A Phantom Trade
India's Agricultural Exports and the Hidden Cost of Thirst
Amidst the concerns about India's growing trade deficit, agri-exports seem to be a silver lining. Agri-exports have boasted continuous growth in the last three years.1 India is, by far, the largest exporter of rice in the world, representing around 40% of the global rice trade in 2022. In fact, India exported more rice than the next four largest exporters put together.2 Buyers get rice at low prices, India reduces its current account deficit, everyone wins, trade is a positive sum game. Right?
Not when it comes to water. Agricultural export, especially of water-intensive crops, is a proxy for water export. Every kilogram of rice production needs 3000-5000 litres of water. Exporting rice represents a permanent loss of freshwater resources from the country.3 This globalisation of local water is a strategy that many countries are taking advantage of, and India is getting the short end of the stick.
Rice or paddy is not the only example. Sugarcane is another water-guzzling crop that India exports a lot of - second rank this time.4 Only behind Brazil, which stands at first. However, Brazil has the luxury of having the highest volume of freshwater - 12% of the world's total for 2.75% of the global population.5 India, on the other hand, has merely 4% of the global freshwater resources for 18% of the world's population. According to the FAO, 90% of this water is used in agriculture.6
India is sleepwalking towards an impending crisis. By 2030, India will be left with just 50% of the water it needs.7 This is a threat with catastrophic repercussions - the worst in our history and will disproportionately affect farmers.
Punjab and Haryana are a major rice belt today. They are not ecologically suited to growing paddy. Traditionally, they did not engage in its cultivation at a large scale. It began five decades ago, after the Green Revolution. Today, three-fourths of the rice farms in the region use tube wells for irrigation - drawing large amounts of groundwater using powerful motors.8 According to the Central Ground Water Board, the water table in the region is dangerously low, and water extraction far exceeds the replenishment rate.9
Despite these drawbacks, growing paddy is the only worthwhile choice there because of the low risk and guaranteed returns resulting from the Minimum Support Price (MSP) and procurement policies of the government. These policies were necessary to address the immediate problems of food insecurity in India during the 1960s and 1970s. Sugarcane has its own version of MSP as well in the form of Fair and Remunerative Price (FRP). Five decades later, they have had massive unintended consequences resulting in terrible market distortions.
"Along with paddy cultivation, a system of agriculture was imposed on us," says Joginder Singh Ugrahan, president of one of the largest farmers' groups in Punjab. "Farmers had to buy new machinery, fertilisers, and pesticides. A new market system was also introduced. Now, farmers can't go back to growing other crops. Efforts to grow fruits, vegetables, and cotton have proved economically unviable. We even cultivated green gram as the government promised to buy it. No procurement has taken place yet."10
These circumstances are not limited to the northwestern parts of India. They extend across the country and adversely affect many regions like the Krishna and Cauvery basins in the south and Upper Ganga basin in the north. Rice is grown as an irrigated crop during the non-monsoon season here. The result has been a relentless exploitation of surface and ground water resources. Various interstate water disputes including Punjab-Haryana and Karnataka-Tamil Nadu conflicts; and even international disputes like the India-Bangladesh dispute over the transboundary Teesta river, find their roots in improper water management resulting from unsustainable agriculture practices.11
Indian rice exports are the most competitive in the world due to the lowest prices. It is cheaper than it should be because of the colossal overproduction that occurs due to government interventions imposed on the entire market. The hidden social costs are in the form of the invisible water exports. This borne by the entire country, disproportionately so by the farmers.
https://pib.gov.in/PressReleasePage.aspx?PRID=1911906
https://fas.usda.gov/data/rice-export-prices-highest-more-decade-india-restricts-trade
https://www.downtoearth.org.in/blog/agriculture/india-s-water-is-being-exported-as-agri-exports-is-there-a-solution-77966
https://pib.gov.in/PressReleasePage.aspx?PRID=1817808
https://www.worldatlas.com/articles/countries-with-the-most-freshwater-resources.html
https://www.financialexpress.com/opinion/water-is-food-indian-agriculture-must-be-geared-towards-efficient-use-of-water/3273540/
https://economictimes.indiatimes.com/opinion/et-commentary/an-impending-water-crisis-can-cripple-indias-agriculture-sector-heres-how-to-tackle-it/articleshow/98923063.cms
https://vikaspedia.in/agriculture/best-practices/sustainable-agriculture/water-management/paddy-in-punjab-sustainable-water-use
https://timesofindia.indiatimes.com/city/chandigarh/depleting-water-table-in-pb-hry-big-concern/articleshow/90429830.cms
https://www.thehindu.com/news/national/other-states/bereft-of-viable-options-punjabs-farmers-persist-with-paddy/article65931675.ece
https://www.orfonline.org/research/indias-enduring-war-of-water-governance-paradigms/
well brought out