The Indian Agrarian Challenge: Do we have a ‘real’ solution?

Three critical challenges that Indian agriculture faces are, namely, (i) The Land Challenge (ii) The Market Challenge, and the new (iii) Aspirational Challenges

The indispensability of agriculture to the Indian economy is a well-established reality. However, the farmers still languish for want of genuine welfare. A measly average income of Rs 10,218/month, as estimated by NSSO (2019), for rural households is barely any welfare. It is worth noting that this income figure is not estimated per individual; even assuming a conservative estimate that a typical rural household consists of a minimum of two members, the per capita income halves to less than half the mandated minimum wages.

As an eloquent Indian MP rightly debated in the hallowed halls of Oxford University, “It’s a bit rich to oppress, enslave, kill, torture, maim people for 200 years and then celebrate the fact that they are democratic at the end of it”. Little did anyone imagine that if you substitute ‘democratic’ with ‘farmers’, you have yourself the state of affairs in the country and its celebration of farmers in a sentence. It is ironic that, on the one hand, the country celebrates farmers’ day, while on the other, a good proportion of farmers want to leave agriculture today. The share of agricultural households in rural India had fallen from 57.8% in 2013 to 54% in 2019 as per NSSO.

This quagmire is because of three critical challenges that Indian agriculture faces, namely, (i) The Land Challenge (ii) The Market Challenge, and the new (iii) Aspirational Challenges.

Firstly, the land challenge. Generally, the economics of farming is that you invest in the preparation of land and planting, then go through months of careful tending in the fields to hopefully receive bountiful produce. Finally, you sell the produce, minus the portion that you want to keep for your subsistence, known as marketable surplus. The tragedy here is that 93.4% of farmers are small and marginal, and about 63% of farmers have less than an acre of land and that land may not be in a single contiguous parcel. How much marketable surplus they may receive from this patchwork of agricultural fields without even a chance of mechanisation is anybody’s guess. Additional land cannot be forged for the small farmer category for various reasons.

All interventions, including the much-vilified “tiller is the owner of the land” programme, have long ceased to generate any value-addition for the present generation of farmers. Nobody can be blamed for this, the inheritance laws justly but inadvertently induced this land fragmentation. As regards the political economy of land, the less said the better. It’s better that we in academics and policymaking get out of the business of solving the land problem and employ our resources elsewhere. No one repairs a car that has run its course.

The market challenge is somewhat of a tragedy. The Indian agricultural market has become a poster child for agrarian failure and is the go-to domain for case studies in the classroom. Climate change, erratic weather, unseasonal rainfall, pests, etc., worry the farmer less than the unjust prices at the market. To aid farmers in solving the marketing challenges, interventions such as MSP and government procurement, APMCs, Price Deficiency Payments, e-NAM, alternative marketing channels, etc., are in place. Despite all these measures, reaching every farmer with the benefits of interventions is still a distant dream.

Studies have pointed out that the prices received by small farmers are way below MSP. This does not give enough room for many farmers to meet their basic needs for survival, pushing them further into the pit of poverty. Adding to the problem are the rising input costs and general inflation. No doubt, schemes like PM-KISAN, PMKSY, Interest Subvention Scheme, Soil Health Cards will certainly caress the wound, but they will not heal it.

The third challenge is that of rising aspirations. A livelihood rooted only in agriculture does not necessarily entail a life of penury, but it cannot meet rising aspirations. As seen during the first Covid lockdown, many gym and restaurant-owners ended their lives. Should we jump to the conclusion that they too landed into abject poverty so miserable that they couldn’t carry on at all? No, it was that their aspirations were sunk, a sense of hopelessness prevailed, leading them to the extreme step. So is the case with agriculture; agriculture in its current form cannot meet the aspirations of the present generation. The era of just ‘roti, kapda, makaan’ is over; a genuine need for smartphones, bikes, insurance, internet, expenditures on ceremonies, costs of gifts and guests, the new norms of buying gold on particular days have all become mandatory requirements imposed by the aspirational society.

There is a way out, a modern compromise. Just like in any successful negotiation, no one will get all that they demand, but everyone will get something that they want and they should move on. Agriculture households receive more income from wages and salaries than from crop production, as per SAS rounds. It has even been argued that the daily earnings from crop production are lower than the wages paid by MGNREGS.

We cannot expand farmers’ land holdings, and we cannot let people languish there either. Just as the ‘roti, kapda, makaan’ era is over, so also the era of single job/occupation for livelihood. Pluri-activity is the new normal, whether we like it or not. A household is said to be pluri-active if a member of the household engages in multiple economic activities in a day. One silver lining of rapid urbanisation is that the distance between the villages and cities have shrunk, not just geographically but also economically. This has enabled the rural populace to engage in multiple streams of income, albeit of lesser value, but this is a good start.

Among the three challenges discussed, making new interventions for the land and market challenges is fruitless due to the entrenched political economy. The only remaining solution now is to take care of the aspirational challenges through pluri-activity. As seen in many developed countries, pluri-activity can result in two possibilities – first, the retention of land and risk diversification; and, second, move out of agriculture and allow further land consolidation among the remaining farmers. Both these possibilities result in reducing the ‘land and market’ issues. One thing is clear, there is no real solution for the existing challenges of Indian agriculture. However, working around the challenges to aid the welfare of the farmers is what the policies should now aim at.

(Chethan teaches at the Dept of
Management Studies, VVIET;
Subramanian teaches at CHRIST
University)