The Straw Burning Solution

Introduction

The straw-burning season has started, and soon smoke will overwhelm us. Some days would be clearer than others if the wind and rain gods are kind to us. And those days everyone will take credit for the work they did.  And indeed, if we go into actions being taken in Punjab, Haryana, Delhi, and of course by the Central Government, everyone has tried different things. The problem however persists.

Millions have died and millions will die and the health and economic impacts of crop burning are massive. But this problem will continue for some time to come, as there are few other avenues for the farmer. Crop burning for many reasons is perversely the ‘best’ action for a farmer to take. I delve into issues of incentives, information asymmetries, coordination failures, community action, and technology to assess ways that straw burning can be stopped and why has government been unable to stop this animal till now. And most importantly, I find why many current initiatives cannot work as straw is inferior, useless, and costly for both the farmer and its potential user. Finally, I identify five different mechanisms that will yield long-term gains against crop burning.

Scale of Paddy

Land that has paddy growing is reported to be slightly less than 3 and 1.3 million hectares in Punjab and Haryana respectively. Post-harvest, stubble will need to be cleared from all these lands. A large part of harvesting in Punjab and Haryana uses combines for harvesting. And therefore, in this land, there is straw lying around and will need to be removed over and above the stubble that remains. The removal itself would not be so easy because straw is quite voluminous. Precise estimates are not available and there is a lot of annual variation, but we can safely estimate that leftover straw from between 15 to 20 percent of the paddy grown is burnt in Punjab and Haryana. 

The Problem

This is the problem that the farmers are trying to solve, that is, how to remove the straw quickly and cheaply from their land. Like all businessmen, some farmers have a longer perspective and some shorter. Those that have a shorter perspective will be more likely to burn the crop, and those that have a longer perspective will spend a little effort and money if there is another option available. However, if a cheap and easy option is not available to the farmer close to where they are, and at the time required, even the longer perspective farmers will end up burning the straw.

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In-situ Solutions: Collecting straw is costly

In one class of solutions, we try to get rid of the straw on the field itself, and initially, these seemed quite attractive to environmentalists and governments. These include (a) Happy Seeders which allows the farmer to not remove the straw at all and simply plant the next crop and let the straw remain on the field, (b) straw collecting machines that reduce the cost of straw collection, (c) straw decomposing solutions which if sprayed decompose the straw and (d) adding of mulching equipment to mechanical harvesters which shred the straw into small pieces and throw back into the field. There are a few others as well. In most of these solutions, the idea is to let the straw decompose either naturally or assisted with added microbes. 

There are three problems here. First, does every straw-burning farmer have access to them?  The answer is clearly no, for the roughly 1 million hectares to be covered in Punjab and Haryana, we would need tens of thousands of seeders, etc. spread across Punjab and Haryana. Second, why would it make sense for the farmers to spend the money and effort in hiring the people, implements, and inputs to just clear the straw and get nothing in return? If public welfare is of interest to the farmers, they would rather use that money to feed the poor. Spending to avoid burning, when everyone around him is anyway going to burn their crops, is effectively setting fire to hard-earned cash. And finally, third, all these solutions are new ways of farming, and if they don’t work for some reason, the farmers will be stuck with the straw in their fields when he needs to be planting the next crop. 

To repeat, therefore, it is costly and difficult to not burn the straw; and the alternatives are (a) not accessible (b) costly, and (c) require new skills and risks. Therefore, farmers across the world have been burning crop residue for many millennia. The Punjab government's solution of part financing the purchase of the Happy Seeder was bound to fail even though the government may have been well-meaning. For, it does not make any business sense for the farmers to spend money to buy the seeder and then spend money to operate it, and get no financial returns for this, however much the government may have subsidized it. And therefore, even if the government bought the seeders and handed them to the farmers for free, many farmers would not use them. The same also applies to other similar solutions that convert the straw from the field to mulch or fertilizer.

One solution is to tie up with every gram panchayat, and both fund and reward the gram panchayats for not burning the straw. This is how the system would work. Depending upon the size of the village, the government can provide the required number of Happy Seeders, mulchers decomposers, etc. as is preferred by the panchayat. And one of ISROs many satellites can then be trained to observe each village. Depending upon the number of fires in each village, the relevant panchayat would then be rewarded. The major advantage here is that (a) we will get the community to help in policing crop burning rather than a government functionary with associated risks of corruption, and (b) not only are we rewarding the community but also enabling it with the instruments (seeders, etc) and information (satellite imagery).

Ex-situ Solutions: The inferiority of hybrid paddy straw

Another set of solutions that economists such as myself find attractive is to find alternate uses for this straw. These uses include the manufacture of paper, board, briquettes for burning, fertilizer, ethanol, cattle feed, to name only a few. If there are alternate uses, farmers would earn from selling the paddy straw, and therefore they would then find it attractive to spend money to collect the straw rather than burn and waste it. The problem here is that mostly the paddy straw is an inferior input. It has a higher silica content, lower calory content, very hard and fibrous, whose fibers don’t break easily. Other crops' agricultural residue has far superior properties, in a sense, the hybrid variety paddy straw is the most useless of all agricultural residue. What this means is that whether we are making paper, board, or briquettes, the straw will need to be chopped and processed and there will be a lot of wear and tear of those machines, thereby increasing processing costs. Moreover, cattle don’t like hybrid paddy straw that much, nor is it very nutritious. And therefore, the solution entails adding other nutrients to it that both increase the nutritive benefits and also make it palatable for cattle. Of course, this all adds to the costs.

And so industry will not by itself find it profitable to use straw, and the government will need to subsidize it. Moreover, even if the government-subsidized industry uses agricultural residue, there will always be a risk that they would end up using other crop residues (that are superior inputs) and not hybrid rice paddy straw. Given the serious nature of the problem, I would still provide incentives to industries that use any agri-residues as inputs as it is likely that some of that new demand will also work its way towards paddy straw. But this is unlikely to be a 'big solution’.

The Logistics Problem and Straw Credits

There is another class of problems related to straw that public discourse has not appreciated. Straw is bulky, it decomposes slowly, it can be infected by fungus and other microorganisms, it is produced only once a year, and if you mix straw from different crops, twice a year. In other words, straw is available for at best two months a year, is bulky and therefore costly to store and transport, is perishable and requires much love and care to store, and is spread over a very very large area. Now compare this against what any manufacturing requires. First, almost all manufacturing requires a steady supply of inputs throughout the year. And second, manufacturing units will need to procure that straw from a large area and need to store it.  So much straw spread over a large area will be costly to transport and store and more so since it is perishable and degrades over time.

And therefore, for all uses of straw off the farm, be it coal power plants or cattle feed, there is no other way, but to subsidize the user of the paddy straw. But for that, we face another problem. What prevents the paddy straw user to take benefit from government subsidies but use other agricultural residues. Remember paddy straw is an inferior input for all uses, it is less preferred by everything else whether we burn it, feed it or process it. This is a standard problem for the government when it desires to provide subsidies for specific products. And when such concern exists, governments typically put in many different controls on what and how the beneficiary of the subsidies can operate. The more the government controls the more the corruption, leakage and ineffectiveness of the markets, and therefore that typically reduces the efficiency of subsidy in getting the desired outcome.

In my view, therefore, finding ex-situ solutions for paddy straw will be too costly to be worth the effort, other than perhaps in coal power plants and for biofuel. If straw briquettes are able to replace some of the coal being used, or ethanol can be made easily from straw, the carbon credits generated could then be used to fund the farmer, storage, and transport logistics. But the financing needs to be worked out carefully and checked for long-term feasibility.

Another government policy could also increase the incentive to use the straw. If each farmer gets something similar to carbon credits (say straw credits) for not burning his straw, a new ecosystem for straw credit trade can develop. However, while a satellite can confirm whether straw was burnt on a farm, it cannot confirm who owns the farm. Landholding records are fairly weak everywhere in India and therefore such a program would be very difficult to institute. Therefore a thorough 'war gaming' needs to be done before even piloting such a program.

A Different Crop

This then gets us to the third class of solutions. Why don’t we simply ask the farmer to not grow paddy at all? In fact, paddy was not a major crop in Punjab historically. This has become more and more prevalent since the green revolution, and that is because the government gives so many direct and indirect subsidies on rice that it makes sense to grow rice. But if the government were to stop buying rice from mandis in Punjab and Haryana and also reduce the Minimum Support Price, we would have a serious angry farmer problem on our hands. This anger will emanate from what I term as paddy entanglement. 

Farming is not like a halwai shop, where today you make a samosa and tomorrow you can make a kachori and pakoras the day after. There is a whole ecosystem around each crop, and the farmer has to have knowledge, skills, and networks for every crop. Let us step back and try to understand the farmer's business model and the large risks he faces. A farm produces two or sometimes three crops, and all his income and working capital come from these two or three sales a year. And all the time while the crops are standing and even after harvesting natural elements can destroy the crop or adversely affect its quality. Moreover, he does not know for sure what price he will get, as prices can be very volatile. Farmers therefore tend to be extremely averse to taking more risks than those they are already taking. They also tend to specialize, in fact in Punjab and Haryana we have situations where whole villages are specializing in a single Rabi or Kharif crop. And so if everyone around me is growing rice and I shifted to maize I would be taking significant risks in terms of lack of information, skills, and networks from where I typically get my advice. Farmers are seriously entangled with rice and rapid movement away from rice is very difficult, costly and risky exercise.

Over the long term, however, the government will need to make it more profitable to produce other crops in Punjab and Haryana. And these include pulses, cotton, maize, oilseeds, fruits, and vegetables. There is more than enough human capital and financial resources in Punjab for these crops to take off. The switch away from the rice will be very good for Punjab and Haryana’s economy, groundwater, and environment.  All that the government needs to do is, either remove Minimum Support Price on paddy in Punjab (and risk a very angry farming community) or introduce the purchase of other alternate crops by government agencies along with an attractive Minimum Support Price on each alternate crop. 

Science and a ‘Better’ Rice Plant

What if we moved to other forms of rice that don’t need to be burnt? Is that in the realm of the possible? The answer is yes. Basmati is a classic example of rice whose residue is rarely burnt. The reason is that Basmati straw is softer (and perhaps tastier) and more palatable for cattle. It is well known that the hybrid varieties of paddy rice are the most likely to be burnt. Why? For that, we need to understand the instincts of those who develop hybrid rice.

In trying to optimize rice yields, the scientists in Pusa created a seed with very high yields of rice; this seed has been wildly successful and many of its variants (labeled unimaginatively as Pusa) are now used across the country to grow rice. But the science of the Pusa innovators was driven by modernity which has a built-in zeal for optimization, to the exclusion of other objectives. Not just Pusa, across other research institutes hybrid rice varieties were therefore created to optimize yields, not harmonize the whole plant with the farmer's needs. The cause had an effect, and the paddy from such varieties has straw that is neither palatable for the cattle nor is a superior input in other uses.

And therefore another class of solutions is related to the development of a different kind of seed, that does not simply optimize on rice yields, but also has a softer, nutritious straw with higher calorific content. Such a seed, that enables multiple uses of rice straw will have great value both from an environmental and income perspective. And it will also enable the farmer to diversify revenues from the same crop.  This will of course take some time to develop, seeds are not created so easily. But as a medium-term solution, this is clearly among the better ones. For it would help generate a second viable source of income for the rice farmer.

Conclusion: Summing it all up

Straw burning is not going away anytime soon. Millions of people across North India will die unknowingly because of this over the next few others. And the longer we wait the more the illness, income loss, and deaths. The government knows this and so does the farmer. But each is stuck in their own silos and will find it difficult to get around it. But get around it we must. Since it is the role of the government (be it center or state) to address such a problem the government needs to come up with a public statement and set a target date for itself. Say, 10 years hence. And with that in mind institute the following set of initiatives:

1.      An initiative to reward and support communities to monitoring crop burning and provide alternatives to the farmer

2.      A large investment subsidy to all manufacturing units that use agri inputs as feedstock

3.      Implement a mechanism of ‘straw credits’ that can reward the farmer who does not burn his field

4.      Develop a 10-year plan to provide greater returns to non-paddy crops and make the plan public 

5.      Ask all seed development researchers to develop seeds that yield better quality rice straw and not just more rice

None of these will immediately put a stop to crop burning. But over a 10 year period, it will be possible to develop a new ecosystem that enables the farmer to take better actions than the one that has inadvertently evolved. This will involve significant expenditures for the government, running into tens of thousands of crores. But we all know, that spread over a few years, it will all be worth it.