Government interventions may worsen problems of burning crop residues
Every winter, New Delhi and much of Northern India are shrouded in a thick layer of smoke due to farmers burning crop residue. The resulting pollution impacts over 400 million people exposing them to hazardous gases and fine particulate matter. EfD researcher Digvijay Singh Negi explores in a study whether government interventions in agricultural markets contribute to an increase in crop residue burning and, consequently, higher levels of air pollution and health problems in these regions.
The smoke originates from farmers in Punjab and Haryana, who burn vast quantities of paddy crop residue. The scale of these fires is so immense that they are visible from space. While farmers see burning residue as a cost-effective solution, the public health costs are staggering. Research shows that air pollution from this practice significantly worsens respiratory illnesses and further strains the region's already limited healthcare infrastructure.
Government is involved in the grain markets
A distinctive aspect of India's agricultural system is the government's dominant role as the largest buyer of staple food grains like rice and wheat. Through the Minimum Support Price (MSP) program, the government guarantees to purchase surplus produce at pre-determined price floors, providing farmers with a stable income. However, the implementation of this policy is not uniform across the country. On average, government agencies procure about one-third of the nation’s total rice production, though the volume of procurement varies significantly by state. In states like Punjab, Haryana, and Andhra Pradesh, a large proportion of rice production is sold to the government. For instance, the government procures half of the rice and wheat produced in Haryana and two-thirds of the production in Punjab.
Grain procurement is related to residue burning
The study indicates that the increase in Minimum Support Prices (MSPs) after 2006 has led to a 43% rise in fire incidents and a 6% increase in PM 2.5 levels in districts where the government procures food grains. This trend stems from higher support prices prompting greater specialization and increased rice production in these areas. Given that farmers in Northern India predominantly rely on government agencies as their primary buyers, they responded to the higher prices by producing more rice, resulting in increased crop residue and, consequently, more burning.
Estimated net loss: 1 billion USD
What are the health implications of the increased fires and pollution associated with higher Minimum Support Prices (MSPs) and grain procurement policies? The study indicates that districts engaged in procurement see a 2 percentage point rise in illness likelihood after the price increase, primarily due to respiratory ailments like asthma and tuberculosis, along with heart diseases and other health concerns. The rate of respiratory illnesses in these areas is estimated to be 36% above [PH1] the national average, with even higher rates for heart diseases. Furthermore, there is a 19% increase in average out-of-pocket medical expenses per person, translating to a total rise of USD 29 million across procurement districts. For individuals aged 30 and above, this amount escalates to USD 63.
These findings suggest that while the government’s support price policy brings benefits to foodgrain-producing regions, it also leads to considerable losses linked to health impacts from pollution and associated mortality. Since the increase in support prices post-2006, preliminary calculations indicate that districts involved in government procurement have suffered a net loss of USD 1 billion. The advantages of the policy are largely seen in surplus grain-producing areas, overshadowed by the heightened pollution-related mortality affecting surrounding regions.
Distorted agricultural market
The findings indicate that the link between price, fire, and air pollution is primarily driven by districts where the government is the largest buyer of food grains. This highlights the challenges inherent in the agricultural policy-supported cultivation system in India. The distorted nature of Indian agricultural markets—where the government purchases surplus production at fixed price floors—results in higher rice prices being matched with increased procurement. Consequently, this procured food grain has increasingly entered export markets, positioning India as the largest rice exporter globally. This situation is particularly ironic, as Northern Indian farmers produce this rice with numerous input subsidies, contributing significantly to environmental degradation in the region. These findings underscore the hidden costs of agricultural policies that overlook their social impacts.
Suggests better policies
Current policy responses to crop residue burning have largely consisted of bans and fines. However, these measures are often poorly enforced and have failed to effectively reduce burning practices.
Immediate solutions could involve introducing new planting technologies that eliminate the need for burning or developing markets for crop byproducts and residue. Evidence also indicates success in financially incentivizing farmers to avoid burning. Ultimately, long-term solutions may require a fundamental reevaluation of existing agricultural policies.
As Negi puts it, “It’s crucial that we move beyond reactive measures and address the root causes of the problem. If policymakers begin to consider the full social and environmental costs of their decisions, we could make significant progress in reducing both pollution and the health burdens on affected populations.”
Link to the working paper: https://dp.ashoka.edu.in/ash/wpaper/paper129_0.pdf
Ishita Datta
EfD India