Plight of small and marginal farmers in India A way-out for their resurrection
The plight of small and marginal farmers are not unknown in academic, social and
government circles. Everyone has a view and a solution on the subject. A host of
NGOs operating in India is spending millions on their initiatives to find lasting
solutions for the uplift of farmers. The government has its own theory that is
shrouded with political connotations, mainly to garner votes from farm sector. Yet all
these initiatives have not really touched the core of the problems relating to small
and marginal farmers in India; symptomatic of missing the wood for the trees. That is
why sadly, farmer’s suicides are continuing unabatedly!
On the other side, there are farmers with large land holdings conducting agriculture
profitable. They are in command of all the factors of production like land, labour,
enterprise and capital! These farmers are powerful and many are into politics. They
influence in making the policies on agriculture and are a suspect, in keeping these
poor farmers in their present status. They also enjoy Income Tax exemption; a law
that does not differentiate between farmers who have large and small holdings of
My research reveals that a different paradigm is required to be put in place to
resuscitate small and marginal farmers. Their issues arise predominantly from:
1. Fragmented lands can neither absorb technology nor mechanisation.
2. They are in perpetual debt that inhibits supplies of good quality inputs.
3. Farm labourers are becoming scarce and come with poor productivity.
4. Lack of storage prohibits safe keeping from parasites and price protection.
5. Middlemen deny the worth of farmer’s meagre produce.
6. Bureaucratic ineptitude compound their problems.
Small and marginal farmers have not been able to come out of this syndrome that
compels them to migrate, especially the younger generation to fetch a living, deserting
their old ones. Some have taken to MGNREGA, a Government scheme that provides
assured wages for 100 days to work for them. This system has created a serious
deficit of labour in villages, where some farmers are able to conduct cultivation with
Central and State Governments provide help and assistance to these farmers
through consistent budgetary allocations every year, besides providing ad-hoc relief
when either floods or droughts strike. However, the delivery mechanism is slothful
and ridden with corruption, syphoning bulk of the provisions. This is yet another
reason for the farmers’ abysmal state. Ironically the beneficiaries are some
Government staff. A despicable state!
Logically the Government must disengage itself from the agriculture sector. Instead,
turn its attention towards many enabling activities like building roads, connecting
rivers, build canals, create an intelligent network from these canals, dig rivulets to
ensure all lands gets irrigated. Then, provide continuous power supply, simplify and
speed up the process of land registration/transfer, simplify legal system, bring digital
technology of internet browsing facility and the like. Money spent on all of these
enabling features will benefit the farming communities into a robust system where
the entire sector will benefit more than its present programmes. In addition, it will
build capital assets and avoid revenue expenditure (loss) through largesse. This will
also create more jobs and consequently arrest migration from villages to cities and
towns. This way the farm sector will begin to boost the GDP growth and generate
employment in a significant manner.
The other worrisome factors that encumber farmers are unpredictable weather,
depleting water resources, adulterated seeds, inefficient power supply and lack of
availability of the farm labour and mounting farm debts. It is may surprise everyone
that farmer is charged a steep interest for the bank loans provided to them at 11.75%
p.a (NABARD scheme)!! Can farmers afford to pay interest on such heavy loans they
are offered to them? All these collapses the farmer. Their disillusionment drives them
to extreme poverty. The plight of farmers with large land holdings, up to 10 acres of
lands are not very different.
Many authors and theorists including business managers of repute, say that “In our
opinion, the real problem in agriculture is the absence of a holistic framework,
incorporating technology, risk mitigation, institutions, policies and technical training”,
say the authors of their book titled ‘What India can do differently in agriculture’, in
para 4.3. The authors have not identified the vehicle and the methods through which
these can be done. However, these ideas can form a part of the curriculum of
agriculture schools in the country and not applied to small and marginal farmers
whose minds are pre-occupied with finding their next meal.
Dr Ramesh Chand’s (Full-time member of Niti Ayog) book on Doubling Farmer’s
Income, Rationale, Strategy, Prospects and Action Plan Document, in its opening
para, describes the strategy adopted by our planners achieved 45% increase in per
person food production that has made India not only food sufficient at an aggregate
level, but also a net food exporting country. That’s is very well but the next para says
that the planners did not strategize explicitly to recognise the need to raise farmer’s
income and did no mention of any direct measures to promote farmer’s welfare. In
my opinion these reflect the output of well to do farmers and not small and marginal
farmers. If we do not pay attention to the uplift of small and marginal farmer’s needs,
the efforts of doubling farmer’s income will be that much difficult.
In the same book, Professor Ramesh Chandra quotes NSSO Data on consumption
and expenditure for the year 2011-12, mentioning that one-fifth of the rural household
with self-employment in agriculture as their principal occupation were having income
less than the poverty line! Only in the year 2016, did Government thing seriously that
farmer’s welfare is essential to avoid agrarian crises. This was the basis for the
PM to announce that by the year 2022-23, farmer’s income must double and that
work on this must commence. It is difficult to measure and say that the goal is
achieved, even if great strides are made. But if we are able to demonstrate that all
villages that have small and marginal farmers have been enabled in the method
suggested herein by 2022-23, the goal can be said to have achieved. For instance, a
full round the year employment in itself will demonstrate that the farmer’s income
would more than double. In the article, it can be seen that there is a confusion in
what is the meaning of doubling farmer’s income? At the end of 2033, one hopes that
there is no confusion in the assessment and it becomes a political rhetoric.
Today, most students go to study agriculture because they may not get admission in
any other curriculum. There is no future studying this subject and hence this
situation. Only banks offer jobs for agricultural graduates. Present Agriculture
Universities teach students only good agricultural theories and an apology of
practical training, with which their education remains incomplete. So how will
students passing out get to work in the agricultural environment? That is one reason
that 19000 students graduating from Agriculture Universities do not work in
Agriculture, even if they are passionate. ICAR and many such R & D institutions
create new varieties of crops, seeds; tissue cultures with excellent credibility but all
are a bundle of wasteful efforts if these cannot be applied real-time farms. R & D is
done on the University’s farms with ideal conditions that may not be so in real fields
of farmers. This is corroborated by data showing that new varieties of researched
seeds had varying yields in different parts of the country.
An eminent Agronomist in the country, Mr KPP Nair once said a long time ago that
the difference between the Chinese and Indian scientist in agriculture is, while in
China, the scientists go to the villages and hand hold farmers in teaching their
findings. In India, the scientists sitting from the comfort of their offices, direct their
subordinates in the field to communicate to the farmers. With poor work culture, these
experiments never get translated except for farmers holding large land tracts of
lands. The exponential growth China has achieved in agriculture is well known.
The subject of agriculture should be taught in the schools in addition to the present
curriculum. After class 8, when students usually branch off to either science or arts
or commerce streams, agriculture could be one additional stream. This may create a
strong preference and students can go up to the college levels in Universities and
get employed in rural India. In fact, such students must be trained for ‘skill
development, assessment of risk and its mitigation techniques, building institutions
incorporating technology’ from the beginning. Endowed with these skills they can
enter agriculture just as they would do with any industry. The future generation will
immensely benefit if adopted sooner. Working in agriculture industry will be sought
after employment. This could promote more employment in villages.
Economist Prabhat Patnaik observes in Outlook Magazine: “Our share of cultivators
has fallen since 1951. A whole set of people who might have been independent
peasants has been pushed into the ranks of agricultural labour. They have no rights,
no security of income; they are subject to the worst kind of drudgery because it is all
manual work. They cannot organise. It’s just in a miserable and painful state of
Since the stagnant rural economy offers meagre opportunities for employment, a
large segment of these households is footloose, circular distress migrants, that Jan
Breman, labour anthropologist has evocatively described ‘hunters and gatherers of
work’. To stay alive, they will go to any corner of the country, to do any work, with
any remuneration, on any terms. How true, as we see these migrants from lands far
away, with different languages and cultures reside by road-side to seek work! It is
indeed pathetic and painful to see such fellow Indians who once fed us, suffer from
penury, now. Their children loiter and have lost the opportunity to be educated.
Admittedly only large farmers are finding this vocation sustainable and emerge as
real producers of food grains in the country. They produce whatever is best suited for
them. They are an influential lot and often seen to be behind making / amending
policies on agriculture. Many are politically connected and consequently are the
biggest beneficiaries from this vocation. These class of farmers in our country,
conduct profitable agribusiness. They have innovatively done value addition and
successfully tapped opportunities for exports. They are the most preferred ones to
do contract farming by large corporate who in turn make big profits in agri-business.
They have large financial resource and can organise local labour easily. They also
benefit from Government’s largess in terms of the waiver of Income Tax, subsidy
benefit and take loans even though they may strictly not need one but wait for a loan
Also, there seems no system to communicate with farmers to produce what is
needed in the country. For instance, if there is the shortage of pulses, there is no
mechanism available to communicate with farmers to grow pulses. Even if there is
one, is it possible to get farmers to grow pulses to fulfil the demand? The minimum
support price announced by the Government barely covers the cost of production.
This is because the Government compute costs on the ideal situation and the costs
for farmers are higher due to a variety of uncontrollable factors. Very sophisticated
measure are employed to calculate the MSP but in reality, small farmers do not have
sufficient resources to grow crops in the stipulated manner. Hence there is a
perpetual demand to secure higher MSP. Many who may not have grown pulses
before, will hesitate to take the risk. In addition, the fear of middlemen playing havoc,
because government engage them to buy from farmers. These systems and
practices weigh heavily on the minds of poor farmers. They Organising skills is yet to
develop to tackle such eventualities. Finally, the Government is left with no other
alternative but to import. There appears no organised system to guide and
operationalise the means of food production in India.
In recent times, when Government resorted to buy pluses from Mozambique,
farmers in Karnataka staged a protest that their pluses were left unsold in the market
and that importing will further ruin their chances of selling their stocks!
With generally poor administrative machinery, one wonders if the statistical
information provided by the Government is authentic. It is thus clear that the
Management of the affairs of agriculture needs refurbishment to get around the
issues eluding the right answers.
A progressive step the Government took in the year 2000, was to incorporate clause IXA
of the Company’s Act, Ref Sec 465(1) to enable registration of Farm Producer
Company (FPC). Essentially this was to overcome the convoluted problems relating
to the functioning of the cooperative society system in the agriculture industry that was
initiated soon after independence. As a relief, FPC gives a structural form to enable
farmers to create a corporate type of enterprise so that farmers can form into such
form, in their villages. They would have a Management Committee. This committee
would undertake jobs like negotiating with banks for loans for individual farmers
negotiate with fertiliser and other input suppliers, machinery suppliers and the like,
so that good and cheaper cost will accrue to farmers. To undertake such measures,
the committee must be endowed with skill, leadership and managerial proficiency to
steer the issues of farmers successfully. Unfortunately, in reality, the lack of these
qualities and cooperation amongst themselves has made these FPC, a mere
signboard in villages. Slowly it became to be politicised. They were more interested
in seeking to fund from NGOs. These led to a lack of vision to produce a common
good that was intended. So it remains in an indeterminate state. There are some that
are working but they merely work as enabling institution for farmers. These FPC are
formed by those farmers who have means to cultivate and thus small and marginal
farmers are very few and derive no uplift from these institutions.
Many corporate like ITC, Mahindra, Birla, Reliance, HLL, Rallies, Godrej, and Pepsi
to name a few have got into the agricultural business, since many years ago. All of
them have gained considerably from agriculture that signifies that wealth can be
created from agriculture. However, they are done with large land owners only. They
resort to contract farming and even in these types, there are many who have
misgivings of the system and are in legal skirmishes. Instead, the same group of
corporate without an exploitative mind, can form an FPCs and install a professional
team to do agriculture on the farmers’ lands and derive benefits for all constituents.
However, this has not happened so far in the country.
Observers and writer on agriculture subjects level criticism against corporate
farming, alleging collisions with international agriculture companies, like Monsanto /
Cargill and the like. This may not be true entirely. The problem stems from a
misconception. Farmers feel that it is fertilisers that produce good crops and
varieties. Without judicious use, they felt that using a larger proportion of this will get
them more yields and with that greed, they indiscriminately use fertilisers and ruin the
soil fertility that makes their land unusable.
Fertilisers are like elixirs for the human body. When human food deficiency takes
place these elixirs help rejunuvation of the health of the body. Similarly, fertiliser play
a similar role. If we do not keep the soil health clear, do not give sufficient water, the
crop is bound to show a sign of ill-health and does not yield or yields far less than
anticipated. Like the human body, fertilisers should be used judiciously to rejuvenate the
crops. By applying more, with greed the crops get destroyed instead of being
protected. This misunderstanding creates the problem. That is the same with
the application of pesticides.
In Andhra Pradesh, under the aegis of the then Chief Minister, Chandrababu Naidu,
it was agreed to let BHC Agro India Private Limited conduct agricultural on lands
belonging to farmers. Around 200 acres of lands belonging to small and marginal
farmer’s lands were given to this company. The company had a tie up with an Israel
Company for the supply of drip irrigation. The land-owner farmers were asked to
leave the village. A few were however engaged as labour but for a low wage. They
were treated shabbily and poorly and exploited them. BHC Agro operated with a
huge budget and spent money like water in pesticides and high-value fertiliser. They
had no systematic plan for growing crops and did not engage any agricultural
personnel but carried on with whatever manpower they had. This resulted in a total
failure of the project and ultimately, had to be wound up. The farmers felt cheated at
the end of the experiment. These details are in public domain. This is the result of a
good model but improperly executed. The Chief Minister had farsighted mind as he
had a very similar idea, that the bureaucrats bungled and the experiment failed
miserably; a pity indeed. If it was executed with precision, by now a big agricultural
revolution would have flourished in Andhra Pradesh and spread elsewhere!
Having virtually exhausted all avenues to resurrect small and marginal farmers, the
way ahead can be summarised as follows:
Agriculture in India needs to be well structured and planned in a new paradigm. This
is essential to grow the crops that are required in various places in the country for
consumption. They must work like and industry and just like how industries are
structured and apply business management means to get the best out of their
produce, agriculture can also do the same and reap the benefits.
Individual farmers are too tired and worn out, confused at the array of rural
interventions by NGOs and exploiters. Skill development, training and professional
jargons do not enter farmers’ minds. They need hand holding, encouragement and
assurance. Individually farmers cannot do agriculture and make a living.
Based on these I have been looking to connect with farmers and take this idea to
their doorstep to explain this concept. I was fortunate to do this in a village in
Tiruchirapalli District of Tamil Nadu.
In this village, farmers had left cultivating their lands due to the condition that was not
conducive for cultivation to make a sustained living. Water deficiency and soil
runaways were the main issues. Water levels in bore wells have depleted. Ran-fed
farming used to be practised but with insufficient rains continuously, farmers began
to migrate, leaving their families back. Some were doing unviable farming but were
living on animal grazing and selling them, even though farming lay in their hearts.
With friends around, we explained the advantages of land pooling. We were able to
create an interest in 43 families with around 134 acres of lands, who were prepared
to experiment this idea. They gave their consent to be members of a Farmer
Producer Company, as shareholders. The modus operandi are planned as under:
1. We have conducted a socio-economic survey of the village and have sought
the consent of all the landowners to pool their lands. We have explained to
them that their lands will retain the ownership and in no way will be
encumbered. We have explained the advantages in remaining together for
long and not sell off their holdings for any reason.
2. We have explained to them about our team that will work on a plan to cultivate
and market with the necessary investments required.
3. We have assured them that they will be employed for wages throughout the
year and will be treated with dignity. We have also assured them that their
cattle will be looked after and food for them as well as for the farmers will be
grown on these very lands.
4. We have explained to them that the profits that we will make will be distributed
amongst them after keeping a reserve for the future. We have explained to
them that these profits will not be taken away by anyone other than existing
member farmers and is meant to be used for farmer’s welfare only.
5. We have explained to them that should anyone wish to sell their land, they
would provide a right of refusal to the existing holders before selling to any
outsider. The new buyer will need to be members of the company in the place
of the seller so as to not disturb the contiguity of the lands.
6. A dispute resolving mechanism will be in place with independent persons to
look into and resolve any issues that may arise during the course of this
Based on the above understanding we propose to register a Producer Company
under clause IX-A of the Company’s Act, Ref Sec 465(1). Currently, this process is
under way. Under this provision of the Law, only thos who own land or cattle etc., as
provided, can become members. The persons connected in this proposal are as
1. Raghavan - Retired as Director with Indian Oil Corporation (IBP Unit) and with
over 4 decades of work experience in corporate world. He is the Originator of
the idea and concept of farmer emancipation. Others below have joined him
to assist his mission and also are as passionate.
2. Thangapandian: An engineer who has worked for many years in electronic
Industry has finally settled in his village doing enormous social work and who
introduced me to the village.
3. Senguttava: A farmer who resonates my passion and has been looking for the
right way to help these farmers.
4. Ravishankar, CEO of an HR Company in Chennai. Has over 35 years of
5. Ramesh - Marketing professional in MNC, with over 35 years of corporate
6. Raja Vel - A Chartered Accountant, with over 30 years of corporate
7. Venkatramani Govindan – An Agricultural Professional, associated with M.S.
Swaminathan Foundation for over 25 years and Agriculture Correspondent in
The Hindu for over 25 years. He is the driver of technology in this project.
8. Dr Nageswaran - an Agricultural professional who has worked with
Venkatramani in M.S. Swaminathan foundation and he will manage the
operations on a full employment basis. Has vast hands-on experience.
In addition to the above, a few farmers who are well-versed with agriculture will also
be a part of the core Management Team who will be associated with the project
Based on the above a Business Plan, a Financial Plan and a Technical Plan have
been assembled. The project is viable from the end of the first year with a surplus.
The project cost is $300,000.
We are now looking for a Grant or a loan for commencing the operation of the
project. While we have not yet begun this project, word has spread around and
another village nearby at Achanayakampatti is ready to fall in line with this concept.
We have assured them that we shall take their village as well only after we have
successfully demonstrated this concept and have made gains for the farmers after
one year of operation.
March 23rd 2017; Chennai