Non-farm jobs and social mores hold India’s key to farm reforms

Context: The repeal of three farm laws announced last week was a sudden reversal of the government’s stand.

Challenges

• Fall in income: The majority of today’s ‘rich’ farmers who have benefited from Indian farm policies are rice and wheat farmers, especially in Punjab, Haryana and western Uttar Pradesh who fear that a reversal of price guarantees for rice and wheat would make a price decline inevitable and would be unable to sustain their current income levels and lifestyle.
• Societal circumstances: To maintain their current lifestyle, women and younger adults in farmer families have to take up paid work that would signal a drop in social status, something that would be considered unacceptable culturally.
• In 2018-19, only 12-13% of adults in the age group of 20-59 years were involved in agricultural work in Punjab and Haryana in comparison to 32-35% in 2004-05.
• Only 5-7% of women (in the 20-59 age group) reported being employed in agriculture in 2018-19 whereas 30% in 2004-05.
• 28% and 34% of young men (aged 20-29 years) could afford to remain unemployed or in education in Punjab and Haryana, respectively, in 2018-19 which was 12-14% in 2004-05.

Way Forward in farm reforms

• Curtail support for excess supply: It is absurd and unthinkable in any other industry for prices and supply excesses to both see a sustained rise, as seen in the case of foodgrains such as wheat and rice.
• Benefits for poor: Establishments of farmers’ producer associations for all agri-based products should improve price-negotiation power, lower commissions for middlemen and higher corporate investment in supply chains, etc. with superior storage and marketing facilities, could be key gains.
• Employment: Non-farm sector generated enough high-paying jobs and/or women should resume paid work.
• Irrigation and Insurance support: Improved irrigation and an agriculture insurance market that functions better.

Conclusion: The success of any attempt to reform the agriculture sector in India would depend to a large extent on the state of its economy’s non-farm sectors as well as societal culture. 

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