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Time to cash in

Cash crops have the potential to make the goal of doubling farmer income a reality


INDIA is undergoing a period of prodigious change, things are being looked at from a whole new perspective and rural India, is today, at the heart of many government policies and initiatives. In all this, the Prime Minister’s passionate appeal of doubling farmer’s income assumes a game changing role. To my mind, this can become even more attainable if we look at the tremendous potential that cash crops have to offer.

My focus here is on cotton, tobacco and jute, cash crops that have good demand and a ready market. In times, when farmers mostly have small tracts of land, with the right interventions, cash crops can indeed provide the platform for exponentially increasing their income.

In India, cotton provides livelihood to 6 million farmers directly and an additional 40-50 million people are employed in the cotton trade and its processing. India is the largest producer of cotton in the world producing 6.2 million metric tonnes in 2017-18; of this, 5.3 million metric tonnes were consumed locally. Despite being the largest producer, India has the lowest yields of cotton in the world. Since cotton is a water intensive crop, drip irrigation that provides maximum benefits with minimum wastage is the need of the hour, if yields are to be substantially increased. High density plantation as against the relatively spacious planting (specially in hybrid models), providing seeds that reduce duration of the crop thereby reducing pressure on scarce moisture in the rain-fed areas along with providing superior and stronger seeds that can withstand pest attacks (a major problem facing cotton farmers) can go a long way in addressing problems relating to cotton farming in India and increasing farmer income.

Technological advancements along with synergy between the government and entrepreneurs is the need of the hour if jute is to expand its footprint and become a viable alternative to plastic

India is the second largest producer and exporter of tobacco in the world with an estimated annual production of 800 million kg. It provides livelihood to 46 million people. However, it occupies a meagre 0.24 per cent of the country’s total arable land area. Tobacco also continues to face the wrath of the state despite the fact that no other crop can provide similar remuneration to farmers in the regions where it is grown. In 2004, a study by the Central Tobacco Research Institute (CTRI) concluded that no single crop is more remunerative than FCV tobacco. This study replaced tobacco with Bengal gram, black gram, red gram, paddy and sugarcane. This replacement by other crops caused a massive loss of Rs. 225 crore to the farmers as compared to the value realisation in the previous year.

Tobacco needs to be seen as a cash crop and no more. If its production is reduced, there is less to export and the Indian farmer loses out. On the contrary countries that have dealt with tobacco purely as a cash crop like Zimbabwe and Malawi to name a few, have witnessed tremendous increase in the tobacco farmer’s income, which has in turn benefitted their overall economy.

In 2018, Zimbabwe witnessed record tobacco production at 240 million kg; its grower earnings increased from $559 million in 2017 to $700 million in 2018. These are expected to reach $1 billion in the near future. Here it is pertinent to note that such results were possible only because of the government’s support in allowing farmers to increase hectarage under tobacco cultivation and encouragement of contract farming which ensures that farmers get the necessary inputs and at the right time. In Malawi too, owing to favourable government initiatives, it produced 171 million kg of tobacco and earnings from it were pegged at $212 million in 2017. If we look at the total areas of India, Zimbabwe and Malawi we realize that India has a far greater potential while the smaller countries are already producing at near optimum levels.

JUTE provides direct employment to 0.37 million workers in organised mills and in diversified units, including the tertiary sector and allied activities, and supports the livelihood of around 4 million farm families. If we look at the average production of raw jute during 2011-2015, it stood at 11,395 thousand bales while the average land area under raw jute cultivation for the same period stood at 893 thousand hectares. India has a total of 89 composite jute mills that produce 1,566 thousand tonnes per annum. India exports 204 million tonnes of jute per annum and the average for the period 2011-15 stood at Rs. 1,861.7 crore per annum.

Countries that have dealt with tobacco purely as a cash crop like Zimbabwe and Malawi have witnessed tremendous increase in the tobacco farmer’s income, which has in turn benefitted their overall economy

Today, jute needs to be looked at from a fresh perspective, where it needs to be the material of choice for replacing plastic for packaging. In fact, jute also called the ‘golden fibre’ meets all the standards for safe packaging, being a natural, renewable, biodegradable and eco-friendly product. Plastic items take anywhere between 450-1000 years to decompose and with landfills taking up more and more space, the clear and unprecedented dangers to the environment are for all to see. The jute industry, however, faces challenges and is bogged down by the fibre’s association with the old style sacking for grain rather than the more aesthetic uses that its being put to in the home and elsewhere. The lack of exposure of the industry and failure to look beyond old-style sacking, the industry’s inability to take advantage of the global shift towards natural products are the challenges that face this important cash crop in India. In addition, it is important to state that the quality of fibre is a hindrance for the industry to venture into household accessories and fashionable items that have a huge local and international demand. Therefore, technological advancements along with greater synergy between the government and entrepreneurs is the need of the hour if jute is to expand its footprint and become a viable alternative to plastic.

In conclusion, it is vital that we look at cash crops as an income booster for the farmer. The state needs to innovate and overcome certain fixed opinions relating to them especially with regard to tobacco. I’m confident that the best is yet to come as far as cash cropping in India is concerned.

The writer is Sr. Vice President, ITC Ltd. The views expressed are personal.

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