Gujarat's miracle agri growth is myth

There has been much debate on the 'miracle' growth of agriculture in Gujarat, particularly after 2003-04. Before that, agriculture in the state was low-performing and highly fluctuating.

The high growth performance was explained by factors like the boom in Bt-cotton cultivation, power sector reform ('Jyotigram Yojana', which provided regular, high-quality three-phase electricity to all villages), innovative extension model ('Krishi Mahostav', bringing scientists to the doorstep of farmers), increase in the use of inputs like fertilisers and high-yielding seeds, etc. The much-hyped 10% growth story of Gujarat's agriculture seems to have been associated with the favourable monsoon during the period.

However, the growth rate has collapsed in recent years, and it was as low as 3.7% between 2013 and 2015. An unfavourable monsoon season between 2012-13 and 2015-16, combined with volatile market prices, led to a decline in the growth rate of the sector.

The decline is mainly due to failure in crop production; even the positive growth of the livestock economy couldn't help much. The production of major crops like cotton, groundnut and maize has dropped, particularly after 2010-11, and the yield of cotton and groundnut has remained stagnant, as noted by the socio-economic Review of Gujarat, 2017).

At an all-India level, the slowdown in agricultural growth and rising distress in the agrarian sector is the effect of the rising costs of cultivation, inability to cope with the vagaries of rainfall, indebtedness and bottlenecks in agricultural marketing, to mention only a few causes.

The increasing distress of the agrarian sector is due to the lower growth in income of farmers; after 2011-12, the annual growth rate of farmers' income has been only 1%. The present government's declared ambition to double farmers' income by 2022 came in the middle of the agrarian crisis, which might be a huge challenge to achieve.

Among the 18 major states, income from crop cultivation in Gujarat ranks 11, which is below the national average (Situation Assessment Survey-NSSO 2014). Using the SAS-NSSO data for 2003 to 2013, Chandrasekhar and Mehrotra (2016) show that farmers' net income from crop cultivation increased by 1.34 times at the national level, compared to only 1.18 times in Gujarat.

Though the total income of the farm household has increased by 1.36 times in the state, income from cultivation, which constitutes around 60% of the total income of the agrarian household, has not grown.

However, it is not clear whether the government is concerned about the real increase in income or unadjusted nominal income. The calculation by Satyasai and Mehrota (2016) shows that doubling the income in real terms would take more than 13 years.

Income from other, non-farm sectors might not take such a long period to be doubled, as the income from non-farm sectors and salaries increase faster than income from cultivation. This raises serious concerns about the viability of the sector and the incentive to work as a farmer.

Irrelevant pricing

Cotton is one of the major crops cultivated in Gujarat, constituting around 20% of gross cropped area (2015-16), but the cost of cultivation of the crop is highest due to the higher price of seed and fertiliser. The minimum support price (MSP) set by the government to assist farmers is irrelevant.

The MSP for cotton needs revision as the cost of cultivation is increasing fast. The MSP should be double the cost of cultivation for farmers to be receiving a reasonable price. It is only recently that the government announced additional MSP for cotton. As reported elsewhere, that increase in the MSP for cotton was effected mainly in view of the Gujarat election.

Around 43% of farm households are indebted in Gujarat and a major chunk of farmers, as reported by NSSO, "do not like" farming as a profession. They are stuck with farming due to a lack of other income earning opportunities.

The farming community as a whole is in a vulnerable situation, with increased marginalisation of the agricultural sector, as around 55% of the total agricultural workers work as wage labourers. The proportion was 45% during the 2001 census, highlighting the non-profitability of the sector, and hence the decline of cultivators and cultivation.

The withdrawal of the younger generation from farms, as they migrate in search of better job opportunities, declining investment, increasing burden of input cost, etc., makes a future in farming uncertain and unattractive. The huge and increasing burden of per-hectare input cost of cultivation leads to decline in crop profitability and makes the farmer disinterested in farming. Thus, the vision of the Narendra Modi government at the Centre to double farmers' income seems to be more a slogan rather than a strategic policy to be achieved by the year 2022.

(The writer is a faculty member at the Gujarat Institute of Development Research, GIDR)

(Syndicate: The Billion Press)

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