Gujarat policies achieved 10 per cent agricultural growth, but benefits haven’t reached huge majority of small and marginal farmers

agriBy Sejuti Dasgupta*

Gujarat is a western Indian state, reputed world over for its economic achievements and powerful and controversial chief minister Narendra Modi. Recent literature indicates a blissful marriage between the economic and political interests in Gujarat. The state has been favourably disposed towards the industrial bourgeoisie, the highest expression of the same being in facilitating land acquisition. My fieldwork has found Gujarat has taken strident steps towards rapid industrialisation, focusing particularly on real estate. Alongside industrial success, agricultural growth has touched 10 per cent, the highest in the country between 2002 and 2012.

The fieldwork shows that the origin of this high growth in agriculture lies in two phases of shift in cropping pattern: the first from food crops to cash crops, and second stage to floriculture and horticulture accompanied by intensive use of chemicals and machines. Teli mafia (vegetable oil goons) was the most important lobby in the state until the 1990s. They hailed from Saurashtra. They were landed and controlled the oil mills. But with BT cotton arriving, groundnut slowly lost its position to cotton. With GM seed, cotton production increased manifold. China’s huge demand for cotton created a big export market, and the prices were pushed up.

The industrial bourgeoisie have stakes in agriculture which makes it easier for the state to cater to their interest. They are keen to invest in cash crops, which generate high revenue and are capable of bearing the cost of cultivation. This creates a rupture in farmers’ interests. Small and marginal farmers do not have access to irrigation to adopt cash crops. So they supplement their income by either working as labour in agriculture, or by giving up cultivation entirely and move to urban centres as casual labour. Their inability to continue with cultivation and need for stable income is forcing them to sell land.

This is creating a continuous supply of land which is much desired by the industrial bourgeoisie, thus resulting in monopolization of land resource in hands of few. The voice of majority of farmers who operate on small holdings go unrepresented in state politics. Farmers’ demands and protests have centred round interests like electricity, water rather than cheaper inputs, or land access indicating the high cost of cultivation was a non-issue for them. These are capitalist farmers who have stakes in secondary sector, and have assumed petty-bourgeoisie or industrial bourgeoisie class position.

Gujarat’s total cropped area is 128 lakh hectares, 65 per cent of total area of the state. The agricultural policy statements post-2000, and Agro-vision 2010 document have set the goals and stipulated a planned path. The central goal is singularly achieving growth in primary sector. The path stipulated to achieve the same is input centricity, meaning using chemical pesticides and fertilizers and hybrid seeds, all bought from market. This is a clear departure from any distribution with a “go-getter attitude”.

The state is favouring commercial cropping and providing aid for required infrastructure to grow these crops as they will be growth pullers. Under these circumstances, moving away from food sovereignty and security is an obvious outcome. An activist based in Vadodara informed me how unlike other states like Madhya Pradesh, the state has not adopted a policy on organic farming. While the state has been boasting about organic crops and how it is in support of the same, ground reality does not show any sign of same (Vinod Singh, Vadodara interview).

This I regard as an instance to show how the state wants agriculture to thrive on use of chemical inputs as it promises high yield. The push is towards growth even if it comes at high cost of irrigation and inputs, affordable by few. Also, big farmers engaged in floriculture are receiving 20 per cent subsidy on tools and technology as given by the government. The government needs high growth figures, and this sub-sector has been making significant contribution to Gujarat’s agricultural growth and thereby earning state patronage.

This indicates the Gujarat government is taking the classic developmentalist policy with two prongs: pro-industry and large-scale farming. It is based on the Lewis model of gradual shifting out of population from primary sector. In this case the pivotal problem of such state vision is it cares too little about the small farmers and wage labourers. Liaison with big MNCs like Monsanto and Cardill to push chemical inputs and hybrid seeds, procured from MNCs to achieve higher growth rates.

I do not think there is an absence of policy. Rather, I think, even if some aspects of policy are not implemented, the main agenda set by the ruling classes is very well being taken forward. The main reason for deriving such a conclusion is the following. During 2003-06, the Gujarat government introduced Jyotigram Yojana. The aim was to provide 24/7 power supply to villages. However, a subsequent realization was that this could not be achieved without effective rationing of farm power supply.

This led the government to invest Rs 1,170 crore in separating agricultural feeders from non-agricultural feeders throughout Gujarat. Hence, now the Gujarat government is effectively rationing farm power supply and reduced losses. There is no denying that this has made a difference in cultivation but only for those who can bear the cost of an electric pump for irrigating his fields. The mass of small farmers and wage labourers bear the additional cost of hiring pumps to irrigate their fields. The government concentrates on those who are already ahead in the race.

Gujarat has raised the Narmada dam height to 121.5 metres, and there is enough water in the dam to irrigate 1.8 million hectares, as originally planned. The Gujarat government has also pursued aggressive policies to promote diversification to high value crops, especially fruit and vegetables, and spices and condiments. For example, it began offering farmers direct capital subsidy of Rs 2.5 lakh to set up green houses, besides 25 per cent relief in electricity duty. These measures have produced some outcomes. For example, between 2000-01 and 2005-06, Gujarat’s horticulture production increased by 108 per cent.

sagesThe result is two-fold. The private seed sector has come to dominate the seed market. In Gujarat, they have floated 26 private seed companies. Secondly, across fieldwork it was observed that the retailers are rural elites, who have found new avenues of diversification in input shops. Their close social ties and caste hierarchy play a crucial role in selling the products. As a reputed businessman aptly put it, “BT cotton growers are tending to unite with global capital”. The other end of the reality is the huge number of small farmers and landless wage-labourers who can rarely access government seed supply and are thus entirely dependent on them. The resource-rich farmers alone qualify to make good use of the crop. A kind of absentee landlordism is also reported in field.

The government has been concerned about making cheaper inputs and credit available to farmers. Gujarat farmers have en-mass adopted 6.5:3.5:1 nitrogen-phosphorous-potassium composition fertilizer to a13:7.5:1, which are cost effective. The farm credit system has been simultaneously revitalised. Agricultural loan disbursements in Gujarat have clocked 22-25 per cent annual growth rate, thanks to supportive government policies. In the three years ending 2006-07, for example, agricultural loan disbursals in Gujarat doubled from Rs 4,735 crore in 2003-04 to Rs 10,468 crore in 2006-07.

The cost of cultivation has risen in the past decade, with the use of chemical products having seen a steady rise. In commercial crops, especially vegetables, inputs have been particularly steep. Coming to loans, the cooperatives and public sources are tapped by big and capitalist farmers alone, is what the fieldwork revealed. In fact, cooperatives are keener to provide credit for buying machinery. Till date, the machinery is owned by big and capitalist farmers, even if its use has spread in past decades.

State procurement has been a major catalyst for remunerative minimum support price (MSP) for cotton by the Central government as an incentive to farmers to increase production area under cotton, particularly so since the Cotton Corporation of India has a sizeable procurement operations in the state. But in Gujarat, I did not find any evidence of state intervention in crop procurement. In fact, farmers tended to sell their products to traders or at most at the Agricultural Produce Marketing Committees (APMCs). At a more generic level, Gujarat has a poor awareness of price policy and procurement agencies. Only 26.7 per cent of farmers are aware of MSP while only 14.3 per cent knows the whereabouts of the procurement agencies.

Further, the food grains that the state produces, viz, jowar, bajra and maize, are not important in the Central government’s procurement priority. So farmers growing these food crops have lost out on any guarantee from the state which possibly explains why cropping area under them have shown steady fall in last three decades. What it further indicates is the lack of concern and proactive action for those growing food grains since these are not high remuneration, neither can capture foreign currency.

Facilitating market access, Gujarat was amongst the early states to amend the Agricultural Produce Marketing Committee (APMC) Act to enable farmers to directly sell their produce to wholesalers, exporters, industries and large trading companies without having to operate through arhatias or commission agents. It allowed large players to establish spot exchanges. The amendment helped create conditions conducive for the spread of contract farming. Vegetables are being grown in this mode. The government has been welcoming large corporates to establish retail chains and source their requirements directly from farmers.

Making water available to farmers has been an important claim of the present government. While Sardar Sarovar Project has been providing canal irrigation, the well known Gujarat Green Revolution Company (GGRC) has been entrusted with micro-irrigation systems. The Gujarat government formed the GGRC to promote micro-irrigation and allocated a fund of Rs 1, 500 crore to be replenished when needed. The GGRC then began offering subsidy-loan scheme to those farmers willing to adopt micro-irrigation. While it is true that this is efficient for water-scarce regions, these technologies are expensive and reduce the use of labour. Both these qualities are useful for big farmers rather than small farmers. The initial cost of installing the machinery cannot be borne by them. The policy exhibits a renewed concern for the landlord and big farmers as seen in Agrovision 2010 prescriptions (GoG).

The state is channelising its energy on increasing productivity by using technological solutions, rather than looking at distributive aspects of agrarian structure. Modi recently declared the upcoming ‘Second Green Revolution’ which will bolster agricultural productivity. While these policies and 10 per cent growth seem to indicate stupendous development, the growth has excluded the huge majority of small and marginal farmers from its benefits. Scholar Jan Breman lists two tools commonly put to use in south Gujarat to keep the landless farmers in their status quo; one is the indifference of local authorities and the other is “downright sabotage” of village elites. He elaborates how the landowning castes are conscious that empowering the lower castes, who at present are at the foot of the economy which would corrode their power base.

This explains why they would do anything to hinder such a change in power structure from occurring. Hence the immediate question that arises is whether the policies are addressing a structural change or are they abiding by the structural hierarchies facilitating accumulation by few and dispossession of the masses? My conclusion is that the policy builds on existing structures, thus polarizing the big and small farmers. The former is adopting superior technology and moving to capitalist agriculture while small farmers are finding it hard to cope with such expensive techniques which are also not suited for small holding. Joining the elements I arrived at the essence of the agricultural path the state has envisioned.

A technocrat working closely with the government contributed hugely in developing the understanding. He indicated that agriculture is not a viable occupation given the small size of holdings. Further small and marginal farmers are moving out of agriculture and are selling land for their ‘lifestyle aspirations’. So the need of the hour in his words is ‘to craft a policy to allow people to move out of agriculture’. In his interview the question that arose repeatedly was the ‘viability of agriculture’. This pointed towards the intention behind government’s attitude to agriculture.

* Excerpt from conference paper by Sejuti Dasgupta at the international conference, “Food Sovereignty: A Critical Dialogue”, held last year in Yale University. Dasgupta is PhD scholar at the Development Studies Department, School of Oriental and African Studies, University of London

2 thoughts on “Gujarat policies achieved 10 per cent agricultural growth, but benefits haven’t reached huge majority of small and marginal farmers

  1. Dear Sir, Thank you for reading the piece and putting me on my toe, as is expected from a senior person. I wrote the paper in 2012 hence the data is not updated, but various government sites continue to reiterate the figures so I did not think of checking it. So I should do so immediately.

    The following websites have the details mentioned in my article,,,

    The intention of my paper was not to challenge the data, but rather to look for political reasons behind the change that agriculture is undergoing, which it undeniably has. There is controversy on 10 percent growth but the popular acceptance is high. I have read in articles which argue otherwise, but the position from which I argue is to find political-economy reasons not introspect the govenment figures, which am sure are ‘carefully crafted’.


  2. My heartfelt sympathies to the Yale university,the department of Development studies of the School of Oriental and African Studies,University of London , the young scholar and of course you .
    Quoting from the latest Season and Crop report, the Gujarat Government reported, in paragraph 3.16,chapter 3 (page 12) of its latest Socio Economic review that the net area sown in the state of Gujarat was 99.10 lakh (9.91 million ) hectares and that it constituted 52% of the total geographic area of 188.10 lakh hectares. The cropped area in Gujarat, reported by the young scholar at 128 lakh hectares constituting 65% of the total land area of the state has absolutely no basis.

    Gujarat government does not report agricultural statistics in terms of calendar years but in terms of the financial year. So I am not sure what are the numbers on the basis of which the young scholar assumed that between 2002 and 2012 agriculture in the state grew at 10%.

    The years 1999-2000 to and 2001-02 where abnormal years due to poor rainfall . The nearest normal year was 1998-99 or the previous one . The growth of agriculture during 98-99 to 11-12 was about 3.2%, .This growth rate is the result of ,uniformly good rainfall for the ten year period (02-03–11-12) which facilitated the substantial shift to BT cotton and suspected over reporting of production during 10-11 and 11-however, In more recent years ie in the last six years , including 12-13 for which the government is yet to release the data formally, the situation has actually reversed and the CAGR is minus 3 percent or so.

    The reported 10% growth in Gujarat’s agriculture is pure fiction carefully crafted though.

    I would add my comments on the rest of the paper once the above facts are understood


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