As the gods of nature disfavor their
source of identity and livelihood, a major division of
Indians who are associated with the agricultural sector are standing at the
crossroads of despair, revolution, vision and opportunity. The political
fortunes associated with this ill-informed majority are attracting all
varieties of shrill politics, further muddying the national debate on this key
aspect of national interest. This article attempts to present various
dimensions of this national problem so readers are better informed, and aims to
contribute towards a more positive debate and a more purposeful national
strategy. The need of the hour is a national vision that views India’s
agricultural sector as an opportunity, rather than the cynical political
ideology that is trying to throw this ill-informed sector into rhetorical
despair and inspire rebellion against a democratically-elected government.
India’s Agri-Sector problems are multi-dimensional and are
impacting both bottom-line efficiencies and top-line opportunities of national
development. Each of these dimensions individually require focused study, and when
they are intertwined the way they are, they require even more careful strategic
management. Superficial analysis of such complex problems will only lead to an
incorrect understanding of the problem and the deployment of knee-jerk
strategies that, in the long term, will only lead to harm to national
interests.
Definition of
Agriculture
First of all, there is no comprehensive definition or policy
regarding the agriculture sector in India. There is no clarification for whether
fisheries, poultry, animal husbandry, medicinal herbs, commercial timber, or other
forest products fall under the scope of
the agriculture sector, and there is very little policy on how to address the
natural inter-dependencies of all these sub-sectors. For example, a sudden
change in a region’s agricultural produce (say, from rice to medicinal herbs or
commercial timber) may have a devastating impact on that region’s animal
husbandry ecosystem. A policy decision to encourage beef-production/exports may
cause the extinction of low-milk producing but drought-tolerant native cattle
species, causing permanent damage to our ecosystem. These complex inter-dependencies demand attention, else disaster strike. By conceptualizing
the ecosystem as a complete system and designing healthy relationships between agricultural
products and practices, India can identify new top-line opportunities in the agriculture
sector, and make it a pivotal part of India’s transformation towards a
renewable economy.
Food Security of the Nation
A second dimension of this problem is the food security of
the nation. Not all sectors of the nation are suitable for pursuing blind
comparative advantages, and the food security of the nation is one such area. While India
achieved food production self-sufficiency decades ago, one-third of Indians are
still suffering from malnutrition. A solution for this chronic national problem
must travel on a sound logistical and food-processing roadmap to achieve this
necessary bottom-line efficiency.
Farm Size and Ownership
Another core aspect of India’s agri-sector landscape is the limited
farm size. A study conducted by S. Mahendra Dev presents that “there were about 121 million agricultural
holdings in India in 2000-01. Around 99 million were small and marginal farmers.
Average size has declined from 2.3 ha. In 1970-71 to 1.37 ha in 2000“[1]. Given this scenario,
there are two approaches to reducing the labor involved in this sector – (a)
make mechanical farming accessible and affordable to small farmers or (b) allow
people to accumulate large farms to absorb the high cost of mechanization.
Unfortunately, the second strategy goes against a different socio-economic
policy called the “Land Ceiling Act”, which limits agricultural land ownership to
5-45 acres based on various factors. Those who want to mimic the success of
agricultural reforms in countries like the USA must remember that the average
farm size in 1900s America was 147 acres, making the base conditions for reform
very different.
Then there is the problem with the labor excess capacity
in the farming sector. Studies put nearly 60% of 600-million person labor force
as dependent upon the farming sector. However, some of this labor force is not
involved in the farming sector not out of choice, but due to a lack of skills
and opportunities to move into the industrial and service sectors. Thus, reducing
the percentage of the labor force in the Indian farming sector to the levels
existing in industrial nations would require facilitating the transition of
nearly 300-million working-age people into the industrial and service sectors.
To put things in perspective, this would be a feat similar to building a new
America, from the ground up, in India without adding a single inch of land or any
natural resources.
National Sample Survey Office (NSSO) studies estimate that
nearly 60 million jobs were created between 1999 and 2004 whereas only 15
million jobs were created in next eight years (2005-2012). Assuming that the Modi
government repeats the performance of the previous NDA1 government, it would
take at least 25 years (that is, from 2015 to 2040) to transition the labor-excess
capacity from farming to industrial/services sectors, even if we freeze the
population growth and demographic trends at today’s levels. But, given the current
demographic trends of the Indian population, India will gain more than 350-million
working-age people while losing only 150-million people to retirement, thus
adding an additional 200-million labor-force people to the agri-sector labor
excess capacity problem. The underlying truth is that no matter how quickly
India industrializes, it will have to live with its farming-labor excess
capacity for at least the next 20-25 years, with the majority being in the 40-70
age group, and therefore too late in life to acquire new skills.
I have done a study in 2010 (posted in Bharat Rakshak Forum
[2]), and calculated that it will cost up to $2 trillion to retrain and
employ 150-million of the agricultural sector labor into industrial sector
labor. This cost estimate covers both retraining costs and the capital required
to set up industries that would provide permanent employment. If the target is
to transition a 300-million workforce, then the cost would double to $4
trillion, two times the current GDP of India.
Another factor that has yet to be considered is what will
this gigantic industrial base, consisting of 200+ million labor force, produce?
How much resources will it process annually, and who will consume its product?
This is where the three slogans: Make in India, Made in India, and Made for
India have to merge and transform
into India’s national power.
Genetically Modified
Organisms Vs Organic Products
An additional technological, and even ecological problem we
need to solve is whether the Indian farming sector should take the path of GMO
crops or Organic farming. Interestingly, the majority of cotton-farmer suicides
in India are attributed to the so-called “GMO-terminator” cotton seeds or their
fake cousins. On the other hand, the developed world is reinventing the concept
of Organic farming for its real or perceived health benefits and long-term
health-cost savings. If India decides to take the GMO route, it needs to
develop and build the necessary scientific and industrial base. If India
decides to take the Organic route, then it needs to detoxify its farming
community, which is chronically addicted to chemical fertilizers and
pesticides. Given the fact that the farming sector also includes aqua-culture
(fish, prawn farming) and animal farms, India needs to alter its land usage for
different types of crops (fish/cattle feed vs grains/vegetables etc.). Each
choice impacts the Indian farming sector in a fundamental way and needs lot of
work to reach the final goal. While complex, this aspect of the farming sector
can open up new topline opportunities in terms of long-term health and ecological
benefits to India.
Price Support, Food Storage
and WTO
Another key aspect of the Indian farming sector is the
pricing mechanism. There is no scientific analysis of the total economic cost
of each crop and what the price of the produce should be. Oftentimes, the price
of farm produce is determined by logistical and political inefficiencies,
rather than the cost to produce. For example, after setting consumer
preferences aside, a kilo of beef costs a fraction of its calorific equivalent
of vegetable food grains because there is no cost-accounting of the materials
required to produce a kilogram of beef compared to other food products. Oftentimes,
the farmer doesn’t even get a fraction of the consumer price for his produce,
just because the farmer doesn’t have awareness of or the necessary logistical
access to the demand side.
The Objective
I urge the readers to not fall into pessimism after reading the
above data. The larger the problem, the bigger the opportunity. I believe that
current state of India’s farming sector is a boon to India’s national interests
because it has the potential to majorly contribute towards a multi-faceted
socio-scientific revolution that India desperately needs to get out of the
quicksands of triple colonization the nation went thru in the past 1400 years.
Only a mind that is firmly rooted in local flora-fauna that can think out of
the western-box can propel a well-rounded development of India in next coming
decades.
This is where the national vision comes into picture. Modi
government correctly identified that Indian Agricultural sector can be and must
be turned into a national asset from a drain on national resources and reservoir
of national poverty.
The stated goal of Modi government is to increase the share
of agricultural sector in national GDP to 33%. Given the exponential growth
India is poised to experience in next couple of decades (a 7% annual growth
projects India’s GDP in 2040 will be 5 times that of today), this means two
separate goals to the farming sector.
- Increase share of farm sector in national GDP
from current 18% to 33%. That translates into a farming sector GDP of $660B
instead of current $360B in 2015 terms.
- Maintain share of farm sector in national GDP at
33%. This means the farm sector GDP continues to grow at the rate of rest of
economy.
Once achieved, these two goals will allow at least 33% of
labor force to continue agriculture sector while maintaining comparable
per-capita incomes with those in industrial and service sectors. At one go this
vision reduces the burden of labor force transition by a whopping 100 million,
reducing the timeline of labor excess capacity transition by 10 years (from 25
yrs. to 15 yrs.). The savings achieved in the process (~ $1.5 trillion) can be
diverted to transform Indian farming sector to build a renewable national
economy.
The Roadmap
Given various dimensions of agriculture sector and the
stated goals of Modi government for this sector, we can identify following
opportunities for the nation as a whole.
Unified Agriculture
Sector definition, vision and policy
An opportunity opens up for the nation to integrate all
forms of agriculture into one sector and identify synergies between various sections
of agriculture. For example the definition of a farm can include, but not
limited to, a solar farm that doubles as cattle-shed, a cattle-farm that
doubles as captive organic-fertilizer factory, a farm that contains a mix of
commercial timber, bio-diesel plantation, food-grain field and vegetable-farm and
so on; the possibilities are endless. Such a definition would facilitate
long-term large capital induction into farming sector that is not available
today, because diverse product base in the farm will reduce overall risk
profile of farm loans.
Farm Ownership and
Land Acquisition Bill
For Indian society, land ownership is not just a financial
aspect but a socio-cultural aspect. There are historical reasons emanating from
India’s prolonged fight with colonial ideologies and the entities behind them.
The spiritual and emotional attachment that Indians have to land is similar to
their emotional attachment to gold; land is Sri Bhudevi and gold is Sri Lakshmi
– both consorts of Sri Mahavishnu. Any person or policy that is perceived to be
cutting this emotional bond will therefore be seen as an agent of yet another
colonial player.
In its current form, the Land Acquisition Bill offers a
onetime non-reversible financial transaction to acquire land from current
owners. A better approach can be to provide more flexible options to the landowner,
such as (but not limited to)
- Land will be acquired permanently for roads and
other public infrastructures, but 99-year land lease agreement will be made for
the industrial sector. This will address the concern that land is being
transferred to corporate owners.
- Equal amount of land swapping within a
meaningful distance (say 10KM) for farmers who are not interested in losing
their agricultural land holdings.
- Flexibility for the landowner to choose between
a one-time cash transaction or a mix of at-face-value shares in the
SEZ/Industry. This can also include the economic benefits from public
infrastructure.
The Land Acquisition Bill will have more approval and support
from landowners if its focus changed from changing land ownership to
facilitating the transition of landowner from one economic sector to another sector,
along with their land holding. The bill would create new opportunities for the
people to transition from one sector to another without losing their financial,
and most importantly, emotional, attachment to their land holdings.
Reorganizing the Agriculture
Sector Labor Force
The agricultural sector labor force is not a single monolith,
and consists of many groups, often with conflicting interests. Remember that 99-million
out of 121-million agricultural land holdings are small and marginal farmers,
with an average land holding size of 1.37 hectares. There are also millions of
farmers who don’t own land, but rent or lease land for farming, in addition to many
more millions of daily laborers. The farming sector employs people as young as 12
years all the way to octogenarians.
There is a great need and opportunity in developing a
national registry of all of our agricultural labor force and performing a
detailed analysis based on their demographics, region, skills and economic
status. An accurate understanding of the labor force is necessary for effective
land reforms, skill development, and re-employment in non-farming sectors.
Various government schemes and policies can be utilized to
reorganize the farm sector labor force in the most effective manner. Some ideas
that can be used in this process are:
- Bring farm labor above a certain age group into a
newly unveiled Social Security scheme in such a way that they live above the poverty
line.
- Identify suitable non-landowning labor for skill
development and reemployment using MNREGA-like schemes.
- Turn agricultural subsidies into long-term loan
contracts, so that the farming sector can get the necessary capital resources
to transform itself into a renewable economy. A recent economic survey [3]
puts the amount of agricultural subsidies (not including Railways, fuel,
electricity and water subsidies) at more than Rs 235,000 Crore per year. This works out to be an annual subsidy of Rs
23,500 for those 100 million small and marginal farmers. There is a lot of room
for opportunity in utilizing these subsidies better.
Ecological Security
for Food Security
Nature, by definition, is the manifestation of the optimized
ecological balance of a given region. By extension of that definition, India’s ecosystem
is the most optimal balance of India’s regional conditions. India’s long-term
survivability and success therefore comes from developing on this natural
balance, rather than from disturbing it. Indian crops, fisheries, cattle etc.
evolved, by natural selection over millennia, to survive and sustain in local
conditions in the most efficient way. The human aspect of our great
civilization can thus prosper by designing its own vision within this ecosystem;
not, outside of it.
Studies tell us that for all of humanity to live at the current
USA/European levels of consumption, we would require more than five Earths. Reaching
China’s current level of consumption would require one and half Earths. Any
logical mind will realize the futility of India trying to tread this path. However,
that doesn’t mean that Indians cannot achieve the quality of life enjoyed by
other advanced economies. India just needs to prioritize improving its human
development indices while having the minimum possible impact on its ecosystem.
This task is not difficult if the national agenda and policy is built around a
renewable economic model from the get go.
Agriculture Sector as
a Renewable Economy
With proper vision, groundwork, and sound national policies,
India’s agricultural sector can give the necessary impetus to leapfrog the Indian
economy from an agrarian-economy to a renewable-economy, bypassing the
industrial and service phases. A renewable economy is where 100% of human
socio, economic, and technological prosperity comes from renewable sources and
processes. The advanced economies are already moving in this direction because
the age of human and industrial colonization is ending, and each civilization
has to live within its own natural means.
Agricultural, industrial, and economic scientists must bring
their minds together to identify various models to achieve target per-capita
incomes at small farm levels (~5 Acres) using a mix of complementing energy,
commercial-timber, animal-husbandry, fisheries, food grains and medicinal herbs
farming models and technologies. Governments must change policies and laws to
recognize the farming sector as a small & medium business, and encourage
necessary innovation in this field.
Conclusion
India’s agricultural sector is a complex multi-dimensional
socio-economic-political problem with far reaching consequences to its national
security. India, as a civilization, has not just a material, but also emotional
and spiritual connection with their land holding. The problems manifesting in
India’s agricultural sector are also a reflection of problems in other sectors.
A proper understanding of the national vision, overall civilizational needs,
and India’s objectives is required to realize the underlying opportunities and
possible solution strategies.
An effective strategy and efficient execution of India’s national
vision is necessary to achieving a purposeful transition of labor force excess
capacity from the farming sector to other sectors.
The Modi government, as articulated in different forums, has
set the right national vision as far as the agricultural sector is concerned.
Different policy decisions made by this government emanate from that vision to
elevate farm-sector as an equal partner in the national economy. Schemes like
JDY, Universal Social Security, and farmer pension schemes are nothing but a few
relevant parts of this national vision.
All the noise from the political opposition is just tactical
maneuvering for their political survivability. There is no alternative vision
proposed by the opposition groups, except for demands for the continuation of failed
policies and corrupt practices.
The Modi government has many other forums to explain,
educate, train, and help the agricultural sector in its transformation into an
equal pillar of the national economy, along with the industrial and service
sectors. As its vision comes into execution, the beneficiaries would be the
millions of people making up the agricultural sector, as well as the nation as
a whole.
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