Gita Gopinath, IMF’s deputy managing director, recently interviewed in this paper (IE, August 17) emphasised that India needs 60-148 million additional jobs cumulatively between now and 2030. But she gave short shrift to agriculture, saying, we need “to get workers to move out of agriculture into other areas”. My question is: Why can’t agriculture too be a driver of growth and creator of desirable jobs?
In 1954, when Arthur Lewis argued that development involves workers moving from agriculture to manufacturing and services, and from rural to urban areas, agriculture was still low-tech and subsistence-oriented. Today, farming in many countries is high-tech and highly productive. We can get there too if we give agriculture its rightful place and rethink the way we farm. Although Indian agriculture has had a five-year average growth rate of 4 per cent, it contributes 18 per cent to the GDP. Its growth is erratic and environmentally costly. It employs 46 per cent of all workers and 60 per cent of rural workers, but incomes remain low, and educated youth don’t wish to farm.
For agriculture to be an engine of growth and attractive to youth, we need to overcome ecological, technological, institutional challenges; reconnect with allied sectors; and create synergy with rural non-farm sector.
Ecologically, we must regenerate our water and soils and tackle climate change. Irrigation is the key to higher productivity and drought resilience. Currently, only half of India’s gross cropped area is irrigated, mainly via groundwater whose over-extraction has led to alarming falls in water tables. A notable cause is free electricity. In Punjab, between 1997 (when free power was introduced for irrigation) and 2002, there was a 40 per cent decline in canal irrigation and a sharp rise in groundwater use and area under rice. This continues. We need regulation, not freebies.
For irrigation expansion, a combination of groundwater regulation, rainwater harvesting and micro-irrigation would be effective. In Gujarat, for example, between 1999-2009 agriculture grew at 9.6 per cent per year, due to mass-based rainwater harvesting via micro-structures. Over 10-15 years, Gujarat built 0.5 million micro-structures: Check dams, bunds, ponds, etc enabling substantial productivity gains. Rainwater catchments provide surface irrigation and recharge groundwater.
Alongside, efficiency in water use is essential, with measures ranging from drip irrigation to less water-guzzling crops. A government evaluation (NMMI, 2014) for 13 states found that micro-irrigation (especially drip) reduced irrigation cost and fertiliser use while raising average fruit and vegetable yields by 48 per cent and 52 per cent, and farmers’ incomes by 48 per cent. So far, less than 10 per cent of our crop area has micro-irrigation.
Next, our soils need fixing. An estimated 37 per cent of our geo-area is degraded, with waterlogging, soil salinity, chemical contamination, and nutrient depletion.
Technologically, we must shift from cereal monocultures to crop diversity and agro-ecological farming. This would revive soils, save costs, raise yields, create jobs, and increase profits. A diversity of produce, including poultry, fruits and vegetables, will also cater to changing dietary patterns. Technology is also key to tackle climate change, especially heat-resistant crops and efficient extension of new farming techniques. Cell phones offer great potential here. A 2019 research paper in Science found that agricultural information provided via cell phones increased yields by 4 per cent and the odds of adopting recommended inputs by 22 per cent in India and Sub-Saharan Africa. Drones offer new means for pest control and crop monitoring.
Most importantly, we need institutional innovation. Today, 86 per cent of our farmers cultivate two hectares or less, occupying 47 per cent of the operated area. Most farms are too small to tap scale economies, use machines efficiently, or bargain well in markets. Some 75-80 per cent use informal credit. Farm incomes are low and erratic. Higher crop prices and market reforms can benefit smallholders if we first address their production constraints.
How can we increase farm size? One answer lies in encouraging smallholders to cooperate and farm in groups. Our 1960s attempts at group farming failed due to poor institutional design. Literature demonstrates that cooperation must be voluntary, with small groups, economically homogenous, and cemented by trust. There should be participative decision-making and equitable sharing of costs and returns. Carefully designed group farming initiatives are paying rich dividends in some regions. Kerala, for instance, promoted all-women group farming in the 2000s as part of its anti-poverty mission, Kudumbashree. Now it has over 73,000 group farms. Each group cultivates leased land, pools labour and resources, and shares costs and benefits. They receive a start-up grant, technical training, and access to subsidised credit via NABARD.
My research in two districts, comparing women’s group farms and largely male-managed individual farms, showed that the annual value of output/hectare of group farms was 1.8 times that of small individual farms. The average net return/ha in group farms (after deducting all paid-out costs) was 1.6 times that in individual farms (Agarwal, World Development, 2018). Farming together also skilled women and empowered them socially.
Group farms are thriving too in Bihar, West Bengal, Telangana and Gujarat too. Forming groups enables them to consolidate holdings, invest in irrigation equipment, and save on labour and input costs. Group farming reports higher yields than farming individually. Some youth groups are doing vegetable farming instead of migrating for jobs, attracted by technical advancement and working together. Federated structures have strengthened group farms, enabled them to take measures for climate resilience, and some have formed farmer-producer organisations for marketing.
Livestock, fisheries and forests also offer huge growth and job potential. In 2022-23, fisheries grew at 10 per cent, providing 28 million jobs (44 per cent for women).
Finally, since 61 per cent of rural incomes come from the non-farm sector, expanding and synergising farm-nonfarm linkages in agro-processing, machine tools, eco-tourism, etc can raise incomes and jobs. We have an opportunity to make agriculture technically sophisticated, environmentally sustainable and institutionally innovative. It can become an engine for growth and create attractive jobs for the young, provided we shed old economic theories and change the way we farm.
The writer is professor of Development Economics and Environment, GDI, University of Manchester
