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Business News/ Industry / From cotton to kinnows: new crops, age-old misery

From cotton to kinnows: new crops, age-old misery

High costs, fast depleting water levels and uncertain returns push farmers to shift to potentially lucrative but risky crops such as kinnow and guar

Hanuman Kumar now rues his decision to switch to kinnows, as the absence of a safety net to cover risks has left him worse off than when he was farming cotton. Photo: Ramesh Pathania/MintPremium
Hanuman Kumar now rues his decision to switch to kinnows, as the absence of a safety net to cover risks has left him worse off than when he was farming cotton. Photo: Ramesh Pathania/Mint

Abohar (Punjab)/Sri Ganganagar (Rajasthan): Ripe kinnows in a green leafy orchard; low levels of irrigation, labour and investment; handsome returns—this was what Hanuman Kumar dreamed of when he switched, like countless other farmers in south-west Punjab, from water-guzzling cotton to kinnows, a citrus fruit.

Five years on, the reality has turned out to be very different. This year’s harvest—the season starts in December and goes on till March—came smack in the middle of a glut. Consequently, prices crashed and there were no takers for the fruit. They were either left rotting in the fields or dumped in canals criss-crossing the area.

Kumar, like many other farmers, now rues his decision to switch to kinnow, as the absence of a safety net to cover risks has left him worse off than when he was farming cotton. The 35-year-old is the sole bread-winner for his joint family, which includes an aged father and an ailing brother. He has racked up debt of 9-10 lakh and the interest keeps mounting.

Walking through his orchard, Kumar points to trees laden with kinnows: some big, others medium-sized. Some fresh and juicy, others squashed and rotten, left lying in the fields. “The big ones you see are from last season," he says. The ones lying on the field have dropped. While the glut was the primary reason for fruits dropping to the ground as they are not plucked in time, they can also fall on account of sudden changes in temperature and humidity, improper soil moisture and, in some cases, due to pest attacks.

“Once a kinnow loses the stalk that attaches it to the branch, it loses its market value. There are no takers," says Kumar.

Currently, for every kg of the citrus fruit, a farmer gets 6-7. If the stalks are missing, the price comes down to 1 per kg. Kinnow retails at around 20-25 per kg. Last year, it was priced at 15-20 per kg in the wholesale market and 30-35 per kg in the retail market. A bumper orange harvest in the Vidarbha region of Maharashtra and the extreme cold conditions in northern India have affected the demand for kinnows.

6 for kinnow? Don’t the raddiwalas (scrap dealers) get the same amount? What kind of a fruit is this if it fetches as much as trash does?" says Kumar.

Kumar and his father jointly own five acres of land. Of this, four acres have been converted into a kinnow orchard. He says he spent 10,000 per acre on saplings, fertilizers, pesticides, irrigation and labour in one year. “For five years you have to keep doing this without expecting anything. You raise these trees like you are raising your child. I thought once it grows, the tree will yield fruits for 25-30 years," says Kumar.

Devilal Singh, 33, another farmer, has a 8 lakh loan to service.

“You keep investing. The money has to be put in, but there are no immediate outcomes," he says. He switched from wheat to barley and then to kinnow recently.

Many farmers made the switch to kinnow at the urging of the Punjab government, which is aggressively promoting crop diversification to conserve the state’s fast depleting water table. In fact, as recently as 5 May, the state government launched an ‘agriculture diversification mission’ to get farmers to shift from paddy and wheat to crops like maize, sugarcane, pulses, fruits and vegetables.

Besides the adverse market, water to irrigate orchards is in short supply. For the past one-and-a-half months, the main irrigation canal in Kumar’s village has remained dry. His trees have begun drying up. Even when there is supply of water, every farmer is allowed just one hour a week to irrigate his land. For small farmers like Kumar, there is no fall-back option.

The switch

High input costs, fast depleting water-table levels, rising diesel prices and uncertain returns in paddy, cotton and wheat farming are among the factors that forced farmers to look at other options.

“Returns from traditional farming are no longer sufficient. So farmers are taking rational decisions to maximize their earnings. Unlike earlier, the government in recent years has been slowly withdrawing protection to farmers, making them directly dependent on the market. They take risks when the market is in their favour and when it’s not, they incur losses," says Himanshu, an associate professor at Jawaharlal Nehru University, visiting fellow at Centre de Sciences Humaines, New Delhi, and a Mint columnist.

In Rajasthan’s Sri Ganganagar district, the same story plays out but with a different crop. Farmers were tired of disease-prone cotton. In 2011, Vikas WSP Ltd, a company based in the district, walked in and told them about the many benefits of guar, a legume that is cheap to grow and does not require pesticides.

The company also distributed seeds free to 400,000 farmers. Until then, all the guar gum produced was used as fodder. But what came as a surprise for farmers in the district was its usage in shale gas exploration, where it is used for fracking. The shale gas industry, on expansion mode in the US and China, uses guar gum in a process where it is mixed with water and sand and forced under high pressure into an oil- or gas-bearing rock to fracture it.

The gum’s high viscosity decreases fluid loss and friction, reduces energy consumption and hence increases the chances of gas or oil recovery. The guar bean is principally grown in India and Pakistan, with small yields from the US, Australia, China and Africa. Around 80% of guar production and exports come from India.

From 2,000-2,500 per quintal in 2009-10, guar seed prices rocketed to 26,000-35,000 per quintal in 2011-2012. The same year, the value of guar seed exports peaked at 21,287 crore. So it is no surprise that most farmers in Sri Ganganagar shifted to guar.

The slump

On the downside, guar’s demand is directly related to crude oil’s fortunes. As guar powder is principally required for drilling new oil wells, when there is a surplus, the demand for guar drops.

With the slump in crude prices in 2014-15, guar prices plummeted from a high of 35,000 per quintal in 2011-12. The demand for guar gum, too, has halved, forcing some production units in northern India to shut shop.

Says Guar Gum Manufacturers’ Association president Purushottam Hisaria, “95-96% of the factories have shut down." Even though around 80% of the country’s guar is produced in Rajasthan, the crop is also cultivated in nearby states like Punjab, Haryana, Madhya Pradesh and Gujarat.

Recalling the guar boom, Sanjay Pareek, vice-president of Vikas WSP, India’s second-largest exporter of guar, says, “Farmers started sowing the crop without any know-how of how to do it. Every person doubled capacity. The demand in the US was growing and supply kept increasing. Then there was a glut. All those factories turned sick. If the demand was 100% then, it is 25% now."

Farmers in Sri Ganganagar have stocked up on guar in the hope that prices will recover. R.N. Goswami, a scientist with Vikas WSP, says: “Even though for the past year, prices of guar gum have gone down, guar remains the most remunerative crop for farmers in Rajasthan."

“If a farmer has money, he can cope with the loss. But what can I do? I used to grow multiple crops: cotton, barley, mustard and castor. When prices went up to 30,000-plus, I shifted every part of my land to guar. My land was limited and I thought I should choose something that is more productive. Someone said the price would rise to 1 lakh per quintal," says Sohanlal, a farmer in Sri Ganganagar.

With prices dropping to 3,000 levels, Rajesh Jhorar, another farmer, prefers to hold on to his stock of 40 quintals of guar. The lack of a minimum support price for the crop means there is no safety net for guar farmers, as exists for wheat, paddy and cotton growers.

“The government needs to maintain the rate of guar gum so that farmers know how much to invest in the crop, how much land to allocate to it," says Sahab Ram Saharan, who in 2013 took up olive farming, dedicating 40 acres of his land to it.

Gaurav Sharma from Kheti Virasat Mission, a non-profit action group, says the pertinent question to address is why farmers resort to crop shifts. “The point is why farmers dropped cotton. Because they weren’t getting enough, right? Farmers experiment, but once they have sown, they don’t know how to manage. That part needs to be dealt with. The changes should be sustainable," he adds.

Saharan’s son Vishal recently completed his LLB. His father doesn’t want him to become a farmer. “I want to continue this legacy but most farmers now have started looking for other jobs. This profession is cursed in this country. No one knows what a farmer has to go through," says Vishal.

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Updated: 15 May 2015, 11:34 AM IST
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