Where Have All of India's Farmers Gone?

Farmers, once regarded as the heart and soul of India's social and economic fabric - have become a dwindling tribe. According to census data released by the office of the Registrar General of India this week, farmer numbers in India plummeted by 9 million during the decade 2001-2011 -- the sharpest plunge since the census began in 1971 - and hovers at 118.7 million today.

Experts call the plunge is a "national tragedy" and although over the last 50 years the proportion of farmers to the total Indian population has been on the wane, the fall wasn't drastic enough for the absolute number to decline given population increases. But over the last decade, the fall in farming, combined with the slowing rate of population growth, has created a fall in the absolute numbers of farmers.

Is the trend worrying? And will it impact the Indian economy? Is there a lesson in China, where the government has moved 300 million people out of the countryside and into the city in the greatest migration in world history? It plans to move hundreds of millions more as Premier Li Keqiang regards urbanization as the most effective way to raise the standard of living of the country.

Although agriculture constitutes only 21 percent of India's GDP, according to the World Bank, its importance in the country's economic, social, and political arenas goes well beyond this indicator. The rural areas still host more than 70 percent of India's 1.1 billion people, a majority of whom are poor, earning less than US$5,000 per year. Most of these rural poor depend on rain-fed agriculture and fragile forests for their livelihoods.

The sharp rise in food grain production during India's Green Revolution of the 1970s facilitated the country's self-sufficiency in food grains and staved off the threat of famine. Agricultural intensification in the 1970s to 1980s augmented demand for rural labor that raised rural wages and, together with declining food prices, reduced rural poverty.

Sustained agricultural growth in the 1990s further whittled down rural poverty to 26.3 percent by 1999/2000. Since then, however, the deceleration in agricultural economic growth has been worrisome. India's rice yields are one-third of China's and about half of those in Vietnam and Indonesia. With the exception of sugarcane, potatoes and tea, the same is true for most other agricultural commodities.

"The ruling political dispensation has been focusing on reducing poverty by raising agricultural productivity," said Sakshi Dhamija, an agricultural economist. "However, given the current scenario, we need bold policy action to shift gears from the existing subsidy-based model, that's no longer tenable, to build a strong architecture for a highly productive, internationally competitive and diversified agricultural sector."

According to a World Bank report, some of the factors hampering the revival of agricultural growth are:

  • Poor composition of public expenditures: Public spending on agricultural subsidies is crowding out productivity-enhancing investments such as agricultural research and extension, as well as investments in rural infrastructure, and the health and education of the rural people. In 1999/2000, agricultural subsidies amounted to 3 percent of GDP and were over seven times the public investments in the sector.

  • Over-regulation of domestic agricultural trade: While economic and trade reforms in the 1990s helped to improve the incentive framework, over-regulation of domestic trade has increased costs, price risks and uncertainty, undermining the sector's competitiveness.

  • Government interventions in labor, land, and credit markets: More rapid growth of the rural non-farm sector is constrained by government interventions in factor markets - labor, land, and credit - and in output markets, such as the small-scale reservation of enterprises.

  • Inadequate infrastructure and services in rural areas.

It has been emphasized often that India will have to boost its annual food-grain output by 20 million to 25 million tonnes from the current level by 2016-17 to feed its growing population and to meet the requirements of a proposed food security program.

Expressing concern over falling output, Prime Minister Manmohan Singh urged the nation to strive towards agricultural growth of 4 percent per annum or even higher in the 12th Five Year Plan (2012-17). However, he also set a 4 percent target for the 11th Plan period and the country didn't hit it.

Economists point out that plummeting farmer numbers can be a game changer provided small agricultural holdings are consolidated to allow enhanced use of farm machinery which can rev up agricultural productivity. (see adjoining story here)

"To remedy the situation," said Kavita Khanna of NGO Grameen, which works in the area of rural poverty, "the government must formulate far-reaching economic policies that boost non-farm employment and take more people off the land. The thrust should be on making economic growth inclusive for India's growing billions."

To achieve that target, however, adds Khanna, the government will need to push through labor reform, upgrade the skills of rural folk and streamline land acquisition for industry.

What also needs attention, points out an official from the ministry of agriculture, are the country's small or marginal farmers (owning less than two hectares of land) but who constitute over 70 percent of the total farmer population.

The Indian government has largely abandoned this demographic, discontinuing support programs and failing to address factors such as lack of rural credit and access to irrigation, among others. New government programs have barely scratched the surface of this crisis.

Frequent droughts due to the changing climate have only made matters worse. Rains have largely failed for the past several years, and many genetically engineered crops have simply withered and died, leaving the farmers with crippling debts.

In a survey conducted at two villages - Mahendragard and Narnoul in the desert state of Rajasthan -- K T Chandy in an article Situation of Small and Marginal Farmers: Agricultural Situation in India said small or marginal farmers can never get out of the economic and social clutches in which they get trapped simply because while yields remain low, they have no ostensible governmental support.

What is also adding to farmers' distress, critics say, is the introduction of genetically engineered seeds and the coercion of Indian farmers to use them, which has led to the largest wave of recorded suicides in human history. According to a publication from the New York University School of Law, in 2009 alone (the most recent year for which official figures are available) 17,638 Indian farmers committed suicide - one farmer every 30 minutes. A great number of those affected are cash crop farmers, and cotton farmers in particular.

In fact, more than a quarter of a million Indian farmers have committed suicide over the past 16 years as their crops have failed, leaving them in financial ruin, largely as a result of genetically engineered seeds (especially Bt cotton). As Bt cotton is much more expensive than traditional cotton seed, it requires more water and pesticides, and has failed to produce the increased crop yields promised by its manufacturers.

Raju Das, a developmental studies professor at York University in Canada, says farmer suicides represent part of a "broader political-economic problem."

"Even now, 60 years after the British left, 70 percent of India's farmland depends on the monsoon," Das said in an interview. "That means if the monsoon fails and rains fail, there is drought and the government has not invested enough in water irrigation facilities."

Economists point out that the Indian government's priority is now clearly the country's new urban high-tech based economy. The gradual transformation from a rural economy to an urban-based manufacturing and technology behemoth has resulted in this paradigm shift. So unless the ruling political dispensation begins to address irrigation, rural credit, and regulation of the business practices of multinational corporations, among other things, the Indian farmers' crisis will continue.