Why is Punjab's farm income growth slowing?

The recently released national survey of farm incomes, Situation Assessment of Agricultural Households 2018-19 (SAS), has shown that agriculture in Punjab has reached a level of ‘diminishing returns’ resulting in slower growth of farm incomes, according to the Hindustan Times report.

In the span of six years, from 2013-14 to 2018-19, Punjab's farm income grew at 6.73 per cent annually. Meanwhile, states like Bihar and Uttarakhand saw a growth of 13.3 per cent and 19.3 per cent, respectively.

About five decades ago, Punjab came out as the only region that was able to capitalise on the initiatives to fulfil India’s food shortage and drive the Green Revolution.

So, what happened to Punjab’s agriculture recently?

Experts have linked the income slowdown of Punjab agriculture to overdependence on crops such as wheat and rice.

Over the decades, the trend of ‘mono-cropping’ gained popularity in Punjab. Mono-cropping is the practice of growing a single crop on the same land for years and years. Punjab farmers’ cultivation swung between rice in summer and wheat in winter.

In the 1960s, the Punjab farmers were growing 21 varieties of crops, which has now come down to nine currently. No crop diversity resulted in a drastic fall in the farm income of the state.

Mono-cropping gained popularity in Punjab due to due to cheap fertilisers, assured minimum support price (MSP) for cereals, free electricity for drawing water, and high-yielding seeds.

MSP or floor prices are set by the government for wheat and paddy to help the income of the farmers. However, the government's procurement of wheat and paddy in large quantities has encouraged the farmers’ dependency on cereal cultivation. This ultimately affects the farm income in the long run.

In 2020, the government procured 60.06 million tonne rice -- the highest ever -- which was grown in the summer-sown Kharif season. The farmers' protest against the three farm laws has prompted the government to increase the procurement of cereals in the upcoming days.

According to a study named 'Changing Modes of Agriculture in Punjab’, between 1961-62 to 1985-86, when the average agricultural growth of the entire country stood at 2.6 per cent, Punjab was at 6.4 per cent.

But lately, Punjab’s agricultural growth has just been 1.6 per cent per annum which is less than half of the country’s agricultural GDP growth of 3.5 per cent, between 2005-06 to 2014-15.

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