Policy Options for Transforming Mountain Agriculture
By Dr BP Maithani
On 9th November Uttarakhand will be celebrating the 23rd anniversary of its birth. While this is the occasion for rejoicing the youthful vibratory poise of developments in infrastructure and institutions, it is also an occasion to reflect as to whether there are developments to regret. The most striking adverse development after the formation of the new state is migration from and progressive depopulation of the vast mountainous part of the state. And this is largely due to rapid decline in mountain agriculture. Agriculture, a family-based occupation, which has been the mainstay of life of people and kept the people tied to their villages, is no longer a preferred occupation for the new age youth. Difficult terrain, low productivity of land, tiny scattered land holdings, lack of irrigation, extension services and marketing facilities have rendered family-based farming an unviable and risky proposition. There was no diffusion of green revolution technology in the hills because of adverse institutional and bio-physical factors. Persistence with subsistence deters the younger generation from engaging in farming under harsh mountainous conditions. While the net sown area in the hills has shrunk to about 8.5 percent of the reporting area, there is steady increase in fallow and cultivable waste land which now accounts for about 9 percent of the land area according to Land Use Statistics of Uttarakhand`s Board of Revenue. So much so, the contribution of agriculture including livestock sector to the state’s domestic product declined from 30.1 percent in 2000-01 to 6.7 percent in 2014-15. This sharp decline in agriculture has triggered exodus of youth from mountain villages to towns and cities in the plains in search of job opportunities.
This is reflected in much lower than State’s average population growth in the hill districts and negative population growth recorded by Pauri Garhwal and Almora districts between 2001 and 2011. The loss of workforce has only aggravated agriculture crisis further giving rise to the phenomenon of Ghost villages. According to a report of the Rural Development and Migration Prevention Commission of Uttarakhand Government, the number of Ghost Villages, (villages which were earlier inhabited but now have no inhabitants) increased from 1053 in 2016 to 1702 in 2022. Ironically, the migration has increased after the formation of separate Uttarakhand State due to lopsided development. Residents are abandoning villages in droves accentuating land degradation, loss of production and income. The challenge confronting policy makers is how to reverse this deterioration in agriculture so as to enhance viability, increase production, create employment and generate income and attract investment in mountain agriculture. The question is what should be done to make farming in the hills remunerative. Business as usual will hasten disaster. Existing family operated small farm-based subsistence agriculture is not conducive to promoting agriculture on modern lines. Only transformational change can rejuvenate this dying sector. If agriculture in the hills has to be transformed from subsistence mode to market oriented commercial farming, executing this transformation will require a holistic change in land management.
Pooling of land holdings:
The main handicap of family-based agriculture system in the hills is that it cannot be operated on business lines for want of viability. It is, therefore, imperative that farmers pool their tiny land holdings at the village level and opt for cooperative or corporate form of production organisation to impart viability and efficiency in resources use. Often land consolidation is offered as panacea for agricultural growth. Land consolidation is a difficult exercise fraught with acrimony and social tension. Moreover, family level land consolidation is no solution for agricultural woes because given subcritical land holding sizes, even consolidated land cannot ensure a viable enterprise. The need is to evolve a paradigm of collective farming which is robust, efficient, inclusive and acceptable to all the farmers. In a situation where cultivable land is scarce and scope for intensive agriculture is limited, the way forward for improving the viability of farm sector calls for three crucial policy interventions. (i) First, there should be pooling of land holdings at the village level to constitute viable farms which could be managed as agribusiness enterprises. Ideally, one revenue village should constitute one farm. This will impart much needed viability to absorb investment in commercial farming. (ii) Second, village common land including Van Panchayat land should also be incorporated in the so consolidated village farm. This will break the land constraint and allow diversification to horticulture and agro-forestry as desirable land use options in the mountain terrain. Another concomitant benefit of this measure will be virtual consolidation of land holdings sans cost and conflict. This in itself will be a great achievement given the cost and complications involved in land consolidation process. (iii) The third and most important policy intervention should be to manage the so consolidated village farms with the help of producer companies of the farmers and ex-army personnel who are in abundance in the state.
Land holding as the basis of share-holding:
This is possible within the framework of One Village-One Farm paradigm. The one village – one farm paradigm will allow inclusion of common village land in the village farm to enhance viability and inclusiveness and also facilitate farming through a producer company with land holding on the basis of share-holding. What is proposed here is a farmer centric contract farming arrangement in which farmers will come together at the village level to form Farmer Producer Organisations by owning shares in proportion of their land holdings to become shareholders of the Producer Company. The unit of land holding in the hills is ‘Naali’ (240 sq yard or 0.02ha) the local measure of land area used in revenue records. Farmer`s share in the producer company could be fixed on per Naali basis or per rupee of the revenue assessed on the individual land holding. This way the farmers will acquire share holdings of the producer company in proportion to their land holding. This design feature is preferable to induce all farmers to pool their land holdings and become share-holders of the producer company without any reservation about how the profits of the producer company from the private land will be distributed. This may attract criticism of reinforcing existing disparity in the production and income of the farmers but it is more important to induce farmers to pool their land holding to constitute a consolidated single village farm. Maintaining social harmony is a paramount need for the success of such a transformative innovation. The objective of inclusion can be or will get integrated in this paradigm through various other ways as we will see later.
Farm Management by Producer Companies:
The management of the village farm will be the responsibility of the producer company. The Producer Company will be an independent entity which will manage the village farm by hiring labour from within or outside the villages and invest in inputs, machinery, post-harvest storage, grading, processing, packaging and marketing of the farm produce. The managers and or directors of the producer company will together plan and decide what is to be produced in which part of the village farm in what proportion or volume, sold to whom, where, at what price and profit. This arrangement is considered proper in a situation where more than half of the households in the villages have totally abandoned cultivation and those continuing half-heartedly are also willing to lease out their land on contract. They are instead willing to work as wage earners for whosoever cultivates the land rather than face the risk and uncertainties involved in farming themselves. This transition from family management to corporate management has many advantages. In the relatively egalitarian mountain communities, almost all households own more or less some land. All farmer share-holders whether resident or nonresident (those who have migrated out but still own land in the village) will be partners in the share of profits of the producer company in proportion to their land holdings. They will have no ground to grudge for pooling their land holdings in a single village farm to reap the benefits of viability and efficiency of the modern management. It will be a win-win situation in which they will receive some dividend income from the share of the output and in addition it will also prevent degradation of their land. Moreover, all households will be equal partners, irrespective of the sizes of their private land holdings, in the proceeds of the products of common property resources and other common village enterprises such as dairy, poultry, fishery, etc., enhancing inclusiveness. This arrangement will not only prevent migration but will also motivate local youth to return to villages and, instead, work with the producer companies on wages from the comfort of their homes.
Benefit sharing arrangement:
There could be two models of benefit sharing between the Producer Companies and farmers/land owners. (i) One, in which the farmers’ land is solely leased out to the producer company for investment in land development, production, harvesting, processing, and marketing of the produce, the producer company should get ninety percent of the produce and ten percent share should go to the land owner. It is because the cost of production, harvesting, post-harvest operations and marketing is very high in the mountain conditions because of which farmers are abandoning agriculture leaving the land barren. Farming can become profitable only when the farm size is large and modern technology of production, processing, etc., is adopted which can be done only in the corporate mode of production. The land owner should be satisfied with the token ten percent share of produce or its value because otherwise the land is left barren open to degradation yielding negative return. (ii) Two, where the land owners themselves collectively bear the cost of farming (mainly labour cost) under the supervision of a producer company in which the producer company will supply the inputs – seeds/plants, fertilizer, pesticides, etc., and knowhow with buy back guarantee at a fixed cost or on seventy:thirty ratio basis in which seventy percent share of the value of produce will go to the producers/farmers and thirty percent will be availed by the producer company for its services.
Integration of MNREGA with agriculture:
To incentivise local youth to stay back in the villages and work for the producer companies, they can be paid wages under MNREGA for working in their own farm land. Already, there is provision for 60 percent of MNREGA fund to be spent on farm related works such as land development, water harvesting, plantations, etc. This should include wages for crop cultivation and harvesting activities also. This will reduce the cost of production which will benefit the farmers as well as the producer companies. Thus, those staying in the village and working for the producer companies can be doubly benefited with wages and annual dividend. Given the anxiety over insurmountable problem of migration of work force from the villages in Uttarakhand, it should not be difficult for the state government to include agriculture works under MNREGA in consultation with the Ministry of Rural Development government of India. Already, in 2018, a subcommittee of the chief ministers formed by the NITI Ayog had recommended this type of synchronisation of MNREGA funds with agriculture for reducing cost of agriculture production. This will minimise the misuse of MNREGA fund also which is otherwise wasted in nondescript types of jobs with huge embezzlement. State government can also make a case for increasing the wage rate under MNREGA to attract rural youth towards agriculture sector. In any case it can be easily increased to current notified agricultural minimum wage rate of Rs 304. Besides, minimum number of man days per household can also be increased from present 100 days to 125 or 150 days to generate adequate employment in building durable productive farm assets like land development, water harvesting structures and tree farming in the vast stretches of rain fed agricultural land which constitutes about 90 percent of the total farmland in the mountain region. This initiative, besides fetching carbon credits for producer companies can also improve ecology and biodiversity of the region.
Pilot Project:
To begin with, this one village – one farm paradigm can be implemented on a pilot basis in some ghost villages with proper land management agreements on ninety: ten benefit sharing arrangement in favour of producer companies and the owners of agricultural land respectively. The local Patwari can help in ascertaining the distribution of land holdings and their ownership in the identified ghost villages. This will however require formation of producer companies of the ex-soldiers, local youth and migrant workers on the lines of Eco Development Taskforce scheme of the Defence Ministry for the implementation of the project in each cluster of villages. In order to be economically viable, a producer company will require a farm size of minimum 100 ha. An average village will have about 50 ha of cultivable land. Most of it or maybe all of it will be rainfed, barren and cultivable waste land which will have to be put to agro-forestry uses involving planting of food, fruit, fodder, fiber, medicinal plants, etc. That means a producer company will need to operate minimum two village farms to be viable. The project will involve substantial initial fixed as well as variable cost in building productive assets like waste land reclamation, soil conservation and water harvesting structures, nurseries and plantations, purchase of equipment and implements, construction of stores and warehouses, etc. There will also be substantial operating cost on wages and inputs like seeds, planting material, fertilisers, insecticides and pesticides, water, etc. Funding this cost is a major issue. It could be a quadrilateral venture of State Government, Central Ministries of Agriculture, Rural Development and Defence. The producer companies could be tagged to some large Pharma and Food processing industries like Patanjali, Himalaya, Dabur, Baidyanath, ITC, and Reliance, etc., for ease of marketing. Cost of developing 100 ha of waste land for productive purpose will be around Rs 1 crore spread over a period of five years. There will be additional Rs 1 crore operating cost over five years. Once developed, it will be self-sustaining indefinitely. For 1700 ghost villages with an average 50 ha cultivable waste land per village, development cost will be Rs 1700 crore only. Not a big amount for presenting the proposal at the global investment summit.
(The writer is a Rural Development specialist. Views expressed are personal.)
