Transforming agriculture

Published : Apr 25, 2003 00:00 IST

The Amarinder Singh government has drawn up an ambitious road-map to change the face of agriculture in the State, even as the farm sector seeks to come to terms with the changing realities in the field.

ASK anyone for the images that they associate most with Punjab, and the answers will most likely be green fields and sprawling farms, tractors and combine harvesters, canals and tube wells. The reasons are not hard to find. Ever since the Green Revolution transformed agriculture in Punjab some three decades ago, the State has become an icon of rural prosperity. Although the State constitutes just 1.5 per cent of India's geographical area, it produced 21 per cent of the country's wheat and 10 per cent of its rice at the turn of the decade. Half of the Central government's foodgrain pool of rice is made up of Punjab produce, as is 70 per cent of the pool of wheat. Last summer, when much of the country was devastated by the worst drought in decades, Punjab's rural infrastructure enabled its farmers to beat the odds and produce a record harvest.

But a closer look at India's agricultural heartland suggests that all is not quite as happy as most people would imagine. Farmers have accumulated massive debts, estimated at between Rs.5,700 crores and Rs.6,000 crores, as a consequence of the growing cost of farm inputs such as fertilizers, machinery and power. Some of the problems are short-term ones. Punjab's drought-year performance, for example, came with high production costs, and farmers, pushed to the wall, have been protesting against efforts by banks to repossess assets pledged to gain loans.

But agriculture in the State faces structural problems. The growth of farm yields is plateauing. In some areas groundwater depletion has led to serious concerns about the sustainability of water-intensive crops such as paddy and sugarcane. Worst of all, the shrinking of the Central government-run public food security programme, as well as the growing ability of States such as Andhra Pradesh and West Bengal, to meet their own foodgrain needs, has led to a decline in demand for Punjab's produce.

Many of these problems have been evident for years, but the previous Shiromani Akali Dal-Bharatiya Janata Party coalition government did little to address them. Handouts like free power supply for farmers were used to deflect attention from the real issues. Now the new government led by Chief Minister Amarinder Singh has drawn up an ambitious road-map to change the face of agriculture in Punjab. It seeks to move farmers away from the rice-wheat two-crop pattern that accounts for an estimated 90 per cent of agricultural land use in Punjab, and to replace them with high-value commercial crops. This year alone, up to 400,000 acres (about 160,000 hectares) will be sown with maize, oilseeds, vegetables, fruit and export-quality basmati rice. Under the new scheme, the Punjab Agro Foods Corporation (PAFC) has entered into contracts with farmers to purchase their produce, guaranteeing returns of up to Rs.30,000 to Rs.40,000 an acre for the new crops. The PAFC has, in turn, tied up with private companies that will provide quality seeds and technical know-how to farmers, and will buy back the produce it acquires. In what is considered a major achievement of the Punjab government, the PAFC has been declared the procurement agency for the State-run National Agricultural Cooperative Marketing Federation of India Limited (Nafed), which is among the biggest such organisations in Asia. Nafed has contracted the PAFC to procure oilseeds and pulses from Punjab at the minimum support price (MSP) mandated by the Union government. The market price of oilseeds and pulses generally remain above the MSP; but should it fall, the PAFC will now be able to provide a cushion to farmers.

The PAFC is also looking to introduce new crops to Punjab. The `Guwara' seed, from which export-quality gum is produced, is to be grown in the Bhatinda region, along with `Rattan Jot', from which a diesel substitute can be extracted. Markfed, the Punjab agricultural marketing cooperative, has agreed to prepare high-quality cooking oil targeted at health-conscious consumers from the `Hyola' variety of rapeseed. Castor Durum wheat cultivation is to be encouraged to meet the regional demand.

Punjab is looking aggressively for markets outside India for its high-value products. On January 19, Chief Minister Amarinder Singh flagged off a million-tonne consignment of vegetables to Dubai. This was the first of a series of exports of winter vegetables such as iceberg lettuce, broccoli, Chinese cabbage, cabbage, cauliflower, cherry tomatoes, zucchini, squash, parsley and carrot produced by Punjab farmers and contracted through the Punjab State Fruit Federation. Markfed has since been sending four consignments of vegetables a week to a supermarket chain in Dubai, generating business worth Rs.1 lakh a day. Markfed has orders for the supply of 5,000 tonnes of onion, 2,000 tonnes of turmeric and 5 tonnes of vegetables to countries of West Asia and to Sri Lanka. Dubai and Sri Lanka have committed to purchasing Rs.13 crores worth of potatoes, while negotiations are on with the soft-drink giant PepsiCo for the introduction of citrus fruits for the extraction of juice for export.

There is little doubt that Punjab has the base needed to make its presence felt internationally. Officials from Punjab recently met Sri Lanka's Agriculture Minister S.B. Dissanayake, asking him to consider a proposal to replace Holland as its source of seed potatoes. Punjab has a Rs.900-crore seed potato industry, and supplies States across India. Similarly, although India is the fourth largest producer of potatoes, its exports account for only 0.1 per cent of the world trade in potatoes. If organisations like Markfed succeed in penetrating the international markets, farmers in Punjab will benefit considerably. Although potatoes require high levels of inputs, a rupee invested in the crop generates a return of Rs.1.40. Since yields per unit of land are high, and the crop matures in under a hundred days, farmers benefit considerably. Punjab is also working on expanding its exports of turmeric and onion. The State grows 147,000 tonnes of onions on 6,855 ha in Patiala, Bhatinda, Ludhiana, Sangrur, Ropar and Moga. Officials are seeking to set up plants to process turmeric and onion; a dearth of such plants had proved to be a major impediment to the expansion of these crops.

Efforts are under way to bring about a dramatic expansion in milk production, which has been relatively stagnant for several years. Semen from high-quality animals that is now being imported into the State to upgrade the quality of livestock is expected to lead to a doubling of the average per-animal yield of milk from 2,500 litres. Under a government plan, one village in each administrative block in the State will be developed as an `Adarsh Gram', or model village. Each of these will be provided comprehensive veterinary support and services, allowing them to upgrade livestock productivity and the quality of milk and milk products. The Adarsh Gram scheme, officials hope, will broaden public awareness about the potential of commercial dairy farming, and bring about a dispersion of scientific skills and methods. Despite Punjab's considerable livestock resources and its well-established tradition of dairying, it has yet to emerge as a major centre of commercial milk production. Improvements in livestock resources and yields, State government officials hope, will encourage diary industries to establish a significant presence in Punjab.

Union government officials are considering Punjab's demand for a Rs.1,280-crore grant to support its diversification plans. Should the funds come through, it will become possible to expand the diversification scheme that is now in place to cover over 20 lakh hectares.

Yet the diversification scheme in itself is unlikely to yield optimum results without the forging of forward linkages from the countryside to industry. Analysis of credit-deposit patterns in Punjab shows that considerable surplus funds from the State are invested elsewhere in the country. The bulk of these funds are drawn from surpluses generated by agriculture. Incentives need to be provided in order to retain these funds in rural Punjab, and to push them into fuelling industrial development in rural areas. There is also a need for Central support for public investment in agriculture, which has declined in recent years. Perhaps most important, ways need to be found to insulate vulnerable farmers from the vagaries of the international marketplace. Prices of agricultural commodities can fluctuate wildly, and farmers can find themselves saddled with expensive-to-cultivate produce whose value has suddenly plummeted - as farmers in countries as diverse as Argentina and Thailand have discovered.

Punjab believes that it has no option but to take the risks that exposure to the international marketplace entail. Declining Central support for agriculture makes current patterns of production unsustainable, and farmers must find new ways to keep their lands viable. Punjab's infrastructure investment in the agricultural sector should assist them. For example, although the State government has withdrawn the supply of power free of cost, it has succeeded in ensuring a minimum of 10 hours of power supply despite drought-related shortages. Special export zones for basmati rice and potatoes are operational, and more centres for wheat and honey are due to go online soon. Farmers across India will be watching Punjab closely to see how its experiment in dealing with changing times fares.

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