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Farm Prosperity

Constraints that prevent farmers from becoming prosperous

Land holding size, water availability, funds and markets impact farmers’ incomes. This second piece of a four-part series explores constraints and viability of mixed farming for farm prosperity

The factors that act as barriers to achieve farm prosperity can be worked around (Photo courtesy Pixabay)

In this second part of the series, I want to look at two main issues. The first deals with real, pressing constraints that farmers find in expanding their incomes from farm operations. The second is to explore whether horticulture and animal husbandry are the essential components of any farming for prosperity. 

Given that nearly five-sixths of the farming households operate one hectare of land or less, any discussion on enabling farmers to be prosperous has to be about small farmers. The main substantial information about them known is that they all hold 1 hectare or less land. 

Putting some numbers together, one may derive the land / man ratio for them. However, in order to understand the situation in which they make their decisions, more specific information is needed. We need to know if a farmer has a homestead in addition to her farm and the kind of soil her farm has.

In additions, we need to know if she has access to any water source for irrigating her land, the degree of control she has on that water source, how expensive it is to apply water, how far she is from a remunerative market, whether she has access to storage facilities, how easy or difficult it is to transport goods and so on. Such detailed characterization will help us figure out why a farmer does not farm for prosperity. 

Main constraints

The table at the end of this note looks at some of the key factors that define the ability of the farmer to shoot for prosperity. The table is largely self-explanatory. We discuss only some selective aspects below.

Among the key constraints characterizing the situation in which a typical small farmer acts, is the set of attitudes she has. Frequently oppressed by adverse weather events, facing exploitative behavior by market players and putting up with recurrent health expenditure, a degree of learnt helplessness and risk aversion are somewhat common attributes of Indian farmers. 

The former is at times expressed as “kheti me se kuchch bhi sambhav nahin hain” or “ham nahin kar sakenge” (nothing fruitful is possible from farming or we will not be able to do) or words to these effects. This set of attitudes makes her xenophobic and reluctant to adopt profitable, if new, crops, agronomic practices and techniques. 

Interveners are often tempted to restrict themselves to incremental changes which can impact incomes only marginally. These attitudes can be changed partly through training, demonstrations and exposure visits. They can be impacted substantially through providing assurances and back up support if practices for farming aimed at prosperity fail. 

This last part is seldom implemented by interveners resulting in preponderance of subsistence oriented incremental changes. In part the need for it is not apparent and in part, they lack resources as well as methods to judge genuine cases of failure from cases arising out of moral hazard.

Cash flows

The other ubiquitous and very severely pressing constraint is the paucity of investment and working capital. A majority of farmers are poor and face pressing and frequent cash needs. Traditional farming gave incomes once or at best twice a year. 

To be honest, despite the introduction of many interesting schemes like the Kisan Credit Card, etc, investment and working capital needs of, in particular the small and marginal farmers, are met only to a very limited extent from formal banking sources. They have to depend upon more expensive credit either from the open market or from their own credit institutions like the self-help group (SHG). 

As cheap food supplies through the public distribution system (PDS) improves, the working capital need for survival has tended to drop. But health care has become more expensive. Interveners need to be sensitive to the need for regular cash flows. 

They need to offer a package that includes ways of frequent cash flows rather than a solution that requires the introduction of a crop that would pay at the end of a year or even longer. The Wadi program has generally worked well where the slow growing fruit trees are intercropped with quick return horticulture which provides cash to farmers. 

Irrigation needs

The third area that needs sensitive understanding and handling is the relationship of a farmer with water. Farm prosperity is not possible on small land holding without multiple, year-round cropping. Needless to mention, year-round cropping needs irrigation. 

In irrigated tracts, water availability is determined by schedule of releases in canals. Elsewhere, the farmer needs to own or have a reliable arrangement for drawing water from the ground. In most places other than lower Gangetic and Brahmaputra basins, ground water level has gone down very significantly. 

Electricity supply tends to be problematic in most rural areas. Diesel has become so expensive that unless a crop yields very high returns, irrigation using diesel pumps is unaffordable. At the subsistence level, use of household waste water in homesteads, from used plastic bottles to water plants in “landless gardens” etc. are some solutions which have contributed to improved well being of farmers. 

For market oriented, prosperity driven farming, in-situ water conservation by constructing water storage and water harvesting structures like jal kund, hapas, and farm ponds can help. These can be in conjunction with water harvesting on commons using innovative and cheap strategies such as the traditional doha model. 

All such steps tend to augment the net water availability. Small farmers need to be enabled to use these in combination with solar pumps, overhead storage and non-pressurized drip for reaching water to the crop root zone. 

Mixed farming

Creating shared facilities, engaging with the market, overcoming logistic constraints, etc. along with aggregation of the inputs or produce, are all considered the mandate of group enterprises such as the farmer producer organizations (FPOs). 

I had discussed these broad subjects in some of my earlier articles in VillageSquare. For the sake of completeness, in this series, I shall deal with the issue of aggregation and group enterprises towards that end in a separate note. (Read the first, second, third and fourth of a series on the success and sustenance of farmer producer companies)

An interesting observation of those farmers who have attempted farming for prosperity with reasonable success is that in addition to cereals, etc. on the farms, they either took to some animal husbandry (including fish rearing) or were producers of horticulture. 

Is this a logical necessity? Is it not possible to aim for prosperity in farming by growing cereal crops? And does including and emphasizing these activities in farm operations always lead to prosperity? There are some advantages associated with these activities. 

In the first place, they usually do not have the messy engagement of the government in price control or minimum support price (MSP) operations. Secondly, they are less intensely weather dependent. A crop can be destroyed with a single frost event, but animal husbandry is much more stable, if due veterinary care is taken. 

Thirdly, usually these activities give more frequent cash flows since they are “multiple harvest” type activities. Milk and eggs are produced and sold daily. Broilers can be produced in up to eight batches in a year. 

Vegetables and flowers can be harvested a number of times once they start yielding. In effect, multiple harvests each of small lots also reduces disaster due to price variations. Finally, thanks to many income schemes which have raised disposable incomes in villages, these items can also be sold locally.  

Of course there are negative sides too: they tend to be more demanding in terms of attention and manual labor. We need to examine carefully if farming for prosperity must include such activities in the total portfolio for farmers. 

ConstraintHow does it affectBinding constraint or open to changing?Ways of relaxing the constraints
Attitude (learnt helplessness, leisure-income choices, risk taking, xenophobia)Hugely Influences decision making on all the issuesOpen to changingBCC, demonstration, assurances, 
Have homesteads?Permits home nurseries of intended crop as also space for making manures, etc.Binding for an individualGroup nurseries
Type of soilDefines what can be done in the farmLargely binding, but possible to modify in partsSoil correction inputs (e.g. gypsum, FYM, mulching)
Access to water sourceMakes or eliminates irrigation possibilityBinding but moisture regime can be improvedIn-situ conservation techniques, buying water
Access to machines for land operationsMakes or mars control on change over between cropsBindingDivisible technologies, sharing mechanisms
Water distribution techniquesHow much can you stretch available resourceCan be relaxed by using micro-irrigationLow-cost MI kits
Degree of water controlDefines flexibility in choosing cropsBinding if the source is public or sharedIntermediate storing 
Cost of water applicationDefines ability to irrigate as well as profitabilityBinding in case of conventional energySolar-powered irrigation, possibly shared
Distance to marketEase of marketing, freshness of produceBinding for a solo player, forces crop choicesAggregation across many persons
Absence of storage and primary processingDefines ability to hold harvest, add value and permit flexibilityNot bindingNone
Physical connectivityDefines ease and speed of engagement with the marketBindingBringing market players to aggregation points
Information access and connectivityDefines how well information asymmetry can be removedBindingSetting up mechanisms for information and electronic transactions
Investment and creditDefines how much of the above is within reachBindingSHG, micro-finance, etc.

Sanjiv Phansalkar is the director of VikasAnvesh Foundation, Pune. He was earlier a faculty member at the Institute of Rural Management Anand (IRMA). Phansalkar is a fellow of the Indian Institute of Management (IIM) Ahmedabad. Views are personal.

Sanjiv Phansalkar
Sanjiv Phansalkar
Sanjiv Phansalkar is associated closely with Transform Rural India Foundation. He was earlier a faculty member at the Institute of Rural Management Anand (IRMA). Phansalkar is a fellow of the Indian Institute of Management (IIM) Ahmedabad. Views are personal.

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