Agriculture has the potential to turn into a powerhouse of economic growth.
As India completes 73 years of Independence, agriculture has emerged as the mainstay of the economy. Serving as a much needed lifeline during the Covid-19 crisis, Indian agriculture is poised to grow by an estimated 3 per cent in 2020-21 prompting the Reserve Bank of India (RBI) Governor Shaktikanta Das to acknowledge that at a time when the economy is shrinking, agriculture remains a “beacon of hope”
The resilience that agriculture demonstrated at a time when the International Monetary Fund (IMF) had pulled down India’s growth projections for 2020-21 to 1.9 per cent clearly shows that the time has come to revitalise Indian agriculture to serve as a pivot for future economic growth. There can’t be a better time to resurrect Indian agriculture, especially when the nation is celebrating 150th birth anniversary of Mahatma Gandhi who had been a strong advocate of village self-reliance.
This becomes more the need and necessity knowing that a few days after Prime Minister Narendra Modi announced the first nationwide lockdown beginning March 25, hundreds of thousands of migrant workers with small children in tow or in their laps, and clutching their meagre household possessions, preferred to defy the lockdown and walk home travelling for hundreds of kilometres. The painful long march that the country witnessed, with some estimates pointing to more than 30 million people returning home (and some experts saying that close to 70-80 million trudged back from the cities if intra-state reverse migration was to be added) was a pointer to the failure of economic policies that had encouraged rural to urban migration.
Several studies have shown that at least 60 to 70 per cent of the migrant workers who returned to their native places are unlikely to return back to the cities, at least not in the near future. These hapless millions were essentially what I called as ‘Agricultural Refugees’ who were driven out of the villages over the past few decades because of economic policies that kept agricultural deliberately impoverished. A recent OECD study in collaboration with ICRIER, a New Delhi-based think tank, had concluded that Indian farmers suffered a cumulative loss of Rs 45-lakh crore (US$ 600 billion plus) between 2000 and 2016-17 on account of being denied their rightful income. Subsequently, the Niti Aayog itself had admitted that between 2011-12 and 2015-16 the growth in real farm incomes had prevailed at less than half a percent every year, 0.44 per cent to be exact. For the next two years, the growth in real farm income had been ‘near zero’. If farm incomes had declined or remained static for the past two decades, what else could be expected from the rural workforce, which was left with little option but to abandon farming and move to the cities looking for menial jobs as a daily wage worker?
But despite these hardships, India farmers had toiled hard to produce a bumper harvest year after year. Saddled with overflowing food stocks, reports show that the abundance of food grains came in handy to provide subsidised rations under the National Food Security Act to over 720 million people during the four months of the lockdown. In addition, free rations were made available to the needy. This was possible only because of a buoyant agriculture despite farmers continuing to be faced with a severe agrarian crisis. With less money available in the hands of farmers, a dip in rural demand had lead to a slowdown in Indian economy prior to the lockdown. After all, in a country where the agricultural workforce accounts for nearly 50 per cent of the population, the surest way to jack up the economy is to create more rural demand, which means provide farmers with decent incomes.
Even during the lockdown period, which coincided with the rabi (winter crop) harvest resulting in a crash in demand leading to farmers suffering huge losses in the case of perishables like vegetables, fruits, flowers, poultry, dairy and fisheries, the USDA estimates that India is poised to achieve a record wheat production and a near-record rice production in 2020-21. For the next kharif (monsoon) season, the sowing of summer crops has increased by 13.92 per cent over the previous year as on July 31. With rains expected to be normal, and with a much higher area brought under cultivation, the kharif harvest is also expected to be bountiful. No denying, in these depressing times, agriculture alone provides a ray of hope.
As India steps into the 74th year of Independence, the coronavirus pandemic has come as a timely reminder of the dire need to acknowledge the inherent bias and blind spots in dominant economic thinking. Treating agriculture as a laggard, the economic design that the world follows had believed in sacrificing agriculture for the sake of industrial growth. In India, in addition to keeping farm incomes deliberately low, public investments in agriculture too declined over the decades. As per RBI, public sector investment in agriculture had hovered around 0.4 per cent of the GDP between 2011-12 and 2017-18 What economic miracle could have been expected from a sector, which is the largest employer in the country, but kept starved of public funds and denied the rightful income to farmers?
It is time to overhaul this outdated economic thinking. It is time not to return to the normal, but to a new normal. It is time to strengthen the rural economy by not only taking into consideration its capacities and capabilities but also to appreciate and acknowledge the socio-economic wealth of rural enterprise, its diversity and the traditional knowledge base. Although the Prime Minister has spelled out his vision of Atmanirbhar Bharat (a self-reliant India), the route to achieve this certainly passes through agriculture. Looking at the inherent strengths of Indian agriculture, and knowing the challenges that reverse migration have thrown up, only a vibrant agriculture can absorb the influx and turn it into an opportunity. It is high time mainline economists and policy makers remove their blinkered glasses, and start looking afresh at agriculture, because agriculture alone has the potential to reboot the economy for all times to come. #
Agriculture is India’s Ray of Hope in Time of Crisis. Fair Observer. Dec 3, 2020.