07 / 2009
The Extent of Small Farming
Small and marginal farmers, whose land holdings are below 2 hectares, constitute almost 80% of all Indian farmers, and more than 90% of them are dependent on rain for their crops. In terms of operational holdings, which includes land owned, the land taken on lease, the land taken on mortgage and any other land cultivated by fair or unfair means, 1.6% of farmers are in the large farmer category, with average holding of 45 acres control 17% of the total land.
In the so called granary of India –Punjab, the figure is 6% of the operational holdings are in the large farmers’ category operating 27% of the total agricultural land, and the average size of such holdings is about 40 acres.
On the front of ownership holdings the scenario is still worse. About 70% of the ownership holding in Punjab are less than 2 hectares as compared to similar share of 80% on All-India basis. Such small and marginal ownership get added every year due to distribution and division of land by inheritance, family partitions and other modes of transfer of rights. This disparity between ownership holding and operational holding indicates that better-off farmers acquire land from small farmers under lease.
With Green Revolution Technology, their costs of cultivation and risks of crop failure are so high that often the farmers cannot recover even the money spent. Between 1990-91 and 1995-96, chemical fertilizer costs increased by 113%, and pesticides by 90%, whereas the wholesale price of wheat went up only 58%. Minimum Support Prices for all crops, except sugar, were 38% to 50% lower than the actual cost of production. Per capita food grain production has fallen to levels lower than the 1939-44 famine. Despite the thousands of crores spent on fertilizer and other subsidies, farmers are increasingly in debt and despair.
The case of Punjab
Small and marginal Punjabi farmers, the rural majority, are the most indebted, unable to stay afloat amid liberalizing economic reforms geared toward their larger counterparts and toward transnational agribusiness.
The Punjab government’s own 2004 Human Development Report cites that the number of total cultivators in the Punjab—farmers working on their own land—decreased hand in hand with an increase in the number of agricultural labourers—landless, bonded workers—between 1970-71 and 1995-96. Most of these labourers are “deeply indebted to landowners and moneylenders.” For example, agricultural labourers in Punjab’s Malwa region, the state’s “prime agricultural belt,” work for only seventy to one hundred-sixty days a year because they can often only find employment during the harvests. They therefore rely on interest heavy loans—interest of well over thirty percent—from their land-owning employers to sustain themselves throughout the rest of the year. Once these loans begin to stack up, un-payable and unsustainable, labourers soon find themselves enmeshed in an inescapable “debt trap.”
Yet even today, a significant number of cultivators still do work small and marginal pieces of land in the Punjab; nearly 400,000 holdings of two hectares or less were recorded in a 1996 state agricultural census. Despite such large numbers of small holdings, today’s agricultural economy is so heavily weighted toward large producers that these small farmers have almost no ability to secure credit through conventional banks, leaving unofficial commission agents to step in and take their place. The high interest rates that these agents charge combined with the low annual income of the small farmer have created another “debt trap” just as vicious as that of the labourer. According to one recent study, seventy percent of all such small farmers in the Punjab were unable to pay back even short-term loans, leaving them with an interest debt of nearly 1900 rupees per acre. Once caught in this trap, there is almost no alternative for the small farmer but to sell or mortgage his land, an “extreme” step taken by about fourteen percent of small farmers as well as a few entire villages, as we have seen.
The example of Punjab is evident of the failure of Market economics which promised that loss of employment in one sector of the economy like agriculture, leads to increased employment in other sectors, such as in industry or service. In Punjab, the shift toward larger and larger farms in the Punjab has meant “dual processes of pauperization and proletarianisation” over its small and marginal farmers, not new economic opportunities elsewhere.
The Food Crisis
The basic crisis is that India experiences hunger amidst 8.5% growth, as one in every five Indian suffers from hunger. In terms of numbers it is staggering – 350 million Indians are chronically food insecure. This situation is severe in vulnerable communities. For example, 99% of tribal households in Rajasthan and Jharkhand face chronic hunger. One survey among 500 Adivasi households in Rajasthan, said that none had access to two square meals through the year. Children are the most vulnerable of all. 50% children are malnourished or undernourished, according to the National Family Health Survey. In Maharashtra, 2,814 children died of malnutrition during Jan-July 2005.
There has been 12% decline in food consumption between 1990 and 2001, even as India’s granaries are over flowing and production of grain is improving. Between 1990 and 1992, the reform years, rural poverty increased from 33% to 44%. The tragedy is that most of the 700 odd million who are actually employed in agriculture no longer can afford to buy the food they actually helped to produce.
This is not a problem peculiar to India. Internationally too, while the plight of poor farmers and communities, worsened, many others in the food business appear to be cashing in on the crisis. Poor countries that have abandoned their agricultural systems, cut cereal production, and become highly dependent on food imports are extremely vulnerable to food price shocks. This applies especially to those countries which lack the cash to pay for their food imports. Countries which do not have well-functioning social protection systems and strategic food reserves to reduce the impact of price shocks are even more exposed.
Prices of staple foods have seen increases ranging from 30 per cent to 150 per cent in 2007 and 2008. Countries suffering from the food crisis received promises of just $12.3bn at the Rome FAO conference in June 2008, well short of UN estimates of the $25bn–$40bn needed.
NGOs have argued that a new approach is desperately needed, because most developing countries are likely to become even more vulnerable to price shocks due to climate change and its toxic combination of rising temperatures, natural disasters, and erratic rainfall patterns.
Food prices, whether high or low seem like a double-edged sword: they hurt either consumers or producers. The false dilemma of which group to support (in practice often leading governments to have an urban bias) can be solved through policies and market interventions that enable both poor consumers and producers to cope in periods of price fluctuations.
As the first decade in this millennium draws to a close, we are in the grips of an economic crisis, triggered off by the sub-prime crisis in the US. While it is a crisis primarily of the financial system, its impacts on the food system will probably be more irreversible. These impacts began in the beginning of the last decade of the previous millennium, as the global economy was said to be booming, and optimistic. Countries of the world were lured into globalisation of their food economy, as well as pushed from the rear by changing World Trade Organization regime on agricultural trade.
Vandana Ramprasad of Green Foundation, in an article in Deccan Herald dated 16th October 2008, speaks of the duality in food production and food economy resulting from a decade of even global economy. The industrially produced cheap foods, mainly in developed countries and increasing in extremely rich pockets in so called emerging countries, have a health consequence, while the wealthy are provided an opportunity to partake of clean and healthy food called organic, at a premium price. This includes the wealthy consumers of the fast growing economies of Asia, particularly like India and China, who get diverse food imported from all over the world.
What future for small farmers?
The consequence of all this directly impacts small farmers, who bear the brunt of global price declines and distorted competition and are compelled to abandon their farming and take refuge in big cities in search of employment. Thus the most important concern is that food production and processing being governed by economies of scalsmall farm livelihoods have been exposed as unviable. In countries like India this means about 50 percent of its population.
The overwhelming majority of these farmers are small farmers, and agricultural labourers. They have moved out of a situation where they were actually paid in kind, and a survival economy, which gave them a substantial portion of their nutrition from foraging, other diverse forms of income and food in the complex rural economy, to a modern regime which alienates them from creative survival, and renders them destitute. Often such a shift has been facilitated by so called anti-poverty programmes or food security programmes like the 2 rupee rice scheme (convert price in USD per kilo), as small farmers were lured into modern crop production for cash, which enabled them to access the food subsidy. Simultaneously, there has been a kind of disincentivising of the poor man’s hardy crops like minor millet, by emphasising only main crops like rice, and wheat, or cash crops like cotton, flowers and the like.
Apart from the necessary immediate reliefs in crisis areas, through write off of loans/interest, and appropriate Minimum Support Prices for agricultural produce, there is urgent need for a planned and vigorous promotion of low-cost, low-risk, high nutrition, holistic and sustainable farming systems to reinvigorate Indian agriculture, and to stem the rising tide of farmers’ indebtedness, distress and suicides.
It is the experience of increasingly large numbers of farmers that holistic farming systems, based on scientifically proven techniques, are a very successful remedy to the economic and ecological crises engendered by green revolution technology. Holistic farming systems rely on available natural resources and rebuild the ecological capital on which all agriculture is dependent. They also greatly reduce or totally eliminate the dependence of farmers on the purchase of expensive external inputs such as seeds, fertilizers, pesticides and herbicides.
Particularly for rain fed farming and horticulture, which cover at least 60% of our cultivated land, holistic farming should be adopted on a large scale without fear of loss of production. Depending on the extent of prior damage by chemical-intensive monocultures, there is some drop in productivity in the transition phase if adequate biological inputs are unavailable. But within 2 to 3 years, the system is equally, or more, productive than other systems – and on an improving and sustainable growth path. This has been scientifically validated internationally by FAO reports, and by ICRISAT.
This sheet is available in French: Agriculture, alimentation et petits paysans en Inde
Bryan NEWMAN, Development Report #15, A bitter harvest: Farmer suicide in India, Jan. 2007, Food First, Institute for Food and Development Policy
Oxfam, Double-edged prices: lessons from food price crisis, Oct. 2008
Vanaja RAMPRASAD, « The polemic of global food economy », Deccan Herald, 16th Oct. 2008
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