Punjab's farm crisis and the way out, says Amarjit Grewal

Editor’s Note: This write-up is an abridged version of a proposal prepared by the author as a part of his idea of rural reconstruction of Punjab. He can be reached for details at grewal52@gmail.com

Experts have been recommending a paradigm shift in Punjab’s agriculture. A fierce debate generated over enactment of three farm laws has made all- policy makers to technocrats to consumer- to pause and think. Let’s translate the prevailing crisis into an opportunity for creating a new paradigm wherein farming rediscovers itself as agri-business through value addition, brand building and marketing.

The concept basically rests on the premise that promotes farmer as an entrepreneur; every rural household as a business house and every village/cluster as a brand so that only value added products get marketed. To begin with such models may be developed in a few villages in the state’s different regions for showcasing and adoption. Such a step accompanied by a few short term measures can help tide over and diffuse the current situation.

It is proposed that a Centre for Rural Reconstruction of Punjab may be established to implement long term strategy proposed here with a view to increase farmers’ income threefold in two years in adopted villages, thereby making agriculture more sustainable and profitable as well as generate employment in rural areas.

The Approach

A total of 20 villages, in a cluster of 3-5 villages each – having a potential of catering to maximum niches, technical interventions and larger markets – will be selected in which the work will be carried out in a participatory mode. Adopting a multi-pronged strategy, need-based, niche-specific intervention will be made according to the broader premise of the proposal. A large number of the required agricultural technologies have already been recommended and need to be collated. Simultaneously, skill development initiatives will be undertaken to enhance the employability of youth and address emerging socio-economic challenges.

An extensive mapping of Punjab has revealed that a number of niche areas of high value crops/commodities and products can be developed in each region. These include organic farming, kinnow, guava, grapes, basmati, corn, pulses, vegetables, floriculture, herbs and medicinal plants, seed production, gur, mushrooms, beekeeping, poultry, goat rearing, dairy, value added milk, wheat and corn products, etc.

Region specific crops and subsidiary occupations will be selected to develop end to end value chains in the selected villages.

Processing and Value Addition:

It has been estimated that around 95 per cent of the sale of fresh produce happens through traditional value chains (Pandey et al, 2010) wherein different stakeholders of the value chain namely, farmers, wholesalers, processors, retailers, etc work more or less in isolation. The concepts of collaborative demand forecasting and production planning in the back-end with information sharing is missing in these value chains leading to a multitude of inefficiencies in the system.

Various studies show that farmers get only 35-40 per cent of the retail price paid by consumers and rest is retained by the middlemen. In the case of fruits and vegetables, there is around 40 per cent due to lack of proper storage, handling and processing facilities marketing channels. Further, larger losses are incurred in less developed value chains, especially those of perishable commodities

As of now, the agro industry in Punjab leans more towards conventional grain processing like rice milling, flour mills, oil mills and cotton ginning. Plants set up by PAGREXCO have the capacity for processing and de-bittering “C” & “D” grade Kinnows. These units have the have the capacity to extract juices of other fruits and vegetables such as, tomato, carrots, pomegranate, papaya, guava, pears, pumpkins, melons, gourds, mangoes, litchis, amla, aloe vera etc but are not much used for the purpose. The processing of horticultural produce is limited to the traditional pickles, chutney, murabbas, etc. Since the production of fruits and vegetables in the state is characterized by short harvesting seasons and high productivity, the viability of processing plants handling only one type or variety of fruits/vegetables gets limited, ultimately becoming uneconomical.

Lab Testing and Grading Facilities:

Government and private agencies should provide lab testing and grading facilities. These two activities add tremendous value to products. Also, finance and insurance are very important for the smooth functioning of a value chain. Access to timely market information, such as prices, is essential for a functioning value chain. This helps participants in the chain, such as producers, to respond to changes in market prices and improves their negotiating power with traders and processors. An understanding of market demands and requirements is necessary to take advantage of market opportunities. Value chains require constant innovation and technology inputs for competitive sustenance.

Promotion of Skill Development and Non-Farm Activities

Skilled manpower is an important engine that drives the economy of any country. It has been estimated that by the year 2022 India will need skilled manpower of about 500 million, out of which nearly 40% would be in the agriculture sector. Despite this huge potential for skill development and employability, the current status reveals that around 57% of Indian youth suffers from unemployability and skill deprivation.

Policy makers in developing countries are convinced that providing gainful employment to every able bodied person in rural areas is necessary to eradicate poverty and achieve balanced rural development. At the same time training youth to make them capable of participating in the state’s emerging rural non-farm sector seems to be a viable option for not only providing employment but for development of rural enterprises as well as checking to urban areas.

Skill development has to be the kind that captures the attention of the youth and makes them globally competitive. For this, programs may be undertaken in digital literacy, automation and augmentation, development of digital platforms, digital marketing, later graduating to data mining and analysis. With the work from home concept growing globally, such beneficiaries can take up global telemigration jobs sitting in a village or a town. Broad range of activities to be undertaken under this head will include:

Agricultural Subsidies:

Presently, there are number of agricultural subsidies given from the state exchequer. The amount is huge but the distribution is not rational and just. For example, electricity pump set is cheap mode of irrigation and diesel pump set is the costliest mode. In spite of this there is 100% subsidy on electricity and 0% subsidy on diesel as fuel for agriculture. Similarly the farmer who can buy heavy appliances (Machinery) enjoy subsidy on it and the small farmer remains deprived of such facility.

It is proposed that the total subsidy amount given to agriculture sector be divided over per acre cultivated land and cash be deposited in each cultivator’s bank account be registered in his Girdawari record. The metered electricity supply to irrigation pump sets will promote water conservation and improve water table in addition to energy saving and reducing carbon emission from thermal plants.

By regulating this subsidy amount, the government may promote or discourage certain crops.

Demographic Shift

According to the Economic Survey of Punjab 2019-20, population growth rate has slowed down in Punjab, on the back of declining birth rates and fertility. Slowing birth rates have not only led to population growth rates falling in Punjab over time, the decline has been sharper for the State than at the all India level. These trends have contributed to a demographic shift in Punjab with a consistent increase in the population in the working age group, i.e., between 15 and 64 years of age. At the same time, the percentage of population in the older age group (i.e., above 65 years of age) is also increasing.

At the present speed of exodus of the youth to foreign countries, accompanied by increased life expectancy, Punjab will become a land of the old and the infirm, leading to a demographic shift that may require policy interventions of a different kind. Its healthcare blue print and the community network may have to be revisited and the population sensitized accordingly in the following manner:

Develop a Multi-sided Digital Platform:

Multi-sided Artificial Intelligence-powered Digital Platform, Protocol and Ecosystem may be built at the state level to aggregate the above-mentioned nodes, AI based feedback for producers, consumers, small traders and retailers would enable the system to learn and grow exponentially with the help of network effects. Advantage of this could be downsizing of the value chains and increased profitability. Further, regular monthly income will wean the farmers away from arhtiyas (Commission Agents).

Precision Agriculture:

Large irrigation schemes with canals are costly, prone to evaporation, pollution, theft and corruption and also harder to maintain. Water pipelines can reduce evaporation/ leakage/ pollution and can easily save more than 70 percent of canal water with the help of IOT powered data analytics and predictive algorithms for focused irrigation, fustigation and disease management

Use of laser leveler, drip irrigation for fustigation and portable rain guns to reduce water consumption in specific areas and crops

Marketing on Digital Platform:

As an aggregator, the digital platform shall be open to all kinds of traders and pipelines of corporate houses, thereby decreasing the competitiveness of large business houses.

Nirmal Vas:

An integrated approach to sustainable living through the Nirmal Vas Yojana using hydroponic soil-less medium for residue free agriculture alongside capturing solar energy for electricity production and rain water harvesting at the household level is proposed for the landless labour, marginal farmers and other casts/ classes, particularly women.

About Author: Amarjit Grewal is Ludhiana (Punjab) based strategist and commentator on matters of socio-economic and cultural relevance. His email contact: grewal52@gmail.com

More With Us

You Want To Showcase Your Website In Top Join With Us