National Workshop: Mitigating Agrarian Distress in Indian Agriculture

Cross-posted from the FSP India website written by Jaspreet Aulakh

Hamish John Appleby / IWMI
Hamish John Appleby / IWMI

Partially spurred by the recent droughts in several states in India, a conference was held in Telangana on October 15, 2015 focusing on “Mitigating Agrarian Distress in Indian Agriculture” as part of a series of dialogues being organized under the Indian Food Security Knowledge Platform and Policy Dialogue. The conference was jointly organized by IFPRI and Centre for Good Governance and took place at the CGG Conference Centre in Andhra Pradesh. Distinguished guests from government, national and international researchers, and private stakeholders participated in the event.

The workshop aimed to look at the problems the agricultural sector faces from the recent drought to formulate proper policies and programs, not only for achieving sustainable and inclusive development of agriculture but also integrated rural development. The main goal of the workshop was to frame a set of recommendations to resolve the agrarian crisis based on an evidence-based assessment of the situation.

Although there are already government policies in place to support irrigation in case of dry spells, including an early weather advisory system and power regulation, there are still many Indian farming communities feeling the impact of drought and entering a phase of agrarian distress. The worst fears of a second consecutive year of rain deficit have played out as 2015 saw the adverse effects of drought in states of Karnataka, Maharashtra, Telangana, Andhra Pradesh, Uttar Pradesh and Bihar. The Indian Meteorological Department (IMD) has reported 12 percent average shortfall covering 40 percent of India for 2015. With a 43 percent below normal deficit in rainfall, Karnataka is the only state to declare drought this year and many districts-- 27 out of 30-- are affected. Yet other states are suffering severely as well; Maharashtra is experiencing a deficit of 51 percent below normal rainfall, for instance.

The central government has released 591.35 million USD as a national relief fund for the state of Karnatakam and last year 617.6 million USD were released for state of Maharashtra. The states of Punjab and Haryana are able to better cope to drought this year due to advanced irrigation facilities than other parts of the country. The delayed rains of September may alleviate some of the further damage but it is unlikely to mitigate the damage already done to agriculture production for 2015.  Hence, there is a need to address this agrarian stress which is multi-faceted through government policies.

The specific objectives this conference were the following:

  • Assess the socio-economic impact of recent droughts in India,
  • Document technological developments to reduce impact of drought.
  • Review government policies and programs which mitigate drought impact.

The impacts of droughts are multifaceted. They range from impacts on the quality and quantity of agriculture produce, on resources such as soil and surface water and depletion of productive assets, and on reduced demand for non-agriculture goods and services. Drought can exacerbate poverty, along with other socio-economic phenomena such as outmigration and overcrowding of cities. Drought can also impact prices of agricultural commodities according to one study presented at this workshop. It was also discussed that hot spots for extreme poverty, unrest, and outmigration are drought-prone areas which can cause effects to be exacerbated due to low resilience to shocks.

Coping with drought has been one of the underlying objectives for government of India for widespread public programs such as PDS (Public Distribution System), MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act), and Agricultural Insurance (National Crop Insurance Scheme). Agricultural insurance is not taking off in India despite the sufficient supply because the willingness to pay for insurance is low in India. Thus, there is need for improvement in product design for selling insurance products in India. Insurance is particularly important in drylands as there is high production risk. There needs to be more studies to estimate whether insurance has improved household economy and improved livelihood opportunities.  MNREGA which can also be applicable in scenarios of drought has prevented 14 million people from falling into poverty since the start in 2005. Less developed regions which use MNREGA show higher participation and higher rate of poverty reduction than more developed regions.

PDS as a vehicle for food security, is the oldest system designed by government of India and needs to be designed around three elements of ‘Availability’, ‘Acceptability’ and ‘Accessibility’ (3 ‘A’s) and active involvement of other states besides Uttar Pradesh, Punjab, Andhra Pradesh, and Haryana. Food availability is a necessary but not a sufficient condition for food security. The Abhijit Sen Committee (2000-2002) brought out the conundrum of availability of excess food and simultaneously food deprivation/starvation. Therefore, the focus of the policy instruments must be to improve access to food with proactive planning, particularly in areas prone to drought without waiting for manual-based declarations.

Presentations also highlighted the existing drought-proofing methods such as solar pumps, drought-tolerant seeds, cloud seeding, and diesel pumps. Cloud seeding was a new concept which is interesting technology used to seed small clouds to create artificial rain over the drought prone agricultural areas. Drought tolerant seeds is an agronomic intervention in which staple crops are bred for drought resistance (can tolerate dehydration in critical growth stages) and show early maturity helping them to escape dehydration. Solar pumps are another mitigation strategy used by Bihar government helped to bring down the cost of irrigation 266 percent when compared to conventional irrigation methods in the case of wheat.

The Telangana government programs includes several initiatives along with Universities to mitigate drought. The press is highly used in the months of high drought risk to spread the weather forecast of Indian Meteorological Department (IMD). The contingency plan in event of drought explaining the adaptation strategies, climate variability, and possible rainfall deficit is shared via video conferences and the farmers given sowing instructions for rainfed crops. The updated forecast is communicated to the officials of Department of Agriculture, farmers and scientists. Wide coverage of contingency plan is given via national television network and 14 other channels.

Bihar government programs for drought proofing include subsidies on shallow tube wells, diesel pump-sets, and investment in public tube-wells. Affordable irrigation is one of the essential components for creating resilient agriculture in Bihar which depends upon affordable power. The current solar-pump model needs immediate change, with farmers and solar companies requiring a modified financial model.

Some options discussed during the dialogue included-stress mitigation with relief measures and subsidies, reduction of single cash cropping, optimization of state reservoir capacities, crop insurance, and improvement of irrigation conditions, alternative government employment, and accessibility of low-interest institutional loans.

The summary conclusions of the dialogue include the following:

  1. There is a need for better information sharing on the role of particular departments within the government as well as more coordination in dealing with drought; for example, between those doing remote sensing and those looking at the agricultural markets and production. More discussion is needed on the role of national markets which can reduce the burden of distress by allowing free trade among Indian Agriculture Markets.
  2. Non-farm employment needs to be considered in policies, as it can be important insurance tool in the incidences of agrarian distress. The non-farm sector has high potential in Telangana and Andhra Pradesh states, for example.
  3. There are many existing policies such as MNREGA, PDS, and NIAS, demonstrating the government’s active role.However, new policies should be built around and in coordination with the programs in place and formulated in the context of the Indian political economy these programs receive a great amount of funding but are not reaching the desired results on poverty reduction.
  4. Tweaking already existing programs cannot give a sustained solution for solving the existing issues. Thinking outside the box is needed along with provision of skill-development programs and crop diversification with livestock, for example.
  5. There is need for pragmatic policies which are based on real-time data and multi-programed technology. Climate-smart agriculture methods are needed as well as a location-specific understanding of the impacts of drought.

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Fighting Droughts in Bihar

Solar Panels in Nalanda District, Bihar. Source: (flickr): Divya Pandey, IFPRI
Solar Panels in Nalanda District, Bihar. Source: (flickr): Divya Pandey, IFPRI

Bihar recorded only 122 mm of rain in the month of June this year against the normal 169 mm—a deficit of 28 percent. IMD reported deficient or scant rains in 23 of the 38 districts and it had ruled out the possibility of good rainfalls till July 17th. This is the sixth year of irregular monsoon and drought-like conditions in Bihar in the last seven years.

What can government of Bihar do to deal with frequent droughts?

High cost of irrigation is a big reason why agriculture in Bihar is so vulnerable to droughts. If irrigation becomes more affordable, droughts would have much less impact on farm economy and the farmers.

At present, Government of Bihar provides cash subsidy of Rs. 25/liter on diesel to farmers in drought affected blocks to make irrigation more affordable for them. It is perhaps the largest conditional cash transfer scheme in agriculture sector in the developing world. Between 2008 and 2014, the state government allocated 17.6 billion rupees this scheme—to little effect. The scheme, though well intended, is poorly implemented.

The diesel subsidy scheme has some nice features. One, it does not distort prices. Farmers get cash subsidy. Two, opponents of cash transfers often worry that the value of the subsidy may not keep up with the price of the subsidized commodity. Not in this case. Government of Bihar promptly raised the subsidy from Rs. 10/liter to Rs. 25/liter as diesel prices increased. Three, there is much less paperwork involved in this scheme. Farmers do not have to submit proof of land ownership, and so, even a tenant can claim the subsidy if his neighboring farmer attests that he has irrigated his land.

The diesel subsidy scheme has been ineffective in spite of all these good features. We talked to 240 farmers in 16 villages of Nalanda to understand why. We found three major problems with the way the subsidy scheme works.

One, the subsidy money reaches farmers too late in the season. Only farmers in drought affected blocks qualify for subsidy. By the time a block is declared drought affected, it is often too late in the crop season. It make take much longer for the money to reach farmers.

The delay would matter less if farmers could count upon eventually getting the subsidy. But they cannot. What qualifies a block to be drought affected is not clear, transparent and automatic. This trigger needs to become automatic and transparent. Government of Bihar should outsource this decision to a technology institution like IIT-Patna or the state agriculture universities. They would track rainfall in all blocks of Bihar and declare a block drought affected in real time. Once a block is declared drought affected, all farmers there should automatically become eligible for subsidy and they should be able to collect it from their nearest bank or post-office.

Late and uncertain payments make the diesel subsidy more like a compensation for crop losses and not a conditional cash transfer, it is meant to be, to induce farmers to irrigate more to reduce the crop loss from drought.

Three, smallholders rarely get the subsidy. The transaction costs are too high for them. A farmer who cultivates 0.5 acre land is entitled to Rs. 375 in subsidy—in 3 installments of Rs. 125 each. He may have to spend up to Rs. 60-80 in transport costs and lost wages just to collect the subsidy from his block office. Government of Bihar should build a system of cell-phone based cash transfers system if it wants to reach all farmers.

Subsidizing diesel is an ad hoc measure to make irrigation affordable. Even if implemented well, it can only mitigate the impact of drought. With droughts becoming so frequent, Bihar needs programs for drought-proofing the agriculture. Economic gains from rapid GDP growth will come to a naught if agriculture remains vulnerable to droughts in Bihar. We saw this in 2009 when one big drought wiped out gains in poverty reduction from five years of double digit growth in state’s economy. The number of poor people living below poverty line (BPL) increased by 4.7 million between 2004-05 and 2009-10 even as the per capita GSDP grew at 6-8% per year. This misery is avoidable. Farm economy in Bihar can become more resilient to droughts.

The drought in 2009 was much more severe in Punjab, Haryana and Western Uttar Pradesh. Still, there was much more crop loss in Bihar mainly because farmers in Bihar pay 25-30 times more for a cubic meter of water than his counterparts in north-western India. Improving rural power supply can make groundwater irrigation affordable in Bihar too. It can be the best possible investment for drought-proofing agriculture and the most effective poverty reduction strategy for the state.

Rapidly falling price of solar panels offers another opportunity to make irrigation affordable. In 2012, the minor irrigation department of Bihar revived 34 public tubewells in Nalanda by connecting them to solar panels. Our research shows that farmers have benefited a lot from the solar powered tubewells. There are more than 5000 defunct public tubewells in Bihar. The defunct tubewells can be revived to provide affordable irrigation and drought proofing in 50 thousand to one lakh hectares of land if they are solarized and their management is turned over to farmers.

Read More Striving For Drought Proof Agriculture in Bihar, India

Multiple Factors Hamper CCT Scheme

Cross-posted from the FSP India website written by Rachel Kohn

Women Farmers, Nalanda District, Bihar: Source (flickr) Divya Pandey, IFPRI
Women Farmers, Nalanda District, Bihar: Source (flickr) Divya Pandey, IFPRI

The increasing frequency of altered rainfall patterns in India has heightened the vulnerability of the agricultural sector, already susceptible to rainfall-related volatility. The impact extends beyond macroeconomics and into the households and lives of hundreds of millions of people. In Bihar, for instance, the poorest and third-largest state in India, 24 of its 38 districts are considered extremely vulnerable to climate change and a large portion of the state experienced droughts in four out of five years between 2009 and 2013.

In 2008, the government of Bihar launched one of the largest conditional cash transfer schemes (CCT) in the world in an effort to mitigate the effect of drought on crop area and farming. The CCT scheme uses a non-distortionary subsidy of diesel in drought-affected to encourage farmers to use groundwater for irrigation of their kharif crops. Paddy is Bihar’s staple crop and is primarily vulnerable to drought because of the high cost of irrigation.

Given the state’s great needs, limited resources, and the large-- and growing—investment in this program, it is important to have a clear impression its effectiveness. It is also a prime case study to research the impact and functioning of cash transfer programs in the agricultural sector and adaptation policies to mitigate the impact of climate shocks on crop production.  IFPRI researchers Avinash Kishore, P.K. Joshi and Divya Pandey present the first evaluation of this CCT scheme in their paper “Drought, distress, and a conditional cash transfer programme to mitigate the impact of drought in Bihar, India.”

The authors use several sources of data to conduct their evaluation including district-level rainfall during monsoon months combined with crop area and yield to measure the impact of drought on area and yield of paddy.  Relying upon the standards of the Indian Meteorological Department, they classify a district as drought-affected if the total rainfall from June–September is 80 percent or less of its long-term mean. The authors also use unpublished district-level data on allocation and uptake of the diesel subsidy from the state government’s records, published data from the minor irrigation census of India on the number of pumping sets in each district, and agricultural data (e.g. net sown area, crop yields total value of crop output) to identify factors that drive the large inter-district variation in use of the diesel subsidy. Last but not least, they survey 240 real and potential beneficiaries of the scheme in 16 villages of the Nalanda District, as well as block and panchayat-level government officials responsible for grass-roots monitoring and implementation.

The authors that between 2001 and 2012, drought reduced paddy yield by an average of 450 kilograms per hectare and the cropped area of paddy was reduced by 4750 hectares.  The authors note however, that although the diesel subsidy scheme launched in 2008 has steadily increased in value over time, has not had the intended effects.  They note an uptake ranging from 2% to 100% and from the primary survey, they note limited awareness of the scheme, high transaction costs, and poor targeting.  As a result, they find that the scheme has not been effective in mitigating the impact of drought on paddy production. The authors note “at present, it works more like a drought-relief programme where some farmers, especially the better-off ones, get some cash from the state in a poor monsoon season, and not like a CCT or a drought-mitigation programme that would encourage farmers to do something they would not otherwise do – maintain their cropped area and crop yields by using more groundwater to make up for the shortfall in rains.” The authors recommend changes in the subsidy transfer including doing away with the requirement to produce diesel purchase receipts, transparent mechanisms for declaring a block drought-affected, and information-sharing through mobile networks.  The authors also recommend creating permanent irrigation infrastructure as an affordable and sustainable way to provide assured irrigation to all farmers.

A fuel subsidy to lower the cost of irrigation is a popular policy for drought-proofing in South Asia, and the lessons learned in their study can be applied not only in the region but in other drought-prone parts of the world vulnerable to rainfall shocks.

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Striving for drought proof agriculture in Bihar, India

Risk-Management Increases Resilience in the Face of Drought

Cross-posted from the FSP India website written by Jaspreet Aulakh

Nalanda District, Bihar Source (Flickr): Divya Pandey, IFPRI
Nalanda District, Bihar
Source (Flickr): Divya Pandey, IFPRI

Shocks of any form can be have a more pronounced effect in the developing countries like India where half of the population is engaged in agriculture, and the occurrence of droughts can deplete of productive assets, aggravate food insecurity, and entrench people further into poverty. During a drought year, studies show income falls by an estimated 25-60 percent while the per capita poverty rate rises by 12-33 percent.  In a new study to be published in October 2015, Pratap S. Birthal, Digvijay S. Negi, Md. Tajuddin Khan and Shaily Agarwal argue that drastic shifts in the drought management strategy from crisis management to risk management has improved the resiliency of Indian agriculture. Using rice, a water-intensive crop, to test risk-tolerance, the authors find a small decline (2.5 percent) in rice production in 2009-2010 over the previous level despite the rainfall deficit of more than 20 percent. They attribute this resilience to improvements in water management, technological advances in crop breeding, as well as the development of infrastructure and institutions engaged in delivery of advisory services, information, and inputs.

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Food Security in Bihar: The State of Things Looking Ahead

Konark Sikka is an intern with IFPRI- South Asia office

Women Farmer Winnowing Rice, Bihar. Source (Flickr) Divya Pandey, IFPRI
Women Farmer Winnowing Rice, Bihar. Source (Flickr) Divya Pandey, IFPRI

Over the years investments in food and nutritional security have shown significant improvement in Bihar, but year-to-year fluctuations in agricultural production aggravated due to climate change, infrastructure problems, and slow progress in nutrition improvement have hampered the translation of investments into Continue reading "Food Security in Bihar: The State of Things Looking Ahead"

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