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Here’s How Experts Believe We Can Make India’s Farmers Worry-Free

Here’s How Experts Believe We Can Make India’s Farmers Worry-Free

“Farmers are becoming more intelligent as well. Their attitudes are changing, besides looking towards what can fetch them better prices.”

In the past two instalments of our series on agriculture in India, we have looked at the possible impact of the Central government’s agriculture sector reform announcement on 15 May, which seeks to free farmers from the shackles of outdated regulation, give them greater access to markets, expertise and formal credit, and the role private sector could play in propelling that change. (You can read these articles here and here.)

In this instalment, we will be looking at two other fundamental concerns—irrigation and crop insurance—and how gaps in these areas can be addressed, in addition to what the future holds for farmers in India.


It has been over 70 years since Independence, but a vast number of farmers in India still live at the mercy of the monsoon season. By some estimates, nearly 55% of India’s arable land depends on rain. What also has a major impact is the spatial distribution of rain. For example, during the last monsoon season by the middle of August, states like Maharashtra recorded 161% excess rainfall, while others like West Bengal were short by 42%.

Why is more than half of India’s arable land still subject to the vagaries of nature? Why isn’t more arable land irrigated?

“This is a geographical limitation. Water resource potential, both in terms of ground, riverine systems and rainfall, clearly indicates that the potential of irrigation is only 50%. You can push it to 55%, but not beyond. So the remaining 45-50% will have to depend on rain. Some states, like Tamil Nadu for example, have done better. They have a greater percentage of their cultivated land under irrigation. Most states, however, hover around 30-35% of their cultivated area coming under irrigation,” says Dr. Venkatesh Tagat, former Chief General Manager, Business Initiatives Department at the National Bank for Agriculture and Rural Development (NABARD), speaking to The Better India.

For representational purposes only: Ground water tubewell irrigation. (Image courtesy Wikimedia Commons)

Nonetheless, he does point out that there are other major issues with irrigation systems in India like the inability to complete projects in time, cost overruns and poor execution of field channels.

“Even when they do build a main structure like a dam, building the infrastructure—like irrigation canals backed up by field water channels or field irrigation channels required to ensure that water reaches the farmer’s fields—takes a long time. Moreover, these canals also get silted up and require maintenance. To overcome these issues and speed up the process, the World Bank and many technical experts have suggested that we could possibly use underground pipes, that do not need as much maintenance and can be laid without having to acquire farmland,” adds Dr Tagat.

“Another significant problem is the wastage of water in assured irrigation areas. If the water is optimally used , they can do at least 1.5 times more the acreage. Since people pay such a low price for water and electricity, water wastage happens. These are some of the reasons why we are not able to get optimal results from storable irrigation water. There are some parts of the country that can never have irrigated cultivation and it’s not feasible until some grand scheme like the inter-linking of rivers happens. However, that has negative environmental consequences,” notes N Srinivasan, an international consultant and expert on Indian agriculture, to TBI.

Meanwhile, speaking to an in-house IIM-B publication, Dr Gopal Naik, Chairperson for the Centre for Public Policy at Indian Institute of Management, Bangalore, addressed some other concerns surrounding irrigation infrastructure.

“We do not effectively manage water bodies, in terms of how much water is stored, how much is being used for irrigation, or what value we can add to this water. This is partly because it is seen more as an engineering kind of work rather than looking holistically that its main purpose is irrigation. We, therefore, do not have the mindset to make the best use of water for irrigation purposes. Consequently, water use efficiency is very poor in India and remains a major concern,” he notes.

Rain precipitation has not been very predictable. Some of the very good dams that were built in the good old days are suffering because the catchment receives less rain. And if that happens, farmers in one state have known how to use rainwater much more effectively for their local crops, leaving little surplus water for their counterparts in another. Some inter-state water disputes you see like between Tamil Nadu and Karnataka are a consequence of this new reality.

Dr Naik also addresses the issue of equity, particularly in terms of availability and access of groundwater. Those with greater ability to extract water from groundwater aquifers often take away disproportionate amounts.

“This gives rise to various problems. If groundwater is closer to the coastal area, it may get mixed with salt which affects everybody and is a negative externality. In many other places, groundwater level goes down drastically and often the wells go dry, making it difficult to get even drinking water. So we have dual problems related to availability of drinking water as well as access of groundwater to the poor,” he adds.

In states like Punjab and Haryana, which were the poster boys of the Green Revolution success story, the economic and political structure often dictated a tendency to grow water-intensive crops like paddy.

It was the same case in the sugar belt of Western Maharashtra, where backed by politically influential owners of sugar mills and factories, farmers resorted to growing sugarcane.

And there is an element of convenience as well.

Take the example of sugarcane, which farm experts call ‘a lazy man’s crop’. Unlike the effort and care needed to grow crops like grapes, farmers who plant sugarcane do not need to do anything for the next 12 months. They receive multiple subsidies from the government and the crop doesn’t suffer from many pest attacks or diseases. Only 12 months later, the nearby factory sends men and machinery to cut the cane and pays them based on the tonnage.

It is also a water-intensive crop.

Thankfully, the last Maharashtra government decided to make drip irrigation compulsory for all sugarcane farms across the state, moving away from the water-guzzling flood irrigation system. Besides enforcing a five-year ban on sanctioning new sugar mills, they also promised to give sugarcane farmers five years time to switch over to new crops with cheap loans and other government sops.

Meanwhile, the recent lockdown, which has forced an exodus of migrant labour out of Punjab and Haryana, has unintentionally opened a window of opportunity to wean away farmers from growing rice to less water-guzzling crops such as cotton and maize.


As per The Indian Express on 30 April, “Uncertainty over the availability of an estimated 1 million labourers from Uttar Pradesh and Bihar who undertake the bulk of the paddy transplanting that begins from mid-June. That, plus the lack of mechanical transplanting options, in contrast to the ubiquitous combines used for both paddy and wheat harvesting, means fewer farmers are likely to take up rice cultivation in the coming kharif season.”

Besides government regulation and a pandemic, private players are also offering real solutions to ensure farmers maintain optimal use of water.

Take the example of FlyBird Innovations, a startup which developed sensors, among other products, used across farms in Karnataka and Tamil Nadu to reduce the need for water while growing crops. These sensors, for example, allow farmers to observe moisture content levels and consequently spell out their irrigation requirements and have reportedly helped farmers to improve their crop-yield by 15-20% while saving up to 25-30% of water.

You can even take the example of KisanRaja, a mobile motor controller device developed by an Andhra Pradesh based software engineer which has helped over 34,000 farmers. This IoT-based autonomous irrigation solution helps farmers monitor, control and utilise water judiciously. Farmers no longer have to spend money on repairing water motors or venture out in the middle of the night to switch on and off their water pumps.

For representational purposes only. (Image courtesy Wikimedia Commons)

Crop Insurance

Until March 2016, there were three crop insurance schemes operating in the country:

-National Agriculture Insurance Scheme (NAIS)
-Modified National Agriculture Insurance Scheme (MNAIS)
-Weather Based Crop Insurance Scheme (WBCIS)

None of these schemes, however, made a significant dent in getting farmers to opt for agricultural insurance. Taking cognisance of this lack of crop insurance cover for farmers, the Central government launched the Pradhan Mantri Fasal Bima Yojana (PMFBY).

By removing the cap on premium rates that resulted in a larger sum getting insured, employing mobile-based technology, smarter Crop Cutting Experiments (assessment method employed by governments to measure of the yield of a crop and a region during its cultivation cycle), digitising land records and linking them to farmer banks accounts for quicker assessment/settlement of claims, the PMFBY was supposed to be a gamechanger.

At present, farmers pay 2 per cent premium for kharif crops, 1.5 per cent for rabi crops and 5 per cent for horticulture and commercial crops, while the Centre and State split the rest of the balance premium equally.

However, this crop insurance scheme hasn’t quite worked out.

“The primary reason behind PMFBY’s lacklustre performance is that it suffers from several administrative glitches and the typical red-tape that does not inspire confidence with farmers as they have to wait for months, and even years, to be compensated for their losses,” notes this working paper by Ashok Gulati, Prerana Terway and Siraj Hussain.

Enrolment under PMFBY fell from 40.5 million farmers in kharif 2016 to 34 million in 2018, a 16% drop within two years, according to this report in Mint.

“One of the disincentives was that the normative yield or the basic measurement against which payments were to be made for crop failure was very low. The problem was two fold. Normative yields were suppressed or the data available with the state agriculture department was very poor and since payouts weren’t coming through on time, farmers didn’t want to buy insurance cover. The second thing that complicated this exercise was the very elaborate arrangements to check the yield at the village level. This is done through a series of cost cutting experiments done by the state’s agriculture department. Based on this data, the insurance company will determine the payouts,” notes Dr Tagat.

“Some states like Tamil Nadu ensured the efficient settlement of claims by promptly conducting crop cutting experiments and submitting the data to companies. As a result, the gross premium in 2016-17 was Rs 1,252.42 crore while claims of Rs 2,724.82 crore were paid to farmers. This shows that the scheme can be effective in mitigating farmers’ distress provided banks submit data to companies in time and state governments pay the premium subsidy and conduct CCE promptly and accurately. But such states are more the exception than the norm. The norm that prevails in most states is of red-tape manifested in delays in finalising tenders, in payment of the premium subsidy, in conducting CCE, etc. All these delays finally end up making farmers suffer for months without getting any compensation whatsoever,” says the working paper.

For representational purposes only (Image courtesy Wikimedia Commons)

If the harvest of the kharif crop happens sometimes in October-November, the settlements and payouts happen somewhere in April and May. That’s a long time lag, in addition to the fact that the farmer has to pay interest on the loans he has already borrowed. He is carrying the loan on production that never happened, but has to pay the interest as well.

After the state government collects data, they need to disburse their share of premiums, which then goes to the Central government. After the Centre pays its share of the premiums, it goes to the Agricultural Insurance Corporation of India (AICI). It is finally insurance companies like AICI which finally pays out the settlement to individual farmers.

As a result of all these convoluted methods of arriving at what should be the insurance payouts because of crop failure due to excess rainfall or pest attack or low rainfall, farmers don’t have any incentive to buy insurance covers. States, which are supposed to contribute to the premium kitty so that payouts happen, have not paid their share on time and this has compelled farmers to lose faith in the system.

What’s the point of waiting so long for his payout? However, in their working paper Gulati, Terway and Hussain have presented a series of solutions to address shortfalls in PMBFY.

-Drones could be used to take images of crops affected by hail, wind, rainfall, etc. Because they fly at lower heights, problems such as cloud obstruction can be minimised. As soon as there is information on damage in a particular area, they could be deployed to assess damages in the area so that accurate scenarios can be captured expeditiously.

-Automatic weather stations and use of mobile-based technology for crop cutting experiments (CCE). We also suggest conducting high quality CCEs, switching from random selection of CCE to a science based selection approach on the basis of satellite technology and gradual transition from CCEs to using technological solutions for assessment of crop damage. A dedicated constellation of 5 satellites of high resolution with five day frequency is recommended to increase the precision of crop loss assessment at village level, which is expected to have an additional cost of Rs 1000 crore to the exchequer. There is a need to increase the density of Automatic Weather Stations (AWS) and rainfall data loggers.

-In order to ensure timely settlement of claims, the government could make use of the JAM trinity by linking land records of farmers with their Aadhaar numbers and bank accounts. The use of mobile technology could be used for smart CCEs and direct submission of crop cutting data to servers. This can substantially reduce the time taken in compiling reports of crop cutting experiments from districts. It can also make the process of claim settlement much faster.

Working closely with quality private non-banking finance companies (NBFCs) and Farmer Producer Organisations (FPOs) is also another path for farmers to realise the benefits of crop insurance. For example, working with a Ramnad-based FPO, Chennai-based Samunnati Financial Intermediation & Services got 2232 farmers to sign up for crop insurance for over 4200 acres of land, paying Rs 332 as the premium/acre.

“The FPO guided them through the steps of the registration – filling up applications, mobilizing documents and submitting them online. With Samunnati’s financial assistance agri inputs were made easily accessible to them…When in 2016, Ramanathapuram didn’t receive enough rains, PMFBY released 100% claim amount for all the farmers in FPO, resulting in them getting INR 9.13 crores as claim settlement,” mentions the Samunnati website.

“However, It’s very difficult to bet against nature. So, if you want to insure crops against what nature can do and hope that it will be a commercially viable scheme, you’re living a fool’s paradise. It can probably be done only in small niche areas of highly commercial crops where there is a sustained demand. There are a lot of uncertainties, particularly insuring against any vagaries in production. Instead of getting tied up in the complexities of crop insurance, what would work far better is income support for farmers,” notes N Srinivasan.

The government could tell farmers in rainfed or dryland areas that they would give them say a Rs 15,000 handout to protect their income directly without getting into filling up details about how many acres, what kind of crop they are growing, paying premiums or sitting through inordinate delays in insurance payouts. Income support of any amount that can help them take care of themselves for most of the year.

“If anything, if you’re insuring the farmer for what he carries out as cropping, he should receive insurance not on production but income. Instead of blinding giving income support to every farmer, the government should carefully think this through and maybe opt for this in the long run. Maybe, they could exclude farmers with access to good irrigation facilities or who grow commercially viable crops that the government will buy at MSP,” adds Srinivasan.

A farmer with her corn harvest. (Image courtesy Facebook)

What does the Future Hold?

Irrespective of policy, all of us have to come home and have food. It doesn’t grow anywhere else but the farm. Over the next decade or so, many are going to pay higher prices for what we eat, particularly those with high disposable incomes.

People are already looking closely at the quality of food, source, content and those living in the affluent urban communities are paying higher prices for better quality coming from known sources. This movement will grow further. Those who will not mind paying Rs 50,000 for a smartphone, will be bargaining less over vegetable prices.

“Farmers are becoming more intelligent as well. They’re going to be sensitive to the market. We are already seeing evidence over the past five years of how farmers and FPOs become sensitive to the market and change their cropping patterns accordingly. Otherwise what would happen earlier is generations growing only paddy, maize or something else. That generational continuity doesn’t exist as much. Their attitudes are changing and looking towards what can fetch them better prices. Low priced food, which is not profitable for farmers to produce today, will get discontinued,” observes Srinivasan.

We will also see greater introduction of technology, improvement in productivity and quality, better financial services, farmers getting together in FPOs for better negotiating ability whether it’s to buy inputs or sell their output. In the long run, we may also see diminishing returns for rent seekers like your commission agents in places like the APMCs.

Aggregation in the form of FPOs and cooperatives will trap greater value for the farmer. These are some of the tendencies we are seeing which will make many optimistic. “There are a lot of agriculture and food based enterprises coming up in rural and semi-urban areas. There are already many coming up, and soon you’ll see more of them,” he notes.

What about the threat of climate change? Farmers acknowledge this threat, but are responding faster to the immediacy of what is happening to their environment. Read this listicle this article in The Better India to understand ‘7 Ways Indian Villages Adopted Water Management to Combat Drought’. Solutions are being found locally.

Aside from all the concerns cited in the previous two instalments of this series, irrigation and crop insurance are two critical facets that required addressing. What reforms in the farm sector can do is also open them up to more private players and bring in a wider pool of expertise. Leaving it entirely in the hands of governments hasn’t worked.

(Edited by Gayatri Mishra)

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