Contrary to the popular narrative, the second green revolution is underway.
A dramatic turnaround of agriculture, India’s most important sector, has gone largely unheralded. Contrary to the popular narrative, agriculture has been transformed in the last 10 years. The second green revolution is underway. At the end of the second tenure of the UPA and after a decade of persistent work, we are witnessing record agricultural outputs for every major crop — grains, oil seeds, pulses, cotton, vegetables and sugarcane. And more importantly, we are also seeing record profitability ratios for our farmers.
Today, we are not only self-sufficient but have also made steady progress in becoming a feeder to the world. Our farmers are the unsung heroes of this untold story. Life in a village is no longer a clichéd bundle of miseries, thanks to the inclusive growth policies of successive UPA governments. Emphasis on access to credit, higher farm productivity, road connectivity, debt write-offs and remunerative prices have transformed the face of agrarian India.
In 2014 alone, agriculture is expected to grow at 4.6 per cent. Our agriculture production of foodgrains this year is expected to break the 2011-12 record of 259 million tonnes. More importantly, agricultural profitability has increased over the last decade with record increases in MSPs (minimum support prices for agricultural produce) for all covered crops. MSP increases in the past 10 years, between 2004-05 to 2014-15, vary from about 125 per cent for foodgrains such as wheat and paddy to over 200 per cent for pulses like moong dal. These numbers represent the highest rate of MSP increase for any decadal period in our history. The substantial rise in farmland prices across India is proof that the profession of farming is back in vogue.
The situation was drastically different when the UPA formed the government in June 2004. Agriculture was in crisis. A government drunk on its “India Shining” propaganda had largely ignored the sector. From 1998-2004, agriculture grew by a paltry 2.9 per cent. This low growth adversely affected the livelihoods of farmers and posed a serious threat to national food security. There was the (incorrect) perception that the agricultural sector was crumbling. Farmers were getting uprooted. Unable to service debt, some even took their own lives. For the record, farmer suicides peaked in 2004.
A decade later, a sector once described as terminally sick is now a beacon of hope. The UPA’s inclusive policies have helped the farmer achieve this remarkable success. Such a transformation could only have been achieved by the methodical work and cooperation between the agriculture minister, finance minister, prime minister and the Congress party president, who has taken passionate personal interest in supporting this cause.
According to Ashok Gulati, the outgoing chairman of the Commission for Agricultural Costs and Prices (CACP), investment in agriculture as a percentage of the agri-GDP has risen sharply from 10-12 per cent in the early 2000s to about 20 per cent by 2011-12. About 85 per cent of this investment has come from the private sector, driven primarily by an attractive price regime and rising profitability in agriculture.
Private borrowings, often at very high interest rates, had been a bane for our farmers as the doors of the financial institutions were never really open to them. Our inclusive growth policies have led to financial institutions lending more than Rs 7,00,000 crore in 2013-14, a seven-time increase from Rs1,04,500 crore in 2004-05. The interest on short-term crop loans has been systematically reduced from a record high of about 12-14 per cent in 2004-05 to a 4 per cent average in 2014-15. Not to forget, the largest one-time farm loan waiver scheme, worth Rs 52,000 crore, was delivered by UPA 1 to bring the poorest debt-ridden farmers back into the financial system. The UPA has managed to deliver easier and more credit to a higher number of farmers at a lower rate of interest than previous governments. The down the line effect of easier credit can be seen in indicators like annual tractor sales, which now exceed more than 3.7 lakh units, up from about 2 lakh units in the early 2000s. Similarly, the usage of NPK fertiliser has increased by 50 per cent, from 18.4 million tonnes (mt) in 2004-05 to 28 mt in 2011-12.
According to the Indian Council of Agricultural Research, electricity consumption in agriculture was about 88.6 gigawatt hours (gwh) in 2004-05. In 2010-11 it had increased to 129.1 gwh, an increase of 45 per cent in six years.
Public sector research institutes and state agriculture universities have developed a large number of hybrid seeds since 2004. As a result, the share of public sector seeds has actually increased vis-à-vis the private sector. Bt Cotton is a prime example of advanced technology that can substantially benefit farmers. We now produce about 3.5 crore bales of cotton, as against 1.51 crore bales in 2003-5.
Till 2004-05, the net surplus of agricultural trade did not exceed $5 billion in any year since Independence. In 2012-13 alone, our net surplus from agri-exports stood at $21 billion with $41 billion in net exports. The two major national missions, namely the National Food Security Mission and Rashtriya Krishi Vikas Yojana, launched in 2007, have also shown great promise. There is a substantial increase in farmers moving towards higher value agricultural products, such as horticulture and livestock.
The benefits of the UPA’s policies have not been limited to farmers. Farm labourers have also seen a record increase in daily wages in the last decade as MGNREGA set a base wage. The real farm wage in the last six years has increased at a record annual rate of 7 per cent per annum — showcasing the successful spread of our inclusive policies.
The development of rural India is essential for inclusive growth. Only inclusive growth can create a virtuous, self-sustaining economy by building a solid foundation for the future, without which there will be no equity, social justice and stability. We have been able to unlock the economic potential of that section of our population which was trapped in poverty. The revival of agriculture was not an option but an imperative — after all, about 60 per cent of our population depended on it.
In this last decade, we have been successfully able to change the economic discourse of our nation from the NDA’s “India Shining” to the UPA’s “Bharat Nirman”. And we are hopeful that this inclusive vision of growth pursued by UPA 1 and 2 will continue to be the vision of choice for our people when they go out to vote in this election season.