The report on the State of Indian Agriculture placed
by the Government to the Rajya Sabha March 13, calls for wide-ranging
reforms in agriculture sector to enable it to meet the growing demands
and meet the challenges posed by various human and environmental
factors.
The report was placed in the Lok Sabha yesterday. This is the first time such a report has been brought out.
As per the report, the thrust areas for the agriculture sector include
enhancing public sector investment in research and effective transfer of
technology along with institutional reforms in research set up to make
it more accountable and geared towards delivery, conservation of land,
water and biological resources, development of rainfed agriculture,
development of minor irrigation, timely and adequate availability of
inputs, support for marketing infrastructure, increasing flow of credit
particularly to the small and marginal farmers.
The report highlights the fall in contribution of agriculture to the
overall Gross Domestic Product (GDP), which has gone down to 13.9 per
cent. It notes that this trend is expected in the development process of
any economy. Yet, agriculture forms the backbone of development, as 52
per cent of India’s work force is still engaged in agriculture for its
livelihood and is important for food security and inclusive growth.
The report highlights the records achieved in the production of
foodgrains and many other crops. Among the major steps taken in the
recent years for improving crop production and productivity, the report
specially highlights the contribution made by the Rashtriya Krishi Vikas
Yojana (RKVY) towards increasing public investment in agriculture and
allied sectors. National Food Security Mission (NFSM) and the National
Horticulture Mission (NHM) have also emerged as the path breaking
interventions which have helped in achieving record production of
cereals, pulses, oilseeds, fruits, vegetables and spices during the last
two years. Bringing Green Revolution in Eastern India (BGREI) has been
started to increase the productivity of the cropping system mainly
rice, wheat, maize, pulses through promotion of innovative production
technologies and agronomical practices addressing the underlying key
constraints of different agro-climatic sub regions.
The ‘State of Indian Agriculture’ report emphasises the need to bridge
the yield gap in low productivity regions by technology, inputs and
other interventions. Raising productivity also assumes significance in
view of increasing demand for land for industrialization, urbanization,
housing and infrastructure.
The report takes note of the structural changes in the composition of
Indian agriculture, leading to diversification into horticulture,
livestock and fisheries since the 1990s. Analysing the likely high
contribution of these high-value sectors, the report says that the
shares of fruits & vegetables and livestock have shown an increasing
trend in recent years and have been growing at much faster rates than
the traditional crops sector. Given the rising share of high value
commodities in the total value of agricultural output and their growth
potential, this segment is expected to drive agricultural growth in the
years to come. Bringing in reforms to streamline domestic markets and
expanding the infrastructure and institutions to connect local markets
with national and global markets, will go a long way in improving
India’s competiveness and the benefits from trade liberalization. Higher
investment in basic infrastructure like roads, canal waters,
watersheds, check dams, etc. will attract private investment in other
areas of the supply chain.
Highlighting the importance of private sector investment, the report
observes that the private sector responds much better and faster to the
incentive structures. Hence, along with bringing in greater public
investment in agriculture, there is a need for bringing in reforms in
the incentive structure in agriculture.
Discussing the consequences of rising population pressure on farming and
its capacity to provide employment, the report calls for creation of
additional employment opportunities in the non-farm and manufacturing
sectors, especially in agro based rural industries which have area
specific comparative advantage in terms of resources endowment and
development possibilities. This would require suitable skill
development of the people so as to gainfully employ them in non- farm
activities. This would make agriculture viable in a sustainable manner.
On the impact of the Mahatma Gandhi National Rural Employment Guarantee
Scheme (MGNREGS) on agriculture and farm labour, the report refers to
the evaluation studies carried out recently which have shown that while
MGNREGS has contributed toward water conservation and water harvesting
structures, drought proofing and tree plantation, flood control, micro
and minor irrigation works and land development which will have a
positive impact on agricultural productivity, it has also led to a
substantial increases in the wage rates of agricultural labourers,
reduced the availability of labor for agricultural operations and
increased the cost of cultivation. In order to optimize synergies and
bring convergence between MGNREGA and schemes of Ministry of
Agriculture, guidance has been issued to state governments.
The report cautions that water scarcity will intensify in future with
increase in population and demand for food, and the current water use
practices cannot be sustained over the long run. Inefficient water use
in irrigation is also leading to environmental degradation via water
logging and induced salinity. Irrigation efficiency in the systems needs
to be improved. The report estimates that even a rise of 5 per cent
irrigation efficiency can increase the irrigation potential by 10-15
million ha.
The report also focuses on the problems of imbalanced use of
fertilizers, deteriorating soil health and the threats posed by climate
change and hiighlights the recent measures initiated to tackle these
issues.
On farm credit, the report calls for innovative ways to reach people
still out of the umbrella of institutional credit. The report says that
while the overall credit to agriculture has been growing phenomenally
during the last few years, and the interest rates for farmers have also
been reduced to 7 percent (4 percent after taking into account the 3
percent interest subvention for timely repayment of crop loans), yet the
biggest challenge remains in terms of increasing access to credit,
particularly for the bottom 40 percent. More innovative models are
needed to reach this category as they rely largely on the informal
sector for credit with high rates of interest.
The report calls for wide-ranging reforms in agricultural marketing.
Imperfect market conditions and restrictions on the movement of
agricultural commodities are not letting the farmers to realize the true
value of their produce, whereas it is causing the consumer to pay a
much higher price than warranted. The linking of small and fragmented
farms with large-scale processors and retailers remains a challenge in
the high value sector. With this in view Government has decided that
assistance under National Horticulture Mission and Development and
Strengthening of Agricultural Marketing Infrastructure, Grading and
Standardization Scheme for development of market infrastructure projects
to State Agencies/APMCs would be subjected to waiving of market fees
for perishable horticultural commodities. With a view to overcome this
shortcoming and to bring in private sector investment and
techno-managerial efficiencies, government is promoting Public Private
Partnerships (PPP) in infrastructure development through ‘viability gap
funding’ support, the report says.
