Agriculture Can Fuel the Next Economic Revolution

By Business Of Agriculture on 25 Sep 2018

There are many scientific achievements and great enterprises in our country that bring us pride. Our scientists have sent Mangalyaan into orbit around Mars. In industry and commerce, many things are being built in the country. One of the greatest achievements among all of these is that our farmers, without any technology or infrastructure, are still managing to feed 1.3 billon people using just their traditional knowledge.

Unfortunately, the farmer who provides us with food has children who are starving, and he wants to take his own life. In the last ten years, over 300,000 farmers have committed suicide. That many people did not die in all the four wars this country has fought. I hang my head in shame about this.

Our nation has the blessing of being able to become the “Annadatha” of the world, as we have the needed latitudinal spread of weather, soil, climatic conditions and, above all, a large population that has the intrinsic knowledge to perform the “Magic of Transforming Mud into Food”. We are the only nation to have these blessings. But we cannot hope for the next generation to go into agriculture if we do not transform this sector into a very lucrative activity. Only this will sustain and retain the population in rural India. Urbanising rural India will remain a dream if agricultural income does not multiply in the next few years.

The greatest impediment for the success of making agriculture a hugely profitable enterprise is scale – the land holdings are too small. Owing to over thousands of years of farming and the resulting bifurcation of lands, the average land holding in India today is just over one hectare. With one hectare, anything that you invest will sink you. The two major problems that are destroying our farmers and driving them to poverty and death are unprofitable investments in irrigation, and lack of negotiating power in the market. Without scale, these two vital aspects will stay out of reach.

So we are looking at how to change this by bringing farmers together into Farmer-Producer Organisations (FPO) with a minimum of 10,000 acres of land. We are working out legal structures to ensure that farmers retain control over their land and it is one hundred percent safe for them. Farmers can cultivate their land individually, but micro-irrigation and marketing of produce is taken care of for them together, by companies that have the necessary competence for it.

Otherwise, the way it is done right now is that each farmer has his own pump set, his own bore well and electrical connection. The kind of investment this needs is so high that debt is inevitable and the farmer has to either sell his land and run away from his village, or hang from a tree. And after all this, when the farmer wants to sell his produce, there is no transport, storage or even an established market. Growing a crop is one thing, but when it comes to taking it to the market, it is a big circus for the farmer.

So, if the private sector can establish community micro-irrigation for groups of farmers, and supply water on rent, farmers need not sink large amounts in capital costs. The government will, of course, have to create a proper legal structure so that investors are protected with a viable payback process. And if firms can aggregate produce from say 10,000 farmers in an FPO, they can negotiate for better market prices, the benefit of which can be shared between the farmer and the firm. If we create this support for our farmers so that they do not have to bother about anything other than growing food, India can be the breadbasket of the world.

Unfortunately, though parts of India have a 12,000-year history of organised agriculture, a lot of available land resources today are becoming unusable within one generation because of the chemicals we are putting into the soil. If our farmers are to get good yields and make a living out of agriculture, the soil does not need chemical inputs but rather needs organic content. Soil will be healthy only if we have trees and animals on the land so that the leaves and animal waste can go back into the soil.

In India, we have done small-scale demonstrations of organic tree-based agriculture and seen farmers’ incomes multiply by three to eight times because their cultivation expenses reduce drastically. There is also a huge demand for organic products around the world right now. Some countries like Vietnam have made this transition on a large scale, and Vietnamese experts that we interacted with have told us that farmers’ incomes there have multiplied by as much as twenty times.

If you add to this the income that can come in from value-added products, milk, fisheries and crafts, this can be a tremendous growth story in rural India. For example, the global market for just timber, fruits and tourism is worth hundreds of billions of dollars.

All these aspects cannot be effectively financed by the Indian government. The nature of government finance is such that it may not always be timely. When it comes to tree-based agriculture, where plantation has to happen at particular times, it is the corporate sector that can show the necessary agility to support farmers.

If the corporate sector invests in creating largescale demonstrations of, let’s say, 25,000 farmers and 100,000 hectares of land that can be transformed into organised micro-irrigation and marketing, and if people see the huge economic success this becomes, then there will be no stopping it. People will start taking to it around the country.

When we think of the economy, we look at the stock market and a few other things. But sixty-five percent of our population is in rural areas. If we just double their income, our economy will go through the roof. This is not just about financial numbers. This is an opportunity to provide millions of human beings with a life of dignity and prosperity.