Why rural economies are the future of India

In the last couple of decades, India has witnessed rapid changes in weather conditions across its length and breadth, and the subsequent impact on life and economy is laid out in plain sight. While approximately 70 percent of the country is dependent on agriculture for their livelihoods, they face the brunt of frequent natural calamities like artificial floods, droughts, low rainfall, among many other disasters, resulting in severe land degradation, heavy exploitation of natural resources, loss of income, migration and poor quality of life, as the developmental indices reveal a spiralling crisis. The Global Climate Risk 2020 index ranks India the fifth most affected country in the world due to the climate crisis, amidst a growing population dependent where 60% of the economy depends on nature in one form or the other.

Developing countries like India and China with booming rural economies and populations must consider decarbonisation and ecologically compliant growth as the way to positively impact their ability to meet the needs of the people first. Globally, bold climate action towards the net zero future is a $26 trillion opportunity for a sustainable, equitable future for people & biodiversity by 2030. Out of these, 15 key transitions towards a nature-positive future, across land & ocean use, infrastructure and energy will deliver $10.1 trillion in business opportunities and create 395 million jobs by 2030. In India, sustainable funds have outperformed their regular counterparts, with the Nifty ESG Index delivering a five-year return of 10.80% compared to 8.99% on the Nifty 50.

Reversing the rural economic crisis through climate & biodiversity action

For years, India has been facing a silent rural employment crisis. Farms are increasingly economically unviable, leading rural youth to migrate to urban centres in search of jobs. The average age of farmers have been increasing as a result, driving worries on the future of India’s food security. Facing declining yields, increased climate vulnerability and an aging farming population, there are now worries that India will face a food security crisis in the coming years.

At the same time, India is facing mounting threats to its biodiversity and its overall ecological and climate resilience. Under the Paris Agreement, India has committed to restoring 13 million hectares of degraded and deforested land by 2020. Yet, despite this commitment, data from Global Forest Watch suggests an overall decline in forest cover.

If there is an answer to be found to these multiple dilemmas – jobs for rural youth, better farming incomes, ecosystem degradation – it lies in fundamentally rethinking how we think about our rural economies. An ambitious plan to invest in the country’s ecosystems could go a long way to dealing with its rural employment and economic crisis. For example, a rural recovery plan to rewild the North East’s forests and agricultural lands – 4.1 million hectares – would generate earnings up to INR 450,544 crores annually over a 30 year period through agroforestry produce and sustainable bamboo. Investing these earnings back in the community could deliver universal basic assets such as healthcare, education, energy, water access to over 6 million households – with spending on healthcare and education matching international OECD standards.

Around 172.06 million tonnes of carbon can be sequestered annually by minimizing natural habitat loss and restoring degraded forests, mangroves and peatlands in India. In a region like the North East with nearly a quarter of the nation’s carbon stock and the highest deforestation rates, these efforts are vital to protect forest landscape from turning into net emitters. With over 250 million Indians either fully or partially dependent on forests for their livelihoods, a full-scale restoration plan for forests across the country could easily create enough jobs to minimize the pressures to move to urban centres in search of jobs.

With a growing global appetite for sustainable investment in energy and sustainable land and ocean use, India is rife with opportunities must be leveraged effectively. Investments in payment for ecoystems services through carbon markets will create new income opportunities for rural forest-fringe communities. Building this market will require comprehensive protocols for nesting targets, to link private investments with national targets and minimize double-counting of credits.

Sustainable agriculture and economic dividends

India’s renewed focus on agroforestry with the 2022 budget, with special support to encourage traditional agroforestry systems of tribal communities is a step in the right direction. Under the National Mission on Sustainable Agriculture, farmers received support of up to INR 70 per tree planted on agricultural land or in the periphery/boundary areas. This support needs to be streamlined with new agroforestry policies, to encourage the planting of climate-adaptive indigenous & local crops. A robust climate-smart agricultural policy must be tailored to local conditions and needs, using food forestry models that can help small & marginal farmers build sustainable small businesses that can increase their incomes by 40% within the first year of planting.

On average, agroforestry can generate a 40% increase in household income in farming communities which largely practice subsistence level agriculture. In the village of Baligaon Miri, communities gained an additional INR 18,000 in income, through agroforestry, increasing their overall earnings from INR 13,000 per month to over INR 30,000. Youth returning from cities in search of stable employment found agroforestry a viable opportunity to precarious employment in the service industry. The agroforestry model also presents a unique opportunity to make commercially viable in-roads and manoeuvres into the global sustainable sourcing movement and international markets such as with spices, indigenous food, fabrics and the fast-emerging sustainable fashion industry.

The quicker we can ramp up our collective efforts to deliver a more sustainable, resilient economy and businesses, the better placed we will be to face the biodiversity and climate crisis. A nature positive economy does not have to be a burden. It is an opportunity to invest in creating better, sustainable jobs in rural India, enhance the economic and spending power of households and businesses and foster a robust, future-oriented rural economy.

The author of the article is Ranjit Barthakur, Trustee and President of the Balipara Foundation.

(Disclaimer: The views expressed are of the author, and not not represent the views of DNA India.)