New Delhi: In the last 10 months, farmers across the country have staged half a dozen large protests. On March 12, 2018, 35,000 farmers from all over Maharashtra walked 180 km over seven days to reach Mumbai and demand land titles, better prices for agricultural produce and farm loans. In July 2017, farmers from Tamil Nadu had protested in Delhi with skulls hanging from their necks to demand a loan waiver after the state was hit by a drought. In June 2017, Madhya Pradesh farmers had dumped milk, fruits and vegetables on the roads.
These protests are signs of an agrarian crisis: Farmers are stuck in a cycle of low returns, debt–and, often, death–at a time of increasingly uncertain weather. In a year to June 2013, 70% of Indian farm families reported having spent more than they had earned; and more than 52% said they were indebted and health costs were adding to their debt, IndiaSpend reported on June 27, 2017. In five years to 2015-16, real farm income per cultivator increased only 0.44% per year, our report of July 18, 2017 showed.
Of the issues driving down the country’s farm sector, tenancy is one of the foremost. An age-old, widespread practice in India, tenancy usually involves a landless farmer or holder of a small piece of land leasing land for cultivation. However, since the landlord is typically wealthier and more powerful, the practice is often exploitative, and has been the target of land reforms since Independence. Although tenancy was abolished or restricted in most states during the 1950s and 1960s, state government failed to redistribute land among the landless. Despite land ceiling drives, tenancy continued to grow covertly and informally, leaving tenants vulnerable.
In 2016, NITI Aayog, the policy think-tank of the Government of India, proposed a Model Agricultural Land Leasing Act, which aimed to “liberalize” the country’s tenancy system, arguing that it would actually benefit small farmers and improve the country’s agricultural productivity. Many states have framed laws on the lines of this model, which was drafted by NITI Aayog’s special cell on land policy headed by Tajamul Haque, a former chairperson of the Commission for Agricultural Costs and Prices, former professor at the National Centre for Agricultural Economics & Policy Research, and ex-director of the National Institute of Rural Development. In an interview with IndiaSpend, Haque discussed the model law and how its implementation can benefit all stakeholders.
What does the Model Agricultural Land Leasing Act prescribe? How would it help tenants?
The model law is intended to liberalise and legalise the land leasing system in the country. Most of the states passed their tenancy laws in the ‘60s and ‘70s, which were highly restrictive. Some of the states banned leasing altogether. For instance, Kerala and Jammu and Kashmir do not allow land leasing. Other states like Bihar, Uttar Pradesh, Chhattisgarh, Karnataka and Himachal Pradesh allow only certain categories of people to give land on lease, for example the disabled, widow, minors, etc. Karnataka does not even allow these categories of people to lease out their land, the state only allowed people in services for instance: soldiers to lease their land.
In Andhra Pradesh, Punjab, Haryana and Gujarat, the governments have not banned leasing but at the same time, there are certain provisions in these states which make the option of leasing as good as prohibited. For example, in Andhra Pradesh, if an owner wants to end leasing and take the land from the tenant for personal cultivation, then the owner will have to leave at least 50% of the land with the tenant. Now, no owner would want to lease the land with these restrictions. Similarly, some states prescribe that if a tenant has been cultivating the land for more than the prescribed period of time, the tenant then has the right to occupy the land. The Zamindari Abolition Act of Uttar Pradesh [intended to remove an oppressive land-leasing system], for instance, also had a possession clause which said that if a tenant continued to cultivate a piece of land for over 12 years, s/he would be eligible to occupy that land. These clauses instill a fear in the owner’s mind against the leasing of land.
As a result, people let their land remain fallow, which affects the agricultural productivity of the country. Currently, 25 million hectares of land in the country are lying fallow largely because owners are not leasing them out due to restrictive clauses. If you assume that one hectare produces two tonnes of grain, with 25 million hectares lying fallow, the country is losing 50 million tonnes of grain.
So with the model land leasing act, we tried to remove all these restrictions. If an owner, out of lack of interest, lack of money to invest or other reasons, does not want to cultivate the land, s/he can choose to lease it out to some landless cultivator and benefit from the rent rather than keeping the land fallow for fear of losing it.
The tenant and the owner can mutually agree upon the rent and period of leasing and come up with a written contract, which should be attested by a person in a position of responsibility–such as the gram pradhan (village head), an advocate or a revenue officer–to make the leasing legal. They need not go to any revenue office or administrative department.
This formal signed document will do two things; first, it will assure the owner that the land is safe. Second, it will make a tenant-farmer eligible for government subsidies, insurance, disaster relief and credit schemes, because for the first time the tenant will have a document to prove that s/he is cultivating the land.
Tenant farmers have long been denied the right to even sell their farm produce in government agricultural produce markets where they can get better prices; they have to go through intermediaries and end up losing a lot of their profits. Now, if tenancy is legalized through a contract, the tenant farmer would be able to sell in these markets.
The model land leasing law, if applied, will not only help increase the income and productivity of tenant farmers’ land significantly, it will also help overall agricultural growth while helping the government double farmers’ income.
How many states have adopted the model law or amended their land laws on the lines of the model law?
Uttarakhand and Uttar Pradesh have amended their land laws. Uttarakhand has done it quite comprehensively, whereas Uttar Pradesh has just deleted the clause which allowed the tenant to occupy land after operating on it for more than 12 years. It has also included a range of people–business people, traders, people in services, members of legislative assembly or parliament–who would now be eligible to lease out their land along with the disabled. It is a big relief, but there is one thing they should not have done, which is prescribing a maximum lease period of three years. It should have been left for the owner to decide.
Madhya Pradesh and Maharashtra have passed a new law on the lines of our model law. They have also added a penalty clause that if the tenant does not return the land after the lease period is over, s/he could be punished with imprisonment.
Would these formal leases have to be recorded with a government agency/department?
In our model law, we said the agreement between the tenant and the owner need not be recorded or registered with the revenue department; that would make the process complex. It also becomes a cause for fear in the owner’s head that their land is registered in revenue records under a lease and tomorrow a new law could come and prescribe that the tenant would have right over the land.
Hence, we suggested that the agreement be a simple written document attested by a person in a position of responsibility, for example the gram pradhan (village head), an advocate or a revenue officer. The government does not need to interfere. This document alone would be enough to make the lease formal and legal.
Once the period of the lease is over, the land will by default go back into the owner’s possession. Nobody needs to go to any office to take possession back.
Now, some states are prescribing the timeline of leases between three and six years, but that is not the correct way to do it. You see, if a tenant farmer is cultivating horticulture crops such as fruit, it could take more than a decade for the crop to be completely ready. Now, if the owner is willing to allow the tenant farmer to cultivate for a longer period of time, why are the states saying that it should be three years or six years? The owner and the tenant should be left to decide if the lease is for 10 years, or 20 years.
There are good examples also. Uttarakhand with its new law allows the leases to last for a maximum of 30 years, which is very reasonable.
If the government is not involved, do you not think it leaves a chance for financial exploitation of the tenant?
The chances of a tenant being financially exploited are very low. I do not think that the government protects the tenants, anyway. There are fair chances that if a tenant is going to a revenue officer to seek help, he would end up losing more money in bribes. The lesser the dependency on government bodies for this kind of contract, the better the chances of the contract being honoured by both the tenant and the owner.
In fact, if any such issue arises, we suggested that the gram panchayat (village council) should solve these amicably because the panchayat knows the reality about the land, the crop and the people involved.
Why do you think land redistribution has failed?
Out of the 5.1 million acres of land redistributed, about 21% is in West Bengal alone. Also, 60% of the total number of beneficiaries who received land in redistribution are in the state of West Bengal. So, West Bengal is actually the only state which, somewhat successfully, implemented the land ceiling and redistribution laws. Bihar also took some steps but all other big states like Maharashtra, Madhya Pradesh and Uttar Pradesh failed in redistribution of land.
This is partly because in the past when the time was right, the state governments did not have the willpower to do it and the committed bureaucracy was not there. Another reason was that Jammu and Kashmir and Bihar implemented land ceiling laws along with laws abolishing intermediaries as early as the 1950s, but all the other states implemented these laws very late, in the 1960s and 1970s. By that time all the landlords were alert and had transferred their land under different names, which became a reason for the failure of land reforms in many states.
If we talk about the present scenario of land reforms in the country, the situation is not really good: nearly two lakh hectares of land–together comprising an area larger than Delhi–are under prolonged litigation, so unless this land is free, there is no hope. Currently there is only one state, West Bengal, which is still redistributing small chunks of land to the landless, but nothing is happening in any other Indian state.
On the one hand, 101.4 million–or 56.4%–rural households own no agricultural land and on the other, redistribution of land is failing. What could be the solution?
The model tenancy act will prove to be really helpful if implemented by states. The leasing act will improve landless poor people’s access to land. It will help small and marginal farmers to increase the size of their holdings.
Currently, the landless are not getting any land under most state governments’ land reforms, so if they at least make the leasing formal and legal, the landless would be enabled to access the land with a secure contract. This is the only hope, as of today, and will certainly help landless people improve their economic condition.
More than 50% of India’s workforce is still involved in agriculture with low levels of living and low levels of income. They are stuck in a poverty trap. Once this legal framework of leasing is implemented by all the states, we will see a big transformative change in the agriculture sector.
A 2017 study by the think-tank Global Land Alliance found that nearly one in five rural persons having a separate plot of agricultural land are worried about losing the land, and that tenants are twice as likely as owners to be worried about losing their home. What steps should the country take to make people feel secure about their property rights? Would digitization of land documents help?
If states legalise tenancy, it will really help in addressing the fear among owners and tenants of losing their land. The model land leasing act protects the proprietorship of the owner but at the same time provides tenure-related security to the tenant.
The second thing that India needs to do is to move away from presumptuous land titles. Currently, all the land registrations in India are registrations of deeds, these are not proof that you are the actual owner of the land which is registered in your name; it can be contested, causing a dispute. But under conclusive land titles, once the registration takes place the curtain falls, the land is yours, and it cannot be contested by another person. [In the Indian system, land ownership is presumptive. Currently, under the Transfer of Property Act, 1882, the right or title to land can be transferred or sold only through a registered document (registered under the Registration Act, 1908). The registration of land or property therefore refers to the registration of the transaction (“sale deed”), and not the land title. Therefore, a registered sale deed is not a government guarantee of land ownership; even bona fide property transactions may not always guarantee ownership as a previous transfer of the property could be challenged. The onus of verifying past ownership records is on the buyer, and not the registrar.]
But for India to assure conclusive land titles, it will have to amend a couple of laws. The Registration Act and the Indian Evidence Act [which contains rules for providing evidence in court] will have to be amended on priority. But unless two or more states request the central government, it cannot do that because land is a state subject.
Continuously updating land records, their digitization, followed by conclusive land titles should take care of the fear that Indian landowners have today.
Some 13.65% of India’s farm households–one in seven–were tenants, according to a 2013 National Sample Survey Office (NSSO) study. This implies there were 21.29 million tenant-farmers cultivating about 10.66 million hectares of land in 2012-13, as per a February 2018 study by Bhubaneshwar-based Center For Land Governance. The Agriculture Census 2010-11, on the contrary, states that 2.39% of farmers take land on lease for cultivation. Which data set shows the true picture and why is there so much difference?
The difference in the data is because of two primary reasons. Agriculture data does not present correct data on tenancy because it is based on land records. Since tenancy is not recorded, it is not fairly represented in the agriculture census data. NSSO data is based on household surveys. Someone physically goes to individual households to collect information, hence there is comparatively better representation of tenancy. But it may also not be the complete picture because due to tenancy being an illegal activity in many states, people will not reveal if they have informally leased land to cultivate.
(Tripathi is a principal correspondent with IndiaSpend.)
We welcome feedback. Please write to respond@indiaspend.org. We reserve the right to edit responses for language and grammar.
These protests are signs of an agrarian crisis: Farmers are stuck in a cycle of low returns, debt–and, often, death–at a time of increasingly uncertain weather. In a year to June 2013, 70% of Indian farm families reported having spent more than they had earned; and more than 52% said they were indebted and health costs were adding to their debt, IndiaSpend reported on June 27, 2017. In five years to 2015-16, real farm income per cultivator increased only 0.44% per year, our report of July 18, 2017 showed.
Of the issues driving down the country’s farm sector, tenancy is one of the foremost. An age-old, widespread practice in India, tenancy usually involves a landless farmer or holder of a small piece of land leasing land for cultivation. However, since the landlord is typically wealthier and more powerful, the practice is often exploitative, and has been the target of land reforms since Independence. Although tenancy was abolished or restricted in most states during the 1950s and 1960s, state government failed to redistribute land among the landless. Despite land ceiling drives, tenancy continued to grow covertly and informally, leaving tenants vulnerable.
In 2016, NITI Aayog, the policy think-tank of the Government of India, proposed a Model Agricultural Land Leasing Act, which aimed to “liberalize” the country’s tenancy system, arguing that it would actually benefit small farmers and improve the country’s agricultural productivity. Many states have framed laws on the lines of this model, which was drafted by NITI Aayog’s special cell on land policy headed by Tajamul Haque, a former chairperson of the Commission for Agricultural Costs and Prices, former professor at the National Centre for Agricultural Economics & Policy Research, and ex-director of the National Institute of Rural Development. In an interview with IndiaSpend, Haque discussed the model law and how its implementation can benefit all stakeholders.
What does the Model Agricultural Land Leasing Act prescribe? How would it help tenants?
The model law is intended to liberalise and legalise the land leasing system in the country. Most of the states passed their tenancy laws in the ‘60s and ‘70s, which were highly restrictive. Some of the states banned leasing altogether. For instance, Kerala and Jammu and Kashmir do not allow land leasing. Other states like Bihar, Uttar Pradesh, Chhattisgarh, Karnataka and Himachal Pradesh allow only certain categories of people to give land on lease, for example the disabled, widow, minors, etc. Karnataka does not even allow these categories of people to lease out their land, the state only allowed people in services for instance: soldiers to lease their land.
In Andhra Pradesh, Punjab, Haryana and Gujarat, the governments have not banned leasing but at the same time, there are certain provisions in these states which make the option of leasing as good as prohibited. For example, in Andhra Pradesh, if an owner wants to end leasing and take the land from the tenant for personal cultivation, then the owner will have to leave at least 50% of the land with the tenant. Now, no owner would want to lease the land with these restrictions. Similarly, some states prescribe that if a tenant has been cultivating the land for more than the prescribed period of time, the tenant then has the right to occupy the land. The Zamindari Abolition Act of Uttar Pradesh [intended to remove an oppressive land-leasing system], for instance, also had a possession clause which said that if a tenant continued to cultivate a piece of land for over 12 years, s/he would be eligible to occupy that land. These clauses instill a fear in the owner’s mind against the leasing of land.
As a result, people let their land remain fallow, which affects the agricultural productivity of the country. Currently, 25 million hectares of land in the country are lying fallow largely because owners are not leasing them out due to restrictive clauses. If you assume that one hectare produces two tonnes of grain, with 25 million hectares lying fallow, the country is losing 50 million tonnes of grain.
So with the model land leasing act, we tried to remove all these restrictions. If an owner, out of lack of interest, lack of money to invest or other reasons, does not want to cultivate the land, s/he can choose to lease it out to some landless cultivator and benefit from the rent rather than keeping the land fallow for fear of losing it.
The tenant and the owner can mutually agree upon the rent and period of leasing and come up with a written contract, which should be attested by a person in a position of responsibility–such as the gram pradhan (village head), an advocate or a revenue officer–to make the leasing legal. They need not go to any revenue office or administrative department.
This formal signed document will do two things; first, it will assure the owner that the land is safe. Second, it will make a tenant-farmer eligible for government subsidies, insurance, disaster relief and credit schemes, because for the first time the tenant will have a document to prove that s/he is cultivating the land.
Tenant farmers have long been denied the right to even sell their farm produce in government agricultural produce markets where they can get better prices; they have to go through intermediaries and end up losing a lot of their profits. Now, if tenancy is legalized through a contract, the tenant farmer would be able to sell in these markets.
The model land leasing law, if applied, will not only help increase the income and productivity of tenant farmers’ land significantly, it will also help overall agricultural growth while helping the government double farmers’ income.
How many states have adopted the model law or amended their land laws on the lines of the model law?
Uttarakhand and Uttar Pradesh have amended their land laws. Uttarakhand has done it quite comprehensively, whereas Uttar Pradesh has just deleted the clause which allowed the tenant to occupy land after operating on it for more than 12 years. It has also included a range of people–business people, traders, people in services, members of legislative assembly or parliament–who would now be eligible to lease out their land along with the disabled. It is a big relief, but there is one thing they should not have done, which is prescribing a maximum lease period of three years. It should have been left for the owner to decide.
Madhya Pradesh and Maharashtra have passed a new law on the lines of our model law. They have also added a penalty clause that if the tenant does not return the land after the lease period is over, s/he could be punished with imprisonment.
Would these formal leases have to be recorded with a government agency/department?
In our model law, we said the agreement between the tenant and the owner need not be recorded or registered with the revenue department; that would make the process complex. It also becomes a cause for fear in the owner’s head that their land is registered in revenue records under a lease and tomorrow a new law could come and prescribe that the tenant would have right over the land.
Hence, we suggested that the agreement be a simple written document attested by a person in a position of responsibility, for example the gram pradhan (village head), an advocate or a revenue officer. The government does not need to interfere. This document alone would be enough to make the lease formal and legal.
Once the period of the lease is over, the land will by default go back into the owner’s possession. Nobody needs to go to any office to take possession back.
Now, some states are prescribing the timeline of leases between three and six years, but that is not the correct way to do it. You see, if a tenant farmer is cultivating horticulture crops such as fruit, it could take more than a decade for the crop to be completely ready. Now, if the owner is willing to allow the tenant farmer to cultivate for a longer period of time, why are the states saying that it should be three years or six years? The owner and the tenant should be left to decide if the lease is for 10 years, or 20 years.
There are good examples also. Uttarakhand with its new law allows the leases to last for a maximum of 30 years, which is very reasonable.
If the government is not involved, do you not think it leaves a chance for financial exploitation of the tenant?
The chances of a tenant being financially exploited are very low. I do not think that the government protects the tenants, anyway. There are fair chances that if a tenant is going to a revenue officer to seek help, he would end up losing more money in bribes. The lesser the dependency on government bodies for this kind of contract, the better the chances of the contract being honoured by both the tenant and the owner.
In fact, if any such issue arises, we suggested that the gram panchayat (village council) should solve these amicably because the panchayat knows the reality about the land, the crop and the people involved.
Why do you think land redistribution has failed?
Out of the 5.1 million acres of land redistributed, about 21% is in West Bengal alone. Also, 60% of the total number of beneficiaries who received land in redistribution are in the state of West Bengal. So, West Bengal is actually the only state which, somewhat successfully, implemented the land ceiling and redistribution laws. Bihar also took some steps but all other big states like Maharashtra, Madhya Pradesh and Uttar Pradesh failed in redistribution of land.
This is partly because in the past when the time was right, the state governments did not have the willpower to do it and the committed bureaucracy was not there. Another reason was that Jammu and Kashmir and Bihar implemented land ceiling laws along with laws abolishing intermediaries as early as the 1950s, but all the other states implemented these laws very late, in the 1960s and 1970s. By that time all the landlords were alert and had transferred their land under different names, which became a reason for the failure of land reforms in many states.
If we talk about the present scenario of land reforms in the country, the situation is not really good: nearly two lakh hectares of land–together comprising an area larger than Delhi–are under prolonged litigation, so unless this land is free, there is no hope. Currently there is only one state, West Bengal, which is still redistributing small chunks of land to the landless, but nothing is happening in any other Indian state.
On the one hand, 101.4 million–or 56.4%–rural households own no agricultural land and on the other, redistribution of land is failing. What could be the solution?
The model tenancy act will prove to be really helpful if implemented by states. The leasing act will improve landless poor people’s access to land. It will help small and marginal farmers to increase the size of their holdings.
Currently, the landless are not getting any land under most state governments’ land reforms, so if they at least make the leasing formal and legal, the landless would be enabled to access the land with a secure contract. This is the only hope, as of today, and will certainly help landless people improve their economic condition.
More than 50% of India’s workforce is still involved in agriculture with low levels of living and low levels of income. They are stuck in a poverty trap. Once this legal framework of leasing is implemented by all the states, we will see a big transformative change in the agriculture sector.
A 2017 study by the think-tank Global Land Alliance found that nearly one in five rural persons having a separate plot of agricultural land are worried about losing the land, and that tenants are twice as likely as owners to be worried about losing their home. What steps should the country take to make people feel secure about their property rights? Would digitization of land documents help?
If states legalise tenancy, it will really help in addressing the fear among owners and tenants of losing their land. The model land leasing act protects the proprietorship of the owner but at the same time provides tenure-related security to the tenant.
The second thing that India needs to do is to move away from presumptuous land titles. Currently, all the land registrations in India are registrations of deeds, these are not proof that you are the actual owner of the land which is registered in your name; it can be contested, causing a dispute. But under conclusive land titles, once the registration takes place the curtain falls, the land is yours, and it cannot be contested by another person. [In the Indian system, land ownership is presumptive. Currently, under the Transfer of Property Act, 1882, the right or title to land can be transferred or sold only through a registered document (registered under the Registration Act, 1908). The registration of land or property therefore refers to the registration of the transaction (“sale deed”), and not the land title. Therefore, a registered sale deed is not a government guarantee of land ownership; even bona fide property transactions may not always guarantee ownership as a previous transfer of the property could be challenged. The onus of verifying past ownership records is on the buyer, and not the registrar.]
But for India to assure conclusive land titles, it will have to amend a couple of laws. The Registration Act and the Indian Evidence Act [which contains rules for providing evidence in court] will have to be amended on priority. But unless two or more states request the central government, it cannot do that because land is a state subject.
Continuously updating land records, their digitization, followed by conclusive land titles should take care of the fear that Indian landowners have today.
Some 13.65% of India’s farm households–one in seven–were tenants, according to a 2013 National Sample Survey Office (NSSO) study. This implies there were 21.29 million tenant-farmers cultivating about 10.66 million hectares of land in 2012-13, as per a February 2018 study by Bhubaneshwar-based Center For Land Governance. The Agriculture Census 2010-11, on the contrary, states that 2.39% of farmers take land on lease for cultivation. Which data set shows the true picture and why is there so much difference?
The difference in the data is because of two primary reasons. Agriculture data does not present correct data on tenancy because it is based on land records. Since tenancy is not recorded, it is not fairly represented in the agriculture census data. NSSO data is based on household surveys. Someone physically goes to individual households to collect information, hence there is comparatively better representation of tenancy. But it may also not be the complete picture because due to tenancy being an illegal activity in many states, people will not reveal if they have informally leased land to cultivate.
(Tripathi is a principal correspondent with IndiaSpend.)
We welcome feedback. Please write to respond@indiaspend.org. We reserve the right to edit responses for language and grammar.
Reports of severe agrarian distress have been pouring in from across the country. Credit: Surya Sen / CSE
In absolute terms, the monthly income of an average agri-household hovered around Rs 6426 in 2012-13. Expectedly it was lower for small and marginal farmers. However, there is a wide variation in CAGR of real incomes across states. Odisha registered the highest CAGR growth of 8.7% in real incomes of agri-households, followed by Haryana (7.8%), Rajasthan (7.5%) and Andhra Pradesh (6.3%). The worst performers were West Bengal (-0.7%), Bihar (-0.1%) and Uttarakhand (-3.0%) with an absolute decline in the real incomes of agri-households.
It may be noted that actual profitability over cost (C2) is available from Government of India (GoI) data only up to 2014-15. There is normally a lag of two to three years before one can hope to get actual numbers from 2015-17 from GoI sources. However, one can use the projected costs as calculated by CACP for their MSP calculations, and look at the market prices of those crops at harvest time in major states to get an idea of profitability of major crops in 2016 and 2017. This is what is attempted below. Actual market prices are obtained by taking an average of major mandi prices of the largest producing states and compared with projected costs as derived by CACP. The results of major kharif crops for the season 2016-17 and 2017-18 are presented in Figure 3.
Falling crop profitability since the NDA government took charge in May 2014 is appalling and should serve as a wake-up call. This is also reflected in the overall agri-GDP tumbling down from about 4% in the last three years of the UPA II government to 1.8% in the first three years of NDA rule. Even including 2017-18, the performance of agriculture GDP under four years of the Modi government may turn out to be just 2%. These facts, based on government data, indicate that most likely, under a BAU scenario, the dream of doubling real incomes of farmers by 2022 remains a chimera. But nevertheless there are still a wide range of opportunities available which can help augment farmers’ incomes, if not double them by 2022. But, can we achieve that by cutting down urea consumption by half by 2022? That’s a big challenge which we take up next.Figure 3 clearly shows that farmers producing kharif crops suffered huge losses, especially in kharif 2017. No wonder, farmer agitations are on an increase and even the government realizes that farm distress is severe.
Regressing profitability (over A2 cost) on Fertilizer ConsumptionThe big question is whether the Modi government can achieve the twin objectives of simultaneously doubling farmers’ incomes and halving urea consumption by 2022. In order to better understand this issue, we have tried to look at the relationship between crop profitability and fertilizer consumption. For this, we have estimated year wise profitability (Rs/ha) at constant prices (with 2011-12 prices as base) and regressed it over fertilizer consumption per ha. We pooled the data for major crops (paddy, wheat, cotton, rapeseed-mustard, and sugarcane) and their major producing states, over the three years. In total, we had 75 observations and we ran the regression in log form. The results are as given below:
So, is the PM’s call for halving urea consumption by 2022 achievable and is it consistent with the goal of doubling farmers’ income? In 1992-93, when India’s urea consumption was about half of its current levels, paddy and wheat productivity levels were 38% and 33% lower compared to those in 2015-16. Does it mean that in case of halving urea consumption by 2022, GoI is ready to accept substantially lower yields of paddy and wheat, or is there a special strategy to keep the yields high and rising while reducing urea consumption by half? In our view, with a growing population and limited arable land, there will be tremendous pressure to raise productivity of rice and wheat, and for that urea consumption is likely to increase unless some drastic measures and alternative strategy are put in place.
“India’s dairy industry is worth Rs 5.4 trillion by value, having grown at 15 per cent CAGR during 2010-16. Going ahead, the dairy industry is expected to maintain 15 per cent CAGR over 2016-20, and attain value of Rs 9.4 trillion on rising consumerism,” said in a report