Rural Economy Needs a New Deal For Revival

Context: Indian farmers need a New Deal designed through ideas, policies, and politics to address multiple crises faced by the farmers.

Multiple Crises Faced by Indian Agriculture

• Economic crisis: Although 58% of the rural households are mainly engaged in agriculture, farming is economically unviable due to the following reasons-
  • Small landholdings: 86% own less than 2 acres as per agriculture census of 2015-16.
  • Low and uncertain average yield with low and uncertain prices.
  • Low monthly income of < Rs 8,000 with high consumption and debt. (rising agricultural labourers)
• Ecological crisis:
  • Reasons:
    • Green revolution, superstitious belief in chemical agriculture and overexploitation of water.
    • High temperature and uncertain monsoon due to climate change.
  • Impact:
    • Degradation of soil health, groundwater depletion, loss of biodiversity, shrinkage in seed variety, decline in nutria-crops, loss in livestock economy and deforestation.
    • Incomes of ‘dryland’ farmers are predicted to fall by 25% due to climate change.
• Existential crisis: due to shrinking agriculture
  • Rising trend of farmer suicides, over 3 lakh in the past two decades.
  • Loss of livelihood and dignity as a farmer is forced to become a labourer or a migrant labourer.
  • Loss of trust in farming: Farmers do not want their next generation to take to farming.

Way Forward: Leaders, policymakers and thinkers must come up with New Deal with the following elements-

• Invoke faith in Indian agriculture: India is not condemned to relive European history and follow an Indian path. (Rural India is a land of opportunities and the key to our national future.)
• Push for new policy architecture:
  • Higher and more efficient subsidies, as our net subsidy so far has been low, if not negative.
  • Universal and comprehensive crop insurance, loan as well as debt relief and reconstruction.
  • Building agricultural and rural infrastructure that facilitates private entrepreneurship, agro-processing, farmers’ cooperatives, animal husbandry, forestry, and so on.
  • State support to flourishing private initiative in agriculture.
  • Price support for a wide range of produce on the condition that they adopt crops suitable for local ecological conditions.
  • A small top-up component of income support for small and women farmers and other vulnerable sections linked to a boost for pastoralists, rural industry and handicrafts etc.