Terms of Trade | The problem, and the solution, to Punjab’s farming crisis

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Come November every year and everyone in Delhi realises that there are side effects of farming in India. Delhi has been choking in very bad air for more than a week and pollutants from stubble burning in paddy fields are a major contributor to the problem.

This column does not intend to discuss the problem of pollution in Delhi. For the sake of record, Delhi’s pollution levels can be very bad even without any contribution from stubble burning (look here for details).

What this column wishes to discusses is another serious but low-TRP question: What kinds of cost has India paid to achieve self-sufficiency in food?

Delhi’s current pollution spike is because of stubble burning in mostly Punjab. Stubble burning is essentially a cost-cutting exercise by farmers in one of the most critical states as far as food self-sufficiency in India is concerned. This is the only time people in sanitised spaces of the national capital actually give a thought about the side effects of food self-sufficiency.

The quest for food security

Five decades ago, India had to depend on imports for meeting its food requirements. India was not the only country facing this predicament in the decolonised world. So important was the ability to solve the food question that it attracted the attention of among the most influential development economists of those times.

In one of the earliest and most influential works in development economics, Arthur C Lewis argued that an underdeveloped economy could increase its income levels by drawing labour from low productivity traditional sector (agriculture) to modern sector. Lewis won the Nobel Prize in economics for his work. A key assumption behind this kind of an argument is that taking out workers from farms to work on factories will not reduce food production, lest there is a shortage of it for both the farm and non-farm workers.

How did India solve its food self-sufficiency problem? The one line answer to this question is the Green Revolution. But how did the Green Revolution solve this problem?

It increased food production by encouraging farmers to adopt high yielding variety of seeds and other modern inputs such as chemical fertilizers and pesticides.

To be sure, the Green Revolution’s success was more than just a technocratic fix. Because land ownership was vastly unequal in India and there was largely no land-reform post-independence, farming suffered from a problem which was best described as an asymmetry between inducement and capacity to invest due to rent barrier by Utsa Patnaik, one of India’s most eminent Marxist economists, in a 1983 paper.

The gist of the argument was simple. Because agrarian incomes were volatile (most of Indian agriculture is rainfed) and farming in India was mostly done in sharecropping arrangement, it made more sense for the landowner to take a fixed share of the output under the sharecropping contract (and minimise his risks) and invest any surplus capital he had in other activities such as non-farm business and usury based lending. The tenant who had an incentive to invest to improve production did not have the means to do so.

The Indian state overcame this barrier by a two-pronged strategy. Green Revolution technology was initially introduced in the assured irrigation regions (such as Punjab, Haryana and western Uttar Pradesh) and farmers were offered guaranteed remunerative prices in the form of Minimum Support Prices (MSPs) to incentivise them to undertake the high cost inputs. The strategy yielded results as far as giving a boost to production was concerned. It also gave a boost to food security as the State significantly expanded its food security programme; this was the best way to dispose of the food grain procured via the MSP route.

The unintended consequences

This success, however, has had its own side effects.

First, there was a large-scale shift away from traditionally consumed coarse cereals and even pulses and oilseeds towards rice and wheat (the latter, unlike the former, held the promise of assured MSPs). There are convincing arguments that the former group offered better and more holistic nutritional value.

An even bigger and far more perverse shift took place in geographic cropping patterns. With states such as Punjab and Haryana taking up rice cultivation in a big way — the crop is completely unsuited to the agro-climatic conditions in this region — irreversible damage has been done to agricultural sustainability due to issues such as depletion of water tables and deteriorating chemical balance of the soil. If things continue like this, agriculture will become an unsustainable activity in these regions.

On this front, stubble burning is the least of the problems facing farmers in places such as Punjab and Haryana.

To be sure, this problem has existed for a long time now and far too many government reports have acknowledged its existence. The only solution to this problem is to convince farmers in these areas to stop growing rice. The best nudge available with policymakers is to reduce MSP-based procurement of rice from these regions. The reason this has not been done until now is no government wants to face the political backlash that will accompany such a decision.

It is here that (what can only be described as) a perverse farmers’ solidarity has not helped matters. From a farmers’ perspective, demanding guaranteed MSPs – it was one of the key demands of the 2020 farmers’ protest – makes eminent sense because it offers them better incomes. However, demands for guaranteed MSP need not justify a license for environmental destruction and unleashing air pollution. There is more than enough reason to argue that MSP operations for rice should be shifted from states such as Punjab and Haryana to regions that are more suited to the cultivation of rice crop.

A policy fix, the political challenge

While governments are unlikely to take such a step due to political considerations, nothing stops farmers’ organisations in the rest of the country from raising this demand. In fact, this kind of a demand need not be a zero sum game where farmers in one region will gain at the cost of their peers in another.

An argument can be made that the government should make an announcement well ahead of the cropping season that a similar amount of procurement (in value terms) will be made in the unsustainable rice cultivation regions to compensate the farmers for any loss in income due to withdrawal of MSP operations for rice.

This is definitely a better demand than asking for a double-subsidy (first via the MSP route and then a monetary assistance for not resorting to stubble burning) for rice farmers in states such as Punjab. It will also have the additional benefit of expanding India’s food security net.

Why has nobody raised this idea so far? The reason is simple. Largely, there is no proactive and politically vibrant pan-India farmer politics to reckon with outside the Green Revolution states. In an earlier piece, we had argued that caste is a major impediment to evolution of meaningful farmer politics in India. What we have in the name of farmers’ movements are reactive struggles on issues such as land acquisition or just empty but convenient rhetoric by political parties. Even pro-farmer intellectual opinion has stayed clear of belling the proverbial cat.

Unless farmers’ organisations in other parts of the country start this debate and generate political momentum behind the idea, Punjab farmers will continue to destroy their own fields and poison the air we breathe in while the rest of us keep blaming different set of governments.

Every Friday, HT’s data and political economy editor, Roshan Kishore, combines his commitment to data and passion for qualitative analysis in a column for HT Premium, Terms of Trade. With a focus on one big number and one big issue, he will go behind the headlines to ask a question and address political economy issues and social puzzles facing contemporary India.

The views expressed are personal

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