Agriculture still provides for a majority of Sikkim. It is time that its requirements were prioritised
When seventy per cent of the population, that majority living in rural Sikkim which registers agriculture as its profession, is extended less than 2% of the loans advanced by banks in Sikkim, one knows that an inexcusable denial is afoot. As per stipulations governing banking practices in the country, loans to the agriculture sector should constitute at least 18% of the total advances released by banks. In Sikkim, this figure stands at a dismal 01.51%. It would have been all well if the under-performance by banks was because farmers in Sikkim were so well off that they did not need loans to improve the productivity of their farms. But that is obviously not the case because the number of hands taking up the plough as also the total acreage under cultivation has been steadily declining in the State. This, however, is not a condition unique to Sikkim.
The State Government, to its credit, has undertaken the right policy decision by pursuing the Organic Sikkim mission and identifying horticulture and floriculture as thrust areas for the rural economy. These missions, even as they strive to resuscitate agriculture to its original, un-poisoned by pesticides roots in Sikkim, also capitalize on a growing respect for organic products in the world market. It will be identifiers such as this which will fetch produce from Sikkim a premium in the agri-business and script new introductions for the new generation of farmers and excite more of them to stay in the business. But it will take more than awareness workshops by “service providers” to deliver the real results. Organic farming certification is only one part of the process and the real benefits will come in the form of more families seeing their bank balances increase because of such certification. That will require more people to join agriculture to supplement the dwindling ranks of farmers in the State. And such a turnaround can begin if capital formation in agriculture and allied sectors is accelerated. No one can have complaints against sops from the government, but for agriculture to thrive, more investment credit needs to be extended to the sector. Sikkim has the benefit of being in a situation where agriculture loans are required not for sustenance but to propel the sector to a new level of prosperity. The investment is required because as per the Agriculture Census of 2010-11, 77% of the farmers in Sikkim fall in the small and marginal category, working on average farm sizes of 0.64 hectares. The general consensus on the minimum size of farmland to allow a farmer the space to “do well” is at least one hectare. Hence, for farmers to prosper, or even remain relevant, they will need to invest in their small landholdings and improve productivity through better irrigation, improved seeds, wider diversification and adding sources of livelihood like poultry and animal husbandry. This should ideally come through agriculture loans and not via departmental interventions alone because the latter has its limitations which can also extend to hobbling the decision-making capacities of farmers. Government support should continue and improve, but should be complemented by market support which begins with banks getting more involved in the economic prospects of a majority of the population among which they conduct their business. This is an urgent requirement because, as the National Sample Survey Organisation report titled “Situation Assessment Survey of Agricultural Households” for 2012-13 reveals, agriculture is not only in terrible crisis, but is “fast decaying” across the country. Sikkim is too heavily invested in its Organic State and horticulture and floriculture prospects to allow the decay to spread too deep here as well.
To draw a positive from even the current status of poor banking support for agriculture, this situation allows Sikkim the benefit of learning from the horrors of farmer indebtedness which has torn through wide swathes of farmlands across the country. If the policy-makers decide that banking support for agriculture should be expanded, they should first ensure that fiscal prudence and financial planning is instilled in rural Sikkim. Urban Sikkim already has a very poor track-record of loan repayments, but that spectrum has the cushion of salaries and commerce to tide them over, rural Sikkim is not as privileged, but its resilience is a strong asset to keep the loans safe and serviced if the people are first informed about banking and loan repayment processes.