Distress in the fields: Indian agriculture after economic liberalization, By R. Ramakumar (Ed.), Tulika Books. 2022. pp. xxiv+484. INR 1500 (hbk). ISBN: 978-81-950559-0-6

Abstract

If you are looking for a definitive account of agricultural policy in India over the years following the country's initially tentative economic liberalization in 1991, then this is the book for you. As the editor, himself the author of a long and magisterial introductory essay says, he and the authors of the 16 chapters of the book set out to achieve four objectives. They wanted to offer an extensive review of policies towards agriculture in the era of India's liberalization, setting them in the context of the longer history of agricultural policy, so as to provide both essential reading and an enduring work of reference. Ramakumar and his co-authors mainly from among the rising generation of Indian scholars (S. L. Shetty, a distinguished older scholar, is perhaps the principal exception among the mostly youthful authors) have succeeded in realizing these objectives. The book does not make for easy reading, nor does it provide quite as much of a sense as might have been expected of the distress that is certainly out there, in the fields of India, but it is undoubtedly an important work. Ramakumar's introduction links together arguments and findings from chapters that cover Land and Agrarian Relations (though there is actually rather little on agrarian relations); Investment and Expenditure in Agriculture; Agricultural Trade; Costs, Profits and Incomes; Credit and Insurance; and Agricultural Marketing and Food Security. All the chapters present analyses based on carefully assessed secondary data—attested in the long list of tables and figures at the beginning of the book—and some of them draw on primary data, notably from the village studies that have been conducted over many years by the Foundation for Agrarian Studies (FAS). It is perhaps because the Foundation has dealt quite extensively in some of its publications with changing agrarian relations (as in Ramachandran et al., 2010; Swaminathan & Das, 2017; Swaminathan & Rawal, 2015) that the editor and authors did not think more extensive treatment necessary in this book. Still, more commentary on evidence concerning contemporary landlordism and on changing labour relations would have added to the book and helped to give readers more of a feel for how distress is experienced in the fields.

The overall argument of the book is briskly stated by Ramakumar: ‘even as capitalist development in agriculture proceeded, the liberalization agenda did not increase growth in agriculture; rather, it led to … agrarian distress’ (p. 1). Liberalization has led, he says, to a new set of contradictions; but given the rolling back of redistributive land reform and limited public investment in agriculture, inequality has remained entrenched, while ‘the new policies stymied the potential for a rise in income for a large section of the rural workforce’ (p. 1). The book provides a damning indictment of the economic ideology—centred on the idea of ‘getting the prices’ right—that has underpinned the approach to agricultural policy from the early 1990s. Ramakumar's introduction includes thoughtful reflections—contra the whole idea that policy should be based on ‘getting the prices right’—on the limitations of prices for explanation of patterns of development in agriculture.

Ramakumar traces the history of growth in agriculture over four phases from 1950, drawing on data sets from both the Ministry of Agriculture and the Central Statistics Office. The highest rate of growth, he shows, was in the ‘late green revolution phase’ of the early 1980s into the early 1990s; but then the first decade after liberalization, through to 2002–2003, saw growth only at the rate of about 0.6% per annum. As Pranab Bardhan (2009) wrote of this period, ‘the agriculture sector is in bad shape’ (p. 31). There was then a recovery between 2003–2004 and 2010–2011—encouraged by policy changes that saw the improvement of agricultural terms of trade and an increase in minimum support prices, increases in budgetary allocations to departments related to agriculture, the launch of some projects with a specific focus on increasing agricultural production and the reform of extension services (according to Deokar & Shetty, 2014, cited by Bakshi, p. 334). Growth did not quite return to the levels of the 1980s, however, and after 2011, growth rates dropped back again, so that over the whole liberalization period, from 1992–1993 to 2019–2020, the Index of Agricultural Production recorded the lowest rate of growth since independence. The Government of India's Economic Survey 2015–16 showed that growth in agriculture over the whole period from 1992–1993 had seen at best only a marginal upward trend, accompanied by high volatility from year to year.

The years of higher rates of growth in agriculture after 2003–2004 saw a significant increase in gross fixed capital formation (GFCF) in agriculture—shown in Ramakumar's data (tab. 4)—but growth in GFCF was driven very largely by growth of private sector investment, whereas historically in India, it has been growth in public investment that has encouraged private investment. The complementarity of public and private investments has broken down, as Ramakumar argues. Shetty concludes his chapter in the book, on ‘Agricultural Investment in India’, by noting ‘the persistent neglect of agricultural investment throughout the post-independence era, except for a brief green revolution period’ (p. 156); commenting on the continuing ability of ‘restive farm households’ to extract concessions from the state in the form of subsidies and credit (with quite regular cancellations of farmers' debts); and arguing that ‘[d]espite the absence of public sector investment support, the farm community responded to the market forces—reflected in high terms of trade for agriculture and higher farm wages—in the form of higher private investments through labour-saving mechanization’ (pp. 156–157). These investments, as Pallavi Chavan and Ramakumar show in their richly informative chapter on ‘Trends in Agricultural Credit’, have been greatly assisted by flows of formal sector credit that have gone especially to large farmers and corporate agribusiness. These trends, together, have made for the accentuation of already deep inequality in the farm sector.

Gurpreet Singh and Sridhar Kundu's chapter on ‘Public Spending Priorities for Agriculture’ amplifies these arguments. They argue that ‘[c]ompression in public spending … is one of the important factors behind the agrarian crisis’ (p. 173). But it is of course not just a matter of the lack of public spending but of the way in which it has been allocated. The authors show that there has been a shift away from creating infrastructure and towards cash transfers and loan waivers directed at individuals. Essential areas such as soil, water and seeds have received little attention. As Ramakumar points out, while historically, public investment in research and development has had ‘the single largest effect on sectoral growth in agriculture’, and in India, the government was the leader in agricultural research, in the era of liberalization, private institutions have increasingly substituted in research for those in the public sector, with the predictable consequence that research has been confined to a few crops where expected profit levels are high. Regarding irrigation, recognized as being of vital importance for Indian agriculture (see, for instance, Government of India, 2016, p. 99), Modak shows in his chapter that as public investment in surface irrigation continued to be very low, ‘farmers intensified their [private] investment in groundwater irrigation with the attendant ecological externalities’ (p. 20). The unregulated expansion of groundwater irrigation has many adverse implications—that have been experienced for many years in parts of the country where intensive groundwater irrigation has a long history (see, e.g., Janakarajan, 2004). The trends in public spending have, it seems, tended to exacerbate the fundamental problems that limit agricultural growth, identified in his writings by A. Vaidyanathan, who emphasized how Indian agriculture is constrained above all by the inefficient use of scarce resources that has been perversely encouraged by policy (see Vaidyanathan, 2010).

Alongside the domestic liberalization of the agricultural economy, the pathway to agricultural growth, in the policy framework adopted after 1991, emphasized the importance of free trade, and it was to this end that India became a signatory of the WTO in 1994. The promise of export-led growth has not been fulfilled, however. Key figures are that over the period from 1990–1991 till 2019–2020, though India still had a trade surplus in agriculture, agricultural exports increased by 13.8% but imports increased by 18% (p. 27). Sachin Sharma, Teesta Lahiri and Suvayan Neogi show in their chapter on Agricultural Trade that India did not transform itself fully to becoming a free trade area—so, in effect, retaining a cushion so as to be able ‘to insulate its domestic market from the extraordinary volatilities of the world market’ (p. 29). But still, the increasing integration of domestic and international prices has, the authors find, meant the transmission of some global volatility into domestic markets and reduced domestic prices for many crops.

These findings feed into those of chapters on Costs, Profits and Incomes, effectively summed up in Ashish Kamra's findings that in the 2010s, the profitability of cultivation fell or stagnated, due to the ‘double whammy’ of decline or stagnation in output prices and increases in input costs, and that there has been an absolute shrinkage of real incomes from cultivation for agricultural households. Aparajita Bakshi's conclusions, from an analysis of data in the Situation Assessment Survey of Agricultural Households conducted by the National Sample Survey Office (NSSO) in 2011–2012, are telling, and they provide perhaps the sharpest indication of agrarian distress in the book. Bakshi shows that the average total income—so income from non-agricultural and agricultural sources—of agricultural households was less than average consumption expenditure for 60% of these households. The total incomes of 43% of all agricultural households were below the generally accepted poverty line. Considering incomes from crop production and animal husbandry alone, Bakshi found that 80% of agricultural households, on average, failed to secure their consumption expenditure. Then, the analysis that she presents of data from the FAS village surveys shows that India's agrarian crisis ‘is not a crisis for all, but for certain sectors of the peasantry comprising [the numerically overwhelming predominant] small farmers and manual workers’ (p. 349). In common with findings of other chapters, Bakshi shows that income inequality remains very deeply entrenched in the rural economy. Madhura Swaminathan, who also draws on data from the FAS village studies (which are reported on in greater detail in Swaminathan & Bakshi, 2017), shows how deep income inequality is in many of the villages (tab. 1.6, p. 80).

Swaminathan also reports on findings from the village studies on the extent of inequality in land ownership—commonly the top 5% of households own 40%–50% of agricultural land, while the bottom 50% altogether account for less than 5%. These observations are more than amply borne out in the important chapter by Vikas Rawal and Vaishali Bansal on ‘The Land Question in Contemporary Rural India’. [Correction added on 03 July 2023, after first online publication: The author's name in the preceding sentence has been corrected from ‘Prachi Bansal’ to ‘Vaishali Bansal’.] The authors report on findings both from recent Surveys of Land and Livestock Holdings conducted by the NSSO and from the National Family Health Surveys, which as they say are nationally representative surveys that collect limited but still very useful data on ownership of agricultural land. Both sets of surveys show the increasing extent of landlessness among rural households—probably now between 40% and 50% of rural households own no land—and on the other hand that the share of the land owned by large landowners has increased quite sharply. The authors also show both that the prevalence of insecure and informal tenancy has increased and that resource-rich farmers are expanding their scale of production by leasing in land. Rawal and Bansal's detailed analysis justifies their firm conclusion that ‘Given the vast rural inequalities, redistributive land reforms remain critical for progressive change in India’ (p. 112).

Chapters in the book that I have not referred to include one by Geetanjoy Sahu on the Forest Land Rights of Tribals and articles by Bansal and Rawal on fertilizer policies, by Biplab Sarkar on ‘Price Support and Access to Minimum Support Prices’ and by Awanish Kumar on agricultural insurance. The whole is completed with two strong chapters, by Sukhpal Singh and Sudha Narayanan, on the controversial subject of agricultural market reforms—in part ranging over the issues that were at stake during the prolonged and ultimately successful farmers' protests against the three marketing reform acts introduced by government in 2020, often referred to as ‘the Farm Bills’—and one by Anmol Somanchi on the public distribution system and food security.

The proponents of the liberalization agenda for agriculture will, no doubt, respond to this book with arguments about limitations in the implementation of the policies that they have advocated—the Government of India has not been nearly as committed to free markets as it should have been—but Ramakumar and his colleagues have established a powerful critique that will not easily be demolished.