Thursday, September 29, 2022

Some effective reforms that India should replicate in its agricultural sector

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The contribution of agriculture in India’s GDP is only around 17%, however, the sector employs around 42% of India’s workforce. The country needs to replicate some of the best agricultural practices from around the world. Farm modernisation is vital for making farming efficient and profitable. Countries with a highly-developed agricultural sector have reaped the benefits of investing in the mechanisation of farms. In India, a country where farmlands keep getting smaller as they are passed down generations, due to inheritance, advanced farming techniques present a way for cutting down on production costs. Indian agriculture needs to move from being labour-intensive to capital-intensive. And data shows that it is indeed happening. However, this slow & gradual transformation is fueled by a shortage of labourers and rising labour costs in rural areas. The mechanisation of Indian farms should be investment-driven. If Indian farmers enjoy a free market, they will be able to set aside enough capital from their profits, along with cheap credit, for acquiring farming equipment that will bring down their cost of production, and result in an increase in productivity. Small and medium scale farmers and cultivators who are the most vulnerable to debt cycles will benefit the most from such reforms in the farming sector.

Israel has pioneered crop diversification, and water management using technological intervention. Irrigation techniques like drip irrigation have made it possible for a country with two-thirds of arid and semi-arid lands and very little rainfall to utilize every drop of water available for farming. Measures like recycling wastewater for farming have also helped transform Israel’s Agri sector into a highly-developed one. These measures, if replicated in India, will greatly help farmers in regions that are prone to drought-like situations. Punjab is witnessing a developing crisis in the form of a depleting groundwater table due to incessant usage of water for the cultivation of paddy and wheat crops. Experts suggest that a cutdown of power subsidy for farming is necessary for discouraging farmers from over-exploiting groundwater resources. In Maharashtra a weak monsoon every few years results in crop failure, pushing farmers further into debt. 

Along with water management, India should also invest heavily in crop diversification. Cultivation of a few prominent food grains results in superfluous government procurement. A substantial amount of procured farm commodities stored is wasted every year due to insufficient and poorly-maintained storage spaces. Crop diversification can help the nation cut down on imports of certain fruits and vegetables, and also ensure surplus quantities for export for commodities that India is self-sufficient in. The government must ensure farmers’ access to good quality seeds for this transformation to take place. Educating farmers about how crop diversification can help improve their income should be a priority for the government.

However, for the above-mentioned practices to take place, India first needs a free domestic market for its agricultural sector. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, one of the three farm laws set to be repealed after heavy uproar by farmers’ unions, was claimed by agricultural experts and the NDA government to be a necessary tool for liberating the Indian agri-market. When China did away with communism-inspired commune farming in 1978, it liberated the agri-market and as a result, during 1978-84, farmers’ incomes in China increased by almost 14% per annum, almost doubling in six years. 

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