indian agriculture since independence, Essays (university) of Economics

Download indian agriculture since independence and more Essays (university) Economics in PDF only on Docsity! Indian Agriculture : In Search of Second Green Revolution Uswa Turea* India needs second green revolution to bring food Security to its billion plus population, to remove distress of farming community and to make its agriculture globally ‘3! competitive, For achieving these goals, yield rates of foodgrains, pulses, oilseeds, dairying and poultry, ‘horticultural crops, and vegetables need to be enhanced. ‘This is possible by concerted efforts towards bridging the technology gap and assuring remunerative prices for the produce. It will require new technologies and better farming practices. In this endeavour, marginal and small farmers and raising agricultural productivity in dry areas need special attention without compromising on preserving soil and water resources. This demands proper coordination, implementation and monitoring of the support policies in addition to allocation of sesources. Introduction A number of eminent policy makers have been discussing about the second Agricultural Revolution. Some have called it a second Green Revolution or high value agriculture, others the rainbow revolution that will include white, blue and yellow too. In other words, the country is waiting to. achieve.the next revolution, which will make a paradigm shift in agricultural technology and marketing of farm commodities. This article discusses policy measures for achieving a second green revolution in farm commodities. Prime Minister, Dr. Manmohan Singh, in his address to the Indian National Science Congress in Hyderabad in January, 2006 called for a Second Green Revolution. This was indeed encouraging as it demonstrated the Government's desire to break the current stagnation in agriculture. This concern focused on raising farm incomes and not securing the food supply. He called for a fresh emphasis on fruits, vegetables and new plant varictics that would command higher prices in export markets. He also encouraged measures to harvest, rainwater more efficiently, improve the soil and spread the benefits of agricultural technology, including genetically modified seeds. Government has taken several measures to strengthen credit flow to agriculture, higher budgetary support to irrigation projects and rural infrastructure. The adverse impact of uncertain weather and possible crop failure need to be mitigated by extending crop insurance. These measures are not new and have been impacting agriculture for past decades but problems of agriculture still remain unsolved and unresolved. The crux of the problem is how to ensure outcomes from outlays. How to bencfit the farmers and save them from distress? How to make Indian agriculture globally competitive? It seems that lirst : Green revolution has run its course. Cereals yields are stagnating, water tables are plunging & agricultural growth now averages around 2 per cent annually. Moteover, the country is facing a severe problem of demand and supply gap in important food commodities. India has been imporiing pulses and oiisceds for quite some time. But, wheat is being imported to bridge the demand supply gap and rein in prices for the past two years. Imports aré a short-term solution bul given the soaring international prices, uncertainty of supply and buoyant demand, the long-term solution lies, in augmenting indigenous production. Therefore, second farm revolution is the urgent need of the country. How this can be achieved is a moot question. There are no conercte plans as such. For achieving this objective, private public sector partnership in the country is being called for. Itis being highlighted that nature of the second green revolution would be different from the first onc. In the words of the Prime Minister, “Thére is a difference between the first green revolution of the scventics and the sccond green revolution which would encompass enhancing production of fruits and vegetables. He called upon the scientist’s community to work towards bringing about a second green revolution that would have a special focus on dry land agriculture and will address tac needs of small and marginal farmers”. (Inaugural address, Indian Science Congress, January 2006, Hyderabad). Second Green Revolution: an Urgent Need At the outset, it would be appropriate to discuss some importantissues related to crisis in agriculture, Poor Growth Performance The Indian cconomy has moved from a phase of modcrate growth to a néw phase of high growth. The past two years, 2005-06 and 2006-07 have recorded a growth tate of 9 per cent and 9.4 per cent. A notable feature of current growth has been the exceptionally rising share of services (68.6 per cent) and the declining share of agriculture (18.5 per cent). * Acting Director, AERC, University of Delhi. August, 2007 TABLE 1—-PErcentaGe SHARE OF AGRICULTURE AND ALLIED Ssctors 1 Gross Domestic PRopuct At Factor Cost {Rs. crores ) Year At current price At 1993-94 price Se — 1999-2000 26.2 i 2000-01 26 239 2001-02 AS 240 2002.03 25 215 2003-04 28 21.7 20607 192 Source : Centra) Statistical Organization; Government of India, New Dethi. Particularly, up and down pattern in agriculture continued with growth estimated at 6 per cent and 2.7 per cent in the two recent years. Thus, the' nature of high growth has not been inclusive as agriculture is left behind. After an annual average of 3 per cent in the first five years of the new millennium starting with 2001-02, the growth of agriculture at only 2.7 per cent in 2006-07 on a base of 6 per cent growth in the previous year, is a cause of great concern. It scems that past policies could not deliver the desired outcomes. (Table-2) TABLE 2—AnnvaL Averace Growrt Rate (ar Constant Prices) (Per cent) Period OverallGDP = Agriculture & Growth Rate Allied Sector 2004.05 69 A 2005-06. 9.0 60 2006-07 9.2 27 Source: Economic Survey, Ministry of Finance, Government of India, New Delhi, 2006-07 ere has been frequent mentio: ite providing livelihood to two-third workers of the country and being extremely important from the welfare point of view. Hence, a mechanical calculation of low growth of agriculture on overall growth is misleading. Moreover, poor performance of agriculture in recent years has eroded self-sufficiency of the country and augmented supply side problems of i h as wheat, pulses and oilseeds. India quite some time. sufficiency in case of wheat is Hence, the country is forced TABLE 3—Tarcets AND ACTUAL PRODUCTION OF IMPORTANT AGRICULTURAL ComMoniTies During 2006-07 (Million tonnes} Commodity Target Actual Production % Achieved Rice 92.80 90,00 96.98 Wheat B53 72.50 95.98 Total Coarse Cereals 3652 32.00 87.62 Foodgrains — 220.00 209.00 95.00 Total Pulses 15.15 14.50 95.70 Source: Economic ction of the foodgrains during 2006-07 are given in Table 3. Cleasly, country could not fulfill target set for any of the agricultural commodities. The host gap ws din cn of ous cores and the lowest in the case of rice. The mance of agriculiure in recent years has It has been observed that the total betwe Is an the seat of the green revolution, TFP growth was fou! percent a year between 1981] and 1990, but negative gr: between 1990 and 1996. attributed to the slow down i in productivity gains from: earlier adopti the declin There was a notable deceleration in the rate of growth of agricultural production during the nineties. Table 4 reveals that during the nineties, growth of production of all crops decelerated to 2.2 per cent from 3.2 per cent during the eighties. In case of foodgrains production, trend rate of growth was only 2.02 per cent, which is above the annual population growth. During nineties, there was deceleration intrend growth of yield of wheat. If view of the deceleration in the growth of production of foodgrains, doubts have been expressed about the future growth of foodgrains production. The decline in the growth rates of foodgrains production during the nineties was felt more in casc of kharif crop than rabi crop. Of late, foodgrains, production during the rabi season was almost equal to the level of production during the kharif season. This has reduced the dependence of foodgrains production on moonsoons and, in turn, imparted some element of stability to agricultural Agricultural Situation in India TABLE 6—INTERNATIONAL COMPARISONS OF YIELD OF SELECTED AGRICULTURAL CoMMODITIES (Metric tonnes/hectare) Country Yield «Country = Yield. Country Yield Commodity Rice/Paday Wheat Maize Egypt 9.8 (China 43) USA 9.2 India 28) France 7.6 France 1.6 Japan 6.4 India 2.2) India 2 Mynamar 2.4 Iran 2.1 Germany 6.7 Korea 67 Pakistan 2.4—-Philippines 2.1 Thailend «2.6 (UX 718) China 49 USA 78) Australia 1.6 World 34 World 3.9 World 2.9 Cotton Pulses Major Oilseeds China 11.1) India 0.6 (Argentina 2.5 USA 9.6 China 1.4 Brazil 2.5 Uzbekistan 7.9 Canada 2.0 (China 21 India 46) Brazil 0.8 (India 09 Brazit 10.9 Nigeria 0.7 Germany 4.1 Pakistan 7.6 9 Mynamar = 1.0 | (USA 2.6 World 73) World 0.9 (World 1.9 Source: Economic Survey, 2006-07. Bridging Technology Gap: Recently, emergence of a technology fatigue in Indian agriculture is being referred to as one of the problems impeding productivity of various crops. We have observed in Table-6 that India is lagging much behind other countries in the productivity of wheat, rice, pulses and oilseeds. The declining yield of new varieties released in recent years is one of the reasons holding back productivity. However, there is still considerable scope for increasing the productivity because yields actually being achieved for many years in different regions are much below the realizable potential of existing varieties if best cultivation practices are used. The gap in the highest yields and lowest yields varies from StateytoyState and crop to_ crop. (Low yield per unit of area across almost all crops has become a regular feature of the Indian agriculture, For instance, though India accounted for 21.8 per cent of global paddy acreages the estimated yield per hectare in 2004-05 was less than that of Korea and Japan and only about a third of that in Egypt, which had the highest yield level in the reference year/ Similarly, in wheat while India, accounted for 12 per cent of global production, its yield was not impressive. This indicates that the country can achieve better yield rates. The realizable potential of yield varies from State to State. For instance, unutilized potential in wheat is higher in Madhya Pradesh in comparison to Punjab and Haryana. If Similarly, in the August, 2007 case of maize and rice, the potential is minimum in some Statés, while there is considerable scope in other Sates. It appears that there is considerable scope for increasing production with the existing technology to augment the production of agricultural commodities. In the Jonger run, we must go beyond closing yield gaps and work to extend the technology frontiers to overcome the problem of technology fatigue. This is especially important given the challenge of global warming and the need to adapt to possible climate changes, which may impact adversely the agricultural production unless we discover new varieties that can handle new stress. We need to strengthen our research and extension efforts to achieve this objective. It would remain a dream unless new technologies are developed and taken to the doorsteps of the farmers. Any amount of policy pronouncements on strategy and higher outlays would remain without outcomes. This calls for a more result oriented strategically drawn research system. Where are the superior seed varieties that would break the current yield barriers and take crop productivity to higher levels? Where is the technology package, to manage soil problems caused by our exploitation of ground water, imbalanced fertilizer application and the age-old crop rotation repeated year after year? Where are the package of practices to tackle new pest problems, weeds and crop diseases with concern for the environment? Extension is crucial for improving agricultural productivity, In view of the high variability in agro-climatic conditions particularly, in unfavourable areas, research has to be (location specific. With the increasing role of information technology in every sphere of human life, the extension methodologies need to be revamped. It has to be deployed much more to provide guidance to the farmer, taking into_Considérationythe changed socio-economic scenario, technological leaps such)assthé expanding TV coverage, increased Hteracy levels, improved telecommunication facilities and access to Intemet, The National commission on Farmers has mentioned about the knowledge gap in the existing technology. It can be filled by efficient extension services. A successful case in point is the role of e-choupais, initiated by ITC in improving the economic well being of farmers, as in the soyabean areas of Madhya Pradesh. The need of the hour is to replicate many more such models on extended geographies, covering more crops and increasing larger number of farmers. Remunerative Prices : Technology will help bring second green Revolution in crop production when prices for the output are Temunerative. Historically, prices of agricultural commoditics have, been(highly volatile because supply depends on natural conditions. Morcover, there is a big I3 gap between producer prices and consumer prices. Normally, farmers get less than half of the price paid by the consumers depending on the perishability of the commodity. Therefore, policies 1o raise, prices of farm commodities should be in place with efforts to increase Production, The second green Revolution relates to increased production of milk, fruits and vegetables but it would prove ineffective unless policies.to raise prices are not put in place simultaneously. Marketing of Farm Products: The government is making efforts to improve the marketability of farm produce through implementation of the Agricultural Produce Marketing Committee Act in different Sates. It freessgrowerspfrom.the decades.old restriction of selling at government designated market yards or mandies. The model rules under the State Agricultural Produce Marketing Act, 2003 are being formulated. These allow direct purchase from the field and encourage contract farming on a large scale. It is tempting in the name of liberalization and freedom to farmers to dismantle extant marketing system. But, there is a danger in exposing the small and marginal growers to the vagaries of the free market. It would be naive to believe that buyers are here to protect farmers interests and pay the most remunerative prices. Corporates cannot also be faulted for their sales and profit maximization objectives. Therefore, farmers must have the freedom to sell their produce to anyone who pays the asking price. But, the mandies must be there as well offering the institutional marketing assurance. This situation calls for building in checks and balances into the process that would allow marketing freedom, yet monitor transactions that may be loaded against growers. The rationale of the mandi system, set up decades ago, has not become irrelevant. It is simply that the system has failed to evolve with the changing times and needs. The existing 7500 marketing, yards have to be upgraded by building approach roads, warehouses and facilities for primary gradinig/sorting of produce. Importantly, information technology tools should be deployed to deliver price and market information to growers, who given time, the opportunity and training, will turn savvy traders. Delivery based forward trading can be introduced for number of agricultural commodities, something that would ensure expanded physical trades rather than speculation driven, cash-settled transaction. There is also a need to rationalize/reduce taxes and market fees. Input Policies : For ushering in the second Green Revolution, input policies need a rethinking. Specially, subsidized fertilizer, water and power should be targeted and given only to the poor. Rest of the farming community should pay at least user charges. 14 Farm Credit: The flow cf credit to the farm sector has been improving over the years. But, the distributional aspects of agricultural credit need special attention. The share of small and (marginal farmers in total agricultural credit disbursed should improveiand regional inequalities in credit should be addressed immediately. Infrastructure Development: The pace of agricultural development depends on the growth of infrastructural facilities like irrigation, roads, power, Cold storage etc. Infrastructure helps in ensuring timely and adequate delivery of inputs to the farmers. On the output front, it helps to integrate local markets with national and international markets. Therefore, an adequate and efficient infrastructure is a must for ushcring in of second green revolution. The investment in the agricultural sector declined during the past two decades, particularly in the public. sector. Gross Capital Formation (GCF) in agriculture as per cent of Total Gross Capital Formation in the economy declined during the eighties and nineties. In 1998-99, it was just 5.5 per cent against 16.3 per cent in 1980-81. Unfortunately, GCF in the agriculture sector by the public sector declined at annual average rate of 4 per cent and 1.9 per cent during the 1980s and 1990s respectively. As a result, share of public sector in total capital formation in the sector declined to a round 23 per cent during the nineties as against 32 per cent. However, the private sector boosted its investment and it picked up at the moderate rate of 8.1 per cent in the nineties. Despite the low rate of growth of public capital formation during the cighties, there was subsequent improvement during the nineties and early 2000. The Overall improvement in theveapital formation may be attributed to private sector investment. Noncthcless, it is important to note that while the private investment in agriculture has increased, it was not able to fully compensate for-the falling public investment. Summary and Conclusions India needs second green revolution to bring food security to its billion plus population, io remove distress of farming coramunity and to make its agriculture globally competitive. For achieving these goals, yield rates of foodgrains, pulses, oilseeds, dairying and poultry, horticultural crops, and vegetables need to be enhanced. This is possible by concerted efforts towards bridging the technology gap and assuring remunerative prices for the produce. It will requirenew technologies and better farming practices. In this endeavour, marginal and smal] farmers and raising agricultural productivity in dry areas need special attention without compromising on preserving svil and water resources. This demands proper coordination, implementation and monitoring of the|support policies in) addition to“allocation of resources. Agricultural Situation in India Ser RNR: