Agrarian Crisis in India and Way ForwardMilan 2016AID, Seattle

G. V. Ramanjaneyulu

Crisis in Indian Agriculture• Economic Crisis

– Increasing costs of cultivation and decreasing returns– Reducing public support and increasing indebtedness

• Ecological Crisis– Due to maximizing the output of a narrow range of species leading to monoculture of crops and varieties, – Capital depletion and massive additions of external inputs (e.g. energy, water, chemicals), and – never caring about the externalities

• Socio-political crisis– Increasing tenancy, land use shift– Huge migration

• Climate Crisis– Increased frequency of droughts, floods and cyclones– Extreme temperatures

Source: NCRB 1995-2014

Total 305,926 in 20 years

http://www.agrariancrisis.in

Farmer

Market

Policy

People depending on Agriculture in India

49.93%

19.5%

52.78%

16.69%

43.35%

26.33%

37.82%

22.69%

35.24%

23.75%

31.65%

26.38%

24.64%

29.96%69.43%

69.47% 69.68%60.51%

58.99%

58.03%54.6%

• People depending on agriculture has come down from 69.43% to 54.6% in last 60yrs• For the first time the number of cultivators is lower than agriculture workers both in proportion and absolute numbers• Between 2001-2011 about 86.10 lakh people have left farming in India which is about 2358/day• In 2011 main cultivators (depending on farm income for more than 6 months) are only 95.8 m which is about 8% of Indian population)

(People in Million) (% of working population)

Source: Census of India 1951-2011 http://www.agrariancrisis.in

Where are the jobs?• NSSO 66th Round: From 2004-05 to 2009-10, only 2 million additional employment was generated

but 55 million were added to working age population!

Sector-wise employment (millions)

Sector 2004-05 2009-10 DifferenceAgriculture 258.93 243.21 -15.71

Manufacturing 55.77 48.54 -7.23

Services 112.81 112.33 -0.48

NonManufacturing (construction)

29.96 56.10 26.14

TOTAL 457.46 460.18 2.72

• 63% of all women workers in India (74% of rural female workforce) is in agriculture

• Only 13% of women have access to land

• 35 million women cultivators enumerated by census 2011

Changes in the percentage distribution of households and area owned by category of household ownership holdings in 2012-13 over 2002-03

Category of holdings % of households % of area owned2002-03

(59th Round)2012-13

(70th Round)2002-03

(59th Round)2012-13

(70th Round)Landless (<0.002 ha) 10.04 7.41 0.01 0.01

Marginal* (0.002-1.00 ha) 69.63 75.42 23.01 29.75

Small (1.00-2.00 ha) 10.81 10.00 20.38 23.54

Semi-medium (2.00-4.00 ha) 6.03 5.01 21.97 22.07 Medium (4.00-10.00 ha) 2.96 1.93 23.08 18.83 Large (> 10.00 ha) 0.53 0.24 11.55 5.81

Source: NSSO 59th Round and 70th Round

More than 81.83% of agricultural households today own less than 1.00 ha of land.

Land Holdings in India 1970-2011

Source: Indian Agriculture Census, 2011

Estimated Income and Expenditure of Farmers in India

Compiled from NSSO 59th and 70th Round

    NSSO 59th Round (2003) NSSO 70th Round (2014)Land holding

Category Total Income (Rs/month)

Expenditure (Rs/Month)

% of total Total Income (Rs/month)

Expenditure (Rs/Month)

% of total

<0.01 Landless 1380 2297

67.00%

4561 5108

81.83%0.01-0.4 Sub marginal 1633 2390 4152 5401

0.4-1.0 Marginal 1809 2672 5247 6020

1.0-2.0 Small 2493 3148 17.00% 7348 6457 10.00%

2.0-4.0 Semi-medium 3589 3685 10.00% 10730 7786 5.01%4.0-10.0 Medium 5681 4626

6.00%19637 10104 1.93%

>10.0 Large 9667 6418 41388 14447 0.24%  Total 2115 2770   6426 6223  

Average Monthly income from different sources

Net receipts

Size of land possessed (ha)

wages/ salary

Cultivation Livestock Non farm business

Total income

Total consumption expenditure

Net balance

Net investment in productive assets

<0.01 2902 30 1181 447 4561 5108 -547 55

0.01-0.40 2386 687 621 459 4152 5401 -1249 251

0.41-1.00 2011 2145 629 462 5247 6020 -773 540

1.01-2.00 1728 4209 818 593 7348 6457 891 422

2.01-4.00 1657 7359 1161 554 10730 7786 2944 746

4.01-10.00 2031 15243 1501 861 19637 10104 9533 1975

10.00+ 1311 35685 2622 1770 41388 14447 26941 6987

All sizes 2071 3081 763 512 6426 6223 203 513

Source: Key indicators of Situation of Agricultural Households in India, NSS 70th Round

Credit access

• 2015: Farm Credit Rs.8.5 lakh crore (12.08 %) of the total bank credit against 18% norm

• Rural farm credit gets only Rs.2.48 lac crore which equals only to 4.49 % of bank credit while the remaining 6.03 per cent — more than half of the farm credit — is apportioned by semi-urban, urban and metropolitan farmers

• Small loans, of below Rs.2 lac limit, add up to Rs.2.81 lac core, that is 5 per cent of the total credit supplied by the banks. The small and marginal farmers' share in this could naturally be much less than this 5 per cent

Proportion of agricultural households indebted within each farm size class

Credit access

• 2015: Farm Credit Rs.8.50 lakh crore (12.07 %) of the total bank credit (70.4 lakh crore) against 18% norm

• Rural farm credit gets only Rs.4.08 lakh crore which equals only to 48% of agricultural credit (or 5.79% of total credit) while the rest — more than half of the farm credit — is apportioned by semi-urban, urban and metropolitan farmers

• Small loans, of below Rs.2 lakh limit, add up to Rs.2.81 lakh crore, that is 4.0 per cent of the total credit supplied by the banks. The small and marginal farmers' share in this could naturally be much less than this 4 per cent

Commodity Variety Cost of cultivation (Rs/ quintal)

Recommended MSP for 2015-16 season (Rs/q)

MSP for 2015-16 season (Rs/q)

Increase over previous year (Rs/q)

Paddy Common 2,100 3,118 1410 50Grade A 2,657 3,986 1450 50

Jowar Maldandi 3,740 1590 40Bajra --- 3,206 1275 25Maize --- 2,824 1325 15Ragi --- 3,308 1650 100Tur (Arhar) --- 6,840 10,216 4625 (includes

Rs.200/- Bonus)275

Moong --- 8,878 4850 (includesRs.200/- Bonus)

250

Urad --- 7,595 4625 (includesRs.200/-Bonus)

275

Groundnut- --- 7,186 4030 30Soyabean Yellow 4,735 2600 40Sunflower --- 8,911 3800 50Sesamum --- 6,798 10,198 4700 100Nigerseed --- 3650 50Cotton Long Staple 5,395 8,092 4100 50

Cost of Cultivations (Telangana) and Minimum Support Prices (MSP) offered by the central govt during the year 2015-16

Production PiePaddy in Telangana 2015-16

Total cost Rs. 90,708.94/ha

Total yield 3.414 tons/ha

Cost of production Rs. 2,657/quintal

Consumer PieRice in Telangana 2015-16

Retail Price Rs. 50.00/Kg

Recovery 70% of paddy

2016-17 Budget allocationsTotal: Rs. 19.78 lakh croreAgriculture: Rs. 35,984 crore

(1.8%)

Way forward

Farmer

Market

Policy

What is needed….• Ecological sustainability through

– Reducing risk in agriculture: cropping patterns, production practices– Integrated farming systems integrating livestock, trees etc– Agronomic innovations like high density plantation in cotton or SRI in paddy– Building soil organic matter, mulches etc– Conserving moisture and Rainwater harvesting– Locally adopted crops and varieties-millets, pulses, oilseeds, vegetables….– Contingence planning– Moving away from agro-chemical use

• Economic sustainability– Help them to get organised for production, marketing and entitlements– Recast the support systems-research, extension, subsidies….– Increase the investment-public and private to make farming viable

Insitu water harvesting with grid locking, trenches and farm ponds

• 1 mm of rainfall in area gives 10,000 lit of water

• Most of it runs out of the farm• Leaving 30% to evaporation

loss we can harvest 70,000 lit• Even a conservative estimate

of half is conserved 2,50,500 lit/acre per acre in 5 cm rain fall area is possible

• On farm conservation through grid locking ridges and furrows

• Trenches to take the excess flow with locking for every 10 mt

• Farm pond

25Changing to multiple cropping systems

26Switching over to ecological farming practices

Millets for health and diversity

Farmer Producer Organisations

Producer Co-op-1Farmer Group B

Organic Stores

•Healthy food•Affordable Price•Max share to farmers Organic Store

Mobile Store

Direct to Home

Producer Co-op-2

Other farmers and farmers groups

Farmer Group A

Farmer Group C

Sahaja Aharam Producer Company•Capacity building•Institutional building•Investment support•Brand building•Quality Management•Fair Trade

Market placeDirect to resellers

Whole sale to traders

Bulk buyers

Processing unitsSeeds

Bioinputs

No. of Farmers: 5000Organic: 2500 (1000 ICS certified, 1500 PGS certified)

Cooperatives 30

On wheels

exhibitions In stores

online

Creating Livelihoods

Sericulture

Backyard Poultry

Honey Production

• Developing Livelihoods Plan• Building the capacities• Green Enterprises for Bioinputs• Providing linkages

For diversifying incomes and assets

CompostingAzolla

Decentralised cotton spinning and weaving

Awards and Recognitions • 2014: Best Rural Innovation Award for Non Pesticidal

Management in Bihar Rural Innovation Forum• 2014: Best Rural Innovation Award for ‘Community

Managed Sustainable Agriculture’ in Maharashtra Rural Innovation Forum

• 2012: Best Green Enterprises award by Hivos for NPM scalingup in AP

• 2010: Krishi Gourav Award for Enebavi• 2008: TV9 ‘Navya’ Award for effective campaign• 2005: World Bank Development Market Place Award

Punukula, the first pesticides-free village

Yenabavi -Organic Village• Entire village (55 farmers’ 228 acres) organic for last five years• Most of the inputs internalised into farming• Land Productivity increased, crop yields maintained• In SRI paddy 44 bags were also recorded • Recently awarded Krishi Gaurav Award by Baba Ramdev’s Patanjali Trust for their

role in promoting organic farming• More than 30 thousand farmers visited the village in last three years

Dorli, a village got back to farming• Farmers suicides, indebtedness forced

farmers to quit farming in 2005• Village put up for sale in protest• Today all farmers are back and could reduce

their external input use by about 80%

• First, made use of locally adapted resource conserving technologies.

• Second, in all there has been coordinated action by groups or communities at local level.

• Third, there have been supportive external (or non-local) government and/or non-governmental institutions working in partnership with farmers.

• Fourth, a favorable public policy

Common features of successful models

Economic policies with focus on income security to farmers• Balancing act between

– Costs of cultivation– Prices – Costs of living– Support/subsidies

• New ways of supporting in terms of – Increasing access to productive resources– Increasing institutional support: credit, insurance, extension– Price compensations– Farmers own resources and labour– Ecosystem services

Policy support

• Reduce risk in agriculture– Suitable cropping patterns, crops and varieties– Integrated farming– Protective irrigation– Natural resource management

• All policies should be brought under one umbrella which can ensure income security to producers

• Farmers income commission to balance between costs of cultivation, costs of living, public support and prices

• Increase budgetary allocations to 20% at state level and 10% at national level

CENTRE FOR SUSTAINABLE AGRICULTURE

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