Renowned agricultural economist Sardara Singh Johl takes on father of green revolution M.S. Swaminathan’s idea of raising MSP to 1.5 times the production costs.
New Delhi: Renowned agricultural economist Sardara Singh Johl agrees with M.S. Swaminathan, the man credited as the father of the ‘green revolution’, on the futility of loan waivers to ease farm distress.
But he disagrees with a much-touted recommendation of the committee on tackling the farm crisis Swaminathan headed — that farmers be given a minimum support price (MSP) that’s 1.5 times the production costs — saying it was not the answer.
“Either there were no economists in M.S. Swaminathan’s committee, or if there was an economist, he did not know economics,” Johl added.
Near contemporaries, Johl, 89, and Swaminathan, 92, have both emerged as titans of international renown in their chosen fields of agriculture — Johl is an economist, Swaminathan a geneticist.
The chancellor of the Central University of Punjab, Johl, a Padma Bhushan awardee, has served as consultant to the UN’s Food and Agricultural Organisation and the World Bank on international assignments. He has also chaired the commission on agricultural costs and prices, and served as a member of the economic advisory council for four prime ministers.
The Indian Council of Agricultural Research (ICAR) recognised his national and international prominence by designating him the professor of eminence in economics from 1986 to 1993.
What farmers need
Implementation of the Swaminathan committee recommendations and a loan waiver were among the demands of the thousands of farmers who undertook the ‘Kisan Long March’ last week from Nashik to Mumbai, and they have been accepted by the Maharashtra government.
Explaining his argument against the usefulness of MSP hikes, Johl said, “More than 80 per cent of the farmers in India are small and marginal farmers. Nearly 25 per cent of them make only distress sale at the time of harvest because they have the obligation to retire the loans they have taken.”
“Farmers do not belong to one group for prices to solve the issue. Small farmers don’t gain much from the price; they suffer because the farmers are consumers as well,” he added.
Also read: Swaminathan proposals, the crux of farmers’ tussle with the Centre over MSP
As for loan waivers, Johl raised three major concerns: “What’s the fault of those who have not taken loans? What’s the fault of those who have paid back their loans? And why shouldn’t those who are capable pay back their loans?”
He also questioned the current approach to the idea, saying the focus should be on the individual and not the sector. “There should be a system at district levels where the lender and the borrower can be called and the issue settled. It can be rewriting the loan or a one-time settlement or even waived.”
“It is the individual farmer under stress who has to be involved. By considering the farm sector as a whole, the people who really suffer are not profited,” he added.
Farming as a part-time profession
Johl suggests a better solution would be to encourage small and marginal farmers to juggle farming with other jobs. This can be achieved by spreading the industries into villages, he added.
“In Japan, more than 90 per cent of the farmers are part-time farmers and more than 90 per cent of their income comes from outside the farm,” he said, adding that crop diversification would also help.
As the vice-chairman of the Punjab planning board and head of the chief minister’s advisory committee on agriculture policy, Johl was leading a committee set up by the Indian Council of Agricultural Research in 1985 and presented two reports on the need for crop diversification in 1986 and 2002. With diversification, which entails the use of a farm to cultivate new crops, the committee aimed to encourage farmers to move away from the wheat-paddy cycle.
The report recommended that 20 per cent of Punjab’s area under wheat and paddy cultivation be opened up to other crops, with cash incentives for the farmers to compensate for the assured returns from wheat and rice.
However, Johl said, the recommendations were never taken seriously. “At no stage was my report discussed seriously. It only gathered dust on the shelves of the government offices,” he added.
The key driver of change in income from agriculture is pegged with income of people from other sector than agriculture. As the consumer demand for the high value commodities are highly elastic, overall consumer’s income across states needs to be enhanced significantly to increase the return to agriculture. Indian agriculture is primarily production based. Agricultural price variability is very high across time and region. The risk of low-price affects the primary producers very badly and the risk is easily transmitted to the primary producers only. As a result farmer’s income falls drastically in the event of either production or price instability. Farmers need timely supply of quality seed and other inputs (irrigation, fertiliser, pesticides etc) particularly before two cropping season and remunerative prices to their produce. Professional help was needed, who could act as key service providers to supply inputs and facilitate availing credits, buying insurance products and selling of produce through single-window system. Such professionals will act as the facilitator between farmers and government agencies.
Some of the suggestions of Dr Johl are welcome like crop diversification and futility of loan waiver, however academicians do not completely comprehend the reasons for farm distress. One of the fundamental problem for farmers is lack of easy liquidity and dependence on money lenders who charge anywhere between 20-40% of interest rates. Crop diversification is not happening because paddy and wheat ensure a fixed return whereas other crops like potatoes, onion, tomatoes etc are like a game in which port farmers are often the losers while commission agents make all the money and at the same time govt has not taken any steps for creating more storage spaces and cold chains. What is the alternative source of income? Currently many farmers try to earn extra income by rearing cattles for milk. Another important cause of rural distress is farm mechanisation which has increased the costs for small and marginal farmers and reluctance of new generation to work without these expensive gadgets. It does not make economic sense to use harvesters by small farmers having 2-3 acres of crop. Water level is dropping alarmingly in Haryana and Punjab and hence more powerful motors are being used which increases the electricity consumption. Unscientific way of growing paddy is partially responsible for the water crisis. Academic institutions need to study the grass root problems before suggesting solutions for the farm crisis.
The average farmer needs help and counseling from experts to manage his/ her farm out put. And an average farm output is not enough for the average farmer. The district officers have to create other supplementary local industries for the farmer to work and become economically sustainable.