updated: 16th April 2018 01:56 AM   |  A+A-

Something remarkable happened when the farmers came marching to Mumbai recently. Instead of greeting them with hostility, Mumbaikars welcomed them with affection, food and water. This change in attitude was triggered by the farmers’ extraordinary discipline and their efforts to ensure minimal disruption to the Mumbaikars’ routines. Even hard-boiled journalists acknowledged, for a brief moment, urbanites had realised  our farmers and adivasis were indeed facing difficult times.

The march provides us with an opportunity to examine the linkages between urban and rural India more deeply. The conventional wisdom is that the interests of producers (the farmers) and the consumers (the urban population, in particular) are diametrically opposite. Not only are they competing for the same limited pool of resources (water and energy), even markets are increasingly a zero-sum game. The assumption is farmers can get higher prices for their produce only by dipping into the shallow pockets of urban consumers, already struggling to cope with rising costs of living.

This need not be the case. There are numerous inefficiencies, cartels and unsustainable habits—many intruding layers between farmers and consumers—which can be removed. So, the gap between what the farmer gets when she sells her crop and what the consumer pays in the market becomes substantial. Here’s where policies can play a role in increasing returns, eliminating inefficiencies in the value chain, promoting sustainability in production and consumption, reducing costs, mitigating risks from nature and markets.

But exploring the convergence of interests of the urban markets and that of the farmers, could easily help increase the income of the latter, without hitting the household budget of the former. Urban demand for milk products, for instance, has been matched by dairy cooperatives across India. It has ensured that the milk producer, whether landless or landed, can benefit out of the improved supply chains and cold storage. As urban food habits change, demand for poultry and meat can help farmers diversifying in animal husbandry to supplement their income source.

In fact, states have increasingly become laboratories of successful policy experiments which can later be replicated on a larger scale. A recent Indian Institute of Management, Bangalore, report on ‘Innovation in Governance’ examines the initiatives taken in Karnataka which were later adopted by the Centre, because of their success in the state.

Karnataka’s online portal, the e-marketplace, for direct sale of farm produce has for instance now been adopted by the Centre. The e-marketplace scheme started in Karnataka could successfully break the local monopolies of traders in the Agricultural Product Marketing Committee (APMC) yards. It allowed farmers to sell their harvest across the state through a transparent auction. The e-market platform created competition to the physical market, and ensured 30 per cent higher returns than what farmers were getting under the APMC system.

A forward step could be amending the APMC Act to reduce entry-barriers, increase the number of local market yards and allow more purchasers and traders direct access to the farm produce. This would in turn enhance competition, and ensure fair pricing. Farmers Producers Organisations need to use this model across more crops, and set up more direct outlets in cities, thus promoting consumption of harvests locally, reducing the overall transportation costs.

Another innovation is the cooperative use of farm machinery, again successfully tried out in Karnataka in the last few years. It has reduced farmers’ production costs while increasing productivity by renting out farm equipment at the sub-block level. The subsidised rentals enable even farmers with small land holdings to benefit from mechanisation.

The Punjab and Haryana governments could emulate a variation of the Krishi Yantra Dhare scheme popularised in Karnataka in the last few years, to reduce overhead costs and fight the menace of crop burning. Farmers who cannot afford ‘Happy Seeders’—machines that help plant new crop without having to burn crop residue—can use them, especially if rentals are subsidised.

In the context of sustainable management of water, a major negative impact of ‘free’ power is that farmers pump out groundwater excessively when they get electricity intermittently. A scheme which provides 90 per cent subsidised solar pumpsets in Karnataka had an interesting outcome—it eliminated the need to overdraw groundwater which is not in abundance in either Karnataka or anywhere else. Further, the excess energy produced could be fed back into the grid, earning farmers additional income and turning them into energy producers. Harvesting rainwater in Krishi Hondas or polythene-lined farm ponds is another method that can be used to minimise water loss. Combined with drip irrigation, this initiative ensures water availability at critical points in the cropping cycle.

As India prepares to face the challenges of climate change, it is important to focus on agriculture. The Economic Survey claims farmer incomes could decrease by 25 per cent due to climate change and the loss to the economy could be over `1,95,000 crore. In this context, the model of reviving cultivation of millet is a move that can enhance the society’s resilience. Millet is a hardy crop, appropriate for local conditions, and thus requiring less water and pesticides. It is also better nutrition-wise for a population increasingly vulnerable to obesity and diabetes.

Much more needs to be done, for example, in enhancing value addition at the farm-gate and improving post-harvest logistics related to storage and transportation, along with marketing. A corpus fund to promote agri-focused startups can encourage and support innovative outcomes in the days
ahead where farmers and consumers both gain in a truly sustainable manner.

Rajeev Gowda

Member of Parliament, Rajya Sabha and Chairman, All India Congress Committee Research Department


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