Why is Indian farmer inefficient ?

A lot of people would take offense at such a statement as they see this as an insult. It is not. It is not meant to show some individual farmer as an inefficient lazy person. This is about overall condition of Indian farming sector.

For a farmer to be rich, the farmer must produce a lot of produce. If you have lots of land, you can produce a lot. If you have very little land you will produce little. Whatever land the farmer has limits a farmer's ability to earn a good living. For example an Indian farmer can grow only 1 tonne of rice on an average per hectare. Australian farmers on other hand can grow 3 tonne of rice per hectare. This is despite the fact that Australia does not have fertile soil and easier availibility of water. An australian farmer hence is 3 times richer than Indian farmer even if they have exact same amount of land.

What matters is how much agricultural produce an Indian farmer has per hectare. How hard the farmer works is irrelevant. Whether he sweats in the hot sun or works 18 hours a day is irrelevant. The only way a farmer can earn a decent wage is if he can produce lots of agricultural output from the land he owns. Clearly that is not the case.

For most crops Indian farmer produces 3 times less than the top farmers in the world.

Why this is the case?

Land holding is very litte.

80% of Indian farmers own less than 5 acres of land. This is around 2 hectare. A rice farmer can produce only 2 tonnes of rice. At the market price of 2000 per 100KG this is merely 40,000 ruppees per year. After all the expenses this farmer will be able to earn around 10-20 thousand ruppees.

With that kind of revenue no farmer can afford his own tractor, compound and other mechanical equipment that is needed to produce more. These farmers often wont be able to buy good quality fertilizers, pesticides or packaging and storing mechanism. All this reduces the yield for the farmer.

However for a farmer who owns 50 hectares of land, can earn around Rs 10 Lakh per year. such a farmer might be able to spend on buy tractors and harvesters. Such farmer might be able to buy fertilizers in bulk and employ more people to ensure health of the farm. Obviously such farmer would be able to produce more. Such farmers will also be able to manage the water and borders of his farm much better than others.

Efficient agriculture requires advanced practices. Indian farmer is backward.

There was a time when Indian agriculture was compeltely manual. Farmers used animals like bullocks to plough the field and Indian government prevented mechanical equipments from coming into the country. A tractor was invented in 1849 but was seen in India only after 110 years or so. It took even more decades for the tractor to be common in India. Many farmers even today do not use tractors and rely heavily on bullocks.

A mere use to tractor helped India increase its crop yield. Using basic feritlizers helped even further. Neither of these two technologies were cutting edge and was a pretty basic improvement and yet helped Indian farmers grow their yield by nearly 100% since 1960s to 1980s.

Indian government continues to push for mechanization but given that most farmers are small they can not afford it.

The world on other hand has moved on. The world in last 20 years has made many advances in software controlled agriculture, advanced pestides and soil management, water management and crop storage and transport. Genetically modified seeds have shown yields like never before. Modern marketplaces do not just care about agricultural produce but also have a notion of quality variation. Indian farmer with exception of few crops such as Basmati remains obvlious to this change.

The methods of irrigation are controlled by government. While farmer gets free water most of it is wasted.

Indian farmer does not know the best and latest seeds in the market. What he will sow will mostly depend on what is available and what government is subsidizing.

Government subsidies lead to inefficient use of land.

Indian government promotes inefficient farming. Indian government prvides minimum support price of some crops which is basically a floor pricing for a given crop. Farmers thus prefer such crops over what might otherwise give them better market rate. Farmers end up growing too much of rices and very little pulses or oil seeds. Crops like Rice require lots of water which is provided for free by government and famer never bothers to look for alternatives.

Indian Agriculture