Why we need to bust the myths about agriculture in India

False pictures form the main plank of the political debate on India's agriculture. One is that of the Bharatiya Janata Party and the other of the Congress. The two big political parties in the country agree with each other in believing that farmers and the landless folk in the villages are at the end of the tether, and there is a need to rescue them from extinction. It is a very sympathetic and empathetic view of rural India, but it is a foolish one. It is not based on facts and figures but on the skewed political agenda of each party.

The BJP believes that too many people in India's villages are poor, and the best way of helping the rural poor is to create jobs through infrastructure development in the rural and semi-urban areas. The thrust of the argument of the BJP leaders is that there is need to shift the people dependent on agriculture to other means of employment. The Congress on the other hand feels that the poor in villages need the lifeline of subsidies through MNREGA and the Food Security Act.

The myth of village India being the real India is the one created by Mahatma Gandhi, and no political party has dared to move away from it. It is a reversal of the conviction of many of the nationalist economists in the 19th century, that with the arrival of the colonialists, large-scale de-urbanisation occurred as colonialism killed off the thriving segment of indigenous artisans and their crafts in towns. The conclusion should have been that ruralisation and pauperisation is an imposed condition and not a natural one. The thesis that India is in the villages should have been seen as an economic fact and not as some kind of a spiritual condition. 

India will remain a predominantly agriculture country, and it need not be seen as a disadvantage. It is not necessary to step up urbanisation in order to move up the pecking order of developed countries. India's accelerated economic growth need not be achieved by reducing the importance of agriculture and by increasing the share of industry and services.   

Poets and politicians, India's Versailles crowd and anachronistic leftists have conjured up many popular myths about vanishing villages and declining agriculture, indebted farmers and increased impoverishment in the countryside. But figures about rural India and Indian agriculture tell a different story.

Myth 1: Flight of the rural poor into the big cities

According to the 1951 Census, 82.7% of Indians lived in villages. In 2011, that figure has come down to 68.9%. The decline in rural population has been gradual, not precipitous. It was 82% in 1961, 80.1% in 1971, 76.9% in 1981, 74.5% in 1991, 72.2% in 2001. The sharpest decline, 3.2% occurred between 1971 and 1981, compared to 5.6% between 1991 and 2011, the years of economic reforms. 

The figures turn negative with regard to the number of cultivators and agricultural labourers. In 1951, 71.9% of the rural population were cultivators, and 28.1% were workers. In 2011, the numbers of cultivators is reduced to 45.1%, and that of the agricultural workers rose to 54.9%. The 1951 figure was much before zamindari abolition and land reforms. The phenomenon needs to be examined closely to describe the changes in the village economy. The temptation to draw a picture of increasing immiseration is perhaps irresistible. The reality might not be as dismal as the pessimists want it to be.

Myth 2: Agriculture is in decline and it is vanishing

The performance of agriculture in the last decade has been impressive despite monsoon fluctuations. Agricultural growth in five of the last eight years, from 2005-06 to 2012-13, has been above 4%. It was 5.5% in 2005-06, 4.1% in 2006-07, 6.3% in 2007-08, 9.5% in 2010-11 and 5.3% in 2011-12. It was less than 1% in 2008-09 (-0.3%), 2009-10 (0.4%) and in 2012-13 (0.9%). India's foodgrain output in these years has been equally good. It has moved from 198.3 million tonnes in 2004-05 to 264 million tonnes in 2013-14, and it is projected to dip to 257 million tonnes in 2014-15. The foodgrain production has witnessed an impressive increase from 234.47 million tonnes in 2008-09 to 264.38 million tonnes in 2013-14. Indian agriculture accounts for 10% of the country's exports, with 36 lakh bales of cotton leading the commodity export surge.

This growth has to be compared with the costs as well, to get a fair picture of what it means to be in the business of agriculture and that increased productivity means higher input costs. The Cost of Cultivation study of 2007 carried out by the Department of Economic Statistics, Department of Agriculture and Cooperation in the Ministry of Agriculture reveals that farmers are spending huge amounts to increase their productivity. But there are significant differences in costs in different parts of the country. For example, in 2003-04, the total cost per hectare for paddy was Rs 28,570, while in Assam it was Rs 14,189.36. The cost of growing cotton in 2003-04 in Gujarat was Rs 23,395.87, in Maharashtra it was Rs 20,989.96 and in Punjab Rs 33,233.46. There are then a significant number of farmers who are spending these amounts to increase productivity. It is not the case than a handful of farmers are bringing in scarce investments to reap a rich harvest.  

It would be naive to believe that agriculture can ever be a low-input-costs and high-output business. It can be seen that agriculture is turning out to be a capital intensive like industry. It is not necessary to accept this as an inexorable fact. The question of input costs can be debated because there is the iron law of diminishing returns. Increasing cost inputs perhaps would not always ensure higher productivity. The challenges of agriculture are quite different from the rhetorical flourishes of politicians and activists.

Raw materials for industry and food for the whole of the population – urban and rural – has to come through agriculture. It is the basic resource of any country and economy. There is nothing radical about wanting to marginalise agriculture, or to reduce the number of people depending on it for livelihood. Agriculture can sustain livelihoods of millions if there is an intelligent approach towards making it a thriving business. 

The main challenge with regard to agriculture in India is that the land-to-people ratio is negative. That is, too many people are seeking livelihood from too little land. This can be turned into an advantage with innovations in the structure of agriculture. It is not necessary for everyone to be a cultivator to be part of the agriculture sector. It can be a lucrative chain which could generate livelihoods for more people than is the case now.