The following is the Discussion Paper prepared for Shri L.K. Advani’s interaction with Kisan Representatives in New Delhi on 13 January 2009. The meeting, in which over 50 kisan leaders from different parts of the country participated, was also attended by Shri Rajnath Singh, President of the BJP; Shri Sharad Yadav, Joint Convenor of the National Democratic Alliance (NDA); Shri Sharad Joshi, well-known kisan leader and Rajya Sabha member; and Dr. R.B. Singh, renowned agriculture scientist and former member of the Farmers’ Commission. 

Current Situation

Agriculture is the engine of India’s livelihood security.  Although the share of agriculture in Gross Domestic Product has dropped from over 50% during the 1950s to about 19% in 2007-08, agriculture still employs over 52 per cent of the labour force of the country, and over 70% of the Indian rural work force.  Therefore, well-being of the farming community, about 600 million people comprising nearly 120 million farming families – the men and women feeding the nation – must be the primary concern of the nation.

To us the term “farmers” will refer to both men and women, and include landless agricultural labourers, sharecroppers, tenants, small marginal and sub-marginal cultivators, farmers with larger holdings, fishers, livestock and poultry rearers, pastoralists, small plantation farmers, as well as rural and tribal families engaged in a wide variety of farming related occupations such as apiculture, sericulture and vermiculture.

During 1970s per worker agriculture GDP increased annually by 0.7%, accelerated to1.2% during 1980s, but dropped to only 0.3% during the last decade.  The gaps in growth rates of GDP agriculture (Figure1) and non-agriculture have widened after mid 1990s, sharply decelerating in agriculture and accelerating in non-agriculture, thus further widening the income disparity between agricultural workers and non-agricultural workers, from 1:3 thirty years ago to 1:6 now (Figure 2).

Faces behind Figures

• Number of hungry in India between 1990-92 and 2003-05 increased by 26 million, rising to 231 million, primarily due to poor economic access to food (Fig. 3).
• India continues to be home to one-fourth of world’s hungry and poor and one-third of the world’s undernourished children,

Fig. 3: Trends in Global Undernourishment,
2003-05 Compared to 1990-92

• Deceleration in agricultural growth, per capita agricultural growth 0.2 per cent during 1996-2003; marginalization of rural population; urban-rural and inter-state divides widening,
• Job-less “hallow” growth, hot spots, acute distress, deprivation; Average indebtedness of farmers even in Punjab about Rs. 1 lakh,
• Over 400 million children, women and men belonging to families with small and marginal holdings, as well as landless labour families are in deep distress.

The Agrarian Crisis

• Stubbornly high incidence of hunger and poverty – predominantly rural phenomenon, 18% of our children are wasted, how can we build a strong India on the shoulders of stunted children?
• Lowest agricultural growth rate and investment in agriculture during the last 40 years; shrinking land, water, biodiversity resources,
• Off-track in meeting most of the Millennium Development Goals (MDGs); highest youth unemployment and rising employment insecurity,
• Sluggish NARS, technology fatigue, glaring technology transfer gaps, extension failure
• Huge post harvest losses, estimated US$ 15 billion annually
• Net agricultural trade intensity decreasing, thus degree of food self-sufficiency decreased 
• Predominance of small holdings (over 80%) and their number is increasing,
•  Cost-risk-return structure of farming becoming adverse and rising farmers’ indebtedness; farmer suicides continue unabated.

Why the Agrarian Crisis

• Neglect of the interest of farmers and deterioration in terms of trade for agriculture; worsening cost-risk-return balance; debt crisis; farmer’s income, on an average, meets hardly 80% of their needs and requirements.
• Ineffective and negligible output price intervention in agriculturally underdeveloped regions, thus failing to stimulate increased productivity and production.
• Public investment did not increase to keep pace with the needs of output growth; bulk of it was in irrigation and watershed development from where, due to low water use efficiency and poor asset formation, the pay offs have been far below expectation (a lesson for the future); During the Xth Plan, highest agricultural investment was in irrigation, but there was hardly any increase in net irrigated area and cropping intensity continues to be low. 
• There was general neglect of vast rainfed dryland areas which are highly vulnerable to the intensifying natural disasters and climate change and are inhabited predominantly by resource-poor people harvesting low yields and incomes.
• Adoption of modern technology was slow and public sector extension has become obsolete, the technology missions have also generally not delivered  -  technology fatigue
• Deceleration in TFP growth rate, increasing thirst, hunger (especially hidden hunger) and failing health of our soils, and fast depleting and degrading water resources (often policy-induced)
• Size of farm holdings is fast decreasing, national average holding size hardly 1.4 ha; over 80% of our operational holdings are less than 2 ha; rural poverty stubbornly high
• Rural poor still meet 84% of their credit needs from non-formal sources, layers of debts and unusual stresses intensifying specially in rainfed areas
• Extremely poor rual market and other infrastructure and farmer-market linkage; about 80% of the marketing costs are avoidable;
• 25 to 30% of our produce is wasted, estimated value US$ 15 billion annually; Value addition in agricultural commodities is less than 10%
• Quality, bio-safety, IPR, SPS, TRIPS and other regulatory issues and unleveled playing fields in the post WTO regime

Policy Options and Actions

• Improve economic viability of farming by ensuring that farmers earn a “minimum net income”, and ensure that agricultural progress is measured by advances made in improving that income and livelihood security of the farming families whose socio-economic condition has deteriorated over the years.  To reverse the situation:
• Overcome unacceptably high levels of hunger and poverty through sustaining and accelerating growth in agricultural productivity, raising to at least 2.5% annual growth rate in foodgrains, especially pulses and oilseeds, and 5% each in livestock, horticulture and fisheries – the ‘sunshine’ sub-sector;
• Reduce the productivity gap between marginal and favoured areas; increase average yields by 50% in rainfed areas and about 35% in irrigated areas during the next 10 years;
• Bridge huge yield gaps of 50 to 200% by overcoming the technology fatigue, collapse of extension services and timely supply of adequate quantity of quality inputs, namely, seeds, fertilizers, other agro-chemicals and energy.
• Develop and introduce integrated Flood Code, Drought Code and Good Weather Code for mitigating and managing aberrant weather and climate change

Enhance Inclusiveness and Mainstream the human and gender dimension in all farm policies and programmes and give explicit attention to sustainable rural livelihoods. Enhance productivity, profitability and income of the overwhelmingly large proportion of small, marginal, sub-marginal and landless farmers through developing, transferring and providing appropriate technologies, inputs and services and improving input use efficiency.

Enhance Employment Security by ensuring that at least one member of the marginal and landless farming family will have year-round off-farm employment and earn a dignified living for the family.  Promote skill enhancement and skill based employment under NREGA for widening employment opportunities.

Introduce measures which can help attract and retain youths in farming by making it intellectually stimulating and economically rewarding, by conferring the power and economy of scale to small and marginal farmers both in the production and post-harvest phases of farming.  Each agricultural graduate should be an entrepreneur and associated public-private sector support such as creation agriclinics, e-chaupals and revamping of the Small Farmers Agribusiness Consortium should be assured.

Complete the unfinished agenda in land reforms and initiate comprehensive asset and aquarian reforms and promotion of renewable energy. Stop diversion of productive agricultural lands to non-agricultural uses. Declare water as a common property.  Eliminate concealed tenancy and render land-leasing acts and contract-farming provisions transparent and farmer friendly.  Reclaim waste/degraded lands and distribute to landless farmers and allocate for non-agricultural uses.  Seek support of industries and private sector in developing such lands and ensuring mutual reinforcement of agriculture, energy and industry in the national interest.

Establish a National Land and Water Use Advisory Service and link it to State and Block Level Land and Water Use Advisory Services on a hub and spokes model.  These can be virtual organisations with the capacity to link land and water use decisions with ecological, meteorological and marketing factors on a location and season specific basis.  They should provide proactive advice to farmers on land and water use.

Develop and introduce a social security system and support services for farmers; hassle free credit flow to all farmers; farm family and farming insurance (including health), adopt simple and reliable (such as based on weather) procedures; farm loans at 4% annual interest rate, which could become zero per cent under conditions of disaster and recurrent distress.  Under acute conditions, total loans of all farmers could be waived.  Institute an Agriculture Risk Fund to insulate farmers from recurrent droughts and floods.

Protect and improve land, water, bio-diversity and climate resources essential for sustained advances in the productivity, profitability and stability of major farming systems by creating an economic stake in conservation; Initiate a Seeds and Breeds National Mission under which establish national livestock heritage banks, genome clubs and genetic literacy, biovalleys and gene sanctuaries. Link traditional knowledge with modern knowledge and conserve traditional wisdom and reward the conserving communities; judiciously harness indigenous medicinal and aromatic plants, botanicals, and biofuel species, and develop special policies for management of Exclusive Economic Zones (EEZs) and integrated development of coastal zones, hills and mountains and the major river basins.

Foster community-centred food, water and energy security systems in rural India and to ensure nutrition security at the level of every child, woman and man through whole life cycle approach and thus finally integrating national, family and individual level food security and also removing the vulnerability factors.

Strengthen the bio-security of crops, farm animals, fish and forest trees for safeguarding both the work and income security of farmer families and the health and trade security of the nation.  Strengthen IPR, SPS and other biosecurity and regulatory measures; the Bird Flu management and prevention of entry of the dreadful wheat rust pathotype must have high priority; A comprehensive National Agricultural Biosecurity System ought to be established to be able to share developments in the global village without undue risk.

Science and technology must continue to be the drivers of modern agriculture. Drastically enhance public-private investment in research and technology development, prioritise strategic research for cutting edge technologies and strengthen regulatory measures for biosafety. Restructure agricultural curriculum and pedagogic methodologies for enabling every farm and home science graduate to become an entrepreneur and to make agricultural education gender sensitive.

Make India a global outsourcing hub in the production and supply of the inputs needed for sustainable agriculture, and products and processes developed through biotechnology and Information and Communication Technologies. Support is needed for comprehensive retooling and retraining to cope-up with new challenges and opportunities.

High food prices are also an opportunity. In the long run, high food prices represent an opportunity for agriculture (including small holder farmers) throughout the developing world, but they will have to be accompanied by the provision of essential public goods.  Smallholder gains could fuel broader economic and rural development. Farming households can seed immediate gains; other rural households may benefit in the longer run if higher prices turn into opportunities for increasing output and creating employment.  In order to benefit both the farmers and the consumers (in India 60% of the consumers are also farmers), price protection mechanism as well as public distribution systems (PDS) would need to be strengthened. A Market Price Stabilization Fund should be established jointly by Central and State Governments and financial institutions to protect farmers during periods of violent fluctuations in prices; as, for example, in the case of perishable commodities like onion, potato, tomato.

The scope of the MSP programme should be expanded to cover all crops of importance to food and income security for small farmers.  Also, advice to farmers on crop diversification should be linked to the assurance of MSP.  Small farm families should not be exposed to administrative and academic experiments and gambles in the market.

A Food Guarantee Act should be formulated and enacted. A well-defined, pro-farmer and pro-resource poor consumer Food Security Policy is an urgent necessity.  Set-up a multi-stakeholder National Food Security and Sovereignty Board chaired preferably by the Prime Minister with its membership including the Minister for Agriculture and Food and other concerned Ministers of GoI, the Deputy Chairman of the Planning Commission as well as a few Chief Ministers of food surplus and deficit States, leader of all national political parties, a few experts including specialists in the gender dimension of agriculture and food security, and mass media representatives.

A pan-GoI programme to establish ‘Rural Business Hubs’ on the lines of China’s Township and Village Enterprise (TVE) programme.  A consortium approach involving the different agencies concerned is needed.  Promote mass production by masses and not by machines. Panchayats should also be responsible for agriculture including agricultural extension.  They will have to be empowered with the needed information, training and tools for discharging this responsibility.

Mass media (conventional, electronic and the internet) constitute an important pillar of our democratic system of governance.  Dedicated TV Channels alongwith Regional Media Resource Centres should established, in whose management farmers, media representatives and scientists including extension personnel should play an important part.