SOWING PROSPERITY

Boosting agricultural

productivity

IT FALCONS

• DINESH MANOHARAN

• SENTHIL KUMAR R

• DAVID SHIBIN I

• KARTHIKEYEN GNAYANASEKAREN

• KARTHICK CHINNASAMY

FAST FACTS

• India is the second largest producer of rice in the entire world, right behind

China. India produces 120.6 million tons of rice every single year, while

China brings in a whopping 197.2 million tons. However, India could be

producing an additional 100 million tons every year, enough to feed 400

million people. The techniques that India is using to produce rice are

outdated, and they are beginning to fall behind on the global scale of rice

production.

• India is only 45% as productive as China is, and 60% as productive as

Indonesia, a country who only produces 60 million tons of rice annually. If

India were to adopt the techniques of Indonesia and China, farmers could

be making US$50 billion!

In terms of agricultural contribution, the following states in India are the most

developed states:

• Punjab

• Uttar Pradesh

• Madhya Pradesh

• Haryana

• Bihar

• Andhra Pradesh

• Maharashtra

• West Bengal

statistics

• These are the statistics

for the yield of cotton

from 2000 to 2009

• These are the statistics

for export of agro

products

OVERVIEW

• Although agriculture contributes only 21% of India’s GDP, its importance in the country’s economic, social, and political fabric goes well beyond this indicator. The rural areas are still home to some 72 percent of the India’s 1.1 billion people, a large number of whom are poor. Most of the rural poor

depend on rain-fed agriculture and fragile forests for their livelihoods.

• The sharp rise in foodgrain production during India’s Green Revolution of the 1970s enabled the country to achieve self-sufficiency in foodgrains and

stave off the threat of famine. Agricultural intensification in the 1970s to

1980s saw an increased demand for rural labor that raised rural wages and,

together with declining food prices, reduced rural poverty.

OVERVIEW(cont)

• Sustained, although much slower, agricultural growth in the 1990s reduced

rural poverty to 26.3 percent by 1999/00. Since then, however, the

slowdown in agricultural growth has become a major cause for concern.

India’s rice yields are one-third of China’s and about half of those in Vietnam and Indonesia. With the exception of sugarcane, potato and tea,

the same is true for most other agricultural commodities.

• The Government of India places high priority on reducing poverty by

raising agricultural productivity. However, bold action from policymakers

will be required to shift away from the existing subsidy-based regime that

is no longer sustainable, to build a solid foundation for a highly productive,

internationally competitive, and diversified agricultural sector

SOME CHALLENGES

(a) Population Pressure:

India has a huge population of over one billion and it is increasing at a very

fast rate. According to 2001 census figures the over all density of

population is 324 persons per sq. km. This is likely to increase further in

future. This has created great demand for land. Every bit of land has been

brought under the plough. Even the hill slopes have been cut into terraces

for cultivation.

b) Small and Fragmented Land Holdings:

The pressure of increasing population and the practice of dividing land

equally among the heirs has caused excessive sub divisions of farm

holdings. Consequently, the holdings are small and fragmented. The small

size of holdings makes farming activity uneconomical and leads to social

tension, violence and discontentment.

(c) Inadequate Irrigation Facilities:

By and large the irrigation facilities available in India are far from

adequate. So for half of the total area under food crops has been brought

under irrigation and the remaining half is left to the mercy of monsoon

rains which are erratic in time and space.

(d) Depleted Soils:

Indian soils have been used for growing crops for thousands of years which

have resulted in the depletion of soil fertility. With deforestation the sources

of maintaining natural fertility of soil has been drying out. Lack of material

resources and ignorance of scientific knowledge have further depleted the

soils of the natural fertility. Earlier only animal waste was enough to

maintain soil fertility.

(e) Storage of food grains:

Storage of food grains is a big problem. Nearly 10 per cent of our harvest

goes waste every year in the absence of proper storage facilities. This

colossal wastage can be avoided by developing scientific ware-housing

facilities. The government has taken several steps to provide storage

facilities.

(f) Farm Implements:

Although some mechanization of farming has taken place in some parts of

the country, most of the farmers are poor and do not have enough resources

to purchase modern farm implements and tools. This hampers the

development of agriculture.

THE NEXT STEPS

• Give States an incentive to amend the APMC act and abolish mandi taxes. This would allow competitive markets to develop; farmers and processors will both gain.

• Support the organised private sector in increasing its spending on extension and technology transfer. This would give farmers the knowledge of what to grow, and how to grow so that stringent quality norms are met.

• Implement the Unified Food Law, and back it up with lowering the total tax burden on processed foods so that the sector picks up, and consequently demand for farm produce rises.

• Target foreign buyers of high-value ethnic Indian foods, as opposed to commodity exports-starting with the large NRI population of 20 million, which can be a huge market.

• Create a viable model of public-private partnership that allows private investors to invest in agriculture infrastructure in partnership with banks and financial institutions.

The changing nature of Indian agriculture:

Shrinking resource base The land and water resource base for an average

farm holding has declined considerably during the last five decades

(Selvarajan S and Joshi P.K (2000) Socio-economic Policies in Natural

Resource Management, Souvenir, International Conference on Managing

Natural Resource for Sustainable Agricultural Production in the 21st

Century, New Delhi.) . The main reason for the increasing resource

degradation is the inappropriate and unscientific use of land and irrigation

water. Degraded lands are either going out of cultivation or are being used

for growing low value crops. Most of the future agricultural growth will

have to come via yield enhancement, (that means more intensive but more

appropriate and scientific use of natural resources) and from rainfed areas,

wherein most of the technologies are knowledge based and need

community action. Forming and sustaining farmers' groups will be crucial

in achieving future agricultural growth.

Changes in demand and consumption pattern:

Per capita cereal consumption for food declined somewhat over the past

three decades, while the consumption of fruits, vegetables, meat, fish, eggs

and dairy products increased. The demand for livestock products has been

increasing rapidly during the last two decades. Increasing per capita income

and changing lifestyles are expected to further increase the demand for

milk, fruits and vegetables. Rapid growth in livestock demand would push

demand for cereals for livestock feed. Assuming a modest growth in per

capita income bf 2 percent, the total cereal demand in 2020 is projected at

257.3 million To s, a modest 70% increase over 1993 demand ( Bhalla.

G.S, Peter Hazell and John Kerr(1999) Prospects for India's Cereal Supply

and Demand to 2020,Food, India's size and population, importing huge

quantities of grains is not feasible. The increased demand has to be

primarily met through increase in productivity gained through increased

application of knowledge by the farmers.

Changing farming systems The area under food grains as percentage of GCA

has been declining in the Nineties, whereas the percentage share of non-

food grains has been generally increasing during the same period. Area

under horticultural crops (fruits, vegetables and tuber, spices and plantation

crops) increased from 12.3 m.ha in 1991-92 to 15.0 m.ha in 1996-97.

Farmers require a different type of support (training, problem-solving

consultancy, marketing advice etc) for growing many of these crops, than

simply information on technology, as was the case earlier.

Declining public investments in agriculture Public investments in

agriculture, (investments in irrigation, rural roads, rural electrification,

storage, marketing, agricultural research and education, land development,

co-operation etc) in real terms since mid-seventies have been declining

consistently in all the states. Farmers have to join together to put pressure

on governments to invest more and have to pool together their resources to

develop and maintain the necessary infrastructure. Extension may have to

support farmers in this endeavour.

International developments:

Liberalisation of agricultural trade, consequent to the WTO agreementshas

resulted in new opportunities and threats to Indian agriculture. India is

likely to gain in some crops,but consistent efforts for improving quality (to

meet international standards) and increasing costeffectiveness(increasing

productivity, achieving cost reduction) in these crops/products are essential

to achieve these. Liberalisation of agricultural imports, which would gain

further momentum in the months to come, would subject our producers to

competition from outside. There is an urgent need to increase the

competitiveness of Indian agro-products.