Almost two-thirds of India still lives in rural areas, and their average per capita monthly expenditure was only Rs 3,773 in 2022-23 according to
the National Statistical Office household expenditure survey. Given the average family size of around 4.4, it translates to a family monthly
expenditure of only Rs 16,600. Even if one adjusts for inflation and their meagre savings till day, broadly speaking, an average rural family's income
is not more than Rs 20,000 per month.
There is no doubt that the Narendra Modi government has made inroads into rural areas through its several ramped-up schemes to build toilets, houses (PM-Awas), drinking water (Har Ghar Nal Se Jal), rural roads, electricity supply, etc., yet the rural population's income levels remain much lower. And within the rural space, the income of agricultural households is even lower.
This clearly shows that the rural economy has not been doing well. A good indicator of it that can be tracked is the growth in real wages in rural areas, which have been largely stagnating or even marginally declined in the second term of the Narendra Modi government.
The agri-GDP in FY24 was just 1.4 per cent according to the latest provisional estimates released by the Ministry of Statistics and Programme Implementation. The second advance estimate of this was, in fact, only 0.7 per cent. But since the overall GDP growth in FY24 was 8.2 per cent, the euphoria in business circles and media dominated by urban news was that India is in top gear with the highest rate of growth among all large economies of the world, including G20.
There is no doubt about that. But if the agriculture sector is growing at just 1.4 per cent, and it engages 45.8 per cent of the workforce, one can imagine what is happening to the well-being of the masses. Just giving them five kg of free rice or wheat per capita per month is not enough. That's literally a dole.
Instead, what is needed is to raise their real incomes substantially. But how do we do that? And this is a lesson for all the political parties, who want masses to gain from our development process, or make the growth process more inclusive In this context, three things must be remembered. One, there are too many people dependent on agriculture. They need to move to more productive, non-farm jobs. These could be in rural areas to build infrastructure, or outside the rural economy to build urban India.
It would require massive investments in skill formation for high-productivity jobs. They need to be trained for meaningful jobs. Second, within agriculture, the focus needs to shift from basic staples, especially rice, which is in abundant supply, to high-value agriculture such as poultry, fishery, dairy, and fruits and vegetables. High-value agriculture, being perishable, requires fast-moving logistics in a value chain approach, like the AMUL model in the case of milk.
The government needs to chalk out a robust strategy for that. Third, given that climate change already causing extreme weather events (heatwaves or flash floods), India needs to invest heavily in smart agriculture, including agrivoltaics, which means solar as a third crop for farmers, giving them regular monthly income even when other crops fail due to drought or floods.
If these things have to be done right, the nation needed an experienced and wise person to head agriculture and rural development in the Modi
government. In this context, the choice of Shivraj Singh Chouhan as the central minister appears to be a well-thought-out decision.
It is appropriate to recall his contribution to agriculture in Madhya Pradesh. Madhya Pradesh has performed well in the agriculture sector under Shivraj
Singh Chouhan. From 2013-14 to 2022-23, Madhya Pradesh's agriculture sector registered an average growth of 6.1 per cent per annum. This is when the national average was 3.9 per cent for the 10 years.
Madhya Pradesh's transformation in agriculture under Shivraj Singh Chouhan's tenure could be compared to Punjab's success during the Green
Revolution in 1960-70s. Chouhan served Madhya Pradesh as CM from 2005 to 2023, with a 15-month break in between when Congress formed government in the state for a small period after the 2018 Assembly elections.
MP now ranks first in the production of Soybean, Gram, Urad, Tur, Masoor and Linseed and second in the production of Maize, Sesame, Ramtil, Moong
and Wheat (after Uttar Pradesh) in the country. This was not the case in 2005 when Chouhan took charge as the Chief Minister.
MP was considered as one of the BIMARU states. He began by focusing on each deficiency area at the input side of MP's agricultural economy. At the macro level, Chouhan established an 'Agriculture Cabinet', focusing especially on the financials of the sector. This governance structure fixed individual ministerial and bureaucratic responsibility for various initiatives launched by the state government over the next few years.
The Chouhan government then started focusing on financing of the cultivation process. New schemes were launched to provide interest-free
loans with liberal principal payment terms for farmers. Chouhan also extended targeted subsidies for various factors of agricultural production, like seeds, fertilisers and farm equipment.
The state government worked in parallel to solve the irrigation and water availability problems to risk-proof farmers from the vagaries of monsoons. Chouhan started clearing the backlog of various stalled irrigation programmes and promoting water harvesting and conservation at the micro
level.
The success of the water management programmes of the state was also acknowledged widely. Dewas model named after the water conservation
programme launched in the Dewas district of Madhya Pradesh epitomised the success story with farmers from Maharashtra and Rajasthan travelling to
Dewas to understand micro-irrigation techniques better.
The irrigation coverage almost doubled from 24 to 45.3 per cent of its gross cropped area in the last two decades in MP. The result is that MP's
cropping intensity is 1.9 today, almost the same as Punjab. In the last 10 years, when agriculture in India grew at an average of 3.7
per cent, it was more than double for Madhya Pradesh with an average of 6.5 per cent annual growth.
Along with investments in irrigation, through the provision of new tubewell power connections and building/repairing of canals, Chouhan's government
also focused on creating infrastructure for the marketing of agricultural produce. Government procurement centres were set up even outside the
primary APMC (agricultural produce market committee) yards in sub-mandis, societies and warehouses closer to villages.
Notably, when farmers' protests erupted in MP's Mandsaur in June 2017 and escalated when five farmers were killed in police firing he could quell
the agitating farmers, by deploying a unique strategy. Apart from announcing measures like guaranteed Minimum Support Price (MSP),
friendly acquisition of land and establishment of agriculture cooperatives, Chouhan sat for an indefinite fast for one and a half days.
The situation was back to normal within a few days. He has successfully persuaded farmers to drastically reduce the use of chemical fertilisers and pesticides and instead use organic fertilisers. With this, he could get a brand name for the crops, particularly wheat, grown in MP. The Higher income segment people in northern states preferred MP wheat.
He has also been successful in mobilising lakhs of farmers into farmers' producers organisations (FPOs). Even today MP has the highest number of
active and commercially successful FPOs in the country. Thus, the data backs Chouhan's credibility as the Agriculture Minister.
Political observers believe that it is the first time in the Modi government that a heavyweight leader has got the Agriculture portfolio. One hopes that Chouhan will be able to use his experience from MP as Union Agriculture Minister and improve the sector that faces challenges of climate change, innovation deficit, reluctance to technology adaptation and diminishing interest of the private sector.
