Is India in step to develop a sustainable agricultural future as envisioned in COP27?
Synopsis
Building sustainable farming practices and farmer resilience remains a highly sought after and yet difficult to achieve goal for India, despite extensive farmer awareness. Simple measures such as bringing large parts of the nation under micro irrigation have itself proven to be a challenge.
Agriculture and food security featured prominently in the latest COP27 discussions with governments acknowledging the need for accelerated progress. India has been steadfast in driving climate smart agriculture practices through policy with the establishment of the National Mission for Sustainable Agriculture, farm friendly policy and cost incentives to promote modernization. Building sustainable farming practices and farmer resilience remains a highly sought after and yet difficult to achieve goal for India, despite extensive farmer awareness. Simple measures such as bringing large parts of the nation under micro irrigation have itself proven to be a challenge. For years, Sangram Khadkikar (40) grew sugarcane on his 1-hectare farmland in Maharashtra’s Shirol village. Sangram believes in the power of foresight and knows that drip irrigation will be an essential input for his continued success but is afraid that this need may end up being unfulfilled.
The ‘Per Drop More Crop’ scheme has been the pallbearer for driving micro irrigation adoption by conferring subsidies of nearly 75-80 per cent of the total cost of the systems. For Maharashtra, this is up from the 45-55 per cent support on total cost extended earlier. It’s a welcome move from the government in supplementing urgent necessity with tangible policy amounting to Maharashtra being among the top states covered under micro irrigation. While Sangram was deeply optimistic when the Maharashtra government announced increased support, it was when he contacted his nearest dealer that he realized that certain hurdles still remain. The system cost for a 1 hectare plot is roughly INR 1.50 lakhs, almost half his yearly earnings from the crop, and subsidy can only be availed once the full payment is initially paid by the farmer. This presents a huge upfront cash flow challenge for farmers with a level of uncertainty over subsidy disbursement. In our experience working with and speaking to drip irrigation dealers in the region, we hear that once a farmer applies for subsidy, a process which often requires the assistance of a dealer, they directly receive the subsidy quantum between 6 months to over 1 year, sometimes longer. The Government has leveraged digitized processes through its Direct Beneficiary Transfer process to ensure smooth pass through of subsidies to end beneficiaries in some states, which is certainly a commendable move, but there are lingering timeline uncertainties and regional execution is yet to be uniform. Delays in subsidy implementation and pay out delays by the government, highlight the lack of a unified experience across and within different states. This poses a huge working capital challenge for sugarcane farmers who typically have a long 12 month or more harvest cycle.
angram knows that he cannot afford to pay that high a sum upfront without any surety of the subsidy timeline and he especially isn’t sure if he can trust a dealer to help him with this process. When quizzed if the system could pay for itself during the harvest season and thus reduce some of the pain regarding system adoption, he reveals another concern. Sangram talks about how his friend in the next village installed drip irrigation and increased farm yields by 40-50% which covers a large part of the cost of the system, he adds that his friend was lucky and got the subsidy soon after and quickly reiterates a popular sentiment among farmers in the region of really wanting the subsidy as well if they buy the system, otherwise, it will just feel unfair. This clearly highlights how the equipment subsidy has become a huge selling point for adoption of the system in way that eclipses the true benefits of the system. Thus, the urgency to adopt is diminished when there is poor oversight over receipt of the primary ‘reward.’
With the payments of a home loan already pulling on his purse strings, Sangram decides to look to other alternatives and realises that there is a seasonal variant of the product that can be suitable for his needs and is almost 40-50% cheaper than their ISI counterparts. However, there is no subsidy conferred on the product by the government and Sangram feels disincentivized to try. Thus, the subsidy becomes a deterrent towards adoption instead of being the enabler that it is envisioned to be.
A lot has been done but there is room for more and the plight of Sangram tells a story of nearly 30-32 lakh sugarcane farmers in Maharashtra. The uniform adoption of micro irrigation techniques is of great importance especially for the largely agrarian economy of India and is especially sensitive in the face of climate change. We recommend continued support for the program with increased budgets that can accommodate all farmers in the region and allow subsidy on a larger range of micro irrigation products lines that empower the farmer to choose what’s best suited for their farm and needs; and lastly, relook at ways to improve and streamline operational processes that make the measure more farmer friendly and highly predictable which may be achieved through strategic public private partnerships.
Currently, approximately 17 per cent of the agricultural land in Maharashtra is under micro irrigation but the Government has shown that it cares about adoption and is willing to expedite the process with the necessary financial backing. A strong implementation process that supports this intent by articulating a short and defined timeline for subsidy disbursement and one that is apparent to its intended beneficiaries can be a steppingstone to success.
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