Agriculture is one of the most important sectors in the Indian economy, playing a very significant role in achieving the expected GDP while providing livelihood to a massive proportion of the rural population.
Majority of the farmers in India are small and marginal, often working on landholdings that are less than one hectare or between one and two hectares. As per Agriculture Census 2010-11, land holdings of less than two hectares, cultivated by small and marginal farmers (many of whom are below poverty line), constitute about 85% of total land holdings in India. (indiainfoline.com)
Nearly 57.8 percent of India's rural households are engaged in agriculture. Of them, over 69 percent possess or work on marginal landholdings, and 17.1 percent, on small landholdings. Considering the proportion of growers working on small and marginal farms, it becomes imperative for the government to formulate and implement national policies and programs that ensure sustainability and profitability to such growers. But is that happening?
In 2016, Agriculture Minister Radha Mohan Singh, while expressing concern over the sustainability of small farms, had said "these the small farms, though operating only on 44 percent of land under cultivation, are the main providers of food and nutritional security to the nation, but have limited access to technology, inputs, credit, capital and markets."
"The estimates indicate that small and marginal farmers may account for more than 91 percent of farm holdings by 2030. The continuously declining farm size also gives rise to concerns on the very sustainability of the small farm," Singh had said. (www.economictimes.com)
What are the challenges faced by small and marginal farmers in India?
While most of the challenges in the agriculture sector are common to both small and large farmers but the level of access to technological, financial and institutional support differs, providing a significant edge to large farmers.
In comparison with large farmers, small farmers face issues such as limited access to farm inputs, credit and insurance facilities; absence of irrigation and marketing facilities, lack of efficient extension services and lack of training on modern farm equipment and practices.
Access to farm inputs
Large farmers, who have access to modern equipment and pumps, consume a large amount of water, leaving little for small farmers who lack the financial means to install pumps. They are left to rely on groundwater or monsoons, which is again a cause of concern due to increasing weather variability. Majority of them end up buying water from nearby tube-wells.
The small and marginal farmers in some parts of India are poor to the extent that they do not have the resources to buy basic inputs such as hybrid seeds, pesticides and fertilisers that are critical to crop production.
Odisha's farmers and agricultural labourers, that constitute 70% of the state's population, are currently in deep distress. They are demanding fair support prices for their produce, pension for aged farmers and agricultural labourers, and allocation of 20 percent of the state budget (Rs 21,600 crore) to agriculture and allied sectors.
According to the latest Status of Agriculture report prepared by the state's agriculture department. The marginal and small farmers in the state suffer from "endemic poverty" and cannot afford to procure high-quality seeds, fertilisers and pesticides, or other agricultural inputs like hiring tractors and threshers and, hence, productivity is very low. The farmers in the state have been holding such protests for the past 17 years.
According to National Crime Records Bureau (NCRB) data, Odisha holds the record for the largest number of suicides by farmers. A total of 1,895 farmers took their lives due to crop failures, unremunerative prices, failure to repay loans, and pressure from extortionist moneylenders between 2005 and 2015. (www.swarajyamag.com)
Access to credit and insurance facilities
Due to the low income and unawareness of the formal credit institutions, small and marginal farmers rely on non-institutional credit markets such as traders, landlords and other farmers to finance their investment and consumption needs.
Harsh Kumar Bhanwala, Chairman of the National Bank for Agriculture and Rural Development (NABARD), said small and marginal farmers had relatively lower access to credit compared to other farmers and that as a result depend on the high cost of borrowing from private money lenders.
"Farmers with higher land holdings could get as high as 79 percent of their loans from institutional sources, mainly commercial banks. In comparison, 47 to 65 percent of the loan amount of small and marginal holding is from institutional sources. Agricultural money lenders constitute a major source of credit for smaller farmers," he said.
Dr Bhanwala expressed concern over low credit flow to Eastern India.
"It is surprising that the Eastern region, in spite of having 18 percent of the branch network, accounts for about only 9.5 percent of the agricultural credit. The share of credit does not augur well with the share of the region in the gross cropped area (14.65 percent) or high cropping intensity (151 percent)."(www.hindu.com)
Farmers, particularly small and marginal, are unaware of the crop insurance schemes being run by the government. In the latest report, the Comptroller and Auditor General (CAG) said lack of insurance records, inadequate support system, the low value of crop reimbursement and unawareness about schemes mar the progress of central government's crop insurance schemes.
The report, tabled in Parliament in July this year, pointed out many anomalies in the implementation of schemes like National Agriculture Insurance Scheme (NAIS) and Pradhan Mantri Fasal Beema Yojana (PMFBY). An audit survey of 5,993 farmers revealed that only 37 percent of farmers were aware of the insurance schemes.
"63 percent farmers had no knowledge of insurance schemes," said the audit report, highlighting that such schemes were not properly publicised by the government.
The auditing team said that while there was no provision for CAG to audit insurance schemes of private players, records of government insurance schemes were not maintained. (www.moneycontrol.com)
Lack of education
In order to improve investment, productivity and farming practices, technology-based machinery, education and skills are very important. Studies state that literacy and mean years of education are lower for smallholding farmers compared to medium and large farmers. According to the study, in case of marginal farmers, literacy among males and females were 62.5% and 31.2% while the same for medium and large farmers were 72.9% and 39%.
The mean years of education for males among marginal farmers were 3.9 as compared to 5.3 for medium and large farmers. Low level of education for farmers limits the public dissemination of information and knowledge. Surveys clearly state that awareness about bio-fertilizers and minimum support prices is somewhere associated with education levels which are lower for marginal and small farmers.
Lack of agriculture markets
The lack of agriculture market and marketing information is a massive constraint in achieving a competitive market that allows small and marginal farmers to increase their income.
The government, in 2016, launched a portal called e-NAM, which is a unified national market for trading agricultural commodities. It aims to provide competitive and remunerative price to farmers for their produce through an online competitive bidding process.
The agriculture ministry recently added six new features in the National Agriculture Market (e-NAM) platform to make it more user friendly. This includes MIS dashboard for better analysis, BHIM payment facility by traders, mobile payment facility by traders, enhanced features on a mobile app such as gate entry and payment through mobile, integration of farmer's database and eLearning module in e-NAM website. (www.economictimes.com)
But the success of such digital initiatives of the government in the agriculture sector depends on the level of farmers' education and openness to learn about alternate modes of selling their produce, making it hard for the small and marginal farmers, to capitalise on them.
Lack of real-time extension services
Farmers make critical agronomic decisions every day that have a direct on the nation's food production. In a diverse country like India, farmers are in dire need of real-time, local information on weather, farm inputs, nearest warehouses, mandi prices and government schemes to improve efficiency across agricultural activities.
According to a research paper that aims to ascertain why farmers are not accessing information and where information gaps exist, the coverage of, access to, and quality of information provided to marginalized and poor farmers is uneven despite a wide range of reform initiatives in agricultural extension in India in the past decades.
The review concludes that there is an increasing need to work in partnership and to share knowledge and skills in order to provide locally relevant services that meet the information needs of marginal and smallholder farmers in India.
It is an uphill battle
The aforementioned are, but some of the many challenges faced by small and marginal farmers in raising agricultural productivity and reducing rural poverty. The small farmers in India also experience several other constraints such as liberalization and globalization, land diversification and climate change. But with a government committed to investing in agriculture and allied activities for the creation of infrastructure and livelihood in rural areas, the challenges are not that hard to overcome.
Finance minister Arun Jaitley, in his budget speech, had outlined a slew of measures to boost agricultural production and the rural economy, announcing new projects as well as enhanced support for existing schemes to the tune of Rs14.34 trillion in the Union Budget 2018.
Referring to 86% farmers in India who Jaitley described as small and marginal, he said efforts will be made to link them to markets to get adequate remuneration for their produce. One of the first steps Jaitley announced was setting the minimum support price at 1.5 times the cost of production of the Kharif (summer) crops.
Among the other measures announced by the finance minister were development and upgradation of 22,000 rural haats or markets for which he set aside Rs2,000 crore. He further announced a provision of Rs 500 crore for "Operation Green" to promote agriculture logistics.(www.livemint.com)
Now, what remains to be seen is the materialisation of these talks.