BY G. Chandrashekhar, Economist, Senior Editor and Policy Commentator; Consultant, U.N. International Trade Centre, Geneva.
India ranks third in world agricultural output after USA and China. We have come a long way from the ’ship-to-mouth’ existence of the 1960s. We are the world’s largest producer of milk; and the second largest producer of rice, wheat, sugar, cotton and fruits & vegetables. Today, India is an exporter of several agricultural commodities.
The recent policy initiatives of the central government are commendable. These include efforts to double farmers’ income in five years; issue of soil health card; crop insurance scheme; irrigation program; electronic national agricultural market (e-NAM); framing of contract farming law and many more. All these are welcome initiatives that will enable and facilitate growers.
However, these initiatives by themselves are not enough to move towards substantial self-reliance and demand will continue to outstrip policy. Surely, the recent initiatives are necessary but not sufficient to ensure food security in future. The political sensitivity of the farm sector is well known. To ensure growth with equity, meet growing food demand, advance nutrition security and reduce rural distress, India needs ‘sustainable farm resurgence’ which can lead to inclusive growth. However, there are structural issues that stymie farm growth. Addressing them will demand enormous political will and investment.
We need to prepare for tomorrow. It would be risky to feel smug and complacent on the basis of today’s food availability and price situation. New challenges are emerging. An adverse combination of land constraints, water shortage and climate change has the potential to negatively impact Indian agriculture.
While India is home to 17 per cent of the world’s population (one in six in the world today is an Indian) it has just about 4 percent of world’s agricultural land and a mere 3 percent of world’s water resources. In future, land availability for agriculture is going to be rather tight. The only way to beat land constraints is to raise productivity levels and land use intensity.
Water shortage is looming. Reports of World Bank and NITI Aayog bear this out. We need to ensure scientific utilization of water as also conservation of water.
As a tropical nation, India is more susceptible to the adverse effects of global warming and climate change. We will face aberrations of weather, early or late onset of monsoon and early or late withdrawal of monsoon, skewed distribution of rains spatially and temporally, unseasonal rains and hailstorms, higher incidence of pest and disease attacks and so on.
All these are likely to compromise food security. For example, Indian wheat is already at the limit of heat tolerance. Even a 2 degrees centigrade increase in day temperature during the growing period can affect wheat yields by 20 per cent.
Therefore, as a nation, we have to recognize that our agriculture is fragile and vulnerable. We need to pursue policies to strengthen agriculture and related activities including livestock rearing, dairy, poultry, fisheries, bee keeping and so on.
In its present form, the Minimum Support Price (MSP) announced for crops is outliving its utility. Because MSP may be a political imperative, we need to go beyond mere MSP and work towards MSP++.
‘MSP Plus Plus
‘MSP Plus Plus envisages a robust system of procurement of crops whose price falls below MSP. In some sense MSP is a sovereign guarantee. Our current procurement infrastructure is far from adequate and needs to be strengthened. Professional warehousing companies may be enlisted for procurement. The second plus relates to sound foreign trade policy. Our foreign trade policy is often skewed in favour of imports rather than exports. When imports are allowed liberally, exports should not be restricted.
Irrational restriction on export policy for pulses and edible oil for long years was a clear anti-grower, anti-domestic producer policy. Various ministries of the Indian government appear to be working in silos. We need a more coordinated approach among Agriculture, Food, Commerce and Finance ministries. There are several examples of poor coordination and delayed policy making.
Indian agriculture is crying for policy attention. It deserves strong policy support, investment support and research support. Currently, agriculture is more production / supply centric. Such an approach may have served a purpose in the past; but it is outliving its utility. Agriculture needs to shift focus from production-led growth to demand-led growth. Only then will growers obtain remunerative returns. For the purpose, structural problems that stymie growth have to be addressed.
Given the daunting challenges, agriculture needs resurgence through a holistic approach.Here are my six mantras for farm resurgence:
Strengthen the input delivery system:
We need a system to regulate and monitor input deliveries (seed, fertilizers, agro-chemicals, bank credit); farmers are often short-changed in terms of price, quality and usage advice; small and marginal farmers still do not have adequate access to bank credit.
Rapidly expand irrigation facilities:
Scores of irrigation projects have been languishing for long years with time and cost overruns. On a war footing, the pending projects have to be completed. Availability of water motivates farmers and improves crop yields.
Infuse multiple technologies:
Farming must become tech-driven. Multiple technologies are available and must be adopted – information technology, agri-biotechnology, satellite technology, nuclear agriculture technology, drones, and Nano technology and so on; Strengthening the extension mechanism will surely help.
Invest in rural infrastructure:
The state of agri-infrastructure in rural areas leaves much to be desired. Investment in access roads, warehouses, cool chambers as also primary grading and sorting facilities is critical. The APMC system needs to be depoliticized. Land available with APMC mandis should be used for building primary grading and sorting facilities. Farmer will then be able to obtain quality-based price.
Use ICT to deliver information:
Almost every farmer carries a mobile handset. We should be able to deliver requisite information relating to weather, input availability, output market, prices and so on.
Capacity building:
Markets will be volatile; it cannot be wished away. We need to build capacity among farmers to withstand market volatility, and attempt to make them into savvy traders. “Hamara kisan shayad anpad hoga, magar anadi nahin hai”. Our farmers surely have the capacity to learn /absorb anything in which they see value.
India needs a system of monitoring and evaluation of agriculture projects. There has to be accountability for performance. The government lacks commercial intelligence about agri markets. Sadly, no one in the government has a clue about where global markets are going, their impact on India, how prices are likely to behave and how to respond to emerging situation. A ‘commercial intelligence and research’ desk should be set up with commodity market specialists who will from time to time provide inputs and forward guidance for policymaking.
India needs to learn from Organisation for Economic Cooperation and Development (OECD). Enormous sums are spent on subsidizing agriculture directly and indirectly. In particular, about $ 80-100 billion are spent every year by OECD members on what is described as ‘General Services’. This investment is crop neutral and covers activities such as crop surveys, quality testing, agri-infrastructure, export promotion and so on.
India may well be feeling food secure today, but the same cannot be said of nutrition. India’s nutrition status is indeed poor. Pervasive under-nutrition especially in rural areas is the norm. Protein and calorie deficiency is palpable. There is a nutrition challenge.
We need to design policies to ensure expansion of consumption demand through welfare program. First, we need to recognize the close relationship between agriculture, nutrition and health.
