The focus of farm planning must shift from an approach geared just towards increasing productivity to a livelihoods approach, with special attention on small and marginal farmers.
Almost two-thirds of workers in villages are farmers. Of these, an overwhelmingly large percentage are small and marginal farmers—those with land holdings of less than 2ha. These small holdings require a separate strategy to deal with the issues they face.
The National Commission for Enterprises in the Unorganised Sector, or NCEUS, has recently submitted a blueprint for a special programme for marginal and small farmers. But why a special programme for them?
So far, agricultural policy frameworks by Union and state governments have not distinguished between various categories of farmers based on land holdings. The focus of farm policies has been on improving productivity. But the report argues, and rightly so, that the concerns of small and marginal farmers are inherently different from medium and large farmers.
Small and marginal farmers make up at least 80% of all farmer households but own a little less than 50% of the total arable area. Land fragmentation over the years has ensured that their numbers have increased significantly.
At the same time, their contribution in total crop production has also increased and is now a little more than half of the total output. The latest data from the situation assessment survey of farmers of the National Sample Survey Organisation has reconfirmed the traditional productivity advantage enjoyed by small and marginal farmers over medium and large farmers.
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Value of output per ha for small farmers was Rs14,754 in 2002-03. In the same year, large farmers could only realize Rs9,172 per ha. It is important to note here that a significant percentage of small and marginal farmers cultivate foodgrains and their contribution to food security is crucial.
Despite their significant role in the agrarian economy, they continue to remain disadvantaged in terms of accessing technology, inputs, credits and government subsidies. It is well known that a large part of subsidies is cornered by medium and large farmers.
Even in the private sphere, market imperfections are a big impediment to small and marginal farmers who lack the necessary skills, information and asset base to take advantage of market conditions.
Information asymmetry and high transaction costs in the private market always work as disadvantages to small and marginal farmers.
It is well known that the farm sector is in the midst of a severe crisis since 1997. The situation worsened both due to domestic neglect of the sector as well as the international context after the World Trade Organization’s regime, where domestic farmers are unable to compete with protectionist regimes and large subsidies doled out by the developed countries.
As the NCEUS report highlights, the nature of small farming has seen substantial changes over the years. The survey also makes clear that small and marginal farmers do not earn enough from farming despite higher productivity per unit of land.
Given their small asset base, public investment and government support and subsidy is crucial to their survival. This is particularly true in the case of access to credit, security of tenure, access to latest technology, inputs and irrigation at subsidized rates.
The small asset base and meagre profits from farming have also meant more and more small and marginal farmers are not looking at farming as their primary activity. Some of these issues have been highlighted in numerous committees of the government. But there has not been commensurate action to address these problems.
The NCEUS report also highlights some of the neglected issues. One important issue is the significant role played by women in farming. This tendency has quickened over the years, with men vacating the farming landscape to look for better opportunities in non-farm sectors.
A recent article by Palavi Chavan (Economic and Political Weekly, 22 November) has highlighted the huge gender inequality in accessing credit from formal banking. This is also highlighted by the NCEUS report, which also shows the relatively negligible access to insurance and markets by small and marginal farmers.
It is obvious that the problems of small and marginal farmers require a different approach. It requires an increase in public spending directed towards better access and utilization by these farmers by strengthening and improvising public service delivery.
Some of these may require a group approach, such as promoting self-help groups of farmers. A renewed focus on cooperative farming, insurance, training and extension services, better and easy access to credit and an effective marketing intervention are crucial in this regard.
At the same time, strategy for marginal and small farmers should also recognize the need to generate more employment opportunities through skill development, rural diversification and development of off-farm and non-farm activities.
Himanshu is assistant professor at Jawaharlal Nehru University and visiting fellow at the Centre de Sciences Humaines, New Delhi. Farm Truths looks at issues in agriculture and runs on alternate Wednesdays.
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