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Staggering Hidden Costs of Global Agrifood Systems Exceed $10 Trillion


A recent report by the United Nations Food and Agriculture Organisation (FAO) reveals the astonishing hidden costs of global agrifood systems, surpassing $10 trillion. In countries like India, these costs account for nearly 11% of GDP, leading to increased poverty, environmental damage, and health-related issues, including undernourishment and unhealthy diets. The report attributes these rising costs to unsustainable practices and emphasizes the need for a transformation in agrifood systems, suggesting a shift to multi-cropping systems to protect farmers, improve nutrition, and enhance ecological health.


GS III: Agriculture

Dimensions of the Article:

  1. Impacts of Intensive Agriculture
  2. Policy Environment and Its Favors
  3. Crop Diversification’s Role
  4. Transitioning Farmers to Diversified Farming

Impacts of Intensive Agriculture:

  • Productivity Gains: India has seen significant improvements in agricultural productivity in the last five decades through the adoption of monocropping systems and chemical-intensive farming practices.
  • Green Revolution Focus: The Green Revolution emphasized the use of high-yielding varieties of paddy and wheat, which now make up over 70% of India’s agricultural production.
  • Undermining Seed Sovereignty: The introduction of seeds from multinational corporations and fertilizers has eroded seed sovereignty, disrupted Indigenous knowledge systems, and led to a shift away from diverse crop varieties like pulses and millets towards monoculture plantations.
  • Nutritional Compromises: This shift has compromised the nutritional requirements of households and had adverse ecological consequences, including soil fertility decline and excessive groundwater extraction.
  • Increased Indebtedness: Privatization and deregulation of agricultural inputs have contributed to higher levels of indebtedness among farming households. In 2013, the debt-to-asset ratio of farmer households in India was 630% higher than in 1992.
  • Unviable Agriculture: Agriculture in India is becoming increasingly unviable, with the average monthly household income of farming households at Rs 10,816.

Policy Environment and Its Favors:

Legal Right to Food:

  • The National Food Security Act 2013 ensures that 65% of households in India (around 800 million people) have a legal right to access subsidized food through programs like the Public Distribution System, Integrated Child Development Services, and the Mid-Day Meal Scheme.

Food Procurement by FCI:

  • Food procurement in India is coordinated by the Food Corporation of India (FCI), responsible for maintaining a central pool of buffer stock and acquiring, storing, transporting, and managing foodgrain stocks.
  • However, this procurement policy heavily favors rice and wheat.

Rice and Wheat Dominance:

  • In 2019-2020, FCI procured 341.32 lakh million tonnes of wheat and 514.27 lakh MT of rice, with both becoming export commodities.
  • This dominance contrasts with the meager procurement of coarse grains like jowar, bajra, ragi, maize, and barley, which account for less than 1% of total foodgrain procurement.

Impact on Crop Cultivation:

  • The bias in procurement policies has led to a decline in the cultivation of coarse grains by 20% between 1966-1967 and 2017-2018, while rice and wheat cultivation increased by nearly 20% and 56%, respectively.

Promotion of Water-Intensive Crops:

  • Policies favoring investments in dams and canal irrigation have promoted water-intensive cash crops like sugarcane and arecanut.
  • This expansion negatively impacts biodiversity, increases groundwater stress, and contributes to environmental pollution.

Food Security and Nutrition Threats:

  • This trend poses a threat to food security and the production of nutritionally valuable crops. Ironically, small and marginal farmers in India, who are the most food and nutrition insecure, are disproportionately affected.

Global Trade Influence:

  • The global food system structure affects farmers and soil directly.
  • Fluctuations in global soya prices and supply from Latin American countries impacted soy farmers and agro-companies in India.
  • Historically, global trade relations have also influenced food production systems in the Global South, with tax systems introduced for British-enforced exports of primary raw materials.

Crop Diversification’s Role:

  • Shift Towards Local Focus: To address complex systemic issues in the food system, transitioning from global to local value chains is crucial. Local efforts, like farm diversification, can serve as a starting point for addressing these challenges.
  • Agroecology-Based Solutions: Diversified multi-cropping systems rooted in agroecological principles can play a vital role in restoring degraded land and soil. These systems, known by various local names like ‘akkadi saalu’ in Karnataka, involve intercropping with a mix of legumes, pulses, oilseeds, trees, shrubs, and livestock.
  • Benefits of Diversification: Such diversified systems offer various advantages, including income generation from commercial crops, food and fodder production, and ecosystem services like nitrogen fixation and pest control. They also support local biodiversity and collectively contribute to improving soil health.
  • Hidden Costs of Current Systems: Critics have raised concerns about alternative farming systems potentially reducing farmer income, even if they benefit the environment. However, the FAO report highlights substantial “hidden costs” associated with current systems that should be considered in long-term income evaluations.
  • Benefits of Millets: Millets, with comparable yields per hectare to rice and wheat, offer enhanced nutrition, grow in semi-arid conditions without excessive groundwater use, require minimal inputs, and provide a diversified food supply.
  • Preserving Natural Capital: Crop diversification, while potentially reducing productivity by a narrow metric, helps preserve natural capital. Redirecting subsidies from corporations to incentivize farmers for sustaining natural capital, rather than depleting it, can be a beneficial strategy.

Transitioning Farmers to Diversified Farming:

Gradual Approach:

  • Farmers cannot be expected to shift from mono-cultivation of rice and wheat overnight.
  • The transition should be systematic and gradual, allowing farmers to adapt over time.
  • For instance, they can start by moving away from chemical-intensive practices toward non-pesticide management and natural farming, reducing input costs.

Diversification of Income:

  • Farmers can diversify their income sources by incorporating livestock and poultry into their farming practices.
  • This step can be experimented with on specific portions of their land.

Visual Representation of Diversified Farm:

  • An illustrative representation of a diversified farm involves allocating 70% of the land for commercial crops, 20% for food and fodder, and 10% for environmental services, like oilseeds acting as trap crops.
  • Over time, the proportion of commercial crops can be reduced to 50%, and border crops can be replaced with locally suitable tree species for fruits and fodder.
  • Integrating livestock rearing can further enhance incomes.

Economic Modeling:

  • Preliminary economic modeling of these pathways suggests the potential to improve ecological outcomes in the landscape while sustaining farm incomes in both the short run (up to three years) and the long run (up to 25 years).

Challenges to Address:

  • Several challenges need to be addressed during this transition, including ensuring access to local seeds, establishing institutional arrangements for market access, addressing labor requirements, and reducing drudgery.
  • Collaboration among institutions, policymakers, and social groups is essential to create economic incentives for farmers to shift from high-input monoculture to diversified cropping.

-Source: The Hindu

February 2024