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SMALL FARMERS’: THE FUTURE OF INDIAN AGRICULTURE
10/1/2020 11:23:56 PM
Dr. Parveen Kumar, Dr. D. Namgyal

India is home to about 120 million small holder farmers’ who contribute over 40% of the country’s grain production, and over half of its fruits, vegetables, oilseeds and other crops. About 86 per cent of the farmers in the country are marginal and small which means that they have land holdings less than 2 hectares. Further such holdings are fragmented at many places. Another important aspect of agriculture in India is the rainfed agriculture i. e the agriculture which is dependent on timely arrival of monsoons. The Rainfed agriculture plays an important role in Indian economy. In India 68 percent of total net sown area (136.8 mha) comes under rainfed lands spread over 177 districts. Rainfed crops account for 48 percent area under food crops and 68 percent of the area under non-food crops. India ranks first among the rainfed agricultural countries of the world in terms of both extent and value of produce.
The 86% of India’s farmers that operate in less than or just five acres of land have half of their land in dry/rainfed conditions. Reports reveal that small farmers contribute 51% of agricultural output with 46% of operated land, and a much higher share (70%) in high-value crops, such as vegetables and milk. Many other studies show that small farms produce as much as or higher value of output per unit area than that produced by the medium or large farms, which refutes the argument that small farms cannot be the future of Indian agriculture. Therefore, it is not the size of the farm that matters, but what a farmer does on that farm which makes it viable or not. Further, only about 50% or less of the household income of cultivating farmer comes from farming with the rest made up of wages, off-farm and non-farm work. Although marginal and small farms are more efficient in terms of productivity; yet the small farmers’ do not have got the attention they deserve.
Marginal and small farmers are less literate, are from more marginalized castes and communities, and are generally excluded from various developmental initiatives and modern market arrangements, like contract farming or direct purchase.
The problem of a marginal and small farmer livelihood gets compounded by the fact that small farmers’ suffer from many production risks like weather uncertainties, natural calamities like flood and drought, flood, lack of adequate inputs, large yield gaps, lack of assured and adequate irrigation, crop failure and so on. The government tries to cut the production risk by introducing very low cost crop insurance products, but that too has not given the desired results especially in case of small and marginal farmers’.
Now, that the crop insurance has been made voluntary, it is further expected to reduce the area under crop insurance. The insurance coverage in the country already is a low at just less than 30 per cent. The lack of marketing facilities at the grass root level also makes the farmer prone to harassment by middlemen and local commission agents. Due to lack of adequate marketing infrastructure, the farmers has to face high transaction cost, less price realization, low bargaining power and may other related problems. All this ultimately leads to less farm income for the farmers. It is here that the role of market becomes crucial as even if a farmer has produced efficiently but is not able to sell well, the story is lost. The distress among small famers in India is therefore market driven to a large extent in both ways- too much protection (MSP) or too little protection.
It is thus important to realize that smallholders do not suffer from exclusion, market and price fluctuation risks. Suitable strategies and mechanism focusing on the various aspects of well being of these farmers should be developed so that their genuine concerns are addressed genuinely. The MSP government announces benefits only when there is governmental procurement and studies reveal that only a very small fraction of farmers gets MSP benefit in a few states where procurement happens. Therefore, nonfarm sources of income are suggested to be crucial for small farmer families to escape poverty or earn a decent livelihood.
The Agricultural Produce Marketing Committees set up in the 1960s to cater to the marketing needs of the producers have also in due course of time not come to the rescue of the small producers. APMC mandis cater only to only 1/3rd of total marketed farm produce with the rest of the produce being sold outside these mandis already. Second, the nature and type of crops grown makes all the difference. For example, income from farming per month per hectare is Rs. 4236 in Bihar and only Rs. 3448 in Punjab because Punjab is less diversified (only 11% area under Fruits and Vegetables in Punjab compared with Bihar though Bihar does not have efficient or regulated agricultural markets. The average size of farm in Bihar is only 0.39 ha and in Punjab it is 3.62 ha.
Hence, to augment the income of small farmers they need to be motivated to go for diversification. The worst thing is that farmers’ still rely on traders, commission agents, and moneylenders for credit as institutional credit reaches only 65% of them and more of small and marginal farmers are excluded from this institutional credit net. This private source borrowing leads to debt trap for the farmers’ which ultimately leads to the farmers consuming his life. The smallholders and tenants belong to lower castes have limited access to credit.
Given the number of small holder farmers in the country and their contribution in ensuring food security for all, they need to be nurture well. The unique set of challenges they face need to be addressed.
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