2021, the year that was: Of farmers, protests and three dead laws

The ninth of year-ender series finds out why farm sector's multiple problems remain unresolved

The year 2021 will perhaps go down in India’s history as one where there was a paradigm shift in the manner in which agriculture and farm-related issues are handled in the country.

The enactment of the three controversial farm laws last year, the sustained agitation that followed, and the sudden and rather unexpected repeal of the laws are events that have the potential to shape the agricultural sector in the years to come.

Amidst all the debate about the need and efficacy of the farm laws, the fundamental problems related to Indian agriculture have remained unresolved. The problems include stagnant productivity, falling incomes, challenges from changing weather patterns, degradation of soil and other natural resources, badly targeted subsidies and so on.

“I don’t think anything has changed between 2019 (before the acts were introduced) and now (when the acts have been repealed). The reforms that were needed then are still required. But yes, what has happened in the last two years is that the condition of the economy has worsened because of the pandemic. The agriculture sector is now much more affected than it was two years back, because people don’t have purchasing power, which means less demand for agriculture goods and services and, hence, more problems for the sector,” said Himanshu, associate professor at Jawaharlal Nehru University.

He added that the prescription for agriculture post the repeal of the laws is the same as that for any other profession — there needs to be money in the hands of the farmers. “Agriculture cannot continue as a profession unless farmers make money from it,” Himanshu said.

He said schemes like PM-KISAN were started because there was recognition of the fact that small farmers didn’t have money in their hands and that agriculture was no longer a profit-making vocation.

“The government needs to increase productivity, increase the income of farmers, ensure investments, reduce input costs etc —  so that farmers get a decent return on their investment,” Himanshu added.

The latest Situational Assessment of Agriculture Households 2019, one of the most granular snapshots of the state of farming in India, released earlier this year, showed that between 2012-13 and 2018-19 the share of crop production in the monthly income of an average agricultural household in the country has dropped from 47.9 per cent to 37.7 per cent, while that of wages has risen from 32.2 per cent to 40.3 per cent, thus making wages one of the main sources of income.

The survey also revealed that while the number of farming households increased from 90 million to 93 million between 2013-2019, the number of families not engaged in farming rose from 66 million to nearly 80 million over the same period.

It showed, moreover, that an average farm household in India had a debt of  Rs 74,121 in 2018-2019, compared to Rs 47,000 in 2012-2013.

“Thus, as income grew 60 per cent over six years, average debt, too, rose by a similar degree, by 57 per cent,” the report said.

In real terms, the income growth was lower — 21 per cent between 2012-13 and 2018-19, the report said.

Dr S Mahendra Dev, director of the Indira Gandhi Institute of Development Research (IGIDR) said that agriculture needs to diversify from the cultivation of rice and wheat, which is prudent from all aspects, be it environment or the economy.

“We need proper minimum support prices (MSP) for crops such as oilseeds, coarse cereals and their marketing as well. Among reforms, land tenancy laws need to be looked at again,” Dev added.

The lesson from the entire saga of the withdrawn farm laws is that any move to change the way agriculture is done in the country should have the consent of the maximum number of stakeholders, of whom farmers are an integral part.

A 2019 paper by Ashok Gulati, Infosys Chair Professor for Agriculture at the Indian Council for Research on International Economic Relations, along with Devesh Kapur and Marshall M Bouton of the Center for the Advanced Study of India at the University of Pennsylvania, suggests a possible way out.

The paper said that as agriculture is a state subject and the central government has had—and will continue to have—a large role in it, reforms can only succeed if the central and state governments work together in a spirit of “cooperative federalism.”

“Many of the important levers of change—water, power, irrigation, extension, agri-markets, and so on —are controlled by the states. Going forward, it would be helpful if the government created an Agri-Reforms Council on the lines of the GST Council for a somewhat longer term than is currently done (for two months),” the authors wrote.

As a new panel on agriculture gets constituted, in keeping with the promise made by the Prime Minister, to ensure the effective delivery of MSP and other issues, it is perhaps the right time to look at all such suggestions for the betterment of agriculture in the country.