The British had left us a nation where the hearth in many homes was not always aflame. Farmers ploughed their lands as their grandfathers did, to survive, not to produce a national surplus.
The State did not know how to feed the hungry. When rainfall vanished for two years in the mid-1960s and India became a global feast for starvation photography, it had to beg a taunting America for shipments of wheat.
A mortified State clutched at Norman Borlaug’s high-yielding wheat varieties as a boon. Soon, it also found high-yielding varieties of rice. But a desperate State made an epochal error there.
It bet on Punjab, Haryana and west Uttar Pradesh to produce wheat and rice for the nation. These states were relatively suitable for wheat, but not rice. The best states for rice were West Bengal, Odisha, Bihar and Assam.
However, the State, faced with the choice of a begging bowl or a boiling pot, would not care. The three northern states were fostered and pampered for growing rice along with wheat because they had good irrigation, unlike the eastern states that were largely rainfed.
As a consequence, rice has been corroding the Punjab-Haryana-western UP farms as rust does iron. Every sowing adds another coat of rust to the iron. The farms are rusting away. Both the State and the farmers have been making a wild noise over emaciation of farms, but neither of them have done anything transformatory.
Chemicals have swallowed the soil’s innate nutrients. A crippled soil has now become their slave. The water for irrigation is depleting.
About 3,500 litres of water is needed to produce one kg of rice, compared to 1,350 litres for wheat and 900 litres for maize.
To take Punjab’s example, the state extracts 28 billion cubic metres (bcm) of groundwater annually, while its annual recharge is 19 bcm, which is unsustainable. Tubewells have to dive deeper and deeper to find water.
Why are the green revolutionaries growing rice and wheat at such a rapid pace? Why are they digging their own graves?
The answer is: they earn the highest from the two crops. In 2018–19, a Punjab farmer earned ₹75,000 from rice, ₹26,000 from potato, ₹15,000 from maize and ₹9,000 from gram per hectare.
The State has built a robust public ecosystem that guarantees the green revolutionaries high returns from rice and wheat. There is no such ecosystem for other crops.
There lies the root of the ongoing conflict between the government and the Samyukta Kisan Morcha (SKM). The State wants to liquidate the public ecosystem and raise a private ecosystem over its ruins. The SKM wants the State not only to retain the public ecosystem but also to expand it beyond rice and wheat to cover other crops.
The SKM’s position is more rational than the State’s. Most farmers in its movement come from Punjab, Haryana and western UP and can see their farms bleeding unstoppably from the rice-wheat cycle.
They want to diversify to other crops, but they do not want their income to fall in the process. That is why the SKM is demanding an ecosystem starting with a legally guaranteed MSP for all the 23 crops (seven cereals, five pulses, seven oilseeds, four commercial crops) the State fixes a base price for.
Without an ecosystem that brings them assured good returns from alternative crops, the farmers are not going to grow them in a part or whole of their land.
Both the Central and state governments have to work to build a robust ecosystem for them. Their approach to move farmers out of paddy in the past two decades has not been holistic. They have been trying to kill the tiger with a slingstone.
In 2013–14, the Central government started a crop diversification programme for the Green Revolution states. The programme is shackled by a miserly and myopic approach. It has demonstrated to several farmers how to grow alternative crops but failed to motivate them to actually grow these crops.
Last year, the Punjab government announced MSP for moong and also promised to procure all of it. The area for moong rose from 50,000 acres in 2021 to 1.25 lakh acres as a result. However, over 80% of the moong harvest arriving at the mandis was sold at below MSP rate, deluding the farmers.
In 2020, the Haryana government announced it would pay farmers ₹7000 per acre of diversified crop if they moved out of paddy. It has not motivated farmers, for a cash incentive—with a hundred bureaucratic tantrums—is not enough. They want a robust ecosystem for good returns.
The State motivated the farmers of Punjab, Haryana and western Uttar Pradesh to grow rice and wheat by not just fixing an MSP, but also investing in R&D to develop newer varieties to suit different climates and types of soil.
It sent its officials to villages to guide the farmers adopting the new varieties. It gave subsidies to farmers to buy farm equipment. It subsidised irrigation and power. It procured rice and wheat.
Agriculture in green revolution states cannot be saved unless a substantial part of rice cultivation is moved from there to eastern states. And that can be done only when the State builds robust ecosystems for alternative crops as it had done for rice and wheat.
The State need not procure the harvests of alternative crops. Once there is a legally guaranteed MSP, farmers can sell their harvests to private players. And that can lead to higher private investment in storage, processing, marketing, transportation and exports of alternative crops.
That can also prick a hole in the balloon of State expenditure on edible oils and pulses imports.
Credits : New Indian Express, Arun Sinha
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.