Agribusiness

2014 The International Year of Family Farming

By  Dr Amrit Patel

India Can Capitalize Opportunity to Make FFs Food-secure

The year 2014 being declared as the International Year of Family Farming [IYFF] by the FAO of the United Nations and it presents immense opportunities to India to make family farms food secure. It is time now to view Family Farmers (FFs) as part of the solution for nation’s food security and sustainable development instead being viewed as a problem. This article briefly highlights the significance of the international year of family farming and family farms, FAO’s initiatives, Indian scenario and suggests development initiatives to make family farms food-secure.

family farming India

Year of Family Farming

By 2050, global population will be about nine billion people. The 66th session of the General Assembly of the United Nations formally declared the year 2014 as the “International Year of Family Farming” (IYFF).The declaration of the IYFF reflects a growing global consensus that an enabling environment must be created that can facilitate Family Farms [FFs] to produce enough food to feed them. The IYFF can create awareness among all stakeholders [family farmers, Government, civil society, research and financial institutions, private sector, among others] about the potentials of FFs and challenges they face in this regard and seize opportunity to strengthen institutional infrastructure to develop sustainable agriculture based on family farms. During the IYFF media have a responsibility to highlight specific farm production models that our research institutes and State Agricultural Universities have evolved for successful implementation by family farmers to minimize incidence of hunger, poverty and environmental degradation.

FAO’s initiatives

According to the FAO, family farms are engaged in all family-based agricultural and allied activities that contribute to production in vital sectors, viz. agriculture, forestry, fisheries, animal husbandry, pastoral and aquaculture. More specifically, the FAO Director-General Graziano da Silva, describes “a family farm is managed and operated by a family and predominantly reliant on family labor, including that of both women and men”. The FAO would facilitate policy dialogue with nations throughout 2014 to help its implementation, in collaboration with national Governments, International Development Agencies, farmers’ organizations, non-governmental organizations and other concerned organizations of the United Nations. FAO is addressing critical demands aimed at sharing and delivering scientific knowledge about family farming on a continuing basis.

The goal of the IYFF is to reposition family farming system at the centre of agricultural, environmental and social policies in the national agenda by identifying existing gaps and emerging opportunities to promote a shift towards a more equal and balanced agricultural development. The IYFF seeks cooperation at the national, regional and global levels to increase awareness and understanding of the potentials of family farms, challenges they face and help formulate strategic action plan to achieve the goal.

Already the FAO has held discussions with Governments, private sector and civil society organizations, among others, and sought the approval of guidelines, viz.[i] voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests endorsed in 2012 by the Members of the Committee on World Food Security (CFS) and [ii] internationally agreed-on guidance on what needs to be done to ensure that the use of natural resources support food security goals. Concern and commitment to implement these guidelines can make this task easy.

Significance of Family Farms

Over 500 million FFs around the world are producing at least 56 per cent of agricultural output including more of food grains world-wide. Family farmers work on 85 per cent of farm land in Asia, 62 per cent in Africa, 83 per cent in North and Central America, 68 per cent in Europe and 18 per cent in South America. There are different commodity-based models of family farms in different regions, viz. family farms as a source of rice production in Asia, 78 per cent of farmland producing 84 per cent of all produce in USA and making annual sales of US $230 billion, less than 25 per cent of farm land producing 83 per cent of cassava, 70 per cent of beans and 46 per cent of maize, and accounting for 38 per cent of the agribusiness value chain in Brazil and 47.4 per cent of the land producing 84 per cent of yam, rice, manioc, maize and beans in Fiji.

The practice of inheritance of land/ farm to the next generation is an incentive for the children to manage the farm efficiently and improve its productivity from generation to generation by investing in it and adopting scientific techniques. However, this does not imply that FFs are always managed sustainably. Often, higher investments and labor demand for long and short-term development purposes, viz. undertaking soil and moisture conservation works and contour embankments on farms, creating irrigation facilities, purchase/hire of farm machinery and use of high yielding variety seeds, chemical fertilizers become impediment to sustainable natural resource management of poor family farms.

All FFs do not necessarily own the land that they cultivate. They may rent it under different land tenure arrangements/system. In most developing countries, FFs are often operated under share cropping arrangements, where they have to give a mutually agreed specified share of the farm output to the land owner. And worse has been that they have to borrow money from local moneylenders at exorbitant rate of interest and unfavorable terms.

The legal ownership of land by FFs in the developing world determines the access to shelter, education, healthcare, income, economic and social security. The lack of legal rights to hold land often influences and impacts in varying degrees on the poverty in rural areas.

Land ownership motivates and encourages FFs to invest in modernizing, mechanizing and commercializing the farms to the extent possible, guarantees access to institutional credit and insurances, ensures family’s food and nutritional security. Besides, land ownership supports development of allied agricultural activities particularly, dairy and poultry farming which has its own place in the family farming system and adds socio-economic value.

Family farms are the main producers of food consumed locally in developing countries. Increase in productivity of FFs will enhance food security both for FFs and the nation. Increase in productivity must necessarily be accompanied by preserving natural resources and protecting biodiversity. One major asset of family farms is that it tends to diverse cropping pattern based agricultural systems, which safeguard biodiversity and contribute to nutritional and more balanced diets.

Indian Scenario

India now ranks the number one in the world, in the production of milk, pulses, jute and jute-like fibres and two in rice, wheat, sugarcane, groundnut, vegetables, fruits and cotton production and is a leading producer of spices, plantation crops, livestock, fisheries and poultry products. It has been witnessing a shift in the production from food grains to high-value produce, especially fruits and vegetables. Crop diversification into high value produce is a healthy sign of optimum utilization of resources, diversifying sources of income, mitigating risks and meeting changing market needs. Share of fruits, vegetables, meat and fibre in total production increased from 38 per cent in 2000 to 45 per cent in 2010.

Perception of ‘rural’ and ‘agriculture’ signifying once as if they were two sides of the same coin is now changing rapidly. This is evident from the fact that the share of income from agriculture (74 per cent in the 1970s) in the rural incomes has declined to 30 per cent in 2010. Over 42 per cent of rural households draw their income from non-farm sources. The term “non-farm” covers all non-crop agricultural activities, including manufacturing activities, electricity, gas, construction, mining and quarrying, transportation and services in rural areas

Rural income and consumption expenditure is witnessing an upward trend. According to provisional NSSO data of mid-2012, the average monthly per capita consumer expenditure in rural areas shot up at a faster rate than urban areas between 2009 and 2012. Another survey by CRISIL, in August 2012 revealed that rural spending outpaced urban spending between 2009- 10 and 2011-12 for the first time in nearly 25 years. Discretionary spending of an average rural household rose to Rs.24,000 in 2009-10, from Rs.14,000 in 2004-05, growing at about 11 per cent per annum, which is faster than the inflation rate of nearly 6 per cent per annum over the same period. The changing scenario in agriculture shows that agriculture being the primary resource base for a number of agro-based industries and agro-services should now be viewed not as mere farming alone but as a holistic value chain, which includes farming aggregating processing, warehousing (including logistics) and retailing.

Small farmers

Small and marginal farmers are the backbone of Indian agriculture. The smallholding character of Indian agriculture is much more a striking reality and demanding today than ever before. It is necessary to recognize the significant amount of inequality in land ownership and operation. Medium and large farmers accounting for only 6% of farmer households operate more than one-third of total operated area, while large farmers (0.9% of the total) still operate 13.61% of land. Small farms are characterized by application of less capital but higher labor and other owned inputs and reflect a higher index of cropping intensity and diversification.

According to Agricultural Census 2010-11 out of 138 million farm holdings in the country, 117 million are small and marginal holdings. Small and marginal landholdings together shot up from 62% of total in 1960-61 to 85% in 2010-11 and own nearly 44% of the cultivated area. Interestingly, marginal farmers who share 67% in total number of holdings and 22% of cultivated area can be considered as a distinct class by itself, rather than combining them with small farmers since farming for them becomes a significant source of livelihood often much more than that of small farmer households. Thus, marginal farmers in India aptly fit in the definition described by the FAO Director-General Graziano da Silva.

Fragmentation of land presents serious consequences to all aspects of agricultural growth and development, viz. production, storage, transportation, processing, marketing and more importantly, generating incomes and making farms economically viable. Fragmentation to owners of small and marginal farms means higher costs for adopting modern technology and accessing production inputs and extension, credit and marketing services. Continuous decline in average size of land holding has implications for financial institutions since financial investment to create assets is often not viable on marginal farms.

At micro level while the size and scale of operations influence both the production and income at macro level the role of small and marginal farmers is very critical as they account for an estimated two-thirds of national vegetables and milk production and more than half of cereals and fruits produced.

In relation to their aggregate land- holding, the holdings smaller than 1.0 hectare contribute proportionately more to the national grains production than do the larger holdings. The NSSO 59th round of Farmers’ Survey has empirically established that small farms continue to produce more per hectare than their larger counterparts in the country as a whole as well as in most parts of the country. However, with very little marketable surplus even  policy interventions like Minimum Support Price and increased procurement prices do not help these farmers and individual farming is hardly commercially feasible and financially viable. Small and marginal farmers may be efficient’ but smaller volumes of produce, higher transport cost, inability to store and negotiate for remunerative prices impact on their lower incomes, bankability and financial viability.

Declining incomes just due to reducing farm sizes have become a serious disincentive for farmers to continue farming. This fact is supported by the data of NSSO in 2003 revealing that 40% of farmers did not wish to continue cultivation if sustainable employment outside agriculture was available. The small- holder families, who constitute about one- half of the national population, comprise almost three- fifths of the nation’s hungry and poor.

Despite the small piece of land not providing enough employment and reasonable income most farmers are unwilling to sell their land because land is the last valuable piece of insurance.

In socio-economic perception the ownership of even a small piece of land or a buffalo or a cow or a few sheep has been directly associated with some household income, nutrition, and food security. And much more has been the relationship between the educational level of the head of the household and extent of poverty.

Notwithstanding their efforts to increase the productivity and incomes, families that operate holdings smaller than 0.5 hectare and many families with holdings between 0.5 and 1.0 hectare and practically all of the landless farm labourers are net purchasers of almost all food items. They need cash to purchase food and long-term institutional credit at affordable rate to acquire income-generating assets to attain livelihood and pay for family health care and children’s education.

The present constraints on Indian agriculture originating from systemic issues [which also include the macro-policy environment] relate to the declining public investment in agricultural research & development and farmers’ inaccessibility to institutional credit, technology, extension and marketing services, among others.

During the 1990s rates of increase in total factor productivity for crops were appreciably less than in preceding decades. This has been authoritatively attributed to substantially lower public investment in agriculture and in its support to research and extension component during the last decade. This has adversely impacted on the productivity, production and profitability of small and marginal farms.

With the gradual withdrawal of the Government’s needed support to agriculture farmers have to depend much more on privatesources for all their needs, viz. production inputs, extension, markets and credit services. The rapid rise of wages for rural casual labor during the Eleventh Plan period [2007-12] has further increased the relative cost of cultivation with hired labor. Increasing costs of cultivation leading to higher indebtedness, crop failures and inability to face price shocks with greater liberalization of the agricultural sector have driven farmers to the extreme. Unfortunately, in the last several years farmer suicides have been widespread and the victims have largely been marginal and small farmers.

Marginal and small farmers very often face problems of securing on time quality production inputs, and technical knowledge of using them in right quantities. The Situation Assessment of Farmers Survey showed that among the various inputs viz. pesticides, fertilizers, HYV seeds, organic manure and veterinary services, only organic manure was most readily available within the village, whereas in most cases, inputs were available in the nearest large village which was more than 2-5 km away. Farmers had to travel more than 10 km for seeds and pesticides. Access to public extension services was very weak which often resulted in farmer’s inappropriate choice of crops, their varieties and use of inputs. While these farmers are at disadvantages to deal with the markets, the Government interventions also tend to be less effective with respect to these categories of farmers.

A stark reality of India’s farm situation today is that while land hunger continues unabated amongst the poor and women, the educated youths are leaving agriculture. Many large andabsentee owners are leaving land under-cultivated which could be leased out if they are guaranteed of retaining ownership of land by country’s law.

Development Initiatives

As small and marginal farms account for the largest share in India following pro-poor development initiatives in agricultural aimed at improving their income opportunities through maximizing land and farm productivity can have far-reaching development effects.

  • Appropriate policy environment can substantially facilitate FFs to manage natural resources, improve productivity, production and profitability/viability of small farms and enhance local production and consumption to fight hunger and malnourishment on one hand and flush local markets with food on the other.
    National policies should facilitate access to land, water, other natural resources, proven and demonstrated yield-maximizing technologies, institutional credit, insurance [life, agriculture and assets], inputs and commodity markets.
  • Experiences suggest that mass poverty reduction in modern history did start with sharp increases in productivity among small FFs. To achieve this, investment in agricultural research, extension, education and infrastructure is particularly important in increasing FF productivity. To enable FFs to access financial, input and output markets, public investment in infrastructure, viz. processing, storage, transport, rural roads connectivity, and Information and Communication Technology is essential. While subsidies often benefit the better-off and politically well-connected farmers more than the actual needy ones, past experience shows that well targeted subsidies have motivating role in making new technologies viable and acceptable. FFs can benefit considerably by forming multi-purpose service co-operatives and acting collectively when accessing institutional credit and input and output markets. FFs have the potentials to enhance income/profit through contract farming and value chain system with agribusiness enterprises. This necessitates a structured legal framework. Political economy can facilitate FFs to form FFs’ Associations to voice their concern. This is more essential now than before to remove the widespread political bias against agriculture in country’s overall economic development policy and to make FFs engine of agricultural growth, rural prosperity and poverty alleviation.
  • Climate change, degradation of land and water resources and the loss of biodiversity have been serious challenges for FF systems. Besides, unabated population increase has created enormous and competing pressures for land and water uses. For all this, all stakeholders need to build consensus and initiate appropriate policy and formulate time bound action plan.
  • Unfortunately the role of women in family farming is not yet adequately recognized in terms of income earned, asset ownership and succession. Women have less access to services than men. Similarly, most youths are losing interest in agriculture and are looking for jobs in urban areas. Vigorous campaigns are necessary to systematically inform and make women and youths fully aware of their role in family farming. Policy and programs need to be designed targeting rural youths specifically and incentivizing them to hassle-free access to land, water, technology, markets and finance in particular.
  • A focused rural development strategy, rather than just an agricultural one, will meet this challenge.
  • Dialogue is necessary with organizations of FFs to build consensus and seek their participation to implement targeted, policies that can yield tangible results/ improvements.
  • International co-operation is fundamental in channeling a variety of resources to support country-specific pro-family farming policies and international agreements or memorandum of understanding can enhance implementation of strategies.
  • By end of the year, all stakeholders can recognize   the existing and potential contribution of family farming to food security and support the development of agricultural, environmental and social policies for sustainable family farming.
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