Why green revolution states should shift from MSP crops to high value crops and Non-farm activities?

shifting from msp to other

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Context: Green Revolution states are required to shift their focus from MSP crops to high-value crops and Non-farm activities due to the consequences

Punjab, Haryana, and western Uttar Pradesh were early adopters and major beneficiaries of Green Revolution technology and enabled India in becoming a nation close to self-sufficiency in food in just 15 years.

How green revolution states benefitted from the MSP system?

Due to the following factors, the share of rice and wheat in the total cropped area rose from 48% in Punjab and 29% in Haryana in the early 1970s to 84% and 60%, respectively in recent years;

  • Firstly, farmers were insulated against any price and market risk due to the Government procurement of marketed surplus of paddy (rice) and wheat at MSP.
  • Secondly, the best resources were allocated for technological advancement for rice and wheat crops by public sector agriculture research and development for technological advantage.
  • Third, free power, and fertilizer subsidy together with MSP resulted in higher income per unit area from wheat and paddy cultivation.

The above factors made the cultivation of Paddy and Wheat beneficial in terms of productivity, income, price, Land-labour ratio, and yield risk, and ease of cultivation among all the field crops (cereals, pulses, oilseeds).

Then, why green revolution states must shift to Non-farm activities?

Since the Mid-1980s, many reports and policy documents started suggesting the following serious consequences of the continuation of the rice-wheat crop system in general and paddy cultivation in particular;

  • On the demand side, Per capita intake of rice and wheat is declining in India and consumers’ preference is shifting towards other foods. For ex; average spending by urban consumers is more on beverages and spices than on all cereals.
  • On the supply side, rice production is rising at the rate of 14% per year in Madhya Pradesh, 10% in Jharkhand, and 7% in Bihar.
  • On the government procurement side, Rice and wheat procurement in the country has more than doubled after 2006-07 and buffer stocks have expanded to an all-time high, with fewer options available to dispose of such large stocks. It is putting a heavy burden on the government exchequer.
  • On the farmer’s side, More than 50 Years of the MSP system has affected the entrepreneurial skills of farmers required to sell the produce in a demand-supply based market system.
  • On the resources side, paddy cultivation and availability of free power for pumping out groundwater for irrigation, has resulted in the drastic decline of the water table in 84% of observation wells in Punjab and 75% in Haryana. At this pace, both these states might run out of groundwater in a few years. Stubble burning is also a consequence of this system.
  • At present, most of the farm work in green revolution states is being undertaken by migrant labor as the younger generation is not willing to do manual work and looking for better paying salaried jobs in non-farm occupations.

All the above-listed factors do not favour an increase in MSP, which is demanded every year by farmers.

How to shift to non-farm activities?

The government in these states must facilitate the private investment in a large number of area-specific enterprises tailored to State specificities by

  • Promotion of food processing in formal and informal sectors;
  • A big push to post-harvest value addition and modern value chains;
  • A network of agro- and agri-input industries;
  • Setting up high-tech agriculture;
  • A direct link of production and producers to consumers without involving intermediaries.

Besides agriculture-based industries, State needs large-scale private investments in modern industry, services, and commerce.

Thus, the demand of time is that these traditional Green Revolution States of Punjab and Haryana should focus on innovative development strategy in agriculture and non-agriculture to develop a better future for the farmers and aspiring youth of the state.

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