PUNJAB, with only 1.53% of the country’s total geographical area, produced 16% of the country’s wheat, 11% of the rice, 3.4% of the cotton and 7% of the milk in 2019-20. Over the past decade, the state has supplied 35-40% wheat and 25-30% rice to the central pool. Over the past seven decades, Punjab’s agrarian economy has continued to thrive, signaling reach far beyond its demographic and geographic boundaries. The state’s average monthly income for farm households has historically been the highest in the country.
However, the state continues to face several problems, including groundwater depletion, rising debts, and lack of alternative employment opportunities. Alternatives advocated by experts, such as agricultural diversification, have proven unsuccessful. About 67% of farmers in Punjab cultivate less than 4 hectares of land, although their share of total cultivable land is only 34.6%. On the other hand, only 5.3% of farmers have more than 10 hectares of operational exploitation with a share of 21.7% of the total cultivable land of the State. The average operational farm size in Punjab is 3.62 hectares.
Currently, there are 4.69 lakh tractors, 14.83 lakh tube wells, 92,000 lakh threshers and 19,000 combine harvesters in the state; these have made agricultural production capital-intensive. Heavy agricultural investments and the low level of savings in agriculture lead to indebtedness. It is not economically viable to acquire the least 25CV tractor on 67% of farms of less than 4 hectares. Small-scale farmers cannot afford to invest in land, irrigation and agricultural machinery from their own savings to improve farm production capacity and realize the benefits of precision agriculture. Therefore, cooperative farming should be encouraged in order to ease the financial burden of buying expensive machinery and tools. Renting agricultural equipment is an important cost reduction measure for farmers. These machines can be maintained at the level of the cooperative organization at the village level and made available to farmers on a customized rental basis. Collectively, the farmers themselves can also pool their resources and start cooperative farming. To initiate cooperative agriculture, well-run Primary Agricultural Cooperative Societies (PACS) can prove to be a lifeline for small and marginal farmers. These companies should not just be suppliers of fertilizers; they should also promote cooperative agriculture, mechanization and marketing of agricultural products. Such a strategy can help farmers increase their profits. Thus, small-scale farmers should form groups and OPAs (peasant producer organizations) to strengthen their bargaining power, which will enable them not only to buy quality inputs in bulk at relatively lower prices, but also to sell their products at higher prices. Also, farmers can choose crop rotations that are more labor intensive and produce higher yields than the wheat-paddy cycle, such as horticultural crops. This will also result in increased working hours in the fields. Similarly, contract farming can also help small farmers secure their income. However, it requires government intervention to establish strict rules and regulations to protect both parties, as contract farming has a checkered history.
State infrastructure for product storage needs to be improved. Farmers can obtain credit on their stored products using the warehouse receipt system. Moreover, it will help them to avoid distress sales immediately after harvest. About 36% of farmers rely on non-institutional sources of finance (private dealers, sales agents, commission agents and lenders) to meet their household and agricultural needs at high interest rates, ranging from 24% to 36% per year. year. The government should control unregulated operations from non-institutional sources, and the farming community, especially small farmers and sharecroppers, should have increased access to institutional finance.
Another key issue in today’s agricultural scenario is the reduction of agricultural labor hours. The production mode of Punjab agriculture has become capital intensive over time and the demand for human labor has declined since the late 1980s. This idle agricultural labor is often unable to find a new employment in the non-agricultural sector. According to recent data on the cost of cultivation, a rotation of paddy and wheat crops of one acre requires only 20 to 25 man-days of labour. A crop rotation or an additional occupation that generates additional work throughout the year is necessary. Farmers can visit Punjab Agricultural University (PAU) or Krishi Vigyan Kendras (KVK) at district level to explore new additional professions of their choice. With the addition of new professions, the effective working hours of farmers can be increased, resulting in higher incomes.
Farmers must adhere to the agricultural techniques recommended by PAU in order to reduce production costs and ensure the sustainability of their profession. Additionally, it has been noticed that the majority of farmers do not keep proper records of farming expenses and income. By keeping accurate records of returns and expenses, unnecessary expenses can be quickly detected, which can then be reduced. Unproductive expenses associated with displaying status symbols and high costs associated with weddings and other social rites should be eliminated to ease the debt burden. Individuals must live and consume within their means.
The use of modern farming techniques, efficient farm planning, diversified farming through demand-driven production, and better exposure of farmers to local and distant markets can help them reduce crop production costs, increase demand for their products, to explore additional working hours and, ultimately, to transform agriculture. in a profitable occupation. Within the confines of the socio-economic and political framework of the Punjab economy, these approaches can be helpful in increasing farm incomes and reducing indebtedness.
The author is Senior Extension Researcher, PAU, Ludhiana