I am a great believer in Market Economics and Darwinism. In fact, I would argue that market economics is explained by Darwinism. So today, I am exploring how the two are affecting the Indian agriculture sector and if they will triumph or policies can indeed make a difference.
This being the Year of the Millets, let me begin with Millets. The globally most grown coarse cereal is corn. That did not happen by chance but because the US Govt decided to subsidize growing corn in the Nineteen Seventies and Eighties. They had so much excess corn that they squeezed it to extract the minuscule quantity of oil that it contains and sold corn oil. I have never tasted it, but it is said to be an “acquired taste”, to say the least. The moment the animal feed industry figured out the science of feed conversion ratio and corn was the cheapest carbohydrate source they could provide the animals, the need to draw oil out of it went out of the market, and soy (the protein source for the animals) was crushed and soy oil became the prominent oil in use. Corn is still used for human consumption given that the Mexican cuisine depends a lot on it, but almost none as oil.
Darwinists claim the most successful living organism on this planet of our times is wheat as it has trained humans to grow it everywhere and spread it even wider each year. Rice remains the largest grown cereal, but the fastest spread came from wheat which began being grown more and more after Norman Borlaug’s success in getting yields to increase dramatically. A lot of countries with conducive weather now grow wheat for exports more than for domestic consumption. The fact that wheat is a hardy grass, takes less water to grow than rice, has a longer shelf life and can be used in innumerable ways in the kitchen, helped it make inroads in places where wheat was not available before. In India, the southern region did not consume much wheat until the nineteen seventies but once the Green Revolution took off and ample wheat was available and was sold through ration shops through the country, it was adopted all over. The primary cereal may still be rice but several meals a week have been replaced with wheat. All the countries in the Middle East and Africa that ate more rice and millet too now commonly use a lot of wheat, almost all imported. A combination of policy and market economics at a global level has indeed given birth to the most successful living organism of our times.
Most of the world also had numerous millets growing alongside their rice and wheat crops. Every region may have a different one, but millets have always been a part of the human diet. But as rice and wheat took prominence, most of them faded away from the discourse. They did not go away from the dinner tables completely, but were eaten when rice or wheat were not available or as a special treat. Millets are hardier than wheat in terms of being able to handle adverse weather conditions. They were also very nutritious, and a smaller quantity would provide more than the refined wheat and polished rice usually consumed everywhere. But millets have several problems. They are harder to process, cook and digest, harder to store (being more susceptible to fungi led toxins like aflatoxin) and most importantly, again a taste to be acquired. The poorest would consume them, but the moment one could afford wheat or rice, they would move to either. They were grown as marginal crops with little investment, but they would also get lower yields and lower returns. Despite years of research, the yields of millets are nowhere close to wheat and rice and nor are the returns.
Enter the new nutrition specialists who began pushing native millets. Some of the market watchers claim that this push is more of an elitist trend much like the fashion circles where once the middle classes adopt a fashion, the elites move to another one to distinguish themselves from others. When wheat and rice were expensive and not easily available, it was special to eat them. Now that everybody has access, it is time to move to something else. So, the elites in the Europe are eating imported Finger Millet (Ragi) and Indians are importing Quinoa (though that is a pseudo cereal not a millet) or buying branded millets. With a cousin repeatedly telling me to try millets, I ordered some off Amazon amongst a lot of other stuff as one is wont to on the Amazon, and only after receiving it, did I notice that it was priced at Rs. 200 per kilo. In contrast, I buy wheat flour that’s Rs. 40 per kilo and rice that could vary between 60-100 depending on my variety I choose to buy in a particular month. Some in my extended family and friend circles, buy brown rice, which after reading up I figured was a scam (the supposed nutrition benefits so marginal for 50-100% extra price) and some multigrain atta ( another scam where the blend costs more than the individual ingredients and the cardboard like rotis that come out require tons of butter/ghee on top or oil while kneading the dough, from what I see. I prefer eating soft phulkas with a dal on the side and no millets, except on a day that I choose to make millet the centerpiece by choice.) Mind you, there have been regular loose unbranded millets and flour available and people have been having them through the ages, but suddenly it is the thing to be seen eating. The other day, someone told me they are so proud of the concept of Year of the Millet because it gives them pride in eating it. On being asked who stopped them from eating all these years, they had no answer. My family, as I mentioned to him has always had one packet of ragi flour in the fridge, used to make dosas occasionally but more often as a gruel that is consumed at night, if one wanted to skip dinner. It has always been available in the stores, and no one ever stopped us from doing what we want with it.
Coming back to market economics, the fact that millets are now marketed with massive advertising has a big role in people claiming pride in consuming it. If you don’t care what others think, you just eat it whether anyone else does or not. The fact is you end up making with millets what you do with either rice or wheat and they don’t taste as good if you observe the final dish impartially. They end up being good enough, not superlative. The moment you add pride to it, it tastes a hundred times better, apparently. So, they should indeed be good times for farmers, if they can get an exponential increase in prices based on what consumers pay. But unfortunately, that may not be the case. The branding, the “AI based controlled processing and packaging”, the deep frying to make millet-based snacks and so on, are likely to grab the major share of the consumer price. So, if you ask me, people will continue to eat it if they are willing to pay the final price, but the farmer is unlikely to be enamored into growing more and more.
The fact that consumers especially the Indian consumers are very price sensitive is well known. However, with the pandemic in the rear-view mirror (closer than it seems today), I had made some assumptions that led me to make some predictions that went haywire this year. It was with respect to Mustard Oil and Turmeric. At the height of the pandemic, the purveyors of Indian Classic Home Remedies had convinced a lot of Indians that mustard oil can ward away the virus as can turmeric especially with milk. The fact that Westerners took to Turmeric Latte again gave people tons of pride! My mother offered to make me some and I replied, “I hated it when you made me drink it as a child with a cold. What makes you think, I am going to have it now?” We both had a good laugh. But plenty others apparently adopted drinking it regularly. In 2022, the farmers grew mustard and turmeric with great gusto to meet the increased demand. But by then the pandemic had passed as had the fear of death and poor health. India imported tons of cheap palm oil as usual and demand for mustard oil tanked. Ukraine and Russia are so desperate to get rid of their Sunflower Oil stocks that for a short period it was cheaper than palm oil and again a lot of came to India. People returned to using just a few teaspoons a day of turmeric in their curries and none with milk. My miscalculation was that the experience of the pandemic may change consumption patterns forever. That did not happen. Market price dynamics became the decider of the consumption patterns.
In late nineties, India gave up trying to grow more edible oil seeds and began importing palm oil and soy oil. Global environmentalists blame the Indian and Chinese demand for palm oil for Malaysia and Indonesia cutting down tropical forests to grow palms. Palm oil is so cheap that no domestic oil can compete against it. Groundnut oil has become the equivalent of Millets today, something to display to show good taste that money can buy. Soybeans are only crushed if there is demand for soymeal. The oil is now a byproduct. Indian farmers shifted their land to cotton and other commercial crops. Mustard oil remains a common man’s oil but when prices go sky high as they did in end 2021 – early 22 when it hit Rs. 200 per liter (equal to the elitist groundnut oil), the consumers quietly made their switch, health concerns no longer a primary concern. That is global market economics at play. Indian farmers and Indian consumers cannot withstand the pressure of the global markets if they don’t get a level playing field. That could be allowing free exports irrespective of prices changes domestically, allowing better seeds including GM and ensuring there is no dumping.
Pulses have also been areas of concern with India needing to import around 25% of the consumption because farmers don’t find it lucrative enough and hence don’t increase acreage under them substantially. More than edible oils, this has an impact on the nutrition of the growing children and could lead to poor mental and physical outcomes. Unlike other commodities, this is an area where I don’t believe market economics should be allowed to reign high. I have several times argued with agri-economists who tried telling me that the supply demand curve decides the price and the demand, and nothing can be done. But I believe that in this case, when prices go beyond affordability of lots of consumers as an important part of the diet and as the cheapest protein Indians can afford, the govt must intervene to make it available. Tomatoes and Onions, not so much. We can all live without them for a few weeks. Some states like Tamil Nadu do focus on pulses as much as cereals and have had good results, if their HDI parameters are any indication. How much is because of pulses being given, one could not say, but it remains an important part of the plan.
An interesting part of the pulses puzzle is that the Indian household does not easily switch from one pulse to another depending on the price. Where the pulse is a dish, they do. Where it is an ingredient, they don’t. So chana cannot replace tur in a sambhar but can as the ubiquitous Yellow dal that can accompany a roti. Just like the millets being used to replace rice and wheat in numerous ways, housewives have been training their families to eat harder idlis (that my grandmother and mother would be ashamed to serve) by mixing millets and reducing the urad content (and blaming the texture on the millets). But is it a good idea in the overall scheme of things, especially if eggs and meat are also unaffordable? That is a debate that has lasted a long time with no solution in sight.
Letting markets play out is a good idea if the government does not intervene at all. Free imports and exports and let chaos reign for a few years until the markets settle to define what is worth growing in India and what is better being imported. But that should also include pricing water (which is taken as zero, making water guzzlers rice and sugar excellent export-oriented commodities but an environmental nightmares), power, and so on, or figure out a way to subsidize farmers without contravening the WTO rules that somehow always seem to be a targeting to our MSP regime but not subsidies in other countries. The surprising thing I have realized is that farming by itself is not viable or self-sustaining in almost any part of the world and it is so tough that rarely does a farmer’s child want to be a farmer by choice and only usually due lack of other career options. That is a sad commentary on the market economics and the government interventions, both. More on that another day.
