Farm realty check: Back to good old paddy

In the Majha region, whose three districts — Tarn Taran, Amritsar and Gurdaspur — have large basmati-growing tracts, annual charges for leased land have come down by anywhere from 25 to 40 per cent since 2014.

Thirty-year-old Davinder Singh, a farmer from Khuh Raje Wala village in Tarn Taran block, had, in 2014, shelled out Rs 45,000-50,000 per acre for leasing in 100 acres in addition to his own 30 acres of land. But in 2015, this rate dropped to Rs 36,000 and further to Rs 33,000 this year.

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Inderjit Singh, Khuh Raje Wala’s sarpanch (head), informs that some of the village’s lands went for just Rs 28,000-30,000/acre this time, as the lessors did not want to leave these vacant.

Sukhpal Singh Bhullar, the Congress Tarn Taran district president and a large landowner himself, reckons that lease rents in Majha are now roughly Rs 20,000 down from their Rs 50,000/acre peaks of 2014. The main reason for this is the collapse of basmati prices.

Punjab farmers sold Pusa-1509 basmati paddy last year at Rs 900-1,200 per quintal, as against Rs 2,100-2,200 in 2014 and Rs 3,400-3,500 in 2015. The Pusa-1121 basmati variety, likewise, fetched only Rs 1,600-1,800 per quintal, compared to the Rs 3,000-3,300 and Rs 5,000-5,100 levels of the preceding two years.

Lower profitability has meant that farmers aren’t any longer keen to expand basmati area through leasing in additional land. Davinder Singh was until 2014 dedicating his entire 130 acres for Pusa-1121 and Pusa-1509. But this year, he is growing normal parmal (non-basmati) paddy on 100 acres. On the remaining 30, he has sown maize in 25 and a mere five acres under basmati.

Amrik Singh of Khatrai Kalan, a village in Amritsar’s Ajnala block, had taken 4.5 acres on lease at Rs 38,000 per acre last year to grow basmati paddy. “I got a rate of barely Rs 1,100 per quintal, below even the Rs 1,450 minimum support price (MSP) for regular paddy. Moreover, the yields in basmati are just 16-18 quintals/acre, as opposed to 30-32 quintals for parmal paddy. My landowner returned an amount of Rs 16,000 to partly compensate for my losses and has also reduced the current year’s rent to Rs 33,000 per acre,” he notes.

Kewal Singh, a landowner, and the managing committee of the Baba Bahadur Singh gurdwara in the same village were both leasing out their 12 acres and 25 acres respective holdings at Rs 40,000 per acre. But for this year, the former has reduced his rate to Rs 30,000 and the latter to Rs 25,000 per acre.

“They had no alternative because the gross revenue from basmati (a so-called cash crop) was not even Rs 20,000 per acre, while the parmal paddy sold to government agencies at the MSP was giving more than twice that,” points out Dhanwant Singh, Amritsar district president of Kirti Kisan Union, which represents small farmers.

But it isn’t only Majha. Even the Doaba and Malwa regions have shown sharp declines in lease rentals.

“Last year, I gave out my 30 acres for Rs 33,000 per acre. This time, I had to settle for Rs 28,000; my lessee was refusing to pay even that,” admits Sunny Shergill of Binpalke Nangal village in Jalandhar’s Bhogpur block.

Navtej Singh Cheema, Congress MLA from Sultanpur Lodhi in Kapurthala district, says that farm lease rentals in his area are today about Rs 15,000 lower than the average Rs 50,000 per acre two years ago. Cheema has 50 acres that he farms himself.

Jalandhar and Kapurthala, along with Hoshiarpur and Nawanshahr, are part of the Doaba region that lies between the Beas and Sutlej rivers.

In Malwa, Punjab’s main agricultural heartland south of the Sutlej, the fall in lease rates has been largely courtesy Bt cotton. In this case, though, it is not prices alone — kapas realisations have dipped to Rs 4,000-4,500 per quintal, from Rs 5,000-5,500 in 2013-14 – but also large-scale damage to last year’s crop from whitefly infestation that has prompted farmers to plant less cotton this time.

In the main southwest cotton-growing districts of Firozpur, Fazilka, Faridkot, Muktsar, Bathinda, Moga, Mansa and Sangrur, lease rentals have plunged by 40 per cent or so since 2014.

Vinod Jiyani and Sanjiv Puniya, farmers in Katehra village of Fazilka, were till last year exclusively growing Bt cotton, including on land taken on lease. But the huge crop loss suffered from whitefly attacks has led them to go back to parmal paddy cultivation. The annual rent for land in their area, too, is down to as low as Rs 26,000-28,000 per acre. At the height of the Bt cotton and basmati paddy boom, these had reached as high as Rs 60,000 per acre in the Malwa region.

The Punjab farmer’s flight to safety is also seen in the latest official kharif crop acreage data. Farmers in the state have brought a mere 2.56 lakh hectares (lh) under cotton this time, compared to 5.30 lh in 2014 and 4.36 lh in 2015. Similarly, for basmati, the total area covered had soared from 3.50 lh in 2008 to 8.61 lh in 2014. This year, the state agriculture department expects it not to exceed 5.50 lh.

The reduced cotton and basmati area is going mainly to non-basmati paddy. The latter area is projected at 24.50 lh, the highest since 2007 and a substantial jump over the 19.78 lh of 2014 and 20.57 lh in 2015. This, despite a marginal 4.1 per cent increase in the MSP to Rs 1,510 per quintal!