Beyond Agricultural Romance
One of the principal criticisms that one has come across of the Presidential address to the Parliament and the subsequent budget proposals for the year 2013-14 by the Union Finance Minister P Chidambaram is that the UPA government has badly neglected agriculture. I am not a student of economics, but I do keep an interest in agricultural matters since my father was an agriculturalist. Even otherwise, one is affected by the state of country’s agriculture, particularly when the rising prices of food commodities have badly affected my wife’s monthly budget.
The first point I would like to make is that though India has been romanticised as a country of agriculture, the sad fact is that agriculture as such has never given India name, fame and wealth. Even before we became a British colony, all our riches—and we were certainly richer than Great Britain, and along with that of China our economy did constitute about half of the then world’s GDP—were earned through trading, both within the vast Indian subcontinent and abroad. We were never a big exporter of agricultural commodities, particularly the food items. Our villagers were, no doubt, self-sufficient units in food. But, as a trading nation, we imported pearls, wool, dates, dried fruits and rosewater from the Persian Gulf; coffee, gold, drugs and honey from the Arab world; tea, sugar and silk from China; gold, musk and woolen cloth; metals like copper, iron and lead, and paper from Europe. Our undoubted wealth stemmed from the fact that our total imports were much lesser than our exports of cotton textiles, handicrafts, raw silk; pashmina shawls; indigo; opium; pepper and other exotic spices; and precious stones and drugs.
We became poorer under the colonial rule, when we were forced to become essentially an importing nation of the products and raw material that were, ironically, sent from our land—metals and minerals. Indians lost their entrepreneurial streak and our people were forced to depend more and more on agriculture for their basic survival. In other words, our poverty became intrinsically linked with the overdependence of the majority of Indians on agriculture. But then, this linkage between overdependence on agriculture and poverty is something that has been true to every country, including those that are among the world’s richest and highly indutstrialised today. Take for instance, the case of the United States. In the year 1800, as many as 74 per cent of the Americans depended on agriculture, but today only 2.5 per cent Americans are engaged in agricultural work.
If we apply this fundamental principle to India, then it become obvious that we continue to be a poor country essentially because agriculture is still the largest source of employment in India, with 45.5 per cent of Indians being dependent on agriculture for their livelihood. Actually, the truth is even harsher given the fact that most those depending on agriculture or farmers are often underemployed since fulltime farming is dependent on a number of variables. Farmers have not enough land to cultivate in a big scale since 60 per cent of the ownership holdings have a size smaller than one hectare; majority of them are still dependent on erratic monsoonal rainfall for agriculture; the yield of the crops in the country is low in comparison to the international level; faulty strategy of irrigation and agricultural development is degrading land resources in the forms of alkalinity, salinity and water-logging, thus badly affecting the fertility of the soil. Farmers’ problems have been all the more compounded due to increasing diversion of the agricultural lands for industrialisation and urbanisation. Besides, inputs of modern agriculture are becoming more and more expensive for the marginal and small farmers as they have very meager or no saving to invest. If they take loans, they are not having means to repay. The cumulative effects of all these are evident from the growing phenomenon of farmers’ suicides in the country.
The second important point to note is that a country having more farmers does not necessarily produce more food than a country where farmers constitute a microscopic minority. Of course, India, or for that matter China, where agriculture is still the dominant occupation of the people, produce vast quantities of food, with food famines virtually becoming a rarity. Today, of the major cereal and vegetable crops, the United States, China, India and Russia frequently appear as leaders. In fact, China is not only the leading worldwide producer of rice but also the leader in producing wheat and many vegetables, including onions and cabbage. But still, the United States and European countries are ahead in overall agricultural production. They produce much more than what their residents consume. No wonder why world’s top 10 agriculture exporters are the United States, France, Netherlands, Germany, United Kingdom, Canada, Australia, Italy, Belgium and Spain. Each of them is highly industrialised, thus negating the myth that industrial development is the enemy of agricultural development. As a matter of fact, enhancing the agricultural output has nothing to do with the number of farmers. Important is quality, not quantity.
Thus, it is not a bad thing at all that the economic contribution of agriculture to the overall GDP (Gross Domestic Product) of the Indian economy has been declining over years; it was 42 per cent in 1951, but only 12 per cent in 2011. In fact, it is a universally accepted view that the lesser the contribution of the agriculture to a nation’s GDP, the more advanced it is.
But then, as we have seen in India’s case, if we are still poor despite the declining contribution of agriculture to our GDP, it is essentially due to the dependence of nearly half of India’s work force on agriculture. Therefore, in my considered view, the real problem with Indian agriculture is not its negligence, but overdependence on it. This is not to suggest that there are no scopes for improvement on the front of our agricultural output; in fact there are plenty of those to ensure food security for our ever bourgeoning population. Despite increasing at an average rate of 8 per cent per year over the last thirty years, our production yields are still behind other countries. During the last two decades, our agriculture per capita has stagnated with a 1 per cent average annual growth, because we have hesitated to apply modern and scientific methods of cultivation. Our rate of irrigation growth and water management style are far from being adequate. We have emphasised too much on production of wheat and rice and not diversified enough into horticulture, livestock and fisheries, as is the case with many developed countries. We have not encouraged much to encourage private sector investment in agriculture.
But that does not negate my basic point that the best way of helping the unemployed, underemployed and poverty stricken farmers of India is not to keep them captive of the agricultural sector but to empower them in such a way that they have options to choose non-agricultural careers, something my father realised and worked for me and my brothers. Why cannot our leaders and policy makers encourage the revival of the lost entrepreneurship in our villages? I am sure that the best way of ending unemployment and underemployment in the country is to promote cottage or small scale industries in our villages. We must realise that big industries and factories do not make a country necessarily rich. Take the case of Japan, one of the most indutstrialised countries in the world. Little is it realised, and here I am quoting a 1996 statistics, that out of a total of 6.50 million business establishments in that country, small and medium enterprises accounted for 6.43 million with 98.9 per cent share. Much has not changed of this phenomenon in Japan in the subsequent years.
The moral of the story, thus, is that farmers’ emancipation from poverty is linked to their acquiring adequate abilities to look for a vocation outside agriculture.
By Prakash Nanda