Paying Farmers Not To Burn Will Work

Context: Stubble burning in India could be resolved by the effective policy implementation.

Issues with stubble burning

• A health and environmental hazard that repeats every year. As per 2018 Lancet study, stubble burning is major reason for premature deaths in India.
• Huge volumes: Indian farmers set some 92 million tonnes of crop residues on fire which results into health costs to themselves and others.
• Limited financially viable alternatives: Farmers often can’t afford other methods of crop residue management.
• Policy challenge: Imposing and collecting fines for burning is not viable. Politically, penalising farmers who face financial distress is unlikely to pass muster especially in the run-up to state elections.

Policy lessons: Highlights of crop residue management study 2019

• Farmers perceive the alternatives to burning as too expensive, even though the central government has subsidised equipment for crop residue management.
• Preference to ex-situ management equipment over in-situ machinery such as Happy Seeder and Super SMS, as farmers prefer to remove the paddy stubble rather than working it into the field.
  • Cash transfers can succeed in getting farmers to switch from burning to residue management.
• Partial upfront cash transfer: Cash rewards worked only if a partial upfront payment would be done to farmers to build trust. It also provides them financial cushion to pay for the equipment rental.
• Rewards farmers are needed to cover their costs of managing stubble without burning.
  • A subsidy of about Rs 2,500 per acre should be able to achieve a marked reduction in burning.

Way Forward

• Restarting conditional cash payments by the government with proper implementation mechanism.
• Subsidise ex-situ equipment: Encouraging the operation of biogas plants can reduce the net cost of ex-situ management as farmers can sell the crop residue.
• Consider farmers’ preferred method of crop residue management and recognise that they are making a financial calculation.
• Testing effectiveness before these policies are scaled up is important for avoiding spending on things that don’t work.