By Divyat Rungta

Edited by, Namrata Caleb, Associate Editor, The Indian Economist

Despite having nearly half of our workforce engaged in the farms, the share of agriculture as a part of India’s GDP has been looming around the 15% mark. Like that of all developing countries, the share of our workforce in agriculture is only going to decline due to rapid urbanization, a consequence of poor incentives in farming and growing industries in the cities. India thus has a compound problem of increasing farm productivity to deal with a falling workforce as well as a greater need to maintain greater food security to compensate the fall in subsistence farming. The need of the hour is to empower our kisans, from mere pseudo-employees of the middle men to entrepreneurs in the field of agriculture. The current status of farmers is dismal to say the least, with headlines of farmer suicides becoming a common reading. It is hard to accept their state, considering they have an asset as valuable as land, and produce something as necessary as food crops.

The role of research and development in agriculture is absolutely crucial as there is a dire to need to reduce susceptibility to biological factors such as soil richness, water availability and pest attacks, all of which are constantly co-evolving. The variability to these elements, along with over dependence on manual labor, is what has led to our low levels of productivity. To provide some context, if India were to produce wheat at New Zealand’s productivity, we would be producing nearly 2.5 times our current output.

Unfortunately, we are struggling in both aspects of research and development at a national level. To address this issue, the current research infrastructure has to be revamped and agricultural science must get its due recognition in engineering colleges. Areas of research should include indigenous crops with high nutritional value, hybrid crops with commercial viability and measures to synergize modern and traditional practices to raise quantity and quality of produce. Next, the research has to be smoothly connected to efficient extension. The farmers must have an opportunity to add value to their produce, through product diversification over different seasons, and through agri-processing at the farm level. Direct farming to households and producers who use the crops as intermediary goods should also be encouraged as it has a dual advantage of higher prices to farmers and lower prices for consumers. To achieve efficient extension, there will have to be a forward push from the private sector to take up farming extension as potentially lucrative enterprises, with the government supporting these ‘agripreneurs’ through equal equity schemes or subsidized bank loans.

At the present moment, there is lesser emphasis on capital expenditure as compared to revenue expenditure from the government, leading to poor scope of sustainability of the farming community. Revenue expenditure in the form of subsidies is extremely short term in nature and to make matters worse, the current doling out of subsidies is heavily skewed towards favoring the rich farmers. Heavy capital expenditure is required in direct support infrastructure like information centers, roads, warehousing and irrigation, and in indirect support areas such as education and health of farmers. I would like to particularly emphasize on the importance of resource centers. The idea is not to merely provide SMS service, but to provide farmers with the next level information at a large scale. For instance, if a farmer reports a pesticide in his crops, instead of merely reverting back with the right medicine to be used, there has to be an immediate survey on all farms and appropriate action must be taken. Similarly, latest weather and market information should be available at all times through the use of effective technology.

Another crucial element of empowering the small farmers by allowing them to take advantages of modern farming is availability of capital through credit facilities. The current credit system for the farmers, or rather lack of it, has worsened the gap between rich and poor farmers. The big farmers are not only financially sound to purchase machinery, but also have enough land to justify such capital expenditures. The two main hindrances to easy access to credit are lack of organized groups of small farmers and poor literacy.

It is a well known theory that collectivism will bring in better bargaining for prices, and more importantly help in availing loans on heavy capital machines. Until and unless small and marginal farmers organize themselves in groups, they will continue to depend on manual labor and not shift to technology. With better literacy, and understanding of cheap loans from organizations like NABARD, small farmers will be incentivized to purchase the requisite capital.

On a recent visit to villages in Karnal, I had the opportunity to interact with SHGs consisting of women farmers. After a thorough understanding of the complete functioning of an SHG, I strongly feel the concept of SHGs to pool in financial resources has to be fostered at the ground level. The beauty of an SHG is that it combines the ease and flexibility of an informal loan along with the pressure to pay back loans. During the course of my interaction, a common feature that came out was that commercial micro finance banks were extremely exploitive in nature due the low literacy levels of these farmers. A 15-18% interest was invariably accompanied by a nearly similar amount of bribe, and indefinite delays in processing. Thus, self financing by organizing in small groups will also implicitly empower the members by reducing their dependency on commercial banks.

To sum up, while it is unreasonable to expect complete destruction of the middlemen system, there are certainly steps needed for empowering our farmers to ultimately increase our farm productivity. As India progresses towards economic stability, a robust agriculture sector must be prioritized through infusion of technology, capital development and easy availability of credit to farmers. If statistics are to be believed, a one percent growth in agriculture share can lead to a 2 percent reduction in poverty. For long the Indian kisan has not been given his due, and it is in the common man’s best interest he is given so at the earliest.


Divyat Rungta is currently a second year student pursuing B.A Economic (Hons) in Shri Ram College of Commerce. He is a die-hard sports lover and enjoys listening to Indie music. He has been deeply influenced by his parents, teachers, and the Indian Army! As a member of Enactus SRCC, he spends a lot of time working on social entrepreneurship projects undertaken by the team. Having the opportunity to interact with various communities and give them a sustainable livelihood has made a huge impact in his personal life. He strongly believes the student community has the responsibility of shaping a new India, and wants to make a significant contribution to it.

Posted by The Indian Economist | For the Curious Mind