Baisakhi, that annual festival of hope and regeneration, was to have been extra special this April 13. It was a day before the prime minister was due to announce that he would lift the lockdown that had pulled the shutters down on an entire country and its economy. Winter rainfall and an extended cold spell had delayed the harvest of an expected bumper rabi crop; all that was needed for it to resume was the end of the 21-day lockdown. As it turned out, the lockdown was extended by another 19 days. As it pushed people and businesses deeper into despair, agriculture suddenly became the only hope for the country, to resuscitate its stalled economy and infuse demand in the system.
With encouraging minimum support prices (MSP) and a good monsoon, the area under rabi cultivation increased by 8.6 per cent this year, from 59 million hectares (mha) last year to 64 mha this year. Even though rabi acreage in the country is 22.4 per cent less than for kharif cultivation, they have an equivalent contribution in the total foodgrain production in the country. The area under wheat cultivation, primarily in the states of Punjab, Haryana, Rajasthan, Madhya Pradesh, Uttar Pradesh, Gujarat and Bihar, grew 11.2 per cent over the previous year, from 29.7 mha to 33 mha. Riding on the back of a winter rainfall and an extended cold spell, production of wheat, the chief rabi crop, was slated to hit 106 million tonnes this year. With the government announcing an MSP of Rs 1,925 per quintal, the value of the wheat crop alone this year was expected to touch Rs 2 lakh crore.
Other rabi crops, too, such as paddy, maize and cereals, were headed for bumper yields owing to increased acreage and favourable climatic conditions. With a 19.2 per cent increase in acreage this year, jowar, grown primarily in Maharashtra, Karnataka and Andhra Pradesh, was due to see a 35.2 per cent jump in production over last year. Gram, which has the highest acreage for a rabi crop and is grown primarily in UP, MP, Rajasthan, Maharashtra, Andhra Pradesh and Karnataka, was gearing up for a 2 per cent decline in production, from 14.8 million tonnes in 2018-19 to 14.5 million tonnes this year, but the MSP for the crop was increased by Rs 255 per quintal, from Rs 4,620 in 2018-19 to Rs 4,875 this season. In all, the rabi crop was expected to contribute Rs 8 lakh crore, or 4 per cent, to GDP.
Graphics by Tanmoy Chakraborty
It was on this harvest, then, that the Indian farmer pinned all his hope. With the Indian economy in a slowdown even before the lockdown, a bumper crop would be his only salvation. However, just as India was getting ready for a golden harvest, coronavirus struck. The harvest in the western and central states was disrupted, perishables were laid to waste, farm labour disappeared, access to markets was cut off and transport halted. The subsequent relaxations and exemptions issued by the home ministry took a while to be implemented on the ground. It was at this point that it became imperative for the government to step in for the rescue, ensure that the rabi harvest proceeded unhindered, and the grain procured on time to enhance food security and sustain farmers’ livelihoods, leaving more money in their hands. An average farmer in India earned Rs 96,000 per annum in 2015, according to calculations by the agriculture ministry. An agricultural labourer, on the other hand, going by the wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), an average of Rs 200 a day for 100 days, though it varies widely across states, earns roughly Rs 20,000 annually. A bumper harvest would enrich the Indian farmer and, in turn, stimulate demand. Agriculture, thus, could become the catalyst for the economic revival of the entire country.
AGRICULTURE, THEGOVERNMENT’S LAST HOPE
The 17 per cent agriculture and allied sectors contribute to GDP may not seem enough to lead a revival in the economy, but with nearly 65 per cent of the country’s population being rural and 50 per cent dependent on it for livelihood, a successful harvest and the resultant rise in rural demand provide the only possibility of an economic turnaround. “At a time when the entire country is under lockdown with almost no source of consumption other than food and medicines, agriculture,” says Professor Manoj Pant, director at the Indian Institute of Foreign Trade in Delhi, “is the main source of demand in the country.” For former Planning Commission member and leading economist Abhijit Sen too, agriculture remains a key sector. “It provides food security, jobs for half the country and livelihood sustainability for the entire nation,” he says. Reviving it is likely to help provide employment, arrest deterioration in demand at a time when exports are sinking and ensure food security in the country.
Agriculture is key not just to the Indian economy but is also crucial for global trade links. According to Food and Agriculture Organisation (FAO) estimates, India is the world’s second-largest producer of wheat, rice, sugarcane, groundnut, vegetables, fruits and cotton, and the largest producer of milk, pulses and jute. It is among the four countries, besides Russia, China and the US, that produce half the world’s wheat.
The forecast of a normal monsoon presages well for the sector. Prices too have been stable given the extraordinary situation of the pandemic and the massive uncertainty, though labour expert and economics professor Praveen Jha, who teaches at the Jawaharlal Nehru University in Delhi, asserts it is more a case of price restructuring than price stability. “There is downward pressure on producer prices,” he says. “At the same time, given the supply chain disruptions, urban consumers face the upward pressure of consumer prices. The two balance each other out.” Food price volatility has been rather high in the past few years, given both the global fluctuations in commodity prices and uncertainty in the prices of perishables like onions and tomatoes. However, it is not so much prices that worry the farmers as “not having the choice to go to the market”, says Prof. Sen. “To save the harvest, let the mandis go to the farmers.”
SAVING THE HARVEST
Indeed, to save the harvest and the farmer, the central, as well as the state governments, have cranked into action. “The central as well as state governments,” says Ramesh Chand, member, NITI Aayog, and renowned agricultural economist, “are leaving no stone unturned in rescuing the rabi harvest despite the challenges posed by the coronavirus disease.”
First, as part of the Rs 1.7 lakh crore relief package finance minister Nirmala Sitharaman announced on March 26, Rs 15,841 crore was released toward payment of the first instalment of the Rs 6,000 annual benefit under the PM-Kisan Samman Nidhi Yojana, expected to benefit 120 million farmers. Then, wages under MGNREGA were increased from Rs 182 to Rs 202 per day. On April 6, Prime Minister Narendra Modi held a high-level cabinet meeting to discuss means to help farmers grappling with labour shortage. On April 20, the home ministry allowed the intra-district movement of migrant labour. This limited movement of labour is expected to partially address the severe scarcity of labour during harvest and procurement, even though most migrants typically move between states, say from the labour-exporting states of UP and Bihar to labour-importing Punjab and Haryana.
Restrictions on mechanised operations, too, were eased, albeit with guidelines on social distancing and sanitisation of agricultural infrastructure. To address the issue of transportation, the PM suggested exploring innovative app-based solutions, such as truck aggregators on the lines of Ola and Uber, to connect farmers with nearby mandis.
To decongest mandis and revive supply chains, the Narendra Singh Tomar-led Union agriculture ministry, on April 2, added two new features to e-NAM, the electronic national agriculture market, to enable farmers to sell their produce at warehouses and collection centres established by Farmer Producer Organisations (FPOs). The warehouse-based trading module in the e-NAM software is likely to facilitate trading from the premises of warehouses. Another module will allow agriculturists to access the e-NAM platform from the collection centres of FPOs. Some 415 mandis, said Tomar, will be added to the existing 585 mandis in 16 states. These e-NAM mandis provide farmers an additional platform apart from the traditional commission agent system.
The Prime Minister’s Office is also said to be seriously examining the recommendation from an empowered group and senior government officials to expand access to food during the lockdown by doing away with the need to show a ration card or photo ID. As a result, food is likely to be distributed free to everyone, be it migrant labour, daily wagers or other rural/ urban poor. State and district administrations, meanwhile, have been instructed to ensure that the public distribution system is not overcrowded and strict action is taken on complaints of black marketing or inflated prices.
THE STATE PUSH
States, too, are taking the lead in ensuring a successful rabi harvest. In Punjab, the Amarinder Singh government has allowed combine harvesters to run for 13 hours a day instead of eight hours. The wheat harvest in Bihar is completely mechanised, and the state is providing inter-state curfew passes to combine-harvester drivers from Punjab and Haryana; 750 such passes have already been issued.
Punjab and Haryana are also converting their rice mills and deras into purchase centres. The number of such purchase centres in Punjab has doubled to 3,691 from 1,840 last year. The Haryana government, on the other hand, has opened 2,000 wheat purchase centres and 140 mustard purchase centres.
Punjab has also issued coupons with holograms to farmers to bring their wheat crop to the mandi to prevent overcrowding; some 2.7 million coupons have been issued since April 15. In Madhya Pradesh, the state food department is planning to send out SMSes to farmers to bring their produce to the centre. “SMSes are being sent out to 5-10 farmers at each buying centre per day. We are inviting the smaller farmers first, the bigger ones later,” says Avinash Lavania, the state food and civil supplies director.
Most states have also staggered procurement by three months. Punjab has extended the procurement season for 13.5 million tonnes of wheat up to June 15; MP hopes to complete the procurement process by May 25. Haryana has also launched a Bhavantar Bharpaii Yojana, a scheme where farmers will be compensated for any difference in prices. The Yogi Adityanath government in UP has instructed insurance companies to compensate farmers whose crop may have been damaged due to unseasonal rainfall and hailstorms.
In UP, district administrations have also become the nodal coordinating authority, conducting online sessions with mandi officials on Zoom or Skype. Wholesale operations have been separated from retail sales. “To avoid overcrowding in mandis,” says state agriculture secretary Devesh Chaturvedi, “wholesale trade has been restricted to night, between 12 midnight and 7 am. Idle rickshaws and e-rickshaws have been enlisted to take the produce directly to consumers in residential colonies. This prevents overcrowding in mandis during the day and helps provide employment to rickshaw-pullers and others.”
The Ashok Gehlot government in Rajasthan has opened 900 centres right up to the panchayat level to arrange for the procurement, sale and purchase of wheat, mustard and gram. “We are also arranging for rent-free tractors and other equipment. Free seed kits are being provided to one million small and marginal farmers and half a million SC/ ST farmers.” In Bihar, agriculture minister Prem Kumar says there will be doorstep delivery of seeds for the kharif season.
THE CHALLENGES AHEAD
However, despite the best efforts of the central and state governments, labour scarcity, and lack of transport and markets continue to be major impediments for farmers during the lockdown. According to Vikas Rawal, professor of economics at JNU in Delhi, the total quantity of wheat and chana arrivals in the first phase of the lockdown (till April 14) in the mandis of Punjab was only 6 per cent compared to the corresponding figures the year before. “Remember,” he says, “harvest in Punjab and Haryana was delayed last year too.”
“Even if you harvest,” says Professor Yoginder K. Alagh, a former Union minister, “in the absence of transportation and trade, it is back to barter, simply local buying and selling.” In economics, he adds, trade and transportation are two sides of the same coin, you cannot have one without the other. He predicts nil growth in agriculture as far as rabi crops in the western states are concerned. The northern states might fare better, if their governments take the right steps for harvest and procurement.
According to one estimate, the horticulture pile-up of both harvested and unharvested perishables is likely to cause farmers a loss of approximately Rs 15,000 crore. Such losses might double or triple if the lockdown continues into May. Rawal documents another problem. “Staggering of the harvest forces farmers to pay a monthly interest of 3 per cent to arthiyas (middlemen), the new moneylenders of rural India, which works out to an astronomical 36 per cent a year,” he says.
Agricultural expert Ashok Gulati of ICRIER (Indian Council for Research on International Economic Relations) has a simple advice for the government. “Suspend the APMC-run mandi system, buy directly from the farmers, without charging the market fee. Engage the Food Corporation of India (FCI) and corporates in the agro-processing business and exports by using various electronic platforms for scheduling procurement without crowding. Later on, the thread can be picked up through APMC-run mandis.”
The best-case scenario, according to Prof. Jha, is if 80 per cent of the rabi output, especially of wheat, can be rescued. “It will be considered good management, given the disruption caused by the lockdown,” he says. A more realistic scenario, though, would be a saving of 70 per cent of the crop, “though it would lead to negative growth rates. Yet, it would help in providing food security and sustaining livelihoods.”
Chand of NITI Aayog remains extremely optimistic. “There is no question of negative growth in agriculture this quarter,” he says. “I estimated a growth rate of 3.25 per cent this quarter. The setback is marginal, not more than 0.25 per cent. We will maintain 3 per cent growth this quarter. The main setback was in floriculture and perishables. But the grain markets are fairly intact in the big wheat-producing states.”
So, will it be a harvest of hope? The verdict of agricultural expert Devinder Sharma, a trenchant critic of the government’s handling of harvest operations, is brutal. “This pandemic and the handling of the resultant lockdown makes it appallingly clear that when it comes to any aspect of Indian agriculture, various governments, both past and present, have followed a fallacious model of growth. What does the panic migration of labour tell us? We desperately came to the city hungry; today, millions are going back to their villages, once again hungry.”
Ashok Dalwai, CEO of National Rainfed Authority and official in-charge of doubling farm incomes, however, begs to differ. “The lockdown protocols have to be respected as it saves lives in this pandemic,” he says. “However, most restrictions for rabi harvesting and procurement and kharif sowing have now been lifted. DMs have been instructed to take care of farmers and migrant farm workers. The various state governments have indeed responded with speed. Do realise this is an unprecedented pandemic. Governments evolve in governance while handling such a crisis.”
The cliché, then, bears repeating, every crisis is an opportunity. The handling of the sector during this lockdown can forever change the way agriculture is conducted in the country, whether it is mechanisation of agricultural activity, e-NAM-based marketing or digitisation of processes. With enhanced productivity, novel marketing and greater efficiency, not only would a good rabi harvest sow the seeds of a much-needed economic revival but also enable the government to edge that much closer to realising its ambition of doubling farmers’ incomes.
with Rahul Noronha, RohitParihar and Amitabh Srivastava