India must focus on agriculture to rebuild post-COVID-19 economy

An Indian paddy farmer carrying rice saplings for transplantation. (Representational image) (Photo: AP)
An Indian paddy farmer carrying rice saplings for transplantation. (Representational image) (Photo: AP)

The entire world is estimating a deep recession in 2020 due to COVID-19 pandemic. United Nations has projected that the global economy may shrink by up to 1% in 2020, a reversal from the previous forecast of 2.5% growth. It may contract even further if restrictions on the economic activities are extended without adequate fiscal responses. The COVID-19 pandemic is disrupting global supply chains and international trade. Millions of workers and professionals are facing the bleak prospect of losing their jobs. To avert a sharp economic downturn governments across the world are considering large stimulus packages. Some have even begun rolling out these stimulus packages.

The economic scenario is not much different in India due to the challenge posed by the pandemic. However, being a largely agricultural country does India has some advantages? Can the country fully leverage the potential of agriculture sector in reviving the economy? To understand how farming in India will help reboot the country’ economy, firstly we have to comprehend the agriculture sector’s contributions to the Indian economy.

Unlike western countries, around 60-70% of Indian population (directly or indirectly) depends on agriculture sector and currently it contributes to 16-17% of the GDP. India hosts nearly one fourth of the world’s farmers and possess 48% of world’s arable land. While the country has made significant strides in many off-farm sectors (service sector, industrial production etc.), agriculture continues to be the lifeline of the country, especially for the 64% Indians living in rural areas. Today, India is the world’s largest producer of milk, pulses; second largest producer of rice, wheat, fruits, vegetables and overall is the third largest producer of food grains. Agriculture also continues to remain the only sector that has a direct combined impact on poverty, rural livelihoods, health and nutrition.

The most fundamental step that needs to be done during this slowdown to leverage the potential of agriculture sector is to make the farming sector economically viable in the coming months. Some of the suggestive measures that could be implemented are given below.

Promoting group farming by forming Farmers Producers Organisations (FPOs)

The agriculture sector in India is hampered by high transaction costs and low access to credit and agricultural produce markets. One potential solution could be the formation of Farmers Producers Organisations (FPOs) and promoting group farming through them. There are several legal entities which aim to help farmers reap benefits of economies of scale via aggregation and FPOs are one such farmers’ aggregate. In the context of traders and middle men being the main source of price information and marketing, group farming and effective functioning of FPOs have a potential to give better collective bargaining power to farmers and thereby reduce the importance of middlemen traders in the value chain and improved price realisation by farmers through direct marketing of their produce. These farmers’ owned body can also channelise more institutional credit and government facilities for agricultural investment.  

Develop trust building measures between farmers and financial institutions

Majority of small-holder farmers have a fear of taking loans from banks/financial institutions. The reason being, if they do not get good crop yields, they will not have the money to repay the loan. For poor farmers, land is their only asset and they are wary that they will have to mortgage or sell off their land to repay loans. A trust building measure needs to be taken by the bankers and officials from agriculture & extension departments. There is a need to come up with strategies to educate the marginal and smallholder farmers about the procedural aspects of loan repayment and the way forward for farmers if there is any loss of crops due to climate.

Recognising the role of women in farming and supporting them

Every year, a large number of male farmers leave agriculture for off-farm jobs; often leaving agriculture to women farmers who play an extremely important (yet mostly unrecognised) role in farming. Today, women are over 40% of the agricultural workforce in India. The increasing proportion of women farmers also means that agricultural yields and the overall agricultural output of India depends, to a large extent, on women’s participation. However, still their access over resources remains very low as compared to their male counterparts. Only less than 10% of India’s land is owned by women. According to some estimates, if women farmers are provided the same resources as their male counterparts, yields can be increased by as much as 30% per household and country can experience an increase of 2.5 to 4% in agricultural output. To achieve such outcomes, country needs to eliminate gender inequalities in agriculture. Ensuring the registration of all women farmers who do not own land in their name as cultivators in the land documents through systematic sensitisation of revenue department will be a step forward towards giving security for land use. Also, it will be a good idea to ensure that women farmers get subsidized bank credit by facilitating issuance of Kisan Credit Cards in their names.

Propagating the concept of Mahila Krishi Champion

Considering the role of women in agriculture, an attempt could be made to identify the progressive women farmers who contribute immensely and extraordinarily in the agriculture sector. Such women should be recognised and rewarded (reward could be in form of simple appreciation or incentives through cash or agricultural equipment etc.) to boost up their morale. These women may be termed as “Mahila Krishi Champion” and their stories can be projected and popularised as role models so that it can influence and motivate other female farmers too.

Promoting ICT-based farming

Information and Communication Technology (ICT)-based farming can support efforts to cope with an increasingly uncertain climate, including more frequent extreme weather events and more variable rainfall patterns, and the resulting effects on agriculture.

Contingent and regional crop planning

Climate variability in terms of the frequency and quantum of rainfall and temperature regimes varies across the country, as also within the same agro-ecological zone. Hence, having a contingent crop plan well in advance for the main cropping season helps prepare farmers for weather aberrations during the particular year. Also, ensuring regional crop planning and the agro-climatic zone model will make the agriculture profitable and sustainable.

Establishing weather stations

To better equip farmers to respond appropriately to climate variations and to minimise risks, having local automated weather stations at appropriate distances will help generate locale-specific crop-weather advisories.

Promoting indigenous crop varieties

Promotion and revival of indigenous crop varieties should be done to reverse the loss of agro-biodiversity caused due to market drivers. Indigenous crops are more resilient to climate variations and farmers have better knowledge of handling them. Communities need to be encouraged to preserve the heirloom varieties of seeds in seed banks, while rotating their stock each year to ensure that adaptability is retained.

In both farm and non-farm sectors there is a huge potential of upswing, increasing the ratio of farm to non-farm income to 70:30 by 2022-23 from the present 60:40. According to the agriculture census 2015-16, the real income of farmers doubled in almost 20 years from 1993-94 to 2015-16. In the given economic scenario also, only agriculture can reboot the economy, sustain millions of lives and at the same time reduce global warming.

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