The Lost Decade for Indian agriculture
If mere wishful thinking could have attained desired results, Indian agriculture would have been a different story altogether. The beginning of new millennium came with lots of promises and hopes for the agriculture sector. However, a decade down the line, hope has given way to despair; the only way a farmer can prosper is by selling off his land. For the Indian agriculture, the last decade has been a story of lost opportunities.
Y2K started with a great promise for the agriculture sector. Everyone agreed that agriculture was poised for a quantum leap and will provide the much needed impetus to the Indian economy propelling it into the big league. It was only a matter of time before the Indian farmers were happy and prosperous lot. When the first ever National Agriculture Policy was announced on 28th July, 2000, it sought to actualise the vast untapped growth potential of Indian agriculture, strengthen rural infrastructure to support faster agricultural development, promote value addition, accelerate the growth of agro business, create employment in rural areas, secure a fair standard of living for the farmers and agricultural workers and their families, discourage migration to urban areas and face the challenges arising out of economic liberalization and globalisation. Most importantly, over the next two decades, it aimed to attain a growth rate in excess of 4 percent per annum in the agriculture sector.
In the decade that followed, India witnessed more than 1, 00,000 farmer suicides. The first state where suicides were reported was Maharashtra. Soon newspapers began to report similar occurrences from Andhra Pradesh. In the beginning, it was believed that most of the suicides were happening among the cotton growers, especially those from Vidarbha. A look at the figures given out by the State Crime Records Bureau, however, was sufficient to indicate that not just the cotton farmer, but farmers as a professional category were suffering, irrespective of their holding size. Moreover, farmers not only from Vidarbha, but also from the entire Maharashtra showed a significantly high suicide rate. The government appointed a number of inquiries to look into the causes of farmers’ suicide and farm related distress in general. Subsequently, Prime Minister Manmohan Singh visited Vidarbha and promised a package of Rs.110 billion (about $2.4 billion) to be spent by the government in Vidarbha. The families of farmers who had committed suicide were also offered an ex gratia grant to the tune of Rs.100,000 (about $2,000) by the government. The relief measures announced, obviously, had no desired effect as reports of suicides continue to pour in unabated from these belts even after the implementation of the debt relief package. This is largely because private moneylenders, who supplement the loans of even those farmers who are covered under the institutional credit system, have continued to harass them for the settlement of their dues. What farmers need for their survival is income, and not so much debt relief; in other words, the country needs agricultural renewal and productivity improvement.
It is not to suggest that, on its part, the government did nothing to change the situation in the agriculture sector. The center government has been proactive in taking many pro-farmer steps, especially in terms of increasing credit availability to the agriculture sector. The credit flow to agriculture sector has more than tripled in the previous decade. In 2008, the government waived off more than Rs. 72,000 crore worth of farm loans. The loan waiver was India’s largest-ever single-shot income transfer scheme, estimated to have helped some 36 million farmers nationwide. It included a full waiver of outstanding loans for small farmers—who cultivate up to 2 ha —while medium and large farmers got a quarter of their outstanding loans waived on an agreement to pay the rest. The scheme was seen as a contributing factor in the UPA’s re-election a year later.
Over the decade, successive governments have made incremental investments in agriculture, but the proportionate results have not translated in the same magnitude. Agriculture sector has been squarely blamed for the slow economic growth of the country by one and all involved in the policy making and planning process. More and more funds are flown to the agriculture sector through mega projects like RKVY, NHM, loan waiver scheme, etc. but the real spurt is still to be felt, out of the investment. Purely in terms of availability of money, the agriculture sector is prospering like never before.
However, despite this, the overall agriculture picture looks gloomy . The last decade has seen Indian economy being propelled into the big league, minus the vital element that had been the driving force all these years - the agriculture sector. In fact, the contribution of agriculture sector to Indian economy has gone down to less than 15 percent and if the current trend continues, it may nosedive to single digit in the next few years.
The most noticeable reason for the present status of the agriculture sector has been the failure of the public sector to offer anything substantial to the farming community. Apart from Pusa Basmati, the entire National Agriculture Research System is yet to come out with any substantial research breakthrough in any of the field crops. The most glaring failure has been in the field of pulses and oilseeds. We continue to remain the world’s largest importer of both. Similarly, we have also missed the opportunity for growth in coarse cereals.
The much sought after target of 4 per cent growth in agriculture can only be ensured by bringing the non conventional areas into the mainstream and making them perform on par with their predecessors, Punjab & Haryana, the areas of green revolution, which have gone almost stagnant. Like in other sectors, Gujarat has shown the way how this illusive growth rate can be attained in the agriculture sector as well. Agriculture sector in Gujarat performed at more than 10 per cent since the last few years, and even the compounded growth rate for the previous decade is more than 10 percent. This growth rate has been achieved by increasing the irrigation coverage through the utilization of Narmada waters. Apart from this, the state has had a specific plan of action for all crops and regions and saw to it that there was effective implementation of the same. Another important feature of the agriculture revolution in Gujarat has been the involvement of both public and private sector in the process. As we have often mentioned in the past, the next big fillip to Indian agriculture can come only by utilizing the untapped potential in the eastern Gangetic plains. The productivity levels in these regions are abysmally low despite abundance of ground water, fertile soil, and favorable climate. However, the socio-political conditions in the region have prevented the agricultural growth in this region. Thankfully, the new decade starts on a positive note with at least one state, i.e., Bihar seemingly poised for a spectacular growth.
Doubtlessly, Bt cotton has emerged to be the biggest success story of Indian agriculture in the previous decade. Despite the controversy surrounding it, the area under Bt cotton in India has jumped from a little over 40000 ha in 2002-03 to more than 8 million ha in 2009-10, constituting almost 90 percent of the area under cotton in India. In the process, the cotton production in India, which was hovering around 160 lakh bales, has more than doubled and has breached the 350 lakh bales mark. Incidentally, India has the world’s largest area under Bt cotton. Although, it has been unfairly blamed for farmers’ suicides, its success is evident from its large scale adoption by the farmers. What is most remarkable about this success story is the fact that it has come entirely on account of private sector initiative. The public sector has played no role at all, either in research or in extension. Besides negative publicity, it has had to battle court cases along its journey. Besides high yields arising on account of Bt’s resistance to the dreaded American Boll Worm, its growth has also been helped by high cotton prices in the international market. Although, Monsanto may not admit it, Bt cotton got a real fillip when the AP government forced Bt cotton to slash seed prices and make it more affordable.
However, despite the success of Bt cotton, we have nothing else to offer to the Indian farmers. The development of drought resistance crops, salinity tolerant crops, and crops high in desired nutrients still remain a paper dream, and we have been left debating the pros and cons of Bt brinjal.
Private participation, on a rise…
One of the important features of the National Agriculture Policy 2000 has been its emphasis on public private partnership. For reasons unknown, the ICAR and SAU’s have been shying away from involving private sector in the development process. In fact, a deliberate impression is created that the public sector is the only benefactor of Indian farmers and the private sector is out to loot the farmers. Despite all these hindrances, the private sector has beaten the public sector in almost all vegetable crops and coarse cereals. It is only rice and wheat where the public sector still enjoys an edge.
Since the last few years, we are repetitively witnessing instances of flood and drought in one or other parts of the country. The phenomenon of climate change has affected the hydrological cycle to a larger extent and, thus, the crop season is almost getting shifted in the view of non uniform temporal and spatial distribution of monsoon rains. Unseasonal rains in the rainfed areas and deficient rains in the once water sufficient areas are causing a lot of damages to the crop production and shifting the cropping pattern in the regions. Recent rains in the month of November- December, 2010, in the western, southern, and central parts caused havoc and losses reported in many of the crops, which resulted in the added food inflation and rise of the prices of onions and grapes in the market.
It is estimated by many of the agencies that India would face considerable yield losses in rice and wheat alongwith a fall in the growth rate of GDP owing to climate change. Increased occurrence of extreme events, such as cyclones, tsunamis, recurrent droughts and unseasonal rains, etc., due to climate change, will mostly affect the farming community of the nation.
The Centre has allocated Rs.350 crore for implementation of a new planned scheme ‘National Initiative on Climate Resilient Agriculture’ to address the impact of climate change on agriculture and allied sectors. Of this, Rs.200 crore will be spent during 2010-11 and Rs.150 crore in 2011-12 in research infrastructure, capacity building, and on-farm demonstration of technologies. Much has been talked and discussed at different fora about the climate resilience and global warming, but the ultimate output is far from satisfactory.
Mounting labour crisis
One of the inbuilt strengths of Indian agriculture was the cheap and abundant availability of farm labor. However, in the last decade, labour crisis has become acute with the operation of NREGS. With this scheme ensuring that the rural unemployed youth and adults get a satisfactory minimum wage, nobody would like to get involved in farm activities, which has gone more risky, with the wrath of climate change and unaffordable in the view of rising input costs.
Mechanization is the way out, talked much by the authorities to overcome the scarcity of labours in farming activities and economizing the agronomic practices. But with the initial cost and its further maintenance playing spoilsport , the solution is custom hiring of the machineries and equipments and promoting the co-operatives for the areas of woes. The need for developing farm machinery suited to small holdings and making them affordable to farmers is being talked about for the last three decades without any real solutions.
One of the important reasons for the failure of the agriculture sector to perform to its potential in the last decade has been the decline in the quality of human resource with the public sector. It is open secret that all the important posts in the ICAR and SAU’s are filled through political and other lobbying and the factors other than professional merit have a greater role in selecting or rejecting a particular candidate for the particular post. There have been allegations of corruption against many a Vice-Chancellors and more often than not, the matters have reached courts. Thus, the focus on the work that these people are supposed to perform is often lost. The trend had started when Dr. R S Paroda was forced to resign as Director-General of ICAR by leveling false accusations. A decade later, the situation has gone from bad to worse. Apart from politicians, even the corporate world is said to be influencing the selection process.
Horticulture & Food Processing- scaling newer heights
The only positive story of the previous decade has come from the horticulture sector. India has seen spurts in Horticulture sector, from doubling of fruits and vegetables production to increasing the area under floriculture, which was backed on private participation, technology interventions, and supportive policies of the government, and less risky and sure returns. The sector has witnessed an upsurge in the production scenario, particularly of the fruits and vegetables. During 1991, India was stranded at the production figure of 56,000 MT, which made a significant jump to 126,000 MT in 2008 for the vegetables, which even aims to touch the levels of 150,000 MT by 2015. The same kind of trend have been witnessed in the fruits production, with an output of 28,600 MT during 1991 that has reached 63,500 MT. The projected production of horticultural crops during 2009-10 has gone up to 226.87 million tonnes. It includes 73.53 million tonnes of fruits and 136.19 million tonnes of vegetables from an area of about 21 million hectares. The growth rate in horticulture production between 2004-05 and 2008-09 has been to the tune of 7.2 per cent.
Even after the amendments in the APMC act and the adoption of the Model act by many of the states, the problem of middlemen and hoarding still exists. However, amidst the problems, many initiatives like ‘Safal market’ at Bangalore, TNAU precision farming project, and some of the private sector and local small entrepreneurs venturing the scene prove to be a silver lining. Three terminal markets have been approved by the government, among them, the one at Patna would start functioning from this year itself and the other two at Maharasthra and Orissa would be operationised soon. But these efforts need to be replicated on a larger scale at pan India diasporas.
Plantation sector remains almost stagnant over the decade because of ageing and senile plantations, weather fluctuations, and not so remunerative prices, which are highly dependent on the market forces and ruled by International ups and downs/ scenario. Although the government has announced and implemented many policies and relief packages, the breakthrough is still to revolutionize the segment, unlike other sub-sectors of horticulture.
India is a large, low-cost producer of fruits and vegetables, and horticulture is a sector with huge export potential. But, high transportation costs, inadequate storage facilities, a fragmented supply chain, and weak quality standards at home are eroding its competitiveness.
Today, Horticulture has become one of the most profitable ventures among the farm activities. I It has transformed itself from conventional horticulture to a Hi-tech horticultural business, backed with public support, ensured economic returns, hi-tech interventions like polyhouse and micro irrigation technology.