Punjab Won’t Fly Unless It Deals With Its Agrarian Crisis

Agriculture in the state needs a new paradigm, one that acknowledges the scarcity of interlinked resources and the costs of their use.

Credit: PTI.

Credit: PTI.

Recently, experts from Punjab Agricultural University advised farmers in the state to reduce the area taken up by the cultivation of basmati, predicting a crash in basmati prices due to huge carryover stock. Last year, the state produced 18 million tonnes of paddy and contributed a record 9.4 million tonnes to the central pool. Subsequently, farmers in Punjab and neighbouring Haryana suffered losses as the market price for the premium rice halved. Paradoxically, while agricultural productivity has been increasing, farmers’ incomes have not improved much.

Low farm income, rising indebtedness and subsequent farmers’ suicides have been a policy concern in the state and at the national level. Farmers in Punjab account for an accumulated debt of Rs 69,355 crore. Earlier this year, the state passed the Punjab Settlement of Agricultural Indebtedness Bill, which attracted much criticism as a stunt carried out in anticipation of state polls. The bill only envisages the settlement of non-institutional debt – which is just 18% of the accumulated agricultural debt. At the national level, the central government recently made a pledge to double farmers’ income over the next five years.

However, these government measures fail to consider and address the root of the crisis. While the pursuit of higher yields has increased agricultural resource intensity and thus, farm level investment, the overproduction of selected crops has brought down market prices, affecting farmers’ incomes. Therefore, any measure to improve farmers’ incomes has to take into account the consumption of vital resources by the sector.

The Economic Survey 2015-16 appraises Indian agriculture well. According to the survey, agriculture has become “a victim of its own success — especially the green revolution”, by becoming cereal-centric, regionally biased and input-intensive in its use of land, water and fertilisers. It rightly argues that agriculture needs “a new paradigm” which seeks to get “more from less”— higher productivity from fewer resources.

From being one of the least productive regions at the time of independence, Punjab went on to become the ‘breadbasket’ of India. The state, with 5.2% of India’s cultivable area, produces 11% of India’s food grains and contributes about 45% of wheat and 25% of rice to India’s central food pool. The state recorded the highest food grain yield in the country at 4,409 kilograms per hectare in 2013-14. Punjab’s high agricultural productivity and contribution to India’s grain self-sufficiency has been facilitated by the Centre’s policies aimed at increasing food production through the ‘green revolution’, subsequent public sector investments and efforts by the state government.

The need for a new paradigm

Farming systems in the state exhibit not only the highest level of productivity, but also an increasing resource intensity. Over the years, the pursuit of high-yielding grain production has pushed the agricultural sector into a resource trap and towards an emergent agrarian crisis. The crisis is evident in mounting agrarian debt, the subsequent increase in farmer suicides and the withdrawal of small holders from agricultural activity.

Intensive farming of high-yielding cereals has propelled the requirement for input resources, especially water, energy, fertilisers and farm machinery.

While Punjab has one of the best canal irrigation networks in the country, the state has overexploited groundwater resources. Out of the 137 blocks in the state, 110 come under the ‘over-exploited’ category, with some of them having been exploited up to 200%. Groundwater meets three-quarters of the state’s agricultural needs and its withdrawal has significant implications for electricity consumption in the state. Agriculture accounts for 31% of  the state’s electricity consumption, as opposed to the national average of 17%. In 2015-16, the state government spent Rs 5,484 crores to subsidise electricity supply to farmers.

Fertiliser consumption in the state is the second highest in India at 216 kilograms per hectare. Simultaneously, farmers in the state have over-invested in agri-machinery, owing to intensive farm mechanisation and partly to flaunt as status symbols. The five lakh tractors in the state are double the number that the state needs. The rising resource intensity has required farmers to invest more, while agricultural income has not increased, subsequently pushing farmers into debt. Intensive farm mechanisation, coupled with increasing input costs, has pushed many small holders out of agricultural activity. From being the breadbasket for the nation, Punjab seems to be sliding into intense economic difficulty owing to the agrarian crisis.

The agrarian crisis in the state is well recognised, at the state level as well as the national level. In 2013, the Punjab State Farmers Commission prepared a draft agricultural policy which is yet to be approved. It recognises that the strategy for further agricultural development has to address sustainability concerns while achieving overall growth objectives. The draft policy envisages substantial crop diversification (from paddy and wheat) as a solution for Punjab’s agrarian crisis. While diversification is critical to sustain agriculture in Punjab, there is a need to think of an integrated and ecosystem-centric approach towards changing entrenched practices in the sector.

With state assembly elections around the corner, agriculture is high on the agenda of all political parties. Farmers are looking forward to a new government to give them some respite. However, irrespective of the change in power, agriculture in the state needs a new paradigm, one that acknowledges the scarcity of interlinked resources and the costs of their use, and understands how they feature in farmers’ decision-making. Building on existing knowledge, the government needs to coordinate the levers at its disposal to influence both consumption and production choices.

The government should seek to reorient and align policies that affect land use, crop choices, fertiliser use, irrigation practices and energy inputs to complement each other towards the common goals of sustainability and growth. Simultaneously, through better regulation, the government must leverage the potential of markets and market mechanisms to promote resource use efficiency in agriculture. The new paradigm must combine sticks with carrots and both with better information.

Ashwini K. Swain is the Director at the Centre for Energy, Environment and Resources, New Delhi.

Gareth Price is a Senior Research Fellow in the Asia Programme at Energy, Environment & Resources Department, Chatham House, London.

Ranjit Singh Ghuman is the Nehru SAIL Chair Professor at the Centre For Research In Rural And Industrial Development, Chandigarh.