After surveying 5,000 farm households across 18 states in India, it was concluded that 76% of farmers would prefer to do something other than farming. That’s more than one-third of them in the country. What’s driving them away from an occupation which is a primary source of income for approximately 70% of India’s population? Bleak income, fragile economy and an ever depressing future.
Agriculture and farming have simply become unviable for them. Here are a few reasons why Indian farmers want to give up this occupation:
Their income is getting lower and lower
Imagine your salary is the same for 20 years? Without any promotion, perks or hike. This is exactly the state of the Indian farmers since the past few decades. Leading to their frustration which we’re increasingly witnessing today. Farmers led riots are on 8 times fold rise since the past two years. Social movements, protests and strikes have become the new normal today. The suicide numbers are so bad that the National Crime Records Bureau (NCRB) has stopped publishing the data publically since 2013.
Let’s compare the income rise in other sectors to get a clearer idea.
From 1970-2015 (a period of 45 years), the monthly salary of a school teacher increased at least 300 times. That’s from approximately Rs. 90 to Rs. 28,000. Same is the case for the salary of a government employee of the lowest rank. Whereas on the other hand, the farmer’s income has witnessed just a 19% hike.
Today, an average farmer, even in Punjab – the food granary of India – earns just 3,000 per month. Experts say even the daily wage labourers earn more than the farmers, who were once the pride of the nation.
Want to know more about the Punjab Farmer Crisis? Click here to read our article.
Several factors have led to this agrarian distress, one of them being the increased imports. Over the years, despite claiming bumper production of food grains, the government has always encouraged food grain imports. In fact, the food grain imports stood at a whopping Rs. 1,40,268 crore (i.e. approximately 1 lakh crore) – an amount even more than the budget allocated to the agricultural sector.
It all started in 1996 when the World Bank started pressurising India to move 400 million people out of farming by 2015. With every loan India took from the World Bank, they repeatedly empathised on the urgency to move the farmers out of agriculture as only then India will be able to have an abundance of cheap labour for development. As a result, all successive government, policymakers, and economists created deliberate economic conditions which forced farmers to abandon agriculture. For example, one way was to steeply increase food grain imports. And importing food is as good as importing unemployment in the sector. With an increase in food grain imports, there’s an abundant supply of food grains. This, in the long run, brings down the prices of food grain. End results? Farmers have to suffer losses for the produce.
At least 86% of farmers in India are ‘small and marginal farmers’. These are farmers who own less than two hectares of land, which is approximately the same size as two football fields. While, the other percentage of farmers own large farm sizes ranging from 3, 5 to 0 hectares.
It’s the small farmers who suffer the most. Reports prove that income is directly proportionate with the size of farmland. After examining farmer’s income between 2003 and 2013, it was found that income grew the least for marginal farmers. Whereas farmers with large land sizes witnessed doubled income. The reason for this income inequality is simple: economies of scale. The smaller the land, lower the production and thus lower income. Owing to limited and restrictive plot sizes, most farmers produce only enough for self-consumption, leave alone selling the produce at profits.
There are a few reasons why the landholdings in India are getting smaller and smaller. A rise in nuclear families and the pattern of inheritance in India ensures the farm is divided by multiple heirs. Another reason is that farmers are forced to sell their lands or a part of it. Thanks to depleting groundwater and less land under irrigation which makes the land not worthy of farming. Apart from lower production, the farmers with small landholding also have difficulty accessing credits and irrigation facilities or securing crop insurances even.
Burden and risk of wrong choices
More farmers are committing suicide in the state of Maharashtra than other Indian states. In fact in 7 years, 76% of farmers in Maharashtra committed suicide owing to repeated losses and resulting indebtedness. That’s because more farmers in this state are shifting from traditional grain crops to risky cash crops like sugarcane, soya bean and cotton as they have the highest returns and are pretty lucrative. Plus, owing to the high demand for these crops internationally, the government has also encouraged the shift from food grains to cash crops. Being desperate for income, more farmers started growing cash crops. Some even put all their lands into growing cash crops. And this excess shift actually proved to be counter-productive as the increased supply eventually meant lowered prices. Making growing cash crops pretty uneconomical.
Adding to this, growing cash crops comes with its own risks. They are more costly, requires precise science and climatic understanding. Failure to which results in massive losses. This pushes them into the vicious circle of indebtedness. For instance, after heavily investing in pesticides, seeds etc. in order to grow cash crops. Worst case scenario, they’re a crop failure owing to heavy poor rain or crop disease. This results in farmers falling into a huge debt trap and taking more loans to meet the daily ends of their families. Going with the data, the majority of the farmer suicides are the ones in the cash crop sector.
Schemes that are meant to help, aren’t really helping
A significant part of India’s agricultural pricing policy is the Minimum Support Price (MSP). MSP is a fixed price at which the government purchases crops from farmers. This means that if the market prices drop below the MSP, the government has to step in and buy the crops from the farmers. Let’s say for example the MSP for paddy is fixed at Rs. 200 per quintal. Not if the market prices fall below Rs. 200, the government will purchase it from farmers at Rs. 200.
This protects the farmers from losses during unflavoured events like sudden fall in prices etc. In 2014, the BJP promised MSP on 23 crops including wheat, rice, pulses, and oilseeds. The party’s promise of ensuring 50% profit to the farmers over the cost of production was one of the major reason why a majority of the farming communities voted for PM Modi. It was an attractive scheme, but only on paper. In reality, out of the 23 crops, the government majorly buys only rice, wheat, and few other pulses – while the MSP for the other crops is just in name.
In fact, only 6% of the farmers actually reap the benefits of MSP, the other 94% are still grappling with losses. These efforts are more like a band-aid solution where surgery is required.
Despite the government increasing agricultural credits over the years, it has mainly benefitted agri-business than the farmers. Likewise, policies are shifting from supporting agriculture to agri-businesses. For example, in 2017 the credit plan of National Bank for Agriculture and Rural Development (NARARB) for Maharashtra allocated a whopping 53% of credit flow to the city of Mumbai, a city which has no agriculture but does have plenty of agri-businesses. Whereas farmers in districts like Vidarbha and Marathwada, which have been worst affected by droughts, were allocated a tiny 16%.
Its lack of credit facilities from banks and financial institutions force farmers to turn to exploitative money lenders.
Farm to fork is a tough journey
As mentioned in reality the government buys very few crops from the farmers. Thus, irrespective of minimum support price and government intervention, farmers have to depend on middlemen – who ask as a link between the farmers and consumers – for selling their produce. Simply put, farmers are only the producers, whereas the middlemen act as their marketer. And farmers are dependent on them to get their produce to the markets. That’s because transportation and road connectivity from the village to the nearest market even becomes unviable for the farmers. The middlemen often take advantage of this helplessness, compelling the farmers to sell their produce at the rates decided by them. Their monopoly and dominance in the local markets over the years have ensured that farmers become vulnerable and sell them produce even at throwaway prices. As the farmers cannot afford the transportations, packaging, storage expenses, farmers often sell their produce at as low as Rs. 1 per kg.
This is how the long supply chain in agriculture works:
Farmers→ Small Traders (Kaccha)→Larger Trader (Pakka)→Commission agent→
Wholesaler → Retailer→Consumer
At every step, there’s a price rise of Rs 4-5. For instance, the product purchased from the farmers for Rs. 2-3 per kg becomes Rs. 20-30 by the time it reaches the common man. Over the years, this well-knit cartel of middlemen has ensured that the prices remain low for farmers and high for the consumers.