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In ‘prosperous’ Punjab, farmers battle uncertainty, rising costs of production

In the concluding part of #BeingAFarmerNow, a look at how diversification, payment delays and marketing have made farming an unviable option.

india Updated: Jun 24, 2017 10:13 IST
Manraj Grewal Sharma
Manraj Grewal Sharma
Hindustan Times, Fatehgarh Sahib
Farmer,Farm Loan,Locan Waiver
Farmer Gurmukh Singh in his field in Pandriali village in Sirhind district of Punjab.(Ravi Kumar/HT Photo)

He owns four acres of land, farms 20 acres more on lease, and has a debt of Rs 10 lakh. Gurmukh Singh, 44, is one of better-to-do farmers of Pandrali, a quiet, well-groomed village in Fatehgarh Sahib district with several newly-built houses, smooth streets and girls on scooters. It’s a picture that could well be captioned ‘prosperous Punjab’. But the genteel façade hides the struggles of the state’s farming community.

“I am a farmer, have never done anything else, but it’s not sustainable any longer,” Gurmukh clears his throat. A former village head, he is clearly uneasy about sharing his troubles with strangers. The price of potato, the crop he grew on part of the land he’s leased, has crashed. It means more debt for he has to pay a rent of Rs 40,000 for an acre though his potato crop has fetched him only Rs 25,000. “This is what happens when you diversify,” he fumes.

This week, the Punjab government announced a waiver of crop loans up to Rs 2 lakh for small and marginal farmers (up to five acres). Gurmukh is relieved that he falls in this bracket but wishes the government had announced a complete loan waiver. “I know the state has limited funds, but the Centre should rescue farmers,” he opines.

Like most farmers in the state, this matriculate grows wheat and paddy, the two crops with a guaranteed minimum support price (MSP). Paddy has leached the land of water leading to fears of desertification—the water table at Pandrali has breached 70 feet, and is falling at the rate of three feet a year—yet farmers refuse to grow other crops. “I have tried turmeric, sugarcane, maize and vegetables, but marketing is a problem. The sugarcane mills don’t pay us for months and prices of other crops are erratic,” explains Gurmukh.


But now even the MSP of the two main crops, he rues, is becoming unviable due to the spiralling cost of inputs. It’s simple maths. In 1992, says Gurmukh, diesel cost Rs 4-5 a litre, a sack of diammonium phosphate (DAP) Rs 200, while wheat cost Rs 5 a kilo. Now while diesel is pegged at Rs 58 a litre and DAP is 1100 for a sack, but wheat has failed to keep pace at Rs 16 a kilo. “Add to it the cost of boring tubewells every year due to the dipping water level, the steeply priced pesticides scarcely used in the past, and the cost of labour from UP and Bihar in the absence of local helping hands,” says Gurmukh, explaining the high cost of production. A bore costs anywhere between Rs 10,000 and 1 lakh.

Watch | Farmers have to borrow money to farm

Groundwater irrigates over 73% of land in the state. This has led to a sharp decline in the water table. According to the Central Ground Water Board, of the 138 administrative blocks in Punjab, 110 blocks are overexploited, four are critical and two are semi-critical. Only 22 blocks are safe, but they have other problems such as arsenic, fluoride and uranium contamination.

One reason for the indiscriminate use of groundwater is free electricity for farmers introduced in 1999. Also, the Punjab government hasn’t placed any restriction on the depth of tubewells. Nor does one need any permission to dig up a well.

Inadequate rainfall in the last few years is only increasing the general dependence on groundwater. “The year 2014 was very rough on us, so was 2015,” recounts Gurmukh. In 2015, Punjab received only 50% of the monsoon rainfall, and the next year it was 36%.

Little wonder then that any mention of digging up Satluj Yamuna Link (SYL) canal to provide water to Haryana raises hackles. “The Bhakra canal flows 1.5 km from here; the Sirhind feeder and Narwana branch are also close but all the water flows to Haryana and Rajasthan,” gripes a friend of Gurmukh.

Haryana, he claims, also has the job advantage as it borders both Chandigarh and Delhi. “They have benefited from industrialisation and the Gurgaon boom,” says Gurmukh, adding how a working man drawing a salary of 35,000 a month is better off than a farmer who owns 10 acres.

Haryana also offers a better market price for alternative crops such as sunflower. “It fetches Rs 25,000 per quintal in Punjab while in Haryana it gets Rs 35,000,” says Gurmukh.

Watch | Why are India’s farmers seething with anger?

The crop prices show no signs of increasing but land rental rates are going through the roof and range between 40,000 and 45,000 an acre in the district. With farming becoming unviable, more and more small farmers are leasing out their land instead of toiling on it. “These landlords seek a rise of 10% every year regardless of any natural calamity or price crash,” grouses Gurmukh. He recalls 2015 when he was forced to sell his export-grade Basmati (PB 1509) to the Food Corporation of India after the prices crashed from Rs 4,500 a quintal in 2014 to 1700 in 2015.

Ask Gurmukh why he takes so much land on lease, and he points to his machinery. “I have a tractor, a seed sower, a land leveler, a roller et al. I need land to make the most of them.” Also, there is the lure of a good crop and the pressure of repaying the debt.

Demonetisation dealt a heavy blow to Gurmukh who wanted to repay a crop loan. “I had just sold my crop and deposited two lakh in my bank but I could only withdraw 5,000 a week. Somehow the little sums of money I took out were spent elsewhere while the interest on my loan piled up.”

Gurmukh Singh with daughter Gurpreet Kaur and wife Ranjeet Kaur in his House in Pandriali village in Sirhind district, Punjab. (Ravi Kumar/HT Photo)


In 2007, Gurmukh took a loan of Rs 5 lakh to build his house. While the house loan was from a bank, most of his other loans are from commission agents (arhtiya or the middlemen) who charge a higher rate of interest than banks. But Gurmukh appears resigned to working with them. Here is the reason: In Punjab, a farmer cannot sell his produce in the open market at the prevailing price. He can only sell it to commission agents under the Agriculture Produce Marketing Act, 1961. A few days back, the Congress government passed an amendment to the act, allowing private players to set up mandis to purchase farm produce. But Gurmukh is yet to learn about it.

As of now, the middleman also doubles up as a dealer of seeds, pesticides, and fertilisers. So farmers not only sell their produce to him, but also purchase their inputs from him, often on credit.

Milked dry
Farmers in the grain bowl of the country, Punjab, are a distressed lot
Rs 69,335 crore Rural debt
Rs 5.5 lakh Per capita rural household debt
98% Area under irrigation
110 out of 138 blocks are water dark zones (water table dangerously low)
1.6% Rate of agri growth in Punjab from 2004-05 to 2014-15
1.5% Punjab’s share of India’s total area
6,926 No. of suicides between 2000 and 2011*
1,309 Farm suicides in seven districts between April 2013 and Dec 2016

Despite being a farmer’s daughter and wife, Ranjeet doesn’t think highly of farming. “No one values the farmer,” she says.

The couple’s only offspring, Gurpreet, who is doing post-graduation in English from a college in Fatehgarh Sahib, is now looking forward to a bank teller’s course. The young woman, who stitches her clothes herself, may not be sure about her career path, but she is clear that her husband will not be a farmer. “No way,” she declares. “It’s too risky. No matter how hard you work, there is no guarantee of profit.”

Youngsters in the village, she claims, want to either get a job or go abroad. Farming is an option only for the uneducated.

Jagtar Singh, Gurmukh’s man Friday who works on his land for Rs 1 lakh a year, agrees. “In farming, you throw money for six months and then don’t know whether you will get it back or not. A salaried job is better.”

The only person who appears contented in the fields is Harendra Kumar from Motihari district in Bihar, who is here with his team of 10 labourers. “We will sow paddy,” he explains as he arranges ladoos for a pooja before they begin work. He explains, “We pray for a bumper crop, our wellbeing and that of sardar ji.”

Amen to that.

First Published: Jun 23, 2017 07:37 IST