India: Roles and Challenges India: Roles and Challenges of Small Holder Agriculture of Small Holder Agriculture

S.Mahendra DevS.Mahendra Dev

Director and Vice Chancellor, Director and Vice Chancellor, IGIDR, Mumbai, IndiaIGIDR, Mumbai, India

Contents of the presentationContents of the presentationIntroduction and background Introduction and background

Role of small holding agriculture for food Role of small holding agriculture for food security and livelihoodssecurity and livelihoods

Small holders and livelihoodsSmall holders and livelihoods

Issues and challenges for small holdersIssues and challenges for small holders

Opportunities for small holding agricultureOpportunities for small holding agriculture

--Technological innovations--Technological innovations

--institutional innovations--institutional innovationsPolicies to support small holdersPolicies to support small holdersLessons from Indian experienceLessons from Indian experience

Introduction and background onIntroduction and background onIndian AgricultureIndian Agriculture

India ‘s population is 1.21 billion in 2011. 67% are India ‘s population is 1.21 billion in 2011. 67% are rural. Majority are in agriculture. rural. Majority are in agriculture. Importance of agriculture in Indian economy. Although Importance of agriculture in Indian economy. Although it contributes only 15% of GDP, the share of workers it contributes only 15% of GDP, the share of workers is about 55%.is about 55%.Marginal and small farmers dominateMarginal and small farmers dominateMajor crops are rice, wheat, maize, coarse cereals, Major crops are rice, wheat, maize, coarse cereals, groundnut, cotton, sugarcane, fruits and vegetablesgroundnut, cotton, sugarcane, fruits and vegetables60% of cultivated area is rainfed as only 40% of area 60% of cultivated area is rainfed as only 40% of area is under irrigation.is under irrigation.Rural poverty is 41%in 2004-05. Rural poverty is 41%in 2004-05. Agriculture is a ‘State Subject’. In other words, the Agriculture is a ‘State Subject’. In other words, the policies of provinces are also important policies of provinces are also important

Performance of AgriculturePerformance of AgricultureGrowth performance in agriculture%)Growth performance in agriculture%)

1950-1 to 1964-5: 2.51 (area gro. +yield gro)1950-1 to 1964-5: 2.51 (area gro. +yield gro)

1967-8 to 1980-1: 2.20 (yield gr. green revol)1967-8 to 1980-1: 2.20 (yield gr. green revol)

1980-1 to 1990-1: 3.07 (spread of green rev)1980-1 to 1990-1: 3.07 (spread of green rev)

1992-3 to 2004-5: 2.76 (reform period)1992-3 to 2004-5: 2.76 (reform period)

1997-8 to 2004-5: 1.60 (neglect of agri.)1997-8 to 2004-5: 1.60 (neglect of agri.)

2004-5 to 2010-1: 3.47 (revival of growth)2004-5 to 2010-1: 3.47 (revival of growth) The policy, institutional and investment focus during The policy, institutional and investment focus during

green revolution time helped India achieve its food green revolution time helped India achieve its food self sufficiency goals. self sufficiency goals.

However, now different policies are needed to focus However, now different policies are needed to focus on small holdings, rainfed areas, women, lagging on small holdings, rainfed areas, women, lagging regions, rural non-farm for sustainable agricultural regions, rural non-farm for sustainable agricultural transformationtransformation

-15

-10

-5

0

5

10

15

20 Plan CommWB-WDI Annual Growth Rate

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

5-Year Average Growth Rate

Agriculture GDP growthAgriculture GDP growth

Challenges in Agriculture including small Challenges in Agriculture including small farmersfarmers

Concerns and challenges in AgricultureConcerns and challenges in Agriculture--Green Revolution technology mainly benefited the high --Green Revolution technology mainly benefited the high

potential and irrigated areas. They have less impact potential and irrigated areas. They have less impact on dry land and rainfed areas. Also, yield growth on dry land and rainfed areas. Also, yield growth plateaued in the irrigated areas. Technology fatigue.plateaued in the irrigated areas. Technology fatigue.

---With urbanization and income growth, consumption ---With urbanization and income growth, consumption patterns have shifted from cereals to non-cereal food patterns have shifted from cereals to non-cereal food (pulses, edible oils, fruits, vegetables, dairy and other (pulses, edible oils, fruits, vegetables, dairy and other livestock, fisheries)livestock, fisheries)

-- Supply of these commodities are in short supply -- Supply of these commodities are in short supply compared to demand. As a result food inflation compared to demand. As a result food inflation increased in recent yearsincreased in recent years

---- Deceleration in growth from 3.5% during 1981-97 to Deceleration in growth from 3.5% during 1981-97 to 2% during 1997-2005. Decline in yield growth.2% during 1997-2005. Decline in yield growth.

Challenges in Indian agricultureChallenges in Indian agriculture--This led to rising rural distress and also farmers’ --This led to rising rural distress and also farmers’

suicides.suicides.-- Land and water problems, vulnerability to world -- Land and water problems, vulnerability to world

commodity prices,commodity prices,----Disparities in growth across regions and crops: growth ----Disparities in growth across regions and crops: growth

rate declined more in rainfed areas. rate declined more in rainfed areas.

Long term factors: Steeper decline in per capita land Long term factors: Steeper decline in per capita land availability. Shrinking of farm size availability. Shrinking of farm size

Slow reduction in share of employment (still 55%) Slow reduction in share of employment (still 55%)

Main problem is Main problem is low land and labour productivitylow land and labour productivity in in agriculture. Gap between agri. and non-agri. is agriculture. Gap between agri. and non-agri. is widening.widening.

We should blame non-agriculture (industry and We should blame non-agriculture (industry and services) for not absorbing workers from agriculture.services) for not absorbing workers from agriculture.

Sources of growth in Sources of growth in agricultureagricultureWhat are the reasons for slow growth in agri.

during mid-1990s to mid-2000s Steering Group for 11th Plan has estimated sources of growthSources of growth: Five factors: (a) Public invest. (b) private invest. (c) Technology; (d) diversification (e) fertilizerThere has been slowdown in all these factorsTerms of trade also declinedHigher growth in the post-reform period only in the case of agricultural credit

Decline in growth (%) Decline in growth (%) 1980-81 to 1980-81 to 1990-911990-91

1990-91 to 1990-91 to 1996-971996-97

1996-97 to 1996-97 to 2005-062005-06

TechnologyTechnology 3.33.3 2.82.8 0.00.0

Public Inve.Public Inve. 3.93.9 1.91.9 1.41.4

Private Inv.Private Inv. 0.60.6 2.22.2 1.21.2

Irriga.areaIrriga.area 2.32.3 2.62.6 0.60.6

Area under Area under Fruits&vegFruits&veg

5.65.6 5.65.6 2.72.7

NPK useNPK use 8.28.2 2.52.5 2.32.3

CreditCredit 3.73.7 7.57.5 14.414.4

Some Dynamism in Recent Years Some Dynamism in Recent Years 4% growth in agri. During 2004-08. Record 4% growth in agri. During 2004-08. Record foodgrain production during 2008-09 (241 m.t.). foodgrain production during 2008-09 (241 m.t.). Exports in cotton, rice and sugar till 2008.Exports in cotton, rice and sugar till 2008.Revolution in cotton. Cotton prod. doubled in six Revolution in cotton. Cotton prod. doubled in six years. Some positive signs on bio technology (BT years. Some positive signs on bio technology (BT cotton). Success in hybrid maize.cotton). Success in hybrid maize.Some increase in high value agricultureSome increase in high value agricultureSome rainfed regions showing high growth in Some rainfed regions showing high growth in agri: Bihar. Gujarat showed 9% growth in agri: Bihar. Gujarat showed 9% growth in agri.2001-09agri.2001-09Comfortable buffer stocks; 60 million tonnesComfortable buffer stocks; 60 million tonnesTerms of trade in agri. improvedTerms of trade in agri. improved

Three Goals of Agricultural Three Goals of Agricultural DevelopmentDevelopment

1.Achieve 4% growth in agriculture and raise 1.Achieve 4% growth in agriculture and raise incomes. Increasing productivity (land, labor), total incomes. Increasing productivity (land, labor), total factor productivity, diversification to high value agri. factor productivity, diversification to high value agri. and rural non-farm by maintaining food security. and rural non-farm by maintaining food security.

2.Second goal is sharing growth (equity): focus on 2.Second goal is sharing growth (equity): focus on small and marginal farmers, lagging regions, small and marginal farmers, lagging regions, women etc. Share of women is increasing in agri. women etc. Share of women is increasing in agri. On lagging regions, focus on Eastern India and On lagging regions, focus on Eastern India and other other rainfed areasrainfed areas..

3. Third is to maintain sustainability of agriculture3. Third is to maintain sustainability of agriculture

Role of Small FarmersRole of Small FarmersIndian agri. is the home of small farmers (80%).Indian agri. is the home of small farmers (80%).

Therefore, the future of sustainable agriculture growth, Therefore, the future of sustainable agriculture growth, food security and livelihoods in India depends on the food security and livelihoods in India depends on the performance of small and marginal farmersperformance of small and marginal farmers

Marginal (0.01 to 1.00 ha); small (1.01 to 2.00), semi-Marginal (0.01 to 1.00 ha); small (1.01 to 2.00), semi-medium (2.0 to 4.00),medium (4 to 10), large (above 10)medium (2.0 to 4.00),medium (4 to 10), large (above 10)

Agricultural Census data shows that there were about Agricultural Census data shows that there were about 121 million agricultural holdings in India in 2000-01. 121 million agricultural holdings in India in 2000-01. Around 99 million were small and marginal farmers. Around 99 million were small and marginal farmers.

Average size has declined from 2.3 ha. In 1970-71 to Average size has declined from 2.3 ha. In 1970-71 to 1.37 ha. In 2000-01. Average size of marginal 0.24 ha1.37 ha. In 2000-01. Average size of marginal 0.24 ha

Small and marginal farmers account for more than 80% Small and marginal farmers account for more than 80% of total farm hhs. But their share in area is around 44%. of total farm hhs. But their share in area is around 44%.

% Distribution of small holdings

% Distribution of operated area

Land Class

1960-61 1991-92 2002-03 1960-61 1991-92 2002-03

Margina 39.1 56.0 62.8 6.9 15.6 22.6

Small 22.6 19.3 17.8 12.3 18.7 20.9

Small &marginal

61.7 75.3 80.6 19.2 34.3 43.5

Semi-medium

19.8 14.2 12.0 20.7 24.1 22.5

Medium 1.4 8.6 6.1 31.2 26.4 22.2

Large 4.5 1.9 1.3 29.0 15.2 11.8

Total 100.0 100.0 100.0 100.0 100.0 100.0

65.54

18.1

10.64

4.82

0.9

21.8520.19

22.81 22.09

13.06

0

10

20

30

40

50

60

70

Marginal Small Semi-Medium Medium Large

Fig.2.1: Percentage Distribution of Farmer's holdings and Area Operated - All India

Percentage of Farmer Households Percentage of Area Operated

Role of Small HoldersRole of Small HoldersAccess to irrigationAccess to irrigation: irrigation for small holdings 51% : irrigation for small holdings 51% compared to 31% for large farmerscompared to 31% for large farmers

Access to fertilizers, area under HYV and cropping Access to fertilizers, area under HYV and cropping intensityintensity: It is inversely related to farm size. : It is inversely related to farm size.

Cropping patternsCropping patterns: Do small and marginal farmers : Do small and marginal farmers grow high value crops? They allocate large grow high value crops? They allocate large proportion of land to high value crops like fruits and proportion of land to high value crops like fruits and vegetables and also to rice and wheat than other vegetables and also to rice and wheat than other farmers. Thus they contribute to food security and farmers. Thus they contribute to food security and diversification. But less on pulses and oilseedsdiversification. But less on pulses and oilseeds

Farm size, output and productivity: Farm size, output and productivity: Productivity is Productivity is inversely related to farm size. Small holdings inversely related to farm size. Small holdings continue to produce more in value terms per hectare continue to produce more in value terms per hectare than medium and large farmersthan medium and large farmers

Small holders and livelihoodsSmall holders and livelihoodsAround 98 million out of 120 million farm holdings Around 98 million out of 120 million farm holdings are small and marginal farmers. Therefore, their are small and marginal farmers. Therefore, their performance is crucial for livelihoods.performance is crucial for livelihoods.

It is true that small holders have higher productivity It is true that small holders have higher productivity than large holders. than large holders.

But it is sustainable because consumption But it is sustainable because consumption expenditure of small and marginal farmers exceeds expenditure of small and marginal farmers exceeds their estimated income from agri+ non-agri by a their estimated income from agri+ non-agri by a substantial margins and the deficits (dis-savings) substantial margins and the deficits (dis-savings) have to be plugged by borrowings. have to be plugged by borrowings.

According to 2003 NSS data, According to 2003 NSS data,

-Marginal farmers monthly consumption Rs.2482 and -Marginal farmers monthly consumption Rs.2482 and monthly incomeRs.1659monthly incomeRs.1659

-Large farmers: consumption Rs.6418 income Rs.9667-Large farmers: consumption Rs.6418 income Rs.9667

Issues and Challenges for Small farmersIssues and Challenges for Small farmersThe 11The 11thth Five Year Plan says “ The agricultural Five Year Plan says “ The agricultural strategy must focus on the 85% of farmers who strategy must focus on the 85% of farmers who are small & marginal, increasingly female, and are small & marginal, increasingly female, and who find it difficult to access inputs, credit and who find it difficult to access inputs, credit and extension or to market their output”. extension or to market their output”. ““While some of these farmers may ultimately exit While some of these farmers may ultimately exit from farming, the overwhelming majority will from farming, the overwhelming majority will continue to remain in the sector and the continue to remain in the sector and the objective of inclusiveness requires that their objective of inclusiveness requires that their needs are attended to”needs are attended to”Inherent disadvantages faced by the small Inherent disadvantages faced by the small farmers would be larger with increasing market farmers would be larger with increasing market integration and globalization.integration and globalization.

Issues and Challenges for Small HoldersIssues and Challenges for Small HoldersSome of the general issues that confront small Some of the general issues that confront small holders are: imperfect markets for inputs/products holders are: imperfect markets for inputs/products leading to smaller value realizations, leading to smaller value realizations,

absence of access to credit markets or imperfect absence of access to credit markets or imperfect credit markets leading to sub-optimal investment credit markets leading to sub-optimal investment decisions or input applications; poor human resource decisions or input applications; poor human resource base; smaller access to extension services and base; smaller access to extension services and technologytechnology

Poor access to ‘public goods’ such as public Poor access to ‘public goods’ such as public irrigation, command area development, electricity irrigation, command area development, electricity grids.grids.

Key issues and challenges are the followingKey issues and challenges are the following

Role of women Role of women

Challenges of Small HoldersChallenges of Small HoldersSocial groups: Scheduled Castes and Scheduled Social groups: Scheduled Castes and Scheduled TribesTribes

Land issues: land and tenancy securityLand issues: land and tenancy security

Low level of formal education and skillsLow level of formal education and skills

Credit and indebtednessCredit and indebtedness

Globalization challenges: Volatility in international Globalization challenges: Volatility in international prices; challenges of integration of value chains, prices; challenges of integration of value chains, super markets.super markets.

Impact of climate changeImpact of climate change

Water problemsWater problems

Diversification challengesDiversification challenges

Risk and vulnerabilityRisk and vulnerability

Opportunities for Small holding agricultureOpportunities for Small holding agriculture

Research and extensionResearch and extension

Technological innovationsTechnological innovations

--zero tillage--zero tillage

--Public sector led improved technologies--Public sector led improved technologies

--Nutrient management--Nutrient management

--Bio-technology--Bio-technology

--Information technology--Information technology Institutional InnovationsInstitutional Innovations

--land and water management: institutions like --land and water management: institutions like water user associations for water management water user associations for water management of canal irrigationof canal irrigation

Institutional InnovationsInstitutional InnovationsWomen’s collectives: Women’s cooperatives, Women’s collectives: Women’s cooperatives, producer women’s groups and other forms of group producer women’s groups and other forms of group efforts (e.g. Deccan Development Society in Andhra efforts (e.g. Deccan Development Society in Andhra Pradesh).Pradesh).

Gujarat put in place institutional environment for Gujarat put in place institutional environment for development of agriculture (e.g. development of agriculture (e.g. Krishi MohatsavKrishi Mohatsav). ). This This Mohatsava Mohatsava serves as an institutional platform at serves as an institutional platform at the village level and proved to be an important support the village level and proved to be an important support for farmers.for farmers.

Similarly Andhra Pradesh: The Community Managed Similarly Andhra Pradesh: The Community Managed Sustainable Agriculture (CMSA) programme. It Sustainable Agriculture (CMSA) programme. It addresses the major causes of agricultural distress addresses the major causes of agricultural distress and help farmers in adopting sustainable agricultural and help farmers in adopting sustainable agricultural practices. It covers 2.7 million acres and benefit 1.05 practices. It covers 2.7 million acres and benefit 1.05 million farmersmillion farmers

Institutional InnovationsInstitutional InnovationsInstitutions for Marketing of Small holdersInstitutions for Marketing of Small holders

--There are several models: Contract farming, self --There are several models: Contract farming, self help group model, co-operative model and help group model, co-operative model and producer co-operativesproducer co-operatives

--One of the most successful producer --One of the most successful producer organization is dairy cooperative with 12.3 organization is dairy cooperative with 12.3 million members.million members.

--Contract farming is also successful in some --Contract farming is also successful in some casescases

--Some examples of group approach are: --Some examples of group approach are: Apni Apni MandiMandi in Punjab and in Punjab and Rytu Bazar Rytu Bazar in Andhra in Andhra Pradesh Pradesh

Small farmers, value chains and Small farmers, value chains and SupermarketsSupermarkets

Wholesale, processing and retail segments are Wholesale, processing and retail segments are growing in India.growing in India.In India, super market revolution is also catching In India, super market revolution is also catching up. Average annual growth rate of top 10 up. Average annual growth rate of top 10 retailers during 2000-06 in India was 50%.retailers during 2000-06 in India was 50%.Linking small farmers to super markets. Linking Linking small farmers to super markets. Linking farmers with input suppliers, logistic suppliers, farmers with input suppliers, logistic suppliers, agro-processors and retailersagro-processors and retailersIn those cases where small producers have In those cases where small producers have been able to integrate into the supplying chains, been able to integrate into the supplying chains, supermarkets have offered enhanced security supermarkets have offered enhanced security and considerably higher margins than the and considerably higher margins than the traditional clients, such as wholesales and traditional clients, such as wholesales and groceries groceries

Challengeing the conventional view on value Challengeing the conventional view on value chains: IFPRI studychains: IFPRI study

1. Conventional view: Food supply chains are 1. Conventional view: Food supply chains are dominated by long chain of many hands. Findings: dominated by long chain of many hands. Findings: supply chains can be shortsupply chains can be short

2. Earlier view: Staple’s value chains are 2. Earlier view: Staple’s value chains are dominated by small traditional processors and dominated by small traditional processors and retails. Findings: Things are changing. Role of retails. Findings: Things are changing. Role of large cold storages, modernizing rice mills, small large cold storages, modernizing rice mills, small but rapidly increasing super markets in retail chainbut rapidly increasing super markets in retail chain

3. Earlier view: Little change in technology since 3. Earlier view: Little change in technology since green revolution. Findings: there are substantial green revolution. Findings: there are substantial changes in technological and factor marketschanges in technological and factor markets

4. earlier view: little role for quality. Now the role of 4. earlier view: little role for quality. Now the role of quality is importantquality is important

Challenging the Conventional ViewChallenging the Conventional View5. conventional view: traditional supply chainssay 5. conventional view: traditional supply chainssay high rates of wastage and transportation costs. high rates of wastage and transportation costs. Findings: Both are only 10% of final consumer Findings: Both are only 10% of final consumer priceprice

6. Conventional view: Govts. Play a major direct 6. Conventional view: Govts. Play a major direct role in value chains. Findings: It is true in India in role in value chains. Findings: It is true in India in the case of foodgrains but not in non-cerealsthe case of foodgrains but not in non-cereals

7. Conventional view: food security debatemainly 7. Conventional view: food security debatemainly on farm sector. Findings: traders and retailers play on farm sector. Findings: traders and retailers play big role.big role.

8. Earlier view: Retail margins are increasing over 8. Earlier view: Retail margins are increasing over time and cause for inflation. Findings: Retail time and cause for inflation. Findings: Retail margins have not increasedmargins have not increased

Institutions Institutions New institutional approaches are needed to help New institutional approaches are needed to help the farmers e.g. formation of producer groups. the farmers e.g. formation of producer groups. One of the important policy issue is how to link One of the important policy issue is how to link small farmers to high value agriculture. small farmers to high value agriculture. There has been diversification of Indian There has been diversification of Indian agriculture away from foodgrains to pulses, edible agriculture away from foodgrains to pulses, edible oils and to high value products like vegetables, oils and to high value products like vegetables, fruits, milk, eggs, fish and meat products.fruits, milk, eggs, fish and meat products. Although foodgrains are important, future sources Although foodgrains are important, future sources of growth and incomes are going to come from of growth and incomes are going to come from high value agriculture.high value agriculture.Being perishable, it needs fast moving Being perishable, it needs fast moving infrastructure and institutions.infrastructure and institutions.

Targeted Growth Rates for 11Targeted Growth Rates for 11thth Plan Plan

GDP Share%GDP Share% Growth Rate%Growth Rate%

FoodgrainsFoodgrains 2626 2.32.3

OilseedsOilseeds 77 4.04.0

Other cropsOther crops 1515 3.03.0

Crop SectorCrop Sector 4848 2.72.7

HorticultureHorticulture 1919 5.05.0

LivestockLivestock 2525 6.06.0

FisheriesFisheries 44 6.06.0

ForestryForestry 44 0.00.0

Total SectorTotal Sector 100.0100.0 4.14.1

Small Farmers and InformationSmall Farmers and InformationIndian private companies and NGOs are global Indian private companies and NGOs are global leaders in providing information to farmers, as a leaders in providing information to farmers, as a spinoff from India’s meteoric rise as a world leader in spinoff from India’s meteoric rise as a world leader in ICTs. ICTs. E-Choupal (Internet Kiosks) E-Choupal (Internet Kiosks) has expanded access has expanded access to internet in rural areas. Up to 6,400 internet kiosks to internet in rural areas. Up to 6,400 internet kiosks were set up between 2000 and 2007 by ITC Limited, were set up between 2000 and 2007 by ITC Limited, one of the largest agricultural exporters. one of the largest agricultural exporters. It reaches about 4 million farmers growing a range of It reaches about 4 million farmers growing a range of crops - soybean, coffee, wheat, rice, pulses or crops - soybean, coffee, wheat, rice, pulses or shrimp - in over 40,000 villages. shrimp - in over 40,000 villages. They get free information in their language about They get free information in their language about local and global market prices, weather forecasts, local and global market prices, weather forecasts, farming practices and crop insurance. farming practices and crop insurance. It serves as a purchase centre, cutting marketing costs It serves as a purchase centre, cutting marketing costs and allowing farmers to obtain a bigger farm price. and allowing farmers to obtain a bigger farm price.

Small Farmers and InformationSmall Farmers and InformationThe M. S. Swaminathan Research Foundation The M. S. Swaminathan Research Foundation established Knowledge Centers in Pondicherry. established Knowledge Centers in Pondicherry. The women self-help groups use the centers’ The women self-help groups use the centers’ computers to manage their business accounts and computers to manage their business accounts and coordinate their activities, using video links with the coordinate their activities, using video links with the other villages.other villages.Mobile phone coverage in India is expanding at Mobile phone coverage in India is expanding at breakneck speed. breakneck speed. By linking communication technologies to market By linking communication technologies to market exchanges in commercial centers, even small farmers exchanges in commercial centers, even small farmers can overcome the enormous informational can overcome the enormous informational asymmetries that limit their bargaining power in asymmetries that limit their bargaining power in traditional supply chains. traditional supply chains. The revolution in mobile phones is helping the small The revolution in mobile phones is helping the small farmers to get information about crop prices and input farmers to get information about crop prices and input prices and other related information on agriculture.prices and other related information on agriculture.

Special Programmes for Small and FarmersSpecial Programmes for Small and Farmers

National Commission for Enterprises in the National Commission for Enterprises in the Unorganized sector (NCEUS) has advocated a special Unorganized sector (NCEUS) has advocated a special programme for marginal and small farmers.programme for marginal and small farmers.Objectives are: (1) to improve income prospects; (2) to Objectives are: (1) to improve income prospects; (2) to improve the skill base; (3) provide income earning improve the skill base; (3) provide income earning opportunities in the non-farm sector; (4) to ensure the opportunities in the non-farm sector; (4) to ensure the needs of small farmers and adequately reflected in needs of small farmers and adequately reflected in other agricultural and development programmes for other agricultural and development programmes for livelihood securitylivelihood securityPrincipal activities proposed under the special Principal activities proposed under the special programme areprogramme are

(a) Promotion of group approach to small farmers: It (a) Promotion of group approach to small farmers: It proposes setting up of Marginal and Small farmers’ proposes setting up of Marginal and Small farmers’ development society (MSFDS) for the promotion, development society (MSFDS) for the promotion, capacity building and coordination of development of capacity building and coordination of development of

Special programme for small farmersSpecial programme for small farmersMarginal and small farmrers’ groupsIMarginal and small farmrers’ groupsI(b) Enabling gender access to institutional credit(b) Enabling gender access to institutional credit(c) Training and capacity building(c) Training and capacity building(d) Support for strengthening and creation of non-farm (d) Support for strengthening and creation of non-farm

activities activities (e) Gender focused activities(e) Gender focused activities(f) Planning for development of marginal and small (f) Planning for development of marginal and small

farmersfarmersIt also advocates implementation mechanism and It also advocates implementation mechanism and financial resources, M&Efinancial resources, M&EBasically, the commission advocates that there is a Basically, the commission advocates that there is a need to special focus on small and marginal farmers need to special focus on small and marginal farmers for growth and equity in Indian agriculturefor growth and equity in Indian agriculture

Rural non-farm sectorRural non-farm sectorPoverty can not be removed with 55% of Poverty can not be removed with 55% of workers in agri.workers in agri. Need to promote rural non-farm Need to promote rural non-farm sector.sector. India currently produces about 50 million tonnes of fruits India currently produces about 50 million tonnes of fruits and 90 million tonnes of vegetables. Only 2% of these fruits and 90 million tonnes of vegetables. Only 2% of these fruits and vegetables are processed as against 23% in China, 78% and vegetables are processed as against 23% in China, 78% in Phillippines, 83% in Malaysia. in Phillippines, 83% in Malaysia.

Half of those engaged in agriculture are still illiterate Half of those engaged in agriculture are still illiterate and and just 5% have just 5% have completed higher secondary completed higher secondary educ.educ.Even in 2004-05, around Even in 2004-05, around 60% of rural male 60% of rural male workers and 85% of rural female workers are workers and 85% of rural female workers are either illiterateeither illiterate or have been educated upto or have been educated upto primary level. primary level. In other words, In other words, education and skills are education and skills are constraintsconstraintsIndia can learn from China on rural transformation. India can learn from China on rural transformation.

India and China: Manufacturing India and China: Manufacturing

India leap frogged from agriculture to services India leap frogged from agriculture to services without focusing on manufacturing sector.without focusing on manufacturing sector.The share of employment in manufacturing in The share of employment in manufacturing in Malaysia is 50%, in Korea 62%, in China 31%. Malaysia is 50%, in Korea 62%, in China 31%. On the other hand, the share of employment in On the other hand, the share of employment in manufacturing in manufacturing in India is only 12%India is only 12% Diversification towards rural non-form sector in Diversification towards rural non-form sector in China is one of the important factors China is one of the important factors responsible for rural poverty reduction responsible for rural poverty reduction (poverty 3%). This was partly due to (poverty 3%). This was partly due to agricultural productivity. agricultural productivity.

Lessons from Indian ExperienceLessons from Indian ExperienceGreen Revolution and Small FarmsGreen Revolution and Small Farms

Food Grain ManagementFood Grain Management

Dairy CooperativesDairy Cooperatives

Water management in GujaratWater management in Gujarat

Self Help groups and group approachSelf Help groups and group approach

Rights based approachRights based approach

Learning from others: India can also learn from Learning from others: India can also learn from countries like China, Brazil. India can learn from countries like China, Brazil. India can learn from China on rural transformation and infrastructure. China on rural transformation and infrastructure.

It can also learn from Brazil on agricultual It can also learn from Brazil on agricultual research (like EMBRAPA) and zero hunger research (like EMBRAPA) and zero hunger programprogram

ConclusionsConclusionsThis paper examines the role and challenges of small This paper examines the role and challenges of small holding agriculture.holding agriculture.India has done well in attainting food grains self sufficiency India has done well in attainting food grains self sufficiency since the days of green revolution.since the days of green revolution.Difference between green revolution period and the Difference between green revolution period and the expected ‘second green revolution’ is that (a) globalization expected ‘second green revolution’ is that (a) globalization challenges, volatility in prices (b) shrinking farm size (c) challenges, volatility in prices (b) shrinking farm size (c) rain fed farming challenges (d) environmental stress and rain fed farming challenges (d) environmental stress and climate changeclimate changeSmall farmers are certainly going to remain in India the Small farmers are certainly going to remain in India the next decade or more. next decade or more. Way ahead: Main goals are (a) raising agri. growth Way ahead: Main goals are (a) raising agri. growth productivity rise, move towards high value agri. and rural productivity rise, move towards high value agri. and rural non-farm and maintain food security (b) shared growth non-farm and maintain food security (b) shared growth (small farmers, lagging regions, women etc. (c) (small farmers, lagging regions, women etc. (c) sustainable growth sustainable growth

ConclusionsConclusionsThere are six deficits in agriculture. These are: (a) investment, credit, infrastructure (b) research, extension (technology) (c) Market (d) diversification (e) institutions (f) education/skillFood security has been an overriding priority in India’ since the 1960s. The focus paid off with attaining food grain security and poverty reduction. The strategy concentrated on rice and wheat in irrigated areas.The future growth will need to rely on a dual strategy of diversification into non-cereal high value crops and rainfed areas with focus on small farms.Basically investment and institution strategies have to focus on small and marginal farmers, women farmers, rainfed areas, environmental stress, rural non-farm sector for sustainable agri-transformation.

ConclusionsSmall farmers have difficulties to access inputs, credit and extension or to market their output.

Investment in infrastructure like roads, irrigation, communications etc. can benefit small farmers

Many institutional innovations are coming up to link small farmers to high value agriculture and help increasing their productivity and marketing (contracting farming, dairy sector, cooperative marketing).

ICT revolution in India is also helping small farmers with information, input supplies and marketing

Risk mitigation strategies are needed for small farms.

There is a recognition now that small farmers need a special focus in order to have growth and equity in agriculture and food security.

ConclusionConclusionElephant (India) can learn from Dragon (China) on Elephant (India) can learn from Dragon (China) on rural transformation particularly rural industrialization. rural transformation particularly rural industrialization.

Small farmers need agri. Diversification and income Small farmers need agri. Diversification and income from rural non-farm sector.from rural non-farm sector.

Need for massive increase in Need for massive increase in investmentsinvestments for for agriculture and rural infrastructure by simultaneously agriculture and rural infrastructure by simultaneously improving the institutions for better delivery systemsimproving the institutions for better delivery systems

Govt. is thinking of big push to health and education Govt. is thinking of big push to health and education in 12in 12thth Plan Plan

Such a big pushSuch a big push is needed for agriculture sector for is needed for agriculture sector for food security, livelihoods, sustainability and food security, livelihoods, sustainability and transformation.transformation.

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