Farm incomes in the Punjab’s food bowl are growing at a much slower rate than some traditionally poorer states, as new data suggests the state’s agriculture has achieved an immutable law of economics: diminishing returns.
The Punjab propelled India’s Green Revolution five decades ago, saving millions from hunger. But the gains are eroding quickly. Experts say the slowing in incomes is linked to an overdependence on large grains, such as wheat and rice.
The slowing growth of farm income in Punjab is confirmed by the Farm Households Situation Assessment 2018-19 (SAS), a recently released national farm income survey.
Although farmers in the Punjab dominate the country in terms of absolute levels of monthly income, uninflation-adjusted farm income in the state grew by 6.73% annually over a six-year period between 2013-14. and 2018-19, according to the survey.
In contrast, farm incomes in states such as Bihar and Uttarakhand grew much faster at 13.3% and 19.3% during the corresponding period, albeit on a weak basis.
Inexpensive fertilizers, a minimum assured support price (MSP) for cereals, free electricity to draw water and high-yielding seeds have, over the decades, spurred a trend towards “monoculture”, or the practice of cultivating mainly rice in summer and wheat in winter. This deprived the farmers of the Punjab of potential income that could have come from growing a more diverse set of crops, research shows.
The MSP or minimum support price is a floor price set by the government. The government “buys” or buys paddy and wheat from the MSP to build up stocks to redistribute to the poor. This has increased the dependence of farmers on cereals.
Widespread agitation by farmers since last year against the three new agricultural laws of the Modi government and the demand by protesting farmers for a legal guarantee for the MSP have only prompted the authorities to step up the purchase of agricultural products even further. cereals.
The government bought a record 60.06 million tonnes of rice grown during the kharif season sown in summer in 2020, the highest amount on record.
This sourcing policy, which encourages large grains, wiped out the Punjab’s rich landscape of corn, barley, chickpeas, lentils and nutritious coarse grains less than a decade after the entry of large grains. in the state in the late 1960s.
The number of crops grown by farmers in Punjab has increased from 21 in the 1960s to around nine, according to data cited by Professor Surinder S Jodhka of Jawaharlal Nehru University, New Delhi, in a recent article.
“The Green Revolution was actually a Brown Revolution. It was limited to rice and wheat, ”said Uma Kapila, an economist who previously taught at Miranda House in Delhi.
According to a study by economists Ashok Gulati and Siraj Hussain of the ICRIER think tank.
The state’s agricultural GDP, a broad measure of farm income, has grown only 1.61% per year, less than half the average for all of India of 3.5% between 2005 -06 and 2014-15, according to research by Gulati.
The paddy boom is partly to blame for severe winter smog across much of northern India, as farmers set fire to paddy rice residue, known as stubble, to clear fields.
The Punjab needs about 5,500 liters of water to grow one kg of rice, five times more than China, indicating the state’s low water productivity. The northern and central districts are severely water depleted, while the southwestern districts face waterlogging and soil salinity or alkalinity.
Neighborhoods like Muktsar, Fazilka, Bathinda and Faridkot are notoriously degraded. The Central Ground Water Board issued a terrible warning in May last year: At the current rate of water extraction, the Punjab would be a desert within a quarter of a century.
The state has never been able to implement a crop diversification program first defined by the so-called SS Johl committee in 1986, ”said KS Mani, a former professor at the Agricultural University. from Tamil Nadu.
The paddy meant a 165% groundwater extraction rate, a jump of 16 percentage points since 2013. “I went from shallow tube wells to six deep tube wells on my 12 acres. My expenses are increasing because I have to dig deeper and deeper every year, ”says Ravinder Uppal, a rice farmer in Sangrur.
Large grains have fueled an insidious rise in costs, rising 5 to 6 percent each year and pushing farmers into debt, said Balwinder Singh Sandhu, state agriculture commissioner.
The increase in MSP paddy barely kept up with the rising costs, taking into account a measure of the crop known as the ‘C2 cost’, which includes the imputed rental value of land, depreciation and amortization. interest on capital.
Increasing the share of capital, such as mechanized harvesters and investment, is necessary for growth. But pumping more and more capital without technological advancements can lead to what Nobel Prize-winning economist Robert Solow has demonstrated to be a “stable economic state”, where any new investment is used to replace depleted capital without productivity gains. The economy stalls as a result.
Agriculture in Punjab is in the midst of such stagnation, as the Green Revolution has taken its course. “Why else do 1.5 lakh of people migrate abroad every year?” Sandhu asks.