A writer in the International Herald Tribune recently exclaimed: “Now may be the time to shift from gold. Platinum and agriculture are seen as next areas of demand.” The steeply rising prices of agricultural commodities have engaged the attention of the world; agriculture is perceived to be a new pot of gold. World Bank’s World Development Report, 2008 (WDR) stresses this agricultural perspective worldwide, including the challenges India encounters.
India’s farm sector is projected to record a mere 2.6 per cent growth in 2007-08 against the overall GDP growth rate of 8.7 per cent. As the Economic Survey 2007-08 laments, the growth rate of food-grain production decelerated to 1.2 per cent during 1990-2007, lower than annual population growth rate averaging 1.9 per cent.
The share of agriculture in the GDP has steadily declined from 36.4 per cent in 1982-83 to 18.5 per cent in 2006-07, although this sector still supports more than half a billion people, providing employment to 52 per cent of the workforce. The stagnating agriculture, languishing food output account for millions of poor farmers struggling with high debts and crop failures, hundreds of them compelled to give up their lives.
Lack of drive
Recognising a loss of dynamism in this vital sector, the Economic Survey acknowledges that there has been a “gradual degradation of natural resources through overuse and inappropriate use of chemical fertilisers,” affecting the soil quality (consumption of fertilisers increased from 69.8 kg per ha in 1991-92 to 113.3 kg in 2006-07).
In this context, the Eleventh Five-year Plan (2007-2012) calls for a concerted strategy “to double the growth rate achieved in the 10th Plan and put agriculture on a growth path of 4 per cent.” It is realised that the Millennium Development goal of halving extreme poverty and hunger by 2015 will not be reached “unless neglect and under-investment in the agricultural and rural sectors over the past 20 years is reversed.”
The WDR emphasises that the GDP growth arising from agriculture is almost four times as effective in reducing poverty as GDP originating outside the sector. “Three of every four poor people in developing countries live in rural areas – 2.1 billion living on less than $2 a day and 880 million on less than $1 a day – and most depend on agriculture for their livelihoods.”
China’s feat acclaimed
WDR acclaims China’s unprecedented poverty reduction in the past 25 years from 53 per cent in 1981 to 8 per cent in 2001, pulling about 500 million people out of poverty; rural poverty dropped from 76 per cent in 1980 to 12 per cent in 2001. Growth in Indian agriculture likewise did more to reduce poverty than did industry or services. During the 1960s and 1970s, the introduction of semi-dwarf varieties of wheat and rice led to dramatic leaps in agricultural production and raised farmers’ incomes. Rural poverty came down from 64 per cent in 1967 to 50 per cent in 1977, and to 34 per cent in 1986.
To revive Indian agriculture, WDR recommends measures such as stepping up of investments in the sector, crop insurance for farmers, realistic charges for water and power, reduction in environmental footprints of intense agriculture, and creating greater opportunities in the non-farm sector to absorb displaced agricultural labour.
It calls for a clear “policy diamond” in a continued effort to improve access to markets and develop modern market chains, achieve a large scale and sustainable smallholder-based productivity revolution, achieve food security, improve livelihoods for those who remain as subsistence farmers, and capitalise on agricultural growth to develop the rural non-farm sector.
There must be a clear strategy for investments to increase farm yields and profitability as well as rural roads, irrigation, power and markets.
The need is critical to invest in rural infrastructure. The lack of access to food is a greater problem than the availability of food. Nobel Laureate Amartya Sen strikingly said, “starvation is a matter of some people not having enough food to eat, and not a matter of there being not enough food to eat.”
Long-term investment
Long-term investments in soil and water management are needed to enhance the resilience of farming systems, especially for people in subsistence farming in remote and risky environments.
Agriculture uses 85 per cent of fresh water withdrawals in developing countries. More than one-fifth of groundwater aquifers in India are over-exploited in three of the four leading Green Revolution states – Punjab, Haryana and Tamil Nadu. In Punjab, about 60 per cent of the groundwater resources are already over-exploited, extraction rates exceeding recharge rates.
‘Fiscal drain’
WDR terms public investment in agriculture as “much misspending” because it has been heavily skewed towards providing subsidies — to the extent of 75 per cent. Electricity subsidies to agriculture are described as “fiscally draining and environmentally damaging.” In Punjab, electricity subsidies to agriculture in 2002-03 were 7 per cent of state expenditures. Again, labour productivity has remained stagnant in India since the mid-1990s.
The key to the alleviation of rampant poverty among farmers is the increase in productivity of staple crops. Irrigated land productivity is more than double that of rain-fed land. Productivity of crops in India is not only low relative to other countries; there are considerable inter-State variations. As the Economic Survey testifies, productivity of wheat in 2005-06 varied from a low of 1,393 kg per ha in Maharashtra to a high of 4,179 kg in Punjab.
A paramount paradigm conducive to agricultural resuscitation signals towards “the visible hand of the state” that must provide core public goods, improve the investment environment, regulate natural resource management, and secure desirable social outcomes.
The WDR lays emphasis on safety nets and access to credit in order to minimise distress land sales when farmers are exposed to calamities and shocks. Incentives are necessary for farmers to diversify into high-value horticulture, poultry, fish, and dairy products “through an appropriate pricing mechanism”.
Bio-tech advantage
Two-thirds of the world’s agricultural value added is created in developing countries. It generates an average 29 per cent of GDP and employs 65 per cent of the labour force. Revolutionary advances in biotechnology offer potentially large benefits.
Agricultural intensification has created environmental problems from reduced bio-diversity, mismanaged irrigation water, agrochemical pollution, and pesticide poisoning. Many less favoured areas suffer from deforestation, soil erosion, desertification, and degradation of pastures and watersheds. Global warming is one of the areas of greatest uncertainty for agriculture.
While India keenly looks for a second green revolution, particularly in the rain-fed areas, there are schemes such as credit support, revamp of co-operative credit structure, redesign of the insurance scheme, rehabilitation package for distressed farmers, and easy availability of inputs, which, if properly implemented, will lend an impetus to the languishing sector. The Centre’s National Food Security Mission and the Rashtriya Krishi Vikas Yojana aim at rejuvenating agriculture and improving farm incomes.
The former aims at increasing the production of rice, wheat and pulses by 10,8 and 2 million tonnes respectively over the benchmark levels of production by the end of the Eleventh Plan. The latter, with an allocation of Rs 25,000 crore, aims at achieving 4 per cent annual growth in the agriculture sector during the Plan period.
India’s farm sector is projected to record a mere 2.6 per cent growth in 2007-08 against the overall GDP growth rate of 8.7 per cent. As the Economic Survey 2007-08 laments, the growth rate of food-grain production decelerated to 1.2 per cent during 1990-2007, lower than annual population growth rate averaging 1.9 per cent.
The share of agriculture in the GDP has steadily declined from 36.4 per cent in 1982-83 to 18.5 per cent in 2006-07, although this sector still supports more than half a billion people, providing employment to 52 per cent of the workforce. The stagnating agriculture, languishing food output account for millions of poor farmers struggling with high debts and crop failures, hundreds of them compelled to give up their lives.
Lack of drive
Recognising a loss of dynamism in this vital sector, the Economic Survey acknowledges that there has been a “gradual degradation of natural resources through overuse and inappropriate use of chemical fertilisers,” affecting the soil quality (consumption of fertilisers increased from 69.8 kg per ha in 1991-92 to 113.3 kg in 2006-07).
In this context, the Eleventh Five-year Plan (2007-2012) calls for a concerted strategy “to double the growth rate achieved in the 10th Plan and put agriculture on a growth path of 4 per cent.” It is realised that the Millennium Development goal of halving extreme poverty and hunger by 2015 will not be reached “unless neglect and under-investment in the agricultural and rural sectors over the past 20 years is reversed.”
The WDR emphasises that the GDP growth arising from agriculture is almost four times as effective in reducing poverty as GDP originating outside the sector. “Three of every four poor people in developing countries live in rural areas – 2.1 billion living on less than $2 a day and 880 million on less than $1 a day – and most depend on agriculture for their livelihoods.”
China’s feat acclaimed
WDR acclaims China’s unprecedented poverty reduction in the past 25 years from 53 per cent in 1981 to 8 per cent in 2001, pulling about 500 million people out of poverty; rural poverty dropped from 76 per cent in 1980 to 12 per cent in 2001. Growth in Indian agriculture likewise did more to reduce poverty than did industry or services. During the 1960s and 1970s, the introduction of semi-dwarf varieties of wheat and rice led to dramatic leaps in agricultural production and raised farmers’ incomes. Rural poverty came down from 64 per cent in 1967 to 50 per cent in 1977, and to 34 per cent in 1986.
To revive Indian agriculture, WDR recommends measures such as stepping up of investments in the sector, crop insurance for farmers, realistic charges for water and power, reduction in environmental footprints of intense agriculture, and creating greater opportunities in the non-farm sector to absorb displaced agricultural labour.
It calls for a clear “policy diamond” in a continued effort to improve access to markets and develop modern market chains, achieve a large scale and sustainable smallholder-based productivity revolution, achieve food security, improve livelihoods for those who remain as subsistence farmers, and capitalise on agricultural growth to develop the rural non-farm sector.
There must be a clear strategy for investments to increase farm yields and profitability as well as rural roads, irrigation, power and markets.
The need is critical to invest in rural infrastructure. The lack of access to food is a greater problem than the availability of food. Nobel Laureate Amartya Sen strikingly said, “starvation is a matter of some people not having enough food to eat, and not a matter of there being not enough food to eat.”
Long-term investment
Long-term investments in soil and water management are needed to enhance the resilience of farming systems, especially for people in subsistence farming in remote and risky environments.
Agriculture uses 85 per cent of fresh water withdrawals in developing countries. More than one-fifth of groundwater aquifers in India are over-exploited in three of the four leading Green Revolution states – Punjab, Haryana and Tamil Nadu. In Punjab, about 60 per cent of the groundwater resources are already over-exploited, extraction rates exceeding recharge rates.
‘Fiscal drain’
WDR terms public investment in agriculture as “much misspending” because it has been heavily skewed towards providing subsidies — to the extent of 75 per cent. Electricity subsidies to agriculture are described as “fiscally draining and environmentally damaging.” In Punjab, electricity subsidies to agriculture in 2002-03 were 7 per cent of state expenditures. Again, labour productivity has remained stagnant in India since the mid-1990s.
The key to the alleviation of rampant poverty among farmers is the increase in productivity of staple crops. Irrigated land productivity is more than double that of rain-fed land. Productivity of crops in India is not only low relative to other countries; there are considerable inter-State variations. As the Economic Survey testifies, productivity of wheat in 2005-06 varied from a low of 1,393 kg per ha in Maharashtra to a high of 4,179 kg in Punjab.
A paramount paradigm conducive to agricultural resuscitation signals towards “the visible hand of the state” that must provide core public goods, improve the investment environment, regulate natural resource management, and secure desirable social outcomes.
The WDR lays emphasis on safety nets and access to credit in order to minimise distress land sales when farmers are exposed to calamities and shocks. Incentives are necessary for farmers to diversify into high-value horticulture, poultry, fish, and dairy products “through an appropriate pricing mechanism”.
Bio-tech advantage
Two-thirds of the world’s agricultural value added is created in developing countries. It generates an average 29 per cent of GDP and employs 65 per cent of the labour force. Revolutionary advances in biotechnology offer potentially large benefits.
Agricultural intensification has created environmental problems from reduced bio-diversity, mismanaged irrigation water, agrochemical pollution, and pesticide poisoning. Many less favoured areas suffer from deforestation, soil erosion, desertification, and degradation of pastures and watersheds. Global warming is one of the areas of greatest uncertainty for agriculture.
While India keenly looks for a second green revolution, particularly in the rain-fed areas, there are schemes such as credit support, revamp of co-operative credit structure, redesign of the insurance scheme, rehabilitation package for distressed farmers, and easy availability of inputs, which, if properly implemented, will lend an impetus to the languishing sector. The Centre’s National Food Security Mission and the Rashtriya Krishi Vikas Yojana aim at rejuvenating agriculture and improving farm incomes.
The former aims at increasing the production of rice, wheat and pulses by 10,8 and 2 million tonnes respectively over the benchmark levels of production by the end of the Eleventh Plan. The latter, with an allocation of Rs 25,000 crore, aims at achieving 4 per cent annual growth in the agriculture sector during the Plan period.
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