Solar energy versus water tables

What would you choose: Earn Rs. 93 by selling power to grid or Rs. 250 by selling pumped water to neighboring farms.

“Since May 10 this year, when this solar co-operative began supplying power to the grid, farmers have been switching off their solar power pumps after irrigating their farms. The excess solar power generated by the solar panels at their farms was getting diverted to the grid, thus providing them a supplementary income. However, finding this income too minuscule some of them have started to keep their irrigation pumps working overtime and supply water to farmers who don’t have irrigation facilities. Pravin has been selling water to at least 20 neighbouring farmers using his pumps. “The rate fixed in the power purchase agreement is pretty low. The government should pay us more,” he feels. Ramabhai Chavda, another member of the cooperative, sells water, said a family member.”

““For irrigating one bigha, we need about four hours and 20 units of solar power. If we switch off our irrigation pumps and supply the power to the grid we will earn about Rs 93. However, if we sell the water from our tubewells to the neigbouring farmers, we end up earning Rs 250 for the same four hours,” said Parvin Parmar, a member and secretary of the cooperative.”

Read full article:  Gujarat solar co-operative sells water instead of electricity.

 

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Overuse of fertilizer and pesticides in India and its impact

India’s uses more fertilizer (kg/ hectare) than the US, something which I have written about previously.

A recent report by the Standing Committee on Agriculture shows heavily skewed (over)use of fertilizers and their impact on quality of soil, water and human health.

Read some of the findings: “42% of India’s districts use 85% of its chemical fertilisers”

Download the full detailed report: Impact of Chemical Fertilizers and Pesticides on Agriculture and Allied Sectors in the Country: Standing Committee on Agriculture (2015-2016)

 

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Do small farmers have higher productivity than large farmers?

It is commonly heard today that small farmers produce most of the world’s food. But how many of us realise that they are doing this with less than a quarter of the world’s farmland, and that even this meagre share is shrinking fast? If small farmers continue to lose the very basis of their existence, the world will lose its capacity to feed itself.

Such claims are made by several reports in recent months [1].  At the core of the argument is the claim that small farmers are more productive than large farmers, i.e. that they produce more food per acre of land than large farmers.

Obviously, the claim raises some questions:  Are small farmers really more productive than larger ones?  Is this true in India or only in other countries? If true, what are the causes of this higher productivity?  Could industrialized farms improve their productivity by copying the mechanisms used by small farmers? Or, must the large farms be turned over to small farmers for this to work?

The India Data

In India, small and marginal farmers are defined as those with less than 2 hectares of land.  In 2002-03, such farmers made up ~80% of all farmers in India and together they owned about 43% of total land in the country [2].  According to an estimate, they operated about 46% of total land and generated about 51% of total agricultural output [3].

Estimates of productivity ratio (output per hectare by value) of small and marginal farmers to that of large farmers range from 1.25x to 2-4x [3, 5].  That is, productivity of small farmers is greater than that of large farmers. In fact finer analysis often shows a inverse relationship of productivity with farm size:  As farm size increases, productivity (output in Rs. per hectare) declines.

This “inverse relationship” is a contested topic with different researchers attributing it to different causes and some even questioning how real it is.  But since this inverse relationship is at the core of recent debates about small vs. large farms, it is useful to examine it closely.

In productivity analysis, output is measured in terms of value of crops not quantity of crops, to make comparison across different crops possible.   Imagine two farms, a small farm and a large farm.  Let’s assume that the large farmer grows a low value crop, while the small farmer grows a high-value crop.  In such a case, the per-hectare (ha) value of small farmer output can be larger than that of the larger farmer.  So the very first question to ask is about differences in crops produced by small vs. large farmers.

  1. Do small farmers grow different crops than large farmers?

It turns out that the answer Small farmers crop choiceis yes.  Many small farmers select crops primarily for subsistence but sell any surplus they have; such farmers often produce millets, rice, vegetables, etc.  Other small farmers focus on growing “high-value crops” such as vegetables and fruits.  (Interestingly, 10-20 years ago, fruits were the exclusive domain of large farmers, but now increasing numbers of small farmers are cultivating fruits).  Larger farmers usually grow cereals, soyabean, sugarcane, and such crops.  The table below shows details for fruits and vegetables; for other data, see the references [6]. Thus the higher productivity of small farmers is not entirely an apples to apples comparison; it almost literally compares apples with, well not quite oranges, but with wheat and rice.

  1. For the same crop, are small farmers more productive?

I couldn’t find enough studies in India so I’m not convinced yet, though I did find one study which supported this conclusion. A primary survey which compared rice yields by farm size in Allahabad revealed that the inverse farm size-productivity relationship holds even for the same crop [4]. The same study also showed that this inverse relationship is not universal: In China, a parallel primary survey showed that rice yield per ha increases with farm size. And in both countries, yields increase with greater mechanization.

  1. Even if small farmer productivity is higher for same crop, what are the causes?

Studies point to various possible reasons for higher productivity, such as greater proportion of irrigated land among small farmers, greater fertilizer use (which is 1.5-4X higher among small farmers), slightly higher adoption of high-yielding varieties by smaller farmers, and greater farming intensity, that is, the number of crops grown per year (15% higher among small farmers) [5].

Several studies also point to greater labour intensity of production.  My own anecdotal discussions with farmers also indicated this: Because small farmers are more desperate to eke out a living from their parcel of land, they (especially the women of the household) invest greater time in caring for their fields compared to large farmers who often take a hands-off approach.

  1. Does this mean that we should hand over the world’s farms to India’s small farmers? 

Well, not quite so fast. For most crops, average productivity of Indian farmers is much lower than (half to a third) that of global averages, often even a quarter of China’s productivity [7].  While this is a comparison of average productivity, it is still indicative of small farmer productivity in India since more than 50% of the country’s output comes from small farmers. Taking all the land in the US and farming it the way Indian small farmers do, would actually decrease global productivity and global food production.  So handing over large farms to small farmers may not be a wise decision.

  1. Beyond productivity: Other problems with small-farmer production approaches

As we saw earlier, small farmers use intensive farming methods such as greater use of fertilizers, water, etc.  So it is possible that on average the techniques used by small farmers may cause worse ecological impact in some aspects than large farmers. In fact, a recent initiative to provide better agricultural information to small farmers saw a reduction in use of such inputs by small farmers.

Secondly, small farms are labour intensive, and leverage free and upaid labour of household members who are underemployed due to lack of other options.  The per capita productivity of small farms is in fact much lower than that of large farms [5]. So, even if productivity gains were real, it may not be ideal to promote more underemployment around the world.

Thirdly, one of the reasons why small farmers work so hard to achieve higher output is because they don’t have an alternative.  Among small farmer households, an average of 5 people depend on 2 acres of land, and there is extreme pressure to extract as much as possible through intensive farming and “free” family labour.  Medium and large owners have the benefit of more land (and greater total income) and therefore don’t need to squeeze out all they can from their land.

The average Indian farming household earns barely Rs. 6400 per month on average (this amount is for the whole household, not per capita). Incomes of smallholder farmers are even lower.  National data shows that farms below 2 hectares (i.e. small and marginal farms) are, on average, unable to meet the basic needs of farming households.  While their per acre output (“revenue”) might be higher their costs are higher due to greater use of inputs and also because they pay more for them per unit because of exploitative market practices.

Thus, idolizing small farms based on a unidimensional view of “productivity” is fallacious (both in terms of data and its implications).  Blindly converting all farms to small farms implicitly implies promoting intensive farming practices borne out of desperation.

6. There are better arguments in favour of supporting small farmers and land reform

The current agricultural production system in India is highly problematic and in dire need of change.  But using fallacious arguments about relative productivity of small farmers to justify change towards more sustainable farming does not serve much purpose and may be counter-productive.  A much stronger argument for supporting small farmers and land reform is also the simplest one:  equity and social justice.

ENDNOTES AND REFERENCES

  1. See GRAIN report  and George Monbiot in The Guardian  and response 
  2. 2005. “Situation Assessment of Farmers: Some Aspects of Farming, NSS 59th Round”, New Delhi: Government of India. While more recent data is available on ownership, for consistency with productivity data, we will use the 2002-03 NSS data.  The table below highlights the land ownership changes between 2002-03 and 2012-13 (from NSS 2014 report on 70th Round).

Small and marginal farmers

  1. “Operated” can include land leased-in from other farmers. Source: Dev, S. Mahendra. 2011. “Small Farmers in India: Challenges and Opportunities.”
  2. Wang, Jianying, Kevin Z. Chen, and Sunipa Das Gupta. 2015. “Is small still beautiful? A comparative study of rice farm size and productivity in China and India.” China Agricultural Economic Review 7 (3): 484-509.
  3. Chand, R., P. L. Prasanna, and A. Singh. 2011. “Farm size and productivity: Understanding the strengths of smallholders and improving their livelihoods.” Economic and Political Weekly 46 (26): 5-11.
  4. Birthal, P. S., P. K. Joshi, D. Roy, and A. Thorat. 2013. “Diversification in Indian Agriculture toward High-Value Crops: The Role of Small Farmers.” Canadian Journal of Agricultural Economics 61: 61–91.
  5. FAO.org. Accessed 19 October 2015. Datasheet: https://docs.google.com/spreadsheets/d/1xvLORqVm0FFxd-ohF5a65xTQFJlYl3pKrAmQy-3dP-w/edit?usp=sharing
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Pulses: Links

Following up on the previous post about pulse production and imports, this is a brief blog with links to interesting points of view on pulses.

Some of the reasons more farmers don’t grow pulses: 

“Both farmers have sugarcane on their fields too and insist they will continue to water the sugarcane, a 100% irrigated crop, even if means less production of tur or the remaining urad/moong in their field. Per acre, sugarcane will give them an assured profit of Rs 30,000 while the profit from pulses is only Rs 7-8,000 per acre.”

…Logically, if pulses need little water, little processing, fetch such great prices, are always in demand and if we lose so much foreign exchange in buying pulses from Canada, Myanmar and Australia, why are farmers not planting more, asks the report.”

Inadequacy of government reaction:

The government’s decision to import 7,000 tonnes of tur (5,000 tonnes earlier, and 2,000 tonnes now) to tame prices, shows the sheer naivety of officials. In a country where the consumption of tur hovers between 3.3 to four million tonnes, aiming to control rising prices by importing 7,000 tonnes exposes the government’s ignorance in pulse price management.

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Pulses Production, Imports and Availability: By the numbers

With pulses prices topping 200/kg in many parts of India, it is an obvious topic for a blog.  Pulses are a category of produce which have intrigued me for a long time.  India is the largest producer and consumer of pulses.  India is also the largest importer of pulses.  While we have achieved “food security” in terms of cereals, we are increasingly dependent on pulses imports.  Imports currently account for about a fifth of our pulses consumption.

Given all this, I thought it might be useful to take a look at pulses strictly by the numbers.

1510 Pulses image1

India has produced 17-19 million tonnes of pulses in the last 3-4 years including all varieties of gram, tur (arhar), urad, etc.  To put this in perspective, we produce about a 100 million tonnes of rice (about 5% of which we normally export).  Another interesting thing to note is that while production of almost all foodgrains (rice, wheat, millets, pulses) declined last year, tur daal and gram declined more significantly.

Pulses import export

1510 Pulses image3

Every year we import about 20% of total pulses we consume. We hardly export anything – whatever we do export is primarily intended for Indians living in other countries.  In the case of tur daal, we import about 15% of  consumption.  India consumes 76% of the global supply of tur daal, followed far behind remotely by Myanmar at 14% and (mostly eastern) Africa at 9%.  This implies that India probably drives the international prices for tur.

Two other points of interest:

  1. In response to uproar over daal prices, the government recently announced the creation of 40,000 tonne buffer stock. For a country which requires 60,000 tonnes per day, 40,000 seems quite inadequate as a buffer to manage prices and/or supply.
  2. Another interesting question to ponder is whether 20-22 million tonnes of pulses are enough for the country. The chart below depicts the long-term trend which shows a longer term decline, with a slight recovery in recent years.

Per capita availability of pulses in India (grams/day)

More on yields and productivity of pulses in a future blog…

UPDATE March 24, 2016:  Related article from Washington Post about how India’s demand for pulses is luring farmers in Canada, US to grow pulses instead of wheat

SOURCES:

  1. Pulse production: http://eands.dacnet.nic.in/Advance_Estimate/4th_Adv2014-15Eng.pdf
  2. Import/export last two years:  http://agricoop.nic.in/imagedefault/trade/Pulses.pdf
  3. Import/export older: http://www.iipr.res.in/pdf/13_1_24072015.pdf
  4. Per-capita availability: http://indiabudget.nic.in/es2014-15/estat1.pdf
  5. Global consumption of tur (pigeonpea):  http://oar.icrisat.org/191/1/98_2010_BO49_CP_and_PP.pdf
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How much processed food do Indians eat?

“We discourage children from eating processed foods.  In fact, we don’t allow children to bring any processed foods as snacks.  No bread, no pizza, no birthday cake.  Only home-made Indian foods are allowed, like idlis, roti, etc.”  Announced a primary school principal recently.  This got me thinking: what is considered “processed” food?  If I buy dosa batter instead of making it home, does it make dosa “processed food”? Does making bread at home shift it from processed food category to home food?  Is processing a question of who does it and where (home vs. “production unit” or factory) or what ingredients are added to a food? And is all processing bad?

The question of food and food processing in India is something I have been interested in over the last several years.  One topic which I have been particularly curious about is how much processed or unprocessed food do Indians actually eat?  We like to believe that we eat very little processed food, but is this backed by data?  Have changing food habits shifted the norms significantly?

Last week, I came across academic papers which analysed household food expenditure data to show that only 10% of food consumed in urban India is highly processed (with added ingredients), while the majority 73% is minimally processed, and 17% is unprocessed.  For rural India, the comparable figures are: 6%, 79% and 15% (see chart below).  These figures are in terms of money spent, not quantity.

Food consumption processing 1508

Note one slightly tricky point about fluid milk: Fluid milk is treated as unprocessed in rural areas because it is an unpasteurized raw product, but as food with high-value first processing in urban areas.

The first question that arises from the above chart is why are rural Indians eating slightly less unprocessed food (excluding milk) than urban ones?  This could be because the data is based on expenditure, not quantity of food consumed.  Since prices of unprocessed foods are lower in rural areas where they are grown, it could account for the difference.  Another contributor could be that many high-value produce such as fruits and vegetables and milk are intended for urban markets.  Poor households (which constitute ~40% of the producers of the food we eat) often have dire need for cash, and therefore, sell almost all the produce, keeping very little for own consumption. Or this could simply be the margin of error in the data.  The authors didn’t comment on this point.

The second interesting thing to note is that almost 6% of food expenditure in rural households goes towards highly processed foods.  Though this is a significant amount, it is still quite small.

Trend over time

The authors compare expenditures with similar data from 1999-2000 and report some to-be-expected trends.  Both urban and rural people are spending more on foods with high-value first processing and second processing. The interesting data is again in unprocesssed foods: Why are rural households spending slightly more than they used to on unprocessed foods?  Could it be because rural Indias are increasing intake of higher value items such as vegetables? (see “What’s on the Indian Thali?“)

Food expenditure trend by level of processing

Food consumption processing table 1508

The study goes on to show (not surprisingly) a correlation between income and higher expenditure on processed foods.  It also shows that states with greater urbanization also show higher expenditure on processed foods.

Those interested in digging deeper, can check out the two papers in endnotes.

—-

Morisset, M., and P. Kumar. (2008). “Structure and Performance of the Food Processing Industry in India.” Available at http://www.isid.ac.in/~pu/conference/dec_11_conf/Papers/MichelMorisset.doc

Reardon, T., & Minten, B. (2011). The quiet revolution in India’s food supply chains (Vol. 1115). IFPRI Discussion Paper. Available at: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.226.6316&rep=rep1&type=pdf

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How much do farmers earn?

Recently, The Hindu published a very informative analysis based on NSS data.  The average income of a farming household in India is Rs. 6426, out of which roughly half comes from cultivation, another third from wage work and rest from a mix of livestock and other sources.

The analysis also shows that only farm households greater than 1 hectare (about 2 acres) earn enough for household needs.  “But given that over 65 per cent of households have less than one hectare of land, this means that two out of three farm households are simply not able to make ends meet.”

For the full article, see: “Does it pay to be a farmer in India?

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