agriculture & rural development tiss
DESCRIPTION
Lecture at TISS HyderabadTRANSCRIPT
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Agriculture & Rural development: Towards
Next Phase
Prof R S DeshpandeNational Fellow
Institute for Social and Economic ChangeBangalore 560072
E-mail: [email protected]
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Overview of the Presentation
Process of Agri & Rural Development
Importance and What it Involves Review of Research and
Development Process Major Issues Confronting the
Sector Society and Agriculture Future Focus
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PhasePeriod Specific Characteristics and Farmer’s
Focus
First Phase
Pre-independence up to 1947
Problems inherited from the Colonial RuleConsolidating control on the economy through the creation of non-cultivating farmer intermediaries
Second Phase
1947 to 1966Food Insecurity and Community DevelopmentChanging the cropping pattern in favour of food crops Equity in the size of holdingLand reforms (i) favouring the peasant cultivator through tenancy reforms and abolition of intermediaries, and(ii) bringing equity in access to land and other resources.
Phases in Agricultural Growth
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Third Phase 1967-79 Making the farmer technology adopter and attending the constraints of technology from farmers’ perspective. Ensuring farmer friendly technology. Farmers’ participation in the overall growth calculus.Period heralding the technological change (Green Revolution)
Fourth Phase
1980-90 Preparing the farmer for participation in the trade-oriented economy. Domestic market reforms to reduce market margins. Initiating the farmer to the WTO regime.Two distinct phases marking the fall-outs of technological change and environmental debate.
Fifth Phase 1990-2000
WTO & Liberalisation process and its interaction with the agricultural sector.
Sixth Phase 2001-13 Down turn, Lack of Investment, RKVY and Research and Development
Phases in Agricultural Growth -contd
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Crop Groups
Area Productivity
Production
Food Grains
0.31 -0.18 0.11
Non Food
Grains
0.42 0.86 1.31
All Crops 1.40 0.01 0.37
Growth During British India 1891-1947
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Quotation from Paddock and Paddock (1968) FAMINE 1975, (p.278)
“America will have to apply classical triage method- like doctors on the
battlefield trying to make the best out of minimum resources. She will
have to decide which countries to save and which countries to
sacrifice. Today India absorbs like a blotter 25% of the entire wheat
crop, no matter how one may adjust the present statistics and allows
for future increase in the American wheat crop ... It will be beyond US to
keep famine out of India during 1970. The reason ... of all the national
leadership, the Indian leadership comes close to being the most
childish and inefficient, perversely determined to cut the country’s
economic throat. THE MORAL: If other more deserving countries are to
be saved, India must be sacrificed.”
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Crops 1949-50 to 1964-65 1967-68 to 2001-02 Area Prod Yield Area Prod Yield Rice 1.21 3.50 2.25 0.62 2.78 2.20
Wheat 2.69 3.98 1.27 1.38 4.34 2.92
Coarse Cereals
0.90 2.25 1.23 -1.44 0.54 1.90
Cereals 1.25 3.21 1.77 -0.02 2.77 2.32
Pulses 1.72 1.41 -0.18 0.30 0.81 0.74
Food Grains 1.35 2.82 1.36 0.01 2.51 2.12
Oilseeds 2.07 3.20 0.30 1.31 3.32 1.60 Non FoodGrains
2.44 3.74 0.89 1.36 3.20 1.68
All Crops 1.58 3.15 1.21 0.34 2.78 1.90
Growth Performance 1949 to 2002
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Crops 1990-91 to 1999-2000 2000-01 to 2011-12 Area Prod Yield Area Prod Yield Rice 0.68 2.02 1.34 Neg 1.78 1.78
Wheat 1.72 3.57 1.83 1.35 2.61 1.24
Coarse Cereals
-2.12 -0.02 1.82 -0.80 3.00 4.44
Cereals 0.04 -0.02 1.59 0.14 2.33 3.33
Pulses -0.60 0.59 0.93 1.60 3.45 2.00
Fd Grains -0.07 2.02 1.52 0.41 2.43 3.03
Oilseeds 0.86 1.63 1.15 2.13 3.75 2.65 Nn FdGrains 1.18 2.69 1.09 2.26 3.83 2.39 All Crops 0.27 2.29 1.33 0.97 2.76 3.27
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Annual Growth Rate of GDP at Factor Cost in Agriculture
-15
-10
-5
0
5
10
15
20
1951
-52
1953
-54
1955
-56
1957
-58
1959
-60
1961
-62
1963
-64
1965
-66
1967
-68
1969
-70
1971
-72
1973
-74
1975
-76
1977
-78
1979
-80
1981
-82
1983
-84
1985
-86
1987
-88
1989
-90
1991
-92
1993
-94
1995
-96
1997
-98
1999
-00
2001
-02
Per
Cen
tGrowth Rates in GDP from Agri
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Whither Agricultural Reforms
1. How Liberalised Agricultural Sector Is?
2. Performance & Lacunae
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First Phase of Reforms
Structural Adjustments Trade Policy, Industrial Policy Relaxation in licensing Fertiliser Policy Removal of
Control on Non-Nitro Fertilisers Targetting of PDS Credit Policy – Financial Sector
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Annual Growth Rate of GDP at Factor Cost in Agriculture
-15
-10
-5
0
5
10
15
20
1951
-52
1953
-54
1955
-56
1957
-58
1959
-60
1961
-62
1963
-64
1965
-66
1967
-68
1969
-70
1971
-72
1973
-74
1975
-76
1977
-78
1979
-80
1981
-82
1983
-84
1985
-86
1987
-88
1989
-90
1991
-92
1993
-94
1995
-96
1997
-98
1999
-00
2001
-02
Per
Cen
tGrowth Rates in GDP from Agri
RSD/TISS-Hyd/24-09-13 13
0
20
40
60
80
100
120
140
160
180
Growth in Index of Food Productivity
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Index of Yield of Non-Foodgrains
0
20
40
60
80
100
120
140
160
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Growth in Index of Total Crop Productivity
0
20
40
60
80
100
120
140
160
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19RSD/TISS-Hyd/24-09-13
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Importance and What it Involves
Production, State Policy Interventions,Factor Markets,
Institutions; Marketing,Extension, R &
D,Price PolicyISSUES
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Issues Confronting the Production Sector
Productivity is fast reaching the achievable optima during the decade.
Changes in Crop Composition are quite visible and the policy also favours diversification
New technological Breakthrough is needed
Relative price trends, distorting the quality of growth
Terms of Trade Trade Centered Growth Value Addition to the Product
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Issues Confronting the Factor Markets
Land Use Pattern: Declining Land Productivity, and Dependence on External Nutrients
Land Reforms and the Differential Impact and New Phase
Contributions to Total Factor Productivity
Sectoral Imbalances due to uneven increases in Cost and Returns
Imperfections in the Input Markets
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Contd…
Increasing Trends in Inefficient Use of lands
Marginalisation of the Size of Holding
Trends in Capital Formation Imbalances in Fertiliser Use Inefficiency in Water Use Increasing Cost of Cultivation Labour Shortages and Wage Trends
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Cross classification
Naturally Well Endowed Regions
Naturally Constrained Regions
Regions with Significant Impact
Punjab; Har; West UP; TN; Kerala; W Mah.; S WB; MP
Gujarat; N Raj;
Regions that remained bypassed
Assam; Bihar; Orissa;N WB; Chhat;
N Kar; APRayal; Mar-Vid Mah;
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Trends in Capital FormationGross Capital Formation in Agriculture and Allied Sector
0
5000
10000
15000
20000
25000
Rs.
in
Cro
res
Public Sector Private SectorTotal
Total
Private
Public
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Causes of Farm Distress Distress due to Climatic factors Loss of Crop due to inferior quality of
input and timely non availability Adoption of New technology with
inadequate knowledge and expertise Sudden attack of pests and diseases
and associated economic cost for meeting this exigency
Yield or productivity loss due to the above reasons or any other reason
Market prices crash due to bulk arrivals in the market or other extraneous factors
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Contd...
Non-availability of proper marketing infrastructure and imperfections in the existing markets
Mounting credit burden, dept trap and consequent financial non-viability
Exploitative interlocking of input-credit-product markets
Failure of extension services to advise at proper time about farm technologies and immediate steps to be taken
Counseling failure by the institutions and breaking off traditional village institutions
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Agriculture and Globallisation
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Trade Sector : Issues and Challenges
Agricultural Sector with Positive and Increasing Trade Balance
+ ive Growing Exports of Commodities have changed from 47 % to 72 % ; (-) ive changed 52% – 28%
Trade Sensitive Commodities and the State wise list
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Export Performance:1995-2013
Positively Growing Marine products; Cashew; Tea Basmati Rice; Spices; Castor
oil Guar gum meal; Tobacco ;
Pulses Processed fruits and juices Sesame and Dairy products Tobacco manufactured Poultry and Dairy products Floriculture products Fruits/Vegetables seeds Cashew nut shell liquid
Negatively Growing Oil Meals; Non-Basmati Rice Coffee; Groundnuts Meat and preparations Fresh vegetables Fresh fruits Misc.processed items Processed vegetables Cotton raw including wastes Spirit and beverages Sugar and Molasses Wheat
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Imports with Percent Share: 0.50 to 2.00 per cent (Average of 1990s)
Wheat, Jute and Blast Fibres, Wheat and Meslin, Sugar total raw;
Imports with Percent Share: Above 2.00 per cent: Pulses, Soya bean Oil, Silk, Rice, Natural Rubber and Gum,
Rapeseed Mustard Oil, Cotton lint, Milk and Cream dry, Cereals;
Exports with Percent Share: 0.50 to 2.00 per cent:Soya bean Cake and Meal, Sesame Seed, Coffee Green, Pulses,
Sunflower Seed Cake
Exports with Percent Share: Above 2.00 per cent :Tea, Rice, Cotton lint, Tobacco, Unmanufactured, Castor Oil,
Pepper, Rapeseed and Cake, Onions, Cereals, Oilseed Cake and Meal, Groundnuts.
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Trade Reforms
Stepping up of trade in selected agricultural commodities
Encouraging trade in commodities with comparative advantages for the country
New trade avenues for non-traditional agricultural exports/regions
Info on Quality and SPS requirements for different commodities
International market information and market margins
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Trends in Agricultural Trade:1990-2003
0
10000
20000
30000
40000
50000
60000
Imports(Rs Cr) Exports(Rs Cr)
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Is Agri Suffering
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40 % farmers reported that they did not like farming. 27 % reported that their dislike was because farming was not profitable.
60 % Liking Farming
27 % Not Profitable
5 % Risky
8 % Oth. Reasons
Like or Dislike of farming
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Awareness of Farmers percentage of farmer households
percentage of farmer households
aware of aware of
State bio- fertilisers
MSP WTO State bio- fertilisers
MSP WTO
Andhra Pr. 11 29 6 Kerala 55 61 44
Assam 26 22 11 Madhya Pr. 10 29 3
Bihar 19 8 Maharashtra
24 28 6
Chhattisgar 11 35 1 Orissa 15 12 2
Gujarat 11 25 6 Punjab 7 63 23
Haryana 9 62 12 Rajasthan 10 11 2
J & K 28 27 7 Tamil Nadu 48 48 12
Jharkhand 23 12 11 Uttar Pradesh
15 33 5
Karnataka 22 29 7 West Bengal 22 30 12
All-India 18 29 8
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19 %
10 %
71%
knowing procurementAgency
aware of MSP but notknowing agency
unaware of MSP
Knowledge of Minimum Support Price% of farmer Households
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Membership of farmers’ organisations
State % of farmer households with at least one personbelonging to
State % of farmer households with at least one person belonging to
A Regd Farmer’s Org
A Self Help Group
A Regd Farmer’s Org
A Self Help Group
A P 2.4 17.7 Kerala 10.5 19.9
Assam 7.0 8.2 M P 0.8 2.7
Bihar 0.3 0.8 Maharash 2.2 4.9
Chhattis 2.4 6.5 Orissa 0.2 2.8
Gujarat 5.9 3.2 Punjab 0.3 1.5
Haryana 0.0 1.0 Rajasthan 0.4 0.6
J & K 0.6 0.2 T N 3.4 12.9
Jharkha 0.2 2.8 U P 1.0 1.5
Karnata 5.2 8.1 W B 4.0 1.9
All-India 2.2 4.8
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State % of households kind of service most commonly availed*(% of households)
State % of households kind of services most commonly availed* (% of households)
not members of co-ops
members but did not avail of services
not members of co-ops
members but did not avail of services
A P 69 12 CR (17%) Ker 40 21 CR (27%)
Ass 83 5 CON (10%) M P. 57 14 SF (23%)
Biha 93 5 CR (2%) Mah 46 18 CR (27%)
Chh 50 9 SF (28%) Oris 78 7 CR (12%)
Gujt 51 11 SF (22%) Punj 58 9 CR (20%)
Hary 62 9 CR (17%) Raja 79 7 SF (7%)
J& K 75 2 SF(16%) T N 57 15 CR (18%)
Jhar 98 2 - U P 80 7 SF (12%)
Karn 64 14 CR (13%) W B 79 10 CR (9%)
India 71 10 CR & S F(9%)
Services of co-operatives
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10 %Mem No Serv1 % Con
Goods
9 % Seeds Fer
9 % Credit
71 % Not Members
Services By Co-operatives
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0
20
40
60
80
Percent of farmer households using specific resources for farming
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Fertiliser
Org Manure
Imp Seeds
Pestides
Vet Ser
Within Village
27 68 18 20 24
< 2 Km 11 4 9 10 11
2-5 Km 26 8 24 26 29
5-10 Km
20 8 24 24 22
10-20Km
12 6 17 16 11
> 20 Km
4 7 7 5 3
Not Rep
.01 .04 .03 .03 .01
Distribution of farmer households by distance from some farming resources used for cultivation
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57 %Unaw are
3 %can’t pay premium
24 %facility absent
16 %not interested
Reasons for Non-Insurance
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Future Focus
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• Rainfed Regions and Bypassed Groups and Crops
• Product Factor Market Imperfections
• Value Additions and Market Margin Reduction
• Safety Net Programmes and Specially Devised Programmes for Rainfed Agriculture
• Proactive Entry into the new phase of growth
• Issue of Subsidies in Agriculture
Major Problems
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Reform Platform
Withdrawal of the State (intervention not protection) from the factor as well as Product market intervention and allowing agricultural sector to perform.
Identifying the commodities with competitive advantage in international trade and creating institutional incentive structures for such commodities for boosting up the growth in trade.
Creating an institutional setup to help agricultural sector in order to negotiate with the new policy regimes.
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Contd….
Disseminating information about the forthcoming changes in the sector to the farmers in the language understandable to them.
To identify and enlist the natural resource degradation process and create forces with proper incentives to internalize the negative externalities.
Address Land Market,Labour – Factor Market imperfections With First Priority
A proactive price policy, Procurement as a Commercial Operation
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Domestic Market Reforms
State Interventions Low Density of Markets Movement of Commodities across
regions Within Market Infrastructure Market Information Process of Marketing and existing
Imperfections Market intervention schemes
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Policy
Proactive and not Responsive role. Play with partners. Sensitive commodities & Regions
Food Security, Vulnerable Section and Regions; Sustainable living standards as main arguments
Bring out Hidden subsidies and file disputes
Involvement of Stakeholders Technical R & D back up
institutions.
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