Crisis of Indian Agriculture and its Resolution

Agriculture is essential for feeding the population of our country. It is a major economic activity on which crores of peasants and agricultural workers depend for their livelihood. However, in India today, agriculture is neither ensuring adequate nutritious food for the population nor providing secure livelihood to those engaged in producing the food. The crisis of agriculture is endangering the Indian society as a whole.

All-round Crisis

For the working class and other toiling people who buy food from retail shops, prices have shot up very steeply in recent times (Table 1). This has squeezed their consumption levels. The steep rise in the prices of pulses, meat and fish have led to further reduction in the already low level of protein consumption by crores of people in our country.

Table 1: Steep Rise in Food Prices

Percentage Increase in Retail Prices

August 2021 to August 2022

Vegetables

187%

Fruits

173%

Spices

194%

Meat and Fish

206%

Oils and Fats

192%

July 2022 to August 2022

Tur Dal

10-20%

Urad Dal

25-45%

The producers of food include peasants and hired workers engaged in cultivating crops, fishing, rearing animals and producing milk, eggs and meat. Incomes from crop cultivation has been on a declining trend for many years now, forcing crores of kisan families to depend on wage income for survival (Table 2). The reality is diametrically opposed to the claims of the Central Government to be committed to the doubling of agricultural incomes.

Table 2: Average Monthly Income of Agricultural Households in India /*/

Wages Cultivation Livestock Other Total
All-India in 2012-13 2071 3081 762 512 6426
All-India in 2018-19 4063 3798 1582 775 10218
Inflation in Rural CPI: 2012-18 40% 40% 40% 40% 40%
Real Increase in Income 40% -12% 48% 8% 14%
* Agricultural household = Household with at least one member engaged in agricultural and allied activities.
Source: National Sample Survey Organisation, Situation Assessment Survey, 2018-19 & 2012-13

Incomes from crop cultivation decline not only when there is a drought, flood or pest attack. They decline even when there is a bumper crop because the prices they receive for their produce end up being less than the costs they have incurred in production. The production costs that peasants incur have been rising steeply because of sharp increases in input prices. Falling incomes have driven a majority of peasants into unbearable levels of indebtedness.

More than half of India’s agricultural households were in debt in 2018-19, with an average outstanding debt of Rs 74,121, which is more than seven months’ average income. The average level of debt in 2018-19 was 57 per cent higher than it was six years earlier. Rising indebtedness has been driving thousands of peasants to suicide year after year.

Capitalist Orientation

During the past 75 years, the ruling class has persisted with the capital-centred orientation of the economy, established by the British colonialists. The development of agriculture has been driven by the motive of capitalists to maximise their profits, not by the need to provide nutritious food for all or the need to ensure secure livelihood to the tillers.

The land reforms in the 1950s and 1960s were carried out with the objective of paving the way for capitalist and commercial farming, which began to grow with the launching of the Green Revolution in 1965, with technical and financial aid from the World Bank.

The Green Revolution was launched with the aim of creating a buffer stock of food grains in the hands of the government, so as to end India’s dependence of foreign food aid. It was a program to induce farmers in selected irrigated regions to plant wheat and paddy seeds produced in laboratories, along with a particular mix of chemical fertilisers and pesticides, to achieve high yields on medium and large plots of land.

The Green Revolution resulted in skewed cropping patterns that have had very harmful consequences on the long-term viability of agriculture (See Box A).

Box A: On the distorted cropping pattern in Punjab

Who is Responsible and What is to be Done?

Cultivation of paddy on more than 30 lakh hectares of land has led to a crisis of declining groundwater table in large parts of Punjab. It is also true that monocropping, which means the cultivation of one and the same crop, year after year, with high intensity of chemical fertilisers, has resulted in a decline in the fertility of the soil.

The kisans of Punjab are aware of these problems. However, they are not the ones responsible for adopting the present skewed cropping pattern. It was the Central Government which selected Punjab as an important centre of the Green Revolution more than 50 years ago. The Central Government promoted wholesale planting of high-yielding varieties of wheat and paddy seeds in Punjab, backed by guaranteed public procurement at remunerative prices.

Agricultural scientists point out that shifting away from paddy cultivation to less water-intensive crops such as maize, cotton and certain fruits will be in the long-term interests of agriculture and the kisans of Punjab. An essential condition for achieving such a shift in the cropping pattern is to organise public procurement of all those desirable crops at assured remunerative prices.

The Green Revolution resulted in a minority of capitalist farmers in selected regions experiencing some prosperity for some years. On the other hand, lakhs of peasants toiling on small plots of land became poorer and were driven to ruin as a result of the development of capitalist agriculture.

Globalisation and Agricultural Trade Liberalisation

The past 30 years have witnessed agriculture being increasingly integrated with the global market. Lifting of quantitative restrictions on imports, reduction of import duties, cutback in food subsidy, in line with the prescriptions of the World Trade Organisation (WTO), have led to further distortion of cropping patterns. It has led to extreme insecurity in the prices received by kisans for their products.

Giant-sized monopoly companies, Indian and foreign, have gained controlling shares in the supply of seeds, fertilisers, pesticides, animal feed and other agricultural inputs. These include Cargill, Monsanto, Zuari Agro (Birla group), Tata Chemicals, Godrej Agrovet, Brittania (Wadia group) and Rallis India (Tata group).

Reduction in the role of the state in agricultural procurement has been accompanied by the rapid growth of private monopoly companies in this sphere as well. These include Walmart and Amazon. They include companies owned by the Tatas, Mukesh Ambani group, Aditya Birla and Adani groups.

Export-oriented contract farming has led to a rising share of land being allocated to produce sunflower, soyabean, gherkins, etc. Production of pulses has continued to lag far behind the amount required to provide a nutritious diet for all Indians.

Agricultural trade liberalisation is the agenda of the monopoly corporate houses.  It is based on the fraudulent theory that permitting “free competition” in the market place will benefit both sellers and buyers of goods and services.

The idea of a market free from any state regulation belongs to the 19th century, when capitalism had not yet developed to its monopolistic stage.  At that time, commodity markets were characterised by competition among large numbers of sellers and buyers, each of whom had such a tiny market share that he or she could not exert any influence on the prices of commodities.  The nature of markets changed in the 20th century, with the rise of giant monopoly companies commanding the lion’s share of the market for most commodities.

The market for agricultural products in our country presently has more than 10 crore cultivators selling to less than 2 lakh traders.  The relation between buyers and sellers in agricultural markets is getting more and more unequal as giant-sized capitalist corporations expand their share of the market. Reliance Retail, Aditya Birla Retail, Tata’s Star India, Adani Wilmar, Big Bazaar and D-Mart are bound to drive the majority of smaller traders out of business. 

Far from benefiting both sellers and buyers, liberalisation only benefits the monopoly capitalist companies which are out to control food supply. Once they gain a controlling share, they will be able to dictate the prices received by peasants as well as to hoard agricultural products and sell them at high retail prices.

In sum, the life experience of the past 75 years shows that the capitalist path of economic development can neither guarantee food security nor guarantee secure livelihood to the producers of food. Capitalist growth, led and dominated by the monopoly houses, is the root cause of the crisis of Indian agriculture

Resolution of the Crisis

The resolution of the crisis requires a complete reorientation of agriculture, as an essential component of the reorientation of the entire economy. From being driven by the motive of capitalists to maximise their profits, agriculture must be reoriented to fulfil the need to ensure a healthy diet for the population and the need to ensure secure livelihood and prosperity for the peasants and agricultural workers.

Production, storage and distribution of food cannot be left to the “market forces”, which means to be driven by the greed of monopoly capitalists for maximum profits. Production, storage and distribution of food must be brought under social control and carried out according to an overall plan.

The Indian state, including the central and state governments, must take responsibility to create a public procurement system covering all food and non-food crops. Peasants must be guaranteed reliable supply of agricultural inputs at their true values, not at monopoly prices. This requires state control over input supply, taking over the assets of private monopoly companies in this sphere.

Public agencies must purchase the major part of agricultural products, at pre-announced remunerative prices. This is absolutely necessary in order to prevent private traders from looting the peasants.

The public procurement system must be linked to a public distribution system geared to ensure the availability of all essential consumption goods at affordable prices for all.

The main roadblock to the resolution of the crisis is the drive of monopoly capitalists to control food supply. The crisis will not get resolved as long as monopoly capitalists control the state machinery and use elections to get one or another of their trusted parties to form the government.

In the course of waging the struggle for their immediate demands, workers and peasants have to build unity around the program to resolve the crisis of agriculture and of the whole of Indian society. They have to become a political force capable of determining India’s destiny. Workers’ and peasants’ rule will open the path for lifting agriculture and all of society out of crisis.

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