Goa and Agriculture

Save Tigers, Only 1441 left say some. On similar lines several people are shouting Save Farmers only very few left. Mr. Digamber Kamat showed the similar concern in his budget speech about the critical condition of agriculture sector in Goa.

I myself come from a family that is completely dependent on agriculture and we own a significant area of land by any standards. Precisely that is why I feel compelled to bring before rest of the community why the government policies are idiotic and their concerns a farce.

Understanding the problem.

India is an agrarian society. There is nothing to be proud of it but instead we should be ashamed of it. I will explain why. 52% of India’s population in engaged in this business which produces only 16.6% of its total GDP[1].  Ideally for a sector that produces only 16.6% of total GDP it must engage only 16.6% of population if the income levels of those engaged is to be equivalent to rest of Indians. Or the other option is let these 51% people produce as much as 51% of total GDP. Which will require 300% growth.

This one statistic explains why farmers are committing suicides, this one statistic enough to see why all the farmers are poor. As long as such a huge population is going to produce so very little the owners of such an enterprise are going to remain overwhelmingly poor. If they are poor they are likely to commit suicides. Rest of the problems follow.

How can we solve this problem? First. Can we increase the production by 300% ? Last so many years India’s agriculture sector has grown only by around 4%. 4% to 300% is a huge jump. One can grow this sector using following methods

1. Bring more land under cultivation (3 times what we have right now)

2. Use magical fertilizers, special breed of seeds etc.

3. Use crops that give more money.

Now, is it really possible? Land is a limited resource. We are probably at peak of fertilizer usage and we cant use more of it. Changing crops is a tough decision because to shift from Coconuts to Cashew will require huge capital and around 5 years.

Think of it at a micro-level. How can I increase my coconut production by 300% ? Better irrigation methods, more investment in upkeep etc. It needs money, time, man-power without any guarantee of returns. The production might rise at the most by 100% even than I am earning only half then someone else working in a different sector.

Second solution is that decrease the number of farmers. Voila! and we dont have to do anything, they are already committing suicides. That is not what I mean here. Let the population move from agriculture to other ways of earning a living. Manufacturing, Services and so on. Around 34% of India’s population that is around 350 million people in such case need to change their profession. While this is happening, the total land under cultivation should not go down. It should remain the same and it should be operated by 16% of India’s population.

Is this a feasible option? It’s implications are as follows.

1. With an additional workforce of 350 million people, India will need more industries, more cities, better infrastructure and importantly training for this workforce.

2. The people who will continue with farming will have to rely on mechanized farming, should own huge land pieces and employ as few people as they can.

3. It is impossible to achieve in a year or two. It requires a very long time planning. The reason why we are facing this problem today is because our leaders did not plan for it 20 years back.

Now, that we have these two solutions we need to use both of them in an optimal fashion.

Governments Approach

As usual the government goofs up with this issue. It concentrates on farmers rather than farming. It neither tries to persuade them to change their profession neither pushes them to increase their production multiple times.

Instead government provides them with “live another day to fight” sort o schemes. Mr. Digamber Kamat allocates 145% more funds to agriculture in his budget. how exactly this additiona fund is going to affect the problem? We dont know.

Government’s assurances to poor farmers that they will see good day are completely false. The moment they decided to remain farmers they were destined to be poor. As long as they are going to remain farmers they are going to remain poor. Every farmer must make sure that his children dont become farmers.

In Goa’s case the problem is even more serious. With the highest per capita (2 lakh+) income in country, Goa is a state of relatively rich people. A good developed service sector, several people doing jobs abroad have increased the cost of life here. Compared to that farming is completely meager income business. The problem is compounded by relatively poor states nearby. Karnataka and Maharashtra have more land, cheaper workforce and relatively lower standard of living especially in the areas near to Goa. So when Goan farmer keeps a particular product as sale for a particular price, his Karnataki counterpart can afford to sell it at even lesser price.

What has Mr. Digamber Kamat achieved by making a false promise that his additional funds are going to help the poor farmers? It was just a politically convenient argument indeed a misleading one.

As more businesses come in Goa, the gap between farmer’s standard of living and standard of living of a person working as a peon is going to increase. With 4% growth a farmer will increase in income by 40% where as the 7th pay commission will increase the pay of peon by around 100% 10 years down the line not to mention regularity of income and stability in life.

Dr. Nandkumar Kamat has advocated that government must implement the land revenue act. Where every landowner will have to pay certain amount per area units every year. He cites how even during ancient times this model was so crucial form of revenue. He has ignored that during ancient times entire economy was agriculture based and agricultural land was a major asset. Today the case is exactly the opposite, levying any tax on owning such a land will be like kicking the poor man in shins. Poor men at least should have option to convert their land and sell it off.

The Problems

Government incoherent policy has resulted into several problems.

1. People believe that by continuing with farming they can live a good living some day.

2. People believe that government schemes will help them do so.

3. Being a farmer is a virtue.

4. Migrating in search of job, living their village is not necessary or is a bad thing to do.

5. He is not allowed to sell or convert his land where in he can earn lot more money.

Farmers in return face following problems.

1. Their peers who are in different business see steady increase in standard of living.

2. Their income is irregular, where it involves government schemes the farmer is made to feel helpless every time.

3. Farmer is at the mercy of weather and small time middleman who take his product to the market.

The way ahead

Problems can be solved. We should first define the problem. Government fails here unmistakably.

1. The population engaged in farming should produce equivalent percentage of total GDP.

As discussion earlier this can be done in two-way which are not exclusive but need to be applied simultaneously.

First: Increase Production

1. Encourage holding of large agriculture land and then getting it under cultivation. Promote mechanized farming discourage manual farming.

2. Encourage large corporate houses to take up agriculture. This has additional benefits. Such houses can use huge land, they can employ farmers as employees, they can automate farming as much as possible, they can add more value to products by processing them thus increasing profits to whatever extent they want.

3. When big corporate houses take up farming a good amount of population who was previously engaged in farming can now become their salaried employees. They can also earn lease money without losing their land.

Second: Decrease the number of farmers

1. Education, Education and Education. Providing high quality education that makes people employable instead of current namesake education that churns out educated fools can solve countries 90% of the problems.

2. To change profession you need to learn skills that have demand.  Government needs to set up more schools in such areas and encourage young people to give up farming and join some other industry.

Hybrid Approach

In a short-term though we need to take steps to give relief to farmers. Such steps must be

1. Allow large players to become middleman in agriculture business. Let Reliance Fresh and similar outlets be opened everywhere. Give tax concessions to them.

2. Build state of art mass transportation systems. How will this help? There will be a good population of young people who stay away from their house for their job and hence neglect their ancestral agricultural property. If distance between Cancona and Panaji can be covered in 30 minutes so many individuals in Cancona can engage in farming as a part-time activity.

3. Give tax benefits to business houses that invest in buying and maintaining agricultural property. Impose severe penalties on them to convert the land. This means small farmers can sell their land for a good price.

Overall we must understand that Goa can not sustain itself as an agriculture based society any day. It will have to remain dependent on neighboring states for its needs. At some point we will have to realize this truth.

Agriculture can be a hobby but it can’t be a profitable business for an ordinary man. If it has to be profitable than 20% of population must produce for rest 80% of people and nor vice versa.

As long as the poor men continue to believe the lies of government they are going to perish.


10 thoughts on “Goa and Agriculture

  1. Very impressive!

    Incidentally, I had dealt with this issue of disguised unemployment very briefly in my latest blog post on Narendra Modi.

    The solution is increasing urbanization, which requires better education, and which in turn requires urbanization.

    But personally I feel, the problems of disguised unemployment is everywhere! Do we really need so many doctors, lawyers, engineers as are being churned out by our factory-like colleges? I feel, no. 😦 India is just grossly overpopulated.

    Extremely well written article!

  2. Thanks Ketan.

    The lawyers, doctors, engineers that are being churned out are not really fit for those professions primarily due to the poor education system. Improve this aspect and 90% of the problems will simply dissapear. As you have pointed out urbanization is the need of the hour.

    All this needs to be done on war footing. Modi is doing it and hopefuly rest of India will follow.

  3. We in Goa don’t do a high level farming as done in other farm-rich states like Maharashtra. We owe land that is enough to provide us with surplus supply of local grown vegetables and food grain varieties.

    But who cares to provide a balance budget. The Administrator should first of all be educated enough to understand the basics of how to govern a state. Its just bloody useless to talk of budget na d6th and 7th pay commission when such system is in place.

    being a goan, I see a worse of our future if the current system and current govt rules for next 3 years.

    After all its democracy. Of the ppl For the ppl By the ppl.

  4. Run a govt. like Mr Modi.

    Congress is here just to demolish our creativity and talent.

    Roaming in super luxury cars with a siren alarm does not mean ppl respect you guys.

  5. You’ve made a very detailed argument for getting out of agriculture here and your argument about lack of productivity/efficiency is interesting, but there a few things that seem to be counter intuitive to me given some simple supply/demand issues.

    1. Changes of occupation usually take place over a generation – and not over just a decade. If we are asking farmers to give up the only occupation that they have ‘knowledge’ about, then how do we account for the bulk of the farming community that seems to be 40+ years of age? (at least in Goa).

    2. If a small number of large farm owners and corporates could deliver great productivity and reasonable food prices, why does a country like the US (which seems to follow that model), need to still subsidize its farmers. And how does subsidizing middle make sense in the long run – since they seem to be the reason farmers have low margins in the first place?

    3. Since over 90% of the food in Goa seems to come from outside anyway, how can we view Goa as a ‘agriculture based society’ today? Let alone supporting the tourist industry needs, even local population needs aren’t being met. Isn’t the inflation risk for the future extremely high?

  6. Thanks for your comment.

    1. I agree with you. When farming is the only thing one can do it is unreasonable to ask that person to change his occupation. When I say a farmer needs to change his occupation I essentially mean he needs to plan that change over generations. Unless he strives hard to get his children good education thats not going to happen. I see several farmers grumbling that educating their children will astray them from their ancestral occupation i.e. farming. They don’t see it as good.

    2. I am not expert in economics neither I am very aware of what happening in US. But I find it logical that a person/company with a lot of land can produce more and more efficiently than a small farmer. They can compensate their low margins by adding value to the agricultural product. ( I dint get your point regarding subsidies. They are hard to do away with when a huge vote bank is dependent on it for mere survival.)

    3. Precisely that is my point. Agriculture is not for us. But if you read our CM’s budget speech that doesn’t seem to acknowledge this speech. Far from providing incentives to coming out of agriculture we are falling over backwards.

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