India’s dwindling agriculture sector, which employs around 50% of India’s workforce, is decreasing in its contribution to the GDP year after year. “As per latest estimates released by Central Statistics Office (CSO) the share of agricultural products/Agriculture and Allied Sectors in Gross Domestic Product (GDP) of the country was 51.9 per cent in 1950-51, which has now come down to 13.7 per cent in 2012-13 at 2004-05 prices…”
This statement of Minister of State for Agriculture Tariq Anwar last month in a reply to a query in the Rajya Sabha shows the pathetic downfall of a once glowing sector. Even in absolute terms, India’s foodgrain production declined to 250.14 million tonnes in 2012-13 from 259.32 tonnes in 2011-2012.
What continues rising in this sector is just the number of farmer suicides, which reached a shameful figure of 15,440 in 2012, close to 50 farmer suicides every single day of the year, as per the National Crime Records Bureau. The government itself admits that since 1995, more than 300,000 farmers have committed suicide.
There are various issues facing the farming community. The acreage in India has been around 140 million hectares, but with the number of farmers increasing, the divisions in land have resulted in decrease in productivity and diminishing economies of scale, what to say about reduced financing options and killing debt traps. Apart from this, lack of irrigation, warehousing/cold-storage facilities, and an almost non-existent technology support from the government also are critical issues for farmers, pushing them towards destitution.
But what takes the cake in the whole value chain is something else. Every year, like an annual event, vegetables and agri-products find themselves in a comedy circus. On the one hand, our government boasts of record yields, whereas on the other, this so called hollow boast of ‘record yields’ fails to reach its real customers. Think about it – as per the government, we’ve had one of the best monsoons this year. The Central Water Commission confirmed in August 2013 that our water reserves nationally are now at an ever-high level in a decade. We’re apparently experiencing a bumper crop year. Clearly, such a claim is laughable when you consider the rising prices of fruits and vegetables all around.
Unlike other nations, agriculture in India is still treated as a child of a lesser God. Take for instance China. After 1994, the government of China introduced policies that limited the amount of grains that could be imported (giving a boost to domestic production). This brought the domestic farmers to the centre stage and increased the domestic supply of crops. In 1995, a policy named “Governor’s Grain Bag Responsibility System” was incepted, which made the local governors accountable for supply and demand and also for maintaining the prices in their jurisdiction. Later, by the end of 1997, China introduced agricultural industrialisation management strategies for professionalising the flow of produce to the market and morphing the entire agriculture system into a market-oriented system.
As I wrote in one of my previous editorials where I compared India and China, as per a World Bank study, an Indian farmer contributed $400 to the agriculture sector back in 1994, which increased to $500 by the end of 2009 (a mere increase of 25 per cent); while a Chinese farmer increased his contribution by 85 per cent and is currently adding $550 to the sector.
Going further, the Chinese government has definite and clear-cut policies to check food inflation, price rise and hoarding. Fines can go up to a million yuan and imprisonment. And the R&D support China has given to its farmers is phenomenal. close to 10,000 agricultural patents that today China owns compared to around 50 by India.
Contrast this with India. The conviction rate under the Essential Commodities Act, 1955 and the Prevention of Blackmarketing and Maintenance of Supplies Act, 1980, was only 2.47 per cent in 2009, 3.55 per cent in 2010 and 6.68 per cent in 2011. In 2011, an onion export ban (that was put in place because of rising onion prices) was lifted in ten days flat by a committee of Empowered Group of Ministers, led by – no surprises – the then finance minister Pranab Mukherjee.
The situation is quite similar even now. On August 13, 2013, Food Minister K. V. Thomas said, “We would wait for 10 days and if the prices do not comedown, would ban exports,” Minister said. On August 23, 2013, just ten days later, he said, “Currently there is no proposal under consideration to ban the export of onion..” But then, where’s the ground level action against hoarders?
Increase in onions prices is just an indicator of several malaises that are floating seamlessly in our agriculture system. For a start, the agriculture ministry should immediately take steps to introduce stringent laws against hoarding, publicly arrest hoarders and initiate action against them, and open the market further for agriculture produce.
After all, here we are talking about policies that are not for a few crore farmers but for the entire nation and for the larger good of the economy and society.
Author is a Management Guru and Hony Director of IIPM Think tank Connect with the author at http://arindamchaudhuri.blogspot.com