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For the longest time, the price of farmland in Vadicherla stayed below Rs 20,000 an acre.Ten years ago, that began to change. “In 2003, an acre cost Rs 25,000. By 2006-07, it had climbed to Rs 2 lakhs,” says Byru Veeraiah, sarpanch of this village in Andhra Pradesh’s Mehbubnagar district, “By 2010, an acre cost Rs 3 lakh. And Rs 12 lakh by 2012.” It was a puzzling spike. This village with its 700-odd families is nowhere near big cities. Warangal, the nearest big town, is 50 kilometres away. Nor is it close to any highway. The Vijayawada-Hyderabad highway is a good 15 kilometres away. Nor is any farmland in the village or its vicinity being acquired by the government or companies.
Vadicherla is not alone. In the last ten years, the price of an acre in Ramavarapadu, a village next to Vijayawada, has leapt from Rs 7 lakh to Rs 7 crore. Or take Mardi, 15 kilometres off Solapur, Maharashtra. The price of an acre in this village, says Prakash Arjun Kate, a local, has “climbed from Rs 20,000-25,000 ten years ago to Rs 10 lakh now.”
Ramavarapadu, Vadicherla and Mardi are not isolated instances. Microstudies and anecdotal information suggest almost all of rural India is seeing a similar climb in farmland prices. If the trend suggested by the villages — and the microstudies and other anecdotal inputs — is indeed correct, then a large change is playing out in rural areas — their farmland markets are getting activated.
And the question is: Why now? And why are markets across the country waking up at the same time? And what does this mean for food security, rural livelihoods, migration patterns, you name it?
For all that, see story one: on the reasons for this spike, and its implications for farmers, food production and suchlike.
(Also see the next post: story two, on the quantum of land leaving agriculture)
ps – while on the question about the fallouts of such escalations on village india, i cannot help remembering my year at tihi (see this and this), a village in malwa, madhya pradesh, near indore, studying the village level impact of itc’s e-choupal project. it was an enlightening time. in part because tihi was a village in flux. it was close to the industrial cluster of pithampur. it was close to indore, one of the major industrial cities in madhya pradesh. abutting, as it did, the road linking pithampur and indore, tihi was seeing a lot of schools, factories, what have you, coming up on that road. what amplified those trends for the village were two other factors. one, the bombay-agra bypass was cutting thru the village fields to the north-west. and then, there was a proposed rail line for cargo. between them all, land rates in the village were rising fast. they stood at about Rs 44 lakhs to a bigha when i got to tihi. A couple of years later, they stood at a crore.
this change had epic impacts on the village. the younger son of the richest farmer in the village became a land broker. other villagers, especially the youngsters, began trying to copy his example. and began talking to other villagers asking them if they wanted to sell land. with each kid telling farmers to come to them if they wanted to sell. “i will get you a good rate”, etc. there were other changes. villagers confused by the rapid changes around them began yielding to what their kids — more in sync with the processes at work if foolhardy and impulsive about the desire to sell land — said. households began diversifying their livelihoods. working as labour in pithampur, etc. this was, of course, as contract labour. which suggested an uncertain future. i remember how suspicious some villagers were towards me — some right till the end, suspecting i was there to buy land for the company or something.
and now, another update on how india’s journey towards fertiliser cash transfers is unfolding. see it here.
some thoughts on this, though. this january, ET had reported that companies, wholesalers and retailers alike were nervous about the fertiliser ministry’s plans to reroute subsidy from companies to retailers. You can read about that, with context and all, here. well, the ministry has finally decided to scrap this intermediate phase, which was slated to start this kharif. this means the existing subsidy regime — where companies get the subsidy — will continue till it is possible to transfer the subsidy to farmers directly. for that to happen, they will all need to have UID numbers.
that said, this decision to scrap this intermediate phase is going to offer little more than short term relief to farmers and retailers. partly because once cash transfers start flowing to farmers — retailers/wholesalers/farmers will have to buy at full price anyway. also, more tangibly, cash transfers or no cash transfers, in the last few years, fertiliser prices have risen precipitously. see the point made by JNU professor himanshu in the last paragraph.
“While the price of urea has more or less stayed around Rs 500 over the past 6-7 years, that of DAP, for instance, has climbed from Rs 1,050 in 2010-11 to Rs 1,500 by June 2011 and is currently at Rs 1,900. It will definitely increase further.”
this precipitous rise in fert prices means we are using more urea than anything else. which takes us back to the crisis in indian agricultural soils. another thing the fert ministry continues to turn a nelson’s eye to.
Vijay Thakur (name changed) is a worried man. This fertiliser wholesaler in Karnal, Haryana, buys subsidised fertiliser from companies and sells it to retailers in this agricultural district about 120 km north of Delhi. It is a steady, if not hugely profitable, business. Thakur fears that might change this year.
from the latest instalment on the fertiliser ministry’s strange attempt to redirect the fertiliser subsidy away from companies to farmers. sigh. take a look. also see these two stories (one and two) for context.
in the middle of this year, i wrote about india’s weakening agricultural soils.
According to “Degraded and Waste Lands of India” , a report by the Indian Council for Agricultural Research (ICAR) and the National Academy for Agricultural Sciences, about 141 million hectares of our total geographical area of about 328.2 million hectares is under cultivation. Of this, about 100 million hectares — or 70% — is heading down a path where it will be incapable of supporting farming. What is going wrong? Farmers are making the soil work more, growing two or more crops a year, instead of one. This unplanned fertilization is exacerbating nutrient shortages and changing soils’ chemical composition . Levels of organic carbon in soil are dropping across the country, making soils more vulnerable to erosion and possibly resulting in the number of earthworms falling.
Not only are these excesses and imbalances reducing the productivity and life of soils, they are now starting to show up in our bodies.
in april 2010, to encourage more balanced fertilisation, the government of india came up with something called the nutrient-based subsidy. unlike the old system where only basic fertilisers containing nitrogen, potassium and phosphate were subsidised, the government extended the subsidy to sulphur, boron and zinc as well. and changed how subsidy was calculated as well — moving to a system where subsidy was pegged, not to cost of production, but to the nutrient content of the fertiliser.
the government reckoned that the NBS would give companies an incentive to produce more complex fertilisers fortified with micronutrients.
in this story published yesterday, i say that, “two years after its introduction, early signals suggest the NBS is not showing the desired results”.
Take NPK. In last year’s kharif, the NPK ratio was around 4.4:2.6:1. This kharif, it has worsened to 10.8:4.9:1… What about micronutrients? It’s hard to say. The fertiliser ministry simply does not collect data on micronutrient consumption. However, data collated by industry body Fertiliser Association of India (FAI) shows a puzzling trend. The consumption of zinc, ferrous and copper sulphates showed a modest rise over the last seven years, but that did not hold good for nutrients such as manganese sulphate, borax acid and molybdenum.
do take a look.
after the stories on dryland agriculture and the crisis in indian agricultural soils, there is this…
It’s incontrovertible that Indian agriculture needs an overhaul. Yields are plateauing. Agricultural soils are weakening. Groundwater levels are collapsing. Farmers are leading lives of increasing desperation. The big question is: how do we fix agriculture? Does the answer lie in genetically modified crops? Or, perhaps, in organic farming? More balanced fertilisation? According to I P Abrol, director, Centre for Advancement of Sustainable Agriculture (CASA), and chairman of the Working Group providing inputs to the 12th plan on natural resource management and rainfed farming, the answer lies in conservation agriculture. A new approach towards agriculture where the emphasis is on protecting the farmer’s natural resources – not taking them for granted.
take a look. i am not a convert. conservation agriculture still sounds like the current approach with a bit of mulch thrown in. will have to read up more on this sometime. that apart, in the weeks ahead, this theme — on the different thoughts/ideas on how to revive indian agriculture — needs to be developed further.
In his fields, Badhia Naval Singh , a farmer tilling 8 bighas of land in the Bagli tehsil in Madhya Pradesh, has been seeing something strange for a while now. Earlier, if he pulled out a tuft of grass, he would see earthworms . “Ab woh dikhna bandh ho gaye hain (they don’t show up any longer),” says the 45-year old .
Also, he says, when he ploughed earlier, the soil would break into soft crumbs and fall along the long furrows the plough left behind. Now, the soil is harder and the plough uproots a succession of large clods – dheplas, in local parlance – from the earth. The changing nature of soils – for the worse – is a refrain with farmers in these parts, even across the country.Ishwar Lal of Pandutaki village nearby does not see as many birds or frogs around his fields as before. Near Bhopal, farmers say traditional vegetable crops do not grow in their fields any longer. Across the country, farmers say yields drop if they don’t add more fertiliser every year. These anecdotes suggest dramatic changes in Indian soils in about 40 years.