Punjab’s economy experienced phenomenal growth since the 1960s but its agricultural sector is now facing an acute crisis, raising serious questions about future sustainability in development. The crisis in agriculture has manifested itself in the form of declining yield and productivity, shrinking incomes and employment, rising indebtedness and ecological damage. The near reversal of the economic growth process demands an explanation of the inherent weaknesses in the development strategy which has failed to keep Punjab on the track of further growth. The present book brings together articles by eminent scholars who have put forward a number of policy suggestions to help prevent the success story of rural Punjab from going astray. Major issues that pertain to the pros and cons of wheat-paddy monoculture and alternative cropping patterns, water resources, agro-industrialization and human resource development have been brought up in a total of twenty-eight articles, under six themes.
Section I comprises two articles on the theme of rural development. In the first paper Dhesi attempts to provide a framework for analysing key issues in rural development. He mentions two complementary approaches followed to improve living conditions in the rural areas—rural economic development and community development—while stressing the need to address specific issues relating to an impending agrarian transition for a state like Punjab. The development of Punjab’s agrarian economy was phenomenal. However, further development is seriously constrained. What now requires to be done, according to Dhesi, is to adopt a strategy which focuses not only on human and physical capital accumulation but also on technical changes. In this context, Dhesi suggests resource mobilization through public investment and the Punjabi diaspora.
G.S. Kalkat has summed up the crisis in Punjab’s agriculture under six issues, but deals with only three in his paper—water, soil and environment; improving the lot of small farmers through income enhancement; and the issue of underperforming agricultural areas in the state. Elaborating on the crisis, he suggests diversification options and the need for adequate infrastructure, investment and state support. Kalkat has dwelt very briefly on the issue of underperforming agricultural areas. The precision with which he deals with the first two problems is missing here. He also does not specify why he chose to ignore rural education, sanitation and indebtedness completely, although these are also listed by him as problems ‘needing immediate action’.A small omission that has been overlooked is a mention of a table showing MSPs, for wheat and rice (p. 77), but the table itself is missing.
The next section presents challenges faced by Punjab agriculture while accounting for its development process. In the first paper in this section, Ramesh Chand has traced the post-Green Revolution changes in agrarian structure, cropping pattern and performance of allied sectors in Punjab. Agriculture in the state is under serious threat in the face of declining growth rates, cost escalation and squeezing incomes, not to speak of trade liberalization and a new international treaty on agricultural trade in the post-reform period. Reorienting production towards alternative crops varieties to give higher yield and greater competitive quality, contract farming, dairy activity and investment in biotechnological research could be the ingredients of a future strategy to sustain agriculture.
R.S. Sidhu, A.R. Joshi and A.S. Bhullar are more specific and analyse the challenges faced by Punjab agriculture in terms of its two major crops—wheat and paddy. Decreasing productivity, rising cost of cultivation of these two crops and little or no improvement in profitability raise serious doubts about the sustainability of the agricultural sector. Depleting ground water resources and fertility of soil add to the woes of cultivators. The situation cannot be saved merely by raising MSP, because international prices of these two crops have gone down. The central government is reluctant to bear the additional cost of procurement, storage and distribution in the face of rising stocks. The remedies suggested are similar to those given by Chand. Sukhpal Singh proposes that the challenge of sustainability of the farm sector be faced by adopting diversification via contract farming. While he is critical of the contracting models adopted so far, he draws an optimist in conclusion that contract farming can succeed if made more efficient by involving NGOs and Community Based Organisations (CBOs) while at the same time substituting state interference with state assistance, introducing legal protection to contract growers and standardization of contracts.
In the next article, Gurmail Singh has traced the transformation and modernization of agriculture in Punjab over a period of five decades, beginning 1951 with the adoption of the Green Revolution Technology (GRT). Nonetheless, this growth failed to bridge the wide rural-urban gap in terms of quality of life. The reform period also saw a decline in the growth process with all the ensuing problems discussed at length in the earlier papers so much so that the very sustainability of agriculture is at stake. Singh, however, rests on the hope that if GRT technology could push Punjab on to a high growth track, adoption of new, alternative technology mainly in the form of GM (genetically modified) can once again put Punjab’s agriculture back on the road to success. In this regard, the role of the state has to be supplemented by NGOs and private initiatives in making knowledge-based investmetns. However, the author has steered clear of any controversy regarding the adverse effects of GM technology on health.
What was just mentioned as one of the many policy measures to revive the success story of Punjab in the earlier articles,—R&D—has been dealt with in detail by Mathur et al and Vikram Chadha. Mathur et al suggest a PPP (Public Private Partnership) model for the much needed R&D in agriculture, assigning public sector the responsibility of basic and resource management research and training of manpower, while allocating the task of applied research to the private sector. There is also a need to shift away from a system that is oriented mainly toward foodgrain production. Chadha has lamented the neglect of scientific agricultural research in Punjab and argues for informal, on-the-farm research innovations through farmer participation as a quick short term measure, since R&D is a long drawn and expensive process. Once again, the need for a shift away from the wheat-paddy monoculture has been emphasized by him.
H.S. Dhaliwal and Bhullar seek to resolve the economic and ecological crisis in Punjab agriculture by incorporating agro-forestry. Although this might initially pose production and marketing problems, suitable supply side policies regulating wood marketing and contract farming could go a long way in making the agro forestry system more profitable than the wheat-paddy monoculture system.
Section III of the book devotes itself to the issue of water resource management. Depleting ground water resources has been the bane of GRT technology. This not only has serious ecological implications, but could also increase economic distress as farmers are forced to bear huge expenses on deepening tube wells, and installing submersible pumps, becoming indebted in the process. The issue has been taken up in four articles.
G.S. Hira has captured the status of depleting groundwater resources while commenting on its causes. The impact of this is rising expenditure of farmers and the load on energy requirements. A number of remedial measures have been suggested by him including, once again, crop diversification, combined with proper scheduling of planting and irrigation. Lakhwinder Singh has expanded on the problem by undertaking a region specific study (of Kapurthala) and draws on the success stories of other countries as well as other parts of India to suggest corrective measures. The role of local communities, in particular, has been stressed in water harvesting.
The next two papers, one by Rachpal Singh and Kashmir Singh, and the other by U.N. Roy evaluate the Integrated Watershed Development Project (IWDP), launched in 1990–91. Singh and Singh dwell on the achievements of the project in terms of attaining targets but also point towards the need for a follow–up approach with emphasis on education, health care and human skill building. Stakeholders’ participation should be a must in such projects. The suggestion of availability of instituional credit comes rather abruptly without any previous reference or background.
Upendra Nath H. Roy has selected a total of eight villages out of a universe of 20 watershed and 10 forest dependent villages and found that the Watershed Management Programme proved beneficial economically as well as ecologically, but led to widening income disparities, emphasizing a need to distribute the benefits equally.
Section IV examines the possibility and potential of agro-processing industries in Punjab to pull the state out of its agrarian crisis. Theory as well as empirical literature are in favour of an economic transformation that entails diminishing importance of agriculture and transfer of resources—both human and physical—to the more dominant industrial sector. Punjab, therefore, stands to gain if it is able to develop industries in which it has a comparative advantage and for which it is capable of providing the needed raw material ‘in house’. Agro-processing industries are the obvious choice in this regard.
The section has a total of three papers. In the first paper, Gurmail Singh has examined the growth and performance of agro-processing industry in Punjab and has identified industries using wheat, rice, sugarcane and cotton, as well as fruit and vegetable processing and dairy industries as having substantial untapped potential. There is no dearth of raw material, but large scale investment is yet to be undertaken in these industries. Piare Lal has made out a strong case specifically for the wood-based industries which are not only environmentally safe, but have the potential for large scale employment and can promote the much needed diversification in agriculture by encouraging a shift to agro-forestry. Balbir Singh and Janak Raj Gupta and propound bio-fuels as alternate fuels to solve the impending energy crisis in the state in general and to provide the much needed fuel to the highly mechanized agriculture in particular. All the three authors stress on the need for sufficient investment and R&D for the much required shift to agro industries.
No process of development or even transformation is complete, successful and sustainable if human resource development is not an integral part of it. Development effort has to be inclusive, providing equality of opportunity and reduction of disparities in access to education, health, employment and other amenities. Bridging the rural-urban gap, needless to add, is at the centre of this inclusivity. This is what has been emphasized by S.S. Johl in the first of six papers in Section V devoted to human resource development. Rural health and education system have almost completely collapsed. Johl’s observation and remedial strategies have been further taken up by Jaswinder Brar and Sukhwinder Singh. Education has been accorded a low priority in the allocation of public resources, with university and higher education payibng the price. In health, Sukhwinder Singh and S.S.Gill find that since 1991, no expansion was made by the state in either rural or urban health infrastructure.
Singh has put a question mark on the success story of Punjab by exploring the various facets of the dynamics of its population growth and comparing it with Kerala. Punjab suffers from high infant and child mortality rates, deteriorating sex ratio, low female literacy levels, malnutrition and anaemia among children and women. Clearly, a higher per capita income contributed little towards these aspects of human resource development. State efforts in the form of special programmes to help the vulnerable rural households have been evaluated by Manjit Singh and Balbir Singh and J.R. Gupta who find that although these programmes have contributed towards improvement in living conditions, their functioning require better monitoring.
The role of overseas Punjabis (OPs), majority of whom are rural based, has been discussed time and again not only in several articles in this book, but in general, towards the process of development. OPs, with their monetary resources, vision and desire to improve the lot of kin left behind, can supplement state efforts to a great extent. Dhesi has adequately assessed the impact of OPs on the socio economic life back home. He places considerable hope in the approximately five million OPs, in transforming their rural homelands, but finds that so far their efforts have been patchy and sporadic, mainly due to lack of an institutional mechanism to channelize their capital flows into worthwhile and well planned projects. Second generation OPs also do not seem eager to nurture their roots. Shinder Thandi has explored the ways and means to mobilize diaspora finance by drawing policy lessons from successful diaspora-homeland relations. Transparency and accountability is what is needed in such mechanisms.
Darshan S. Tatla, evaluating the impact of the Punjabi diaspora, specifically the Sikh diaspora, on Punjab’s economy shows more optimism than Dhesi. Raghbir S. Basi is in favour of even sparsely-spread efforts of OPs (a fact lamented earlier by Dhesi) because these will ultimately act as role models for further action. He gives an account of the success story of such efforts in his own village as testimony. Gurdev S. Gill presents a theoretical model of bringing about one transformation that can make a big difference to rural living condition—sanitation. Once again, the message is that changes can be brought about bit by bit, even sporadically, but if these are continuous, the impact will be widespread.
Overall, the articles contribute to our understanding of the development process of the rural economy of Punjab, and the reasons behind its subsequent derailment from the success track. The general consensus is that there is an urgent need to pull the economy out of the quagmire of deceleration with all its undesirable manifestations. Numerous directions and frameworks have been identified for further course of action and possible transition to the next stage of development.
However, I would take the liberty of mentioning a few gaps in areas that have remained unexplored in the book. First, the most horrifying manifestation of the agrarian crisis—farmers’ suicides—has not been looked at. An exploration of the extent, causes and consequences of these suicides in the background of a crumbling institutional system of rural credit and flourishing informal lenders, indebtedness and erosion of debt servicing capacity of farmers especially in the post-reform era could have been undertaken to highlight the depth of the crisis. Similarly, the issue of rural labour which constitutes the majority of the rural population and which has been substantially displaced by mechanization of agriculture has not been addressed separately. These are two issues which would require not only long term measures but also short term measures providing immediate relief to the affected party. The same applies to the other issues that have been taken up. Long term measures need heavy investment, patience and perseverance, but the intensity of crisis calls for immediate succour as well. There are other small observations, like in the broad theme of water resources, a discussion on canal irrigation could have found a place.
These apart the book is recommended as a must-read for those who are concerned with understanding the derailment of a successful development model, projected as worthy of emulation by other backward areas.
Anita Gill is Professor of Economics in the Department of Correspondence Courses, Punjabi University, Patiala.