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Indian Government Promises to Revive Country's Ailing Agriculture Sector

  • Anjana Pasricha

The Indian government has promised to invest $6 billion to revive the country's ailing agriculture sector. As Anjana Pasricha reports from New Delhi, the farm sector sustains nearly two-thirds of the country's billion-plus people - but millions of rural households are in distress due to declining agricultural productivity and low wages.

Thirty-four-year-old Ganga Prasad Chauhan left his village in Chattisgarh state in Central India two years ago to work as a daily wage laborer at a construction site in Delhi.

He says he had no choice. He was making less than $1 a day working on farms - and even that work was available only during the sowing and harvest seasons. His earnings, he says, could not feed his four children or his aged parents.

A year ago, Chauhan and his wife came to Delhi in search of work. They now move from one construction site to another, in urban centers where India's booming economy has created a prosperous middle class. They make about $3 a day.

Chauhan's story is not unusual. Cities are thriving, but all across India, survival in the villages is a daily struggle for tens of millions of men and women - whether they are landowners or farm laborers.

Experts say Indian agriculture has been in steady decline after an era of high productivity in the 1970s.

Most farmers only own small patches of land. D.H. Pai Panindiker, who heads New Delhi's RPG Goenka Foundation, says the farm sector has become overcrowded, supporting 120 million rural families.

"There are no more areas to be brought under cultivation, so the limitation of land is there. But the basic thing is that productivity is not increasing, while the population is increasing, and that is what is creating an imbalance between availability and demand," said Panindiker.

Agriculture experts point out that the crisis has been building for a decade. Investment in agriculture has declined steadily. More than two-thirds of the area under cultivation is not irrigated, and crop harvests are completely dependent on the annual monsoon rains.

Moreover, 15 years of economic reforms have exposed farmers to global competition. Costs of production have risen as farmers turn to high-cost seeds, fertilizers and pesticides in a bid to push up yields - but often they still cannot match prices of imported crops like oilseeds or cotton.

India's top agricultural scientist, M.S. Swaminathan, heads the National Commission on Farmers, established by the government to examine what ails agriculture. He says many farmers have moved to large-scale commercial farming, but this exposes them to more market risks.

"Agriculture is a gamble in the monsoon, now it has become a gamble in the market," said Swaminathan. "When gamble in the monsoon and gamble in the market combine together, then you are in real distress, and that is what is happening in rain-fed areas. Even now the approach is … we have enough foreign exchange, why not import?"

The distress of the farmers is well documented. Both government and activist organizations have recorded thousands of instances of farmers who have committed suicide in recent years after being driven into debt.

Srijit Mishra, a professor at the Mumbai-based Indira Gandhi Institute of Development Research, has conducted a study in Western India's Vidarbha region - once a prosperous cotton-growing belt, now a region that has hit the headlines because thousands of indebted farmers have committed suicide there. He explains the problems of farmers who take their lives.

"There, largely cotton-producing farmers were in deeper crisis because of increasing cost and declining return. Various kinds of problems were there: 80 percent of the households indicated there was large indebtedness, crop value declining, economic decline of the household," he said.

A coalition led by the Congress Party came to power in 2004 after immense frustration in the countryside led voters to throw out the previous government. The government is now acutely aware of the need to address the problems of people like 34-year-old Radhika, who are abandoning the countryside and flocking to cities to work as laborers.

Radhika, who would only give her first name, says she misses her village and her children. But she is resigned to her fate, saying "I am poor, what can I do?

Prime Minister Manmohan Singh says the government will provide an infusion of $6 billion, to expand rural credit and build more infrastructure in the countryside.

Farm scientist Swaminathan warns that the need to revive the agricultural sector is acute.

"It is absolutely essential, otherwise there will be social chaos in the country," he said. "After all, agriculture is not just a food-producing machine, it is the basic livelihood of nearly two-thirds of the population of the country, that means 660 million people. Therefore if they are all in distress, then the social fabric will break down…"

Experts say the government must use the promised investment to provide improved technology and water conservation, in order to raise productivity. They want farmers to have access to credit and insurance at affordable rates, and an assured market for their crops.

The government agrees, and says it wants to push up incomes in the farm sector, where growth has declined to an all-time low of about two percent - less than a quarter the growth rate of the overall economy.

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