Karnataka’s record in agricultural development is abysmally poor. Nearly 75 per cent of the cultivators are small and marginal farmers and the area brought under irrigation so far has not crossed 30 per cent. Almost 60 per cent of the arable land is affected by soil erosion, alkalinity, salinity and other problems.
The yield of most agricultural crops is significantly below neighbouring states or the national average. Barring jowar, grams, soya bean and safflower, productivity of all other principal crops has recorded either negative or very low growth rate during the past two decades.
Karnataka’s agriculture has witnessed a very low growth of around 1.47 per annum, coupled with a high degree of year-to-year fluctuation, of around 35 per cent in production during this period. These have led to a severe crisis in agriculture where nearly 62 per cent of the farmers are indebted and have been resorting to suicide.
An analysis of cost of cultivation of 19 principal crops for the year 2009-10 highlights that Karnataka agriculture is emerging as not only a “high cost” enterprise, but also a “high external labour dependent” endeavour. Cost of labour (human, animal and mechanical together) formed almost 40 per cent of the total cost of cultivation. . The cost of marketed physical inputs such as seed, fertilisers, and plant protection chemicals is just 15 per cent of the total cost.
Barring red gram and cash crops, none could give a surplus revenue to farmers of Karnataka. Cultivation of 14 principal crops results in a net loss or very low return to farmers. . If income from farming alone is considered, majority of farmers may fall below the poverty line in Karnataka!
Sources of Despair
Policy failures have been manifold. An attempt is made to capture these failures by estimating what is popularly termed as ‘gaps’ in agriculture economics. These ‘gaps’ persist with respect to (i) realising potential yield, (ii) the government’s intervention to provide remunerative prices and (iii) in the market mechanism to pass on a fair share of consumers’ rupee to the farmers. The yield gap is estimated as difference between the potential yield that can be realised through scientific methods of farming and the actual yield. Barring commercial crops and paddy, the yield gap is quite high. The average yield of cereals is around nine quintals per acre, indicating a yield gap of around 53 per cent.
Except for cash crops, the MSP declared at the national level was inadequate even to cover the cost of production of majority of the crops in Karnataka during 2009-10. The MSP could cover 53 per cent of the cost of production in jowar and 51 per cent in soyabean. Even in paddy, MSP could cover 91 per cent. .
There exists a major market gap -- the inability of market mechanism to transfer a fair share of consumers’ rupee to producers. Farmers producing agricultural commodities realise hardly 40 per cent of the payment made by ultimate consumers for semi-processed/processed end products like rice, flour, oils and sugar. For instance, from one tonne of sugarcane, in addition to 100 kg of sugar (at 10 per cent conversion), 150 units of electricity (from bagasse) and 25 litres of rectified sprit (from molasses) can be manufactured. The press mud is used as organic fertiliser. A modest estimation of total value of all these end products that can be prepared from one tonne of sugarcane comes to around Rs 10,000 rupees. But the producers’ share in that is a paltry Rs. 1,300 within which almost 95 per cent is the cost of production.
Policy Measures required
Administered pricing and procurement of all essential agriculture commodities, and decentralised distribution involving farmers’ organisations, workers’ unions and consumers’ societies. The proposed Food Security Bill needs to be re-oriented towards this end.
An Index of Farmers’ Livelihood Security to be constructed to gauge the changes in income and livelihood status of farmers consequent to changes in agricultural output as well as prices. Research and development (R&D) efforts should be hastened to evolve technologies that help farmers in not only saving the labour and but alsoin reducing the costs associated with it especially for field crops.
A Farmers’ Income Guarantee Commission with statutory power in line with the Pay Commission for government employees, needs to be set up at the state level.
Supplementary Sources of income to the farmers need to be created on a massive scale by enhancing investment in processing, supply of agro-inputs.
(The author is Professor of Agricultural Economics, UAS Bangalore. The views are personal.)