Saving Punjab and Haryana from Ecological Disaster: Re-aligning Agri-Food Policies
Exploitation of ground water in the two states are now becoming unsustainable
Once on the brink of food scarcity in the 1960s, India has flourished into a self-sufficient nation in basic staples with significant export surpluses, especially in rice. It is largely due to the Green Revolution that took root in the 1970s. Punjab, followed by Haryana, emerged as beacons of this transformation. The introduction of modern agricultural practices, including high-yielding varieties (HVYs) of wheat and rice, enhanced irrigation, mechanization, and the use of fertilizers and pesticides, turned the fields of Punjab and Haryana into fertile grounds for innovation generating surpluses of food.
As a result, these states saw their share in national rice and wheat production rise from a mere 5 percent in 1960-61 to a robust 19.7 percent by 2023-24 (3rd AE) (MoAFW, 2024), significantly strengthening government procurement of these staples. In 2023 24, these states contributed 33.9 and 70.2 percent of government procurement of rice and wheat grains, respectively (FCI, 2024). Even on July 1st, 2024, rice stocks with the Food Corporation of India (FCI) were more than 3.5 times the buffer stock norm. Further, India has emerged as the largest exporter of rice in the world with a share of 35 to 40 percent in global exports of rice.
Both states, however, have paid a steep environmental cost for the country’s food security. Intensive agriculture has brought significant land, water and air problems that became evident in these states during 1980s and are becoming increasingly prominent over time.
With 82 percent of the geographic area already under cultivation and having high cropping intensity (192 percent in Punjab and 182 percent in Haryana), the soils of the states are over-exploited and losing their innate nutrients. The groundwater for irrigation is continuously depleting in these states. For example, Punjab extracts 28 billion cubic metres (bcm) of groundwater annually, while its annual recharge is 19 bcm, which is unsustainable. This has resulted in over-exploited blocks reaching 76 percent in Punjab and 62 percent in Haryana.
The major aspect of agriculture’s unsustainability in these states stems from planting of rice during the Kharif (summer) season (June to October) by most farmers. Rice is a water-intensive crop requiring minimum 20-25 irrigations as compared to 4-5 irrigations in other crops. The resultant demand on groundwater for irrigating rice fields in these states has led to a situation where groundwater levels have been declining continuously for the past few decades.
Moreover, anaerobic decomposition of organic material in flooded rice fields produces methane (CH4), which is 27.2 times more powerful than carbon-dioxide (CO2) for causing temperature rise at a 100-yr time scale. Having a shorter life span of 12 years, it is 80.8 times more impactful than CO2 at a 20-years’ time-scale (IPCC, 2021).
Other sources of greenhouse gas (GHG) emission from rice cultivation are nitrous oxide (N2O) ─ which is 273 times more impactful than CO2, at both 100 yr and 20-yr time-scale ─ predominantly through synthetic nitrogen fertilizers; CO2 emissions from energy sources and CH4 and N2O from residue burning.
Accounting these four sources of GHG emissions have marked Punjab as the highest per hectare emitter from rice cultivation in the country, which is 5 tonnes CO2 eq/ha (as compared to 3.1 tonnes CO2 eq/ha at All-India level), followed by Haryana (4.9 tonnes CO2 eq/ha) (Singh and Gulati, 2023). Fire counts from its stubble are also a significant producer of pollution locally, which has direct, negative impacts on people’s health.
The cultivation of HVYs of wheat and rice has necessitated the heavy use of fertilizers (247.9 kg/ha in Punjab and 214 kg/ha in Haryana, TE 2021-22) (FAI, 2022) and pesticides. Overuse of fertilizers, especially nitrogenous ones, has a degrading effect on the environment. Part of applied nitrogen (N) fertilizer is lost as ammonia, nitrogen gas, and N2O emissions and part of the fertilizer N leaches down as nitrate and contaminates the groundwater.
The pervasive use of agrochemicals in these states has been linked to a spectrum of health issues among the local population, including cancer, kidney failure, and congenital anomalies. This narrative serves as a cautionary tale of the hidden costs of agricultural progress and the urgent need for sustainable practices.
The health of the soil, water, climate, and human lives is not just a local concern but a national one, as the country’s food basket has been filled at the expense of these states’ natural resources. Hence, this policy brief suggests alternative strategies to re-align agricultural policies towards fostering positive outcomes for both people and the planet.
Decoding Why Paddy Cultivation is the preferred choice for Punjab and Haryana Farmers?
In order to augment productivity and meet the ever-increasing demand for food, feed and fibre from limited resources, the central government as well as the state government intervenes in the input market and offers critical farm inputs such as seeds, fertilisers, power, water for irrigation, pesticides, machinery etc., at subsidised rates.
However, if the consumption analysis of inputs is done at the crop level and state level, huge disparity is observed across states and crops. For instance, the fertilizer usage per hectare of cultivated land in states like Punjab (247.9 kg/ha), Andhra Pradesh (247.4 kg/ha), Bihar (244.2 kg/ha), Telangana (219.9 kg/ha), and Haryana (214 kg/ha) far exceeds the national average (144.6kg/ha) in TE 2021-22 (FAI, 2022), indicating a disproportionate allocation and use of subsidies to these states.
Moreover, not all crops reap the benefits of these subsidies. In 2021-22, paddy fields in both Punjab and Haryana consumed more fertilizer than their Kharif crop counterparts , which suggests that a substantial portion of the fertilizer subsidy from Government of India (GoI) is funnelled into paddy cultivation.
Additionally, rice production demands a substantial 160 centimetres (cm) of water, outstripping the needs of sugarcane at 90 cm, and far exceeding the modest 40 cm required by wheat, kharif maize, and horticulture crops. In Punjab, a significant 71 percent of irrigation relies on groundwater, predominantly pumped using electricity, which spikes energy use during rice irrigation. The Punjab State Power Corporation Limited (PSPCL) data reveal that the lion’s share of power and thus power subsidy from Government of Punjab (GoP) — nearly two-thirds — is devoured in the paddy season from June to September.
Taking Punjab as an example, the combined subsidies from the GoP and the GoI amounted to a staggering Rs 38,973 per hectare during 2023-24. When considering additional subsidies for managing crop residues both in the field and after harvest, the financial support for paddy cultivation would easily go beyond Rs 40,000 per hectare.
This highlights that the incentive structure is extremely skewed in favour of paddy, and no wonder farmers do not want to switch away from paddy even when they know that it is not environmentally a good crop. This speaks for the need for a more crop neutral incentive structure, which in turn would imply a more equitable distribution of agricultural subsidies across different crops in Punjab and Haryana. This demands innovative policy formulation such that crops other than paddy, such as pulses, oilseeds, millets, and even kharif maize, also receive similar support as is given to paddy.
Profitability of Paddy is higher than other Kharif Crops
By deducting the A2 costs per hectare from the gross value of output per hectare, it is clear that paddy offers greater financial returns. In 2021-22, the profit margin for paddy stands significantly above its Kharif counterpart crops, with differences ranging from Rs 66,663/ha for maize and Rs 11,462 for moong in Punjab, to Rs 68,849/ha for bajra and Rs 36,295 for cotton in Haryana.
The skewed subsidy to paddy contributes to approximately one-third of its profitability. This economic reality makes it challenging for farmers to justify planting crops that are sustainable from environmental angle.
Paddy has assured procurement from government at Minimum Support Price (MSP)
Farmers preference towards paddy is also rooted in its assured procurement at MSP, which is fixed to be no less than one and a half times their production costs. This assurance is absent for other crops, leaving them vulnerable to the whims of the market.
Additionally, the wholesale price for common paddy often surpasses its MSP, a trend observed from 2017 to 2023, offering a safety net against price fluctuations. For example, in KMS 2023-24, while the MSP for common paddy was set at Rs 2,183 per quintal, the market offered a higher price of Rs 2,204 per quintal in Punjab and Rs 2,591 per quintal in Haryana during the harvesting months (October-November). In contrast, crops like maize and moong fetched wholesale prices that fell short of their respective MSPs of Rs 2,090 and Rs 8,558 per quintal in Punjab.
This disparity underscores the role of MSP as a protective baseline for common paddy, cushioning it against market risk and led to rise in its mono-cropping in both the states. This monoculture is a stark contrast to the early 1970s. Paddy cultivation area in Punjab covered a mere 0.39 million hectares (mha), a figure that has since expanded to 3.15 mha, thereby increase in cropped area share from 7 percent to 40 percent.
Haryana, while maintaining a more varied crop mix, also reflected a similar trend towards specialization in these staple grains.
Policy Recommendations
Diversify 12-15 lakh hectares of non basmati paddy cultivation area of Punjab and Haryana
At present, agricultural subsidies are skewed towards paddy . To promote a shift in cultivation practices, Haryana has introduced incentives of Rs 7,000 per acre (Rs 17,500/ha) to encourage farmers in regions where water is scarce to transition from paddy to other crops. However, this incentive falls short of covering the financial gap that farmers face when switching to crops like maize, oilseeds, and millets.
A more robust incentive, ranging from Rs 30,000 to Rs 40,000 per hectare, is proposed for farmers in Punjab and Haryana who opt for non-paddy crops (on 50:50 basis by the central and state government). In Haryana, since there is already a scheme that gives Rs 17,500/ha from state budget, it can be doubled with equal share coming from the Centre. This way farmer will get Rs 35,000/ha for switching away from paddy.
This would not strain the budget of any government as this shift would ultimately reduce electricity, water, and fertilizer usage and thus subsidies on them. Saving on power, irrigation, and other subsidies (e.g. paddy residue management) for paddy from state government budgets and saving on fertilizer subsidy from central government budget could be re-purposed to non-paddy farmers.
For shifting 12-15 lakh hectares of paddy area into non-paddy area, Rs 4,000-Rs 6,000 crores needs to be re -purposed (Rs 2,000-Rs 3,000 crores from GoI and roughly similar amount from the state governments). This is very much doable, if there is a political will on part of both the governments (state and centre) to join hands to save Punjab-Haryana from ecological disaster.
Ensuring that MSPs for non-paddy crops especially pulses, cotton, millets, maize (kharif), and oilseeds are effective
It is crucial for the government to guarantee the purchase of alternative crops at MSP, ensuring a secure market for farmers who diversify their crops. In KMS 2023-24, FCI procured 87 percent of the rice produced by Punjab and Haryana at MSP. Redirecting this support to other crops could free up funds for a revolving MSP pool.
If about 12 lakh hectares are transitioned from paddy, this could result in a reduction of 7.2 million tonnes of paddy production from Punjab and Haryana and make available approximately Rs 13,666 crores4 for reallocation. This amount could be used as a Stabilisation Fund to ensure that pulses, oilseeds, cotton, millets, and kharif maize are bought by relevant agencies (National Agriculture Cooperative Marketing Federation of India Limited (NAFED), Cotton Corporation of India (CCI), or FCI) at MSPs. This will take away the market risk of non-paddy crops.
Promote Public-Private Partnerships for Carbon/Green credits
Carbon is a tradable good in carbon credit system where one carbon credit unit is equivalent to one tonne of carbon dioxide emissions. This system provides financial incentives to farmers by allowing them to sell the carbon credits generated though reduction of GHG emissions in their farmlands. Companies such as fertilizer producers, mining, oil companies etc. who have higher carbon footprints can purchase carbon credits from farmers to offset their emissions. Carbon credits can thus allow farmers to earn an income for every unit of GHG reduced or sequestered from the atmosphere. Farmers are generally paid USD 15 to USD 30 per tonne, and sometimes even higher than USD 40 per tonne of carbon saved/sequestered under agriculture companies’ programs.
Paddy cultivation in Punjab and Haryana emits 5 tonnes CO2 eq/ha and by switching to alternate crops, the farmers can earn upto 4 carbon credits. This would be around Rs 6,288 – Rs 12,576 for USD 20/ha to USD 40/ha. Net water saving from not producing each kg of rice is 2,000 litres. If about 12 lakh hectares are transitioned from paddy, this could result in a reduction of 14.2 bcm of water. The opportunity cost of the saved water can be calculated and provided to farmers as green credits additionally.
Promote One District-One Product (high value) through clusters for exports
The ecologically vulnerable pockets of Punjab and Haryana should be identified and cluster based approach in high-value horticulture crops for these pockets should be aimed. During our field visit to these states, we have seen successful case studies of horticulture crops such as guava, dragon fruit, strawberry, seed-less cucumbers, bell peppers, bitter gourd, etc.
Farmers growing these crops are earning way higher profits than paddy. But they face high market risk, which needs to be reduced by adopting a value chain approach. These are still scattered and need consolidation and scaling up.
Farmer Producer Organizations (FPO), Farmer Producer Companies (FPCs), federations, cooperatives, state agriculture and marketing boards, as well as other public sector entities can assume the responsibility of aggregating small and marginal farmers in the cluster-based approach.
Public-private partnership model can be explored to facilitate scaling up production, post-harvest management, marketing and branding of crops that is suited to that region in sync with export demand. Performance Linked Incentives (PLI) can be provided to the private players for encouraging them to invest in these states. To promote the market of alternate crops, modern storage, primary processing, and logistics facilities to be created to export agricultural produce to other states and internationally through air-lifting.
Maize (kharif) based bio-ethanol for Ethanol Blending Program (EBP) 2025
Presently, most of the maize is used for poultry feed, livestock feed and starch. As per “Expert Committee on Roadmap for Ethanol Blending in India by 2025,” out of the total 10.16 billion litres of ethanol, 4.66 billion litres from food grains are required to meet the targets (NITI Aayog MoP&NG 2021). Since ethanol from rice poses perceived food security challenge, ethanol production from food grains should majorly depend upon maize.
Average maize yield in Punjab and Haryana is 3.5 t/ha, increasing the yield to a minimum of 6 t/ha will increase the profitability. The required technologies like suitable high-yielding single cross hybrid maize cultivars (6-8 t/ha) from state agriculture universities and private players should be made available to farmers. Considering an ethanol yield of 340 litres/tonne (ibid), shifting of few lakh hectares of Punjab and Haryana’s rice cultivation area to maize will contribute significantly to “Atmanirbhar fuel”.
It is proposed that the procurement of maize be done by NAFED and National Cooperative Consumers Federation of India Limited (NCCF) from farmers at MSP. These cooperatives can register farmers to join the programme and to ask the distilleries for their requirements. Based on demand, farmers will produce and distillers will pay to cooperatives in advance through supply contract with price, quantity, location of supply and other pre-defined T&C. Distilleries will produce ethanol from maize and sell it to Oil Marketing Companies (OMCs) at pre-defined T&C. This way oil companies can meet their emissions reduction targets through corn-biofuel.
However, the perceived challenge is that it may lead to production of spring maize, which is also a water guzzler, and the distilleries can procure spring maize. To ensure Kharif maize procurement by distilleries, it is recommended satellite-based mapping and verification of kharif maize growers.
Promote Poplar based agro-forestry model in few clusters
In Punjab and Haryana, farmers practice intensive agriculture, ensuring that no part of the land remains uncultivated. To achieve this, economically viable forest trees compatible with agricultural crops are essential. Poplar is one of the preferred trees. During the first three years of its plantation, all rabi and kharif crops except paddy can be successfully grown. For the initial 3 4 years, kharif season allows for the cultivation of various fodders like sorghum, cowpea, and bajra. Poplar, being a winter deciduous tree, supports the growth of rabi such as wheat, mustard, potato throughout the tree rotation.
The trees have an additional advantage of sequestering carbon. Presently, the crop diversification program by Haryana government is providing one-time incentive to farmers for cultivating poplar. The tree, however, has 6-7 years of gestation period, and thus incentivization, particularly during each kharif season (till 6-7 years from its planting) would encourage the adoption of agro-forestry model.
In sum, it is high time that the policy making in the country is geared towards sustainable and profitable agriculture. The need of this is the most in Punjab-Haryana belt where entrenched rice cultivation is causing ecological disaster. Peasants of Punjab and Haryana have done a yeoman’s job in feeding the country and it is obligatory on the part of the state as well as the centre to steer them towards crops that are less damaging to the environment and yet are more profitable than paddy. This requires innovative policy solutions.
One of such policy innovations is suggested in this policy brief, where farmers shifting from paddy to pulses, oilseeds, millets, and even kharif maize can be given roughly Rs 35,000/ha on 50:50 basis under the joint package of the relevant state and the Centre. Haryana is already giving Rs 17,500/ha and the Centre needs to double it up. Interestingly, there is hardly any additional expenditure involved. It is the savings on power, canal waters, and fertilizer subsidies that need to be given back to farmers in a different form. If this is done, India can save the most fertile plains of Punjab-Haryana from potential desertification. And that will be a great service to the country.
(Indian Council for Research on International Economic Relations)
