College Papers

India world, is the leading producer of pulses

India is an agricultural powerhouse. It is the second
largest arable land area in the world, is the leading producer of pulses and
the second largest producer of rice, wheat, fruits, vegetables, sugarcane. Agriculture
is the major source of food and livelihood security for a majority of India’s
poor. It contributed 17% of the country’s gross value added at 2011-12 prices
during 2015-161
and employs 55% of India’s total workforce2

Agriculture is classified
as an ecosystem (called agro-ecosystems) that both consumers and provides
ecosystem services3.
Ecosystem services are those benefits generated by an ecological system that
contribute to human wellbeing directly and indirectly. Agro-ecosystems are
conventionally considered to provide only provisioning services like food,
fibre, and fuel. New research suggests that agriculture provides regulating,
supporting and cultural services too4. Climate regulation, water purification,
managing surface water flow, maintaining ground water level and waste recycling
are some of the regulating services offered by agro-ecosystems5.

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               Agriculture
also generates ecosystem disservices when farmers adopt environmentally
unsustainable production practices and cause irreversible environmental damage.
Greenhouse gas emissions (like methane and nitrous oxide) occur
due to processes like enteric fermentation, manure management, rice
cultivation, synthetic fertilizers, manure left on pasture, manure applied to
soils, cultivation of organic soils, crop residues decay, prescribed burning of
savannahs and field burning of crop residues. Emissions from application of
synthetic fertilizers accounted for 13 percent of agricultural emissions (725
Mt CO2 eq.) in 2011, and is the fastest growing emissions source in
agriculture, having increased some 37 percent since 20016.

 

India accounts
for about 51 percent of the total global emissions from agriculture.  Conventional farm practices in India are known for indiscriminate
use of chemical pesticides and fertilizers, unsustainable extraction of ground
water, and unsafe agricultural waste disposal like stubble burning (ref-6). These impacts
negatively on agricultural productivity and the unabated rise in farmer
suicides is directly indicative of the acute distress plaguing agriculture and
declining farm income distribution7.

Efforts to increase
farm incomes using business-as-usual approaches which are based on intensive
ecologically unsustainable agricultural practices will only result in further
ecological deterioration 8,9.
There is therefore need to adopt ecologically sustainable production systems to
attain stable productivity in perpetuity – a ‘pro-environmental agriculture’. However,
a shift from the current conventional input intensive agricultural practices to
a pro-environment agriculture has its own challenges. These include lack of
awareness on environmentally safe agriculture practices, lack of access to
easy-to-use and affordable eco-technologies, lack of market demand, long
gestation period to achieve the optimum yield and revenue from farming. The prohibitory
cost of environmentally safe alternative technologies may also act as a deterrent
in farmers’ willingness to adopt them even though it may be for greater social
benefit.

As a result, seemingly
“rational” farmers tend to use cheaper alternatives like chemical intensive
pest and nutrient management practices that are environmentally-detrimental.
The practice of stubble burning in paddy by Punjab and Haryana farmers which
caused severe air pollution in northern part of India has also to be viewed in
this context. Technological solutions outlined by Punjab Agriculture University
for managing rice stubbles, viz,
straw-chopper-cum-feeder and happy-seeder entails capital investments to the
tune of Rs.2 lakhs or more.  

Provision of monetary
incentives for adoption of environmentally-safe agricultural practices is a possible
solution. Mechanisms like ‘payment for ecosystem services’ (PES) and ‘Agri-environmental
schemes’ (AES) could compensate farmers for adopting best practices that
generate good quality ecosystem services from agriculture. AES and PES are
voluntary incentive-based payments for rent and revenue foregone from the use
of low-input agricultural practices. Thus, PES and AES potentially provides
bridges for adoption of environmentally sustainable agricultural practices.   

Majority of the existing
PES schemes are water-related and have been used for managing watersheds across
the world10. There is less empirical evidence of PES being used
in the context of agro-ecosystems. Lipper et al., (2007)11 has outlined conditions under
which paying farmers for AES would succeed. AES on the other hand, has been used as a market-based policy
instrument in the European Union, USA and Australia since the early 1990s. AES provides
for contracts between government and farmers that guarantee annual payments to
farmers who enroll for the scheme. AES compensates the average compliance cost
and foregone farming revenue consequent to adoption of environmentally benign
farming practices12.

AES are time bound
contracts and they have been questioned on their ability to stimulate long-term
behavioral change within farming communities especially after the withdrawal of
schemes. The fact that they are optional and contractual poses the additional challenge
of getting a majority of farmers to enroll for AES. The effectiveness of AES is
limited by the number of farmer participating in the scheme and size of areas
being covered by this scheme13

Under the WTO
regulations, AES qualifies as a green box subsidy measure for agriculture. Currently
the policy environment in India is conducive to introduction of market-based
policy instruments in line with AES. India’s National Environment Policy 2006
proposed to introduce market-based instruments (MBIs) for environmental management.
 

Using lessons from behavioural
economics we know that farmers could be “nudged” towards pro-environment
agriculture practices using market-based instruments14. There is evidence of nudges being
effective in influencing private choices for provisioning environmental goods
commonly either by norm-based messages or goal-setting15. The behavioral changes influenced by
norm-based messages are observed to persist even after the messages stop. This was
used successfully to increase the participation rate in the US Conservation
Reserve Programme (CRP)16.
Similarly, reduction in water consumption in drought prone areas and
sustainable energy and water use are other instances of successful norm-based
nudges17. Integration
of a positive biodiversity norm has resulted in sustainable biodiversity
conservation practices in the ‘French Flowering Meadow-AES’18. Nudges have
also been used to increase participation in AES is to regionalise it and
introduce a collective bonus as it is known to have been successful in the long
run (ref-12 and 13).

            An agrarian economy like India stands
to benefit from drawing parallels from the ‘incentives and nudges’ that are
part of a large number of AES schemes implemented in developed economies.  We know that compliance cannot be ensured by
law alone – the stakeholders have to “buy” into the schemes. Take for example
the legal prohibition of conversion of Kerala’s paddy lands.  Despite the presence of strict regulatory
mechanism (Kerala Conservation of Paddy Land and Wetland Act 2008), there has been widespread
conversion and fallowing of paddy lands in Kerala. On the other hand, factors like expansion of the
definition of ‘Farmer’ in the Kerala State Agriculture debt Relief Act 2006 to
include ‘women’s collectives (joint liability groups) cultivating on leased-in
land’ in its ambit19 and the introduction of a ‘special
production bonus’ by the three tier panchayath
systems –zilla, block and grama panchayats
for paddy farmers has had positive impact on conservation of paddy lands in the
state.

The
‘special production bonus’ is over and above the production bonus extended by
the state government to paddy farmers. The money for the provision of ‘special
production bonus’ is drawn from the panchayaths
own funds. The recognition of ‘women’s joint
liability groups’ as farmers, entitles these joint liability groups to all the
benefits due to paddy farmers, and this arrangement has encouraged large number
of women’s collectives to take up paddy cultivation on leased-in lands, thereby
contributing to an increase in area under paddy in the state post 2008. In
addition the ‘special production bonus’ implemented by the three-tier panchayath system has resulted in more
and more fallow paddy wetlands to be brought under cultivation and thereby
conserved.

The
Kerala example corroborates the fact that nudging is expected to encourage voluntary compliance
compared to a coercive regulatory mechanism. With Government recognizing the effectiveness
of market–based instruments for environmental management, ecological incentives
in line of AES would go a long way. It would ensure flow of ecosystem services
like ‘improved ecological health’ from agriculture at no income loss for the
farmers. The ecological incentives can also be a means for attaining Government
of India’s target of ‘doubling farmers income by 2022 (ref-8). The Fourteenth Finance Commission has
already introduced an environmental component (by linking the forest cover) in
devolution of funds between the Centre and states.

The quantum of the ecological incentive
needs to be worked out in consultation with relevant stakeholders. Potential stakeholders include
Farmer Producer Organisations (FPOs), local farmer collectives like ‘padasekhara samitis and ‘kudumbasree women’s collectives’ in
Kerala, think tanks and civil society organizations like Centre for Science and
Environment, working on environment-development issues, consumer groups, the
state and central government agencies and the local administrations. Funds
could be generated from levying a ‘cess for environmental protection’ reflected
in the direct/ indirect taxes. Budgetary allocation for the scheme should be
shared between the state and central governments, while the respective state
governments could be engaged as implementers of the scheme.