Next steps in agriculture (GS Paper 3, Economy)
Introduction
- India's agricultural sector faces a challenging road ahead in the coming decades (Amrit Kaal). Decades of reliance on outdated methods and a lack of support for farmers' well-being have created significant hurdles.
- We're also facing external factors that may be difficult to control.
Challenges faced by Indian Agriculture sector
Erratic climate events
- The climate is changing irreversibly for the worse.
- We are already witnessing the beginning of erratic climatic events impacting crop production and livelihoods.
WTO’s adversarial rulings against Indian agriculture
- The World Trade Organisation will not change and we will have to live with its iniquitousness.
- For many years, the US has deliberately crippled the dispute-settlement mechanism.
- When it does become operational, Indian politicians are not likely to know how to wriggle out of its rulings domestically.
Fragmentation of landholdings in India
- The large number of small land holdings (85 per cent of total arable land) fundamentally limits the scope for primary producers to eke out a life of dignity from their profession.
Global drive for low food prices
- The global priority to ensure low food prices for consumers is easiest achieved by artificially driving down farm-gate prices.
- This makes farming environmentally unsustainable and economically unremunerative.
Depleting aquifers
- The depleting aquifers due to the insatiable demand for water for agriculture is reaching a threshold point where it won’t be economically viable to extract water for irrigation in food basket regions.
- Drinking water is already becoming a sought-after monetised commodity in large swathes of the country.
Challenges that can be managed by Indian policymakers
- Investment in agriculture: Investments in agricultural research and extension services have stayed below the level of inflation. In other words, funding has actually dropped, even when every rupee invested in agricultural research yields economic returns upwards of 10 times over other investments.
- Unfair Markets & Unintended Consequences: Agricultural markets are inherently unfair, and unintended consequences are inevitable. However, solutions remain elusive.
- State-Level Dissonance: Agriculture is a state subject, yet many states prioritize populist handouts over collaborating with national goals and investing in the future.
- Distorted Pricing: Free or unrealistically low prices for cereals through public distribution systems depress farm-gate prices, making farming an unattractive profession.
- Inefficient Subsidies: Skewed fertilizer subsidies encourage excessive use, harming both human health and the environment.
- Fiscal Constraints: High public debt at central and state levels limits long-term planning and hinders further subsidies.
- State Bankruptcy Risks: Many states face potential bankruptcy, with no clear procedure for sovereign debt restructuring.
- Inept governance: Inept governance and lack of accountability in the ministries managing the agricultural sector at the Centre and the states is not primarily due to incompetence but to the attitude of those at the top — they believe they have the powers because they have the answers.
Conclusion
- Today, the steps that matter the most will be those that the prime minister is going to take.
- A mere tinkering of the framework will not suffice and if nothing were to fundamentally change, including the process of framing policies, we may find ourselves chasing chimeras and living our nightmares.
