Monday, June 30, 2008

State of agriculture in India












Introduction

Agricultural development is vital in a developing country since a vast majority of the workforce derive their livelihood from it. During the Tenth Five Year Plan, the gross domestic product (GDP) emanating from agriculture and allied activities in India registered a growth rate of 2.3 percent, which was lower than the growth rate observed in the industrial sector (8.0 percent) and services sector (9.5 percent). Growth in agriculture and allied activities averaged 2.3 percent during the 10th Plan period, lower than 3.2 percent during the 1990s and 4.4 percent during the 1980s. Hence, it is felt that a big push to the 'agricultural sector' is urgently required via the second green revolution, by implementing the National Agricultural Innovation Project. When one is talking about agricultural development, one cannot neglect food security, nutrition security and livelihood security, since these are related concepts. It is important to point out that per capita foodgrains production has come down to the 1970s level since per capita production of cereals has declined from 192 kg in 1991/1995 to only 174 kg in 2004/2007. Net production of foodgrain has declined from 183.6 million tonnes in the year 2000 to 173.6 million tonnes in the year 2005. However, production of milk has increased from 84.4 million tonnes in 2001-02 to 97.1 million tonnes in 2005-06 as per the Economic Survey 2006-07. Production of eggs has increased from 38,729 millions in 2001-02 to 46,231 millions in 2005-06. Production of fish has increased from 5,956 thousand tonnes in 2001-02 to 6,510 thousand tonnes in 2005-06. It can be recalled that the growth rate in real gross domestic product (7.6 percent) at factor cost has far exceeded the growth rate in agriculture (2.3 percent), during the Tenth Five Year Plan. The revised estimates of the CSO (Central Statistical Organisation) too show that real gross domestic product (GDP) emanating from agricultural and allied activities decelerated from 6.0 percent in 2005-06 to 2.7 percent in 2006-07. During the South-West Monsoon (1, June 2006 to 30, September 2006), India received 886.6 mm of rainfall against the normal rainfall of 892.2 mm, with a deviation of (–)1 per cent. The states of Andhra Pradesh, Assam, Bihar, Karnataka, Madhya Pradesh, Rajasthan, West Bengal, Nagaland and Arunachal Pradesh faced drought/drought-like situation of varying magnitude during 2006-07. Such a pathetic and dismal situation in agriculture is believed to have led to not only the miserable plight of the farmers but also inflationary pressures in the economy. As a result of the higher order of increase in food prices, various measures of CPI inflation rose from 4.9-5.3 percent in March, 2006 to an intra-year peak of 7.6-9.8 percent in February, 2007, before coming down to 6.7-9.5 percent in March, 2007. Inflation mainly happened in wheat, pulses, milk, oilseeds and raw cotton during 2006-07. After improving steadily from 1980 to 1997, the terms of trade turned against agriculture between 1999 and 2004, and reduced profitability of farming. Public investment in agriculture too has declined from 3.4 percent of agriculture GDP in 1976-1980 to 1.9 percent in 2001-03. Although budgetary subsidies to agriculture have risen from around 3 percent of agriculture GDP in 1976-1980 to about 7 percent in 2001-03, the agricultural scenario does not look positive. Food subsidy as percentage of GDP (new series based on 1999-00) too has risen from 0.48 percent in 1999-00 to 0.66 percent in 2005-06. India's total exports of agricultural and allied products including plantations at US$ 10.5 billion in 2005-06 constitute 10.2 per cent of its export share. Developed country markets have continued to account for nearly 35 per cent of India's agri-exports. Total farm power availability is estimated to have increased from 0.295 kw/ha in the year 1971-72 to 1.502 kw/ha in the year 2005-06. As a result of the joint efforts made by the Government and the private sector, the level of mechanisation has been increasing steadily over the years. Tractor sales increased from 2,54,825 in 2000-01 to 2,63,146 units in 2006-07. Power tillers sales have increased from 16,018 in 2000-01 to 13,375 in 2006-07.
Kindly, look at the figures and graphs above in order to check the trend growth rates in production of rice, wheat, pulses and coarse cereals.
Policies and programmes for agriculture

Some of the institutions/ authorities that have been newly created are: National Rainfed Area Authority, Mini Mission-II of Jute Technology Mission, scheme on micro-irrigation, National Bamboo Mission, Forecasting Agricultural Output Using Space, Agri-Meteorology and Land-based Observation (FASAL), Terminal Markets under the National Horticultural Mission, National Bee Board Rastriya Krishi Vikas Yojana, and Central Institute of Horticulture (Nagaland). The National Water Development Project in rain fed areas (NWDPRA) is being implemented in 28 states and 2 Union Territories. Under the Watershed Development Fund, the Department of Agriculture and Co-operation and NABARD have contributed equally to establish a corpus fund of the amount INR 200 crore at NABARD.

The Approach Paper to the Eleventh Five Year Plan has undertaken the following strategies to raise agricultural output: (a) doubling the rate of growth of irrigated area; (b) improving water management, rainwater harvesting and watershed development; (c) reclaiming degraded land and focusing on soil quality; (d) bridging the knowledge gap through effective extension; (e) diversifying into high-valued outputs, fruits, vegetables, flowers, herbs and spices, medicinal plants, bamboo, bio-diesel, but with adequate measures to ensure food security; (f) promoting animal husbandry and fishery; (g) providing easy access to credit at affordable rates; (g) improving the incentive structure and functioning of markets; and (h) refocusing on land reforms issues. Emphasis has also been promised on research and development (R&D) in agriculture. A National Strategic Research Fund has been created within the Agricultural Research System (NARS) so as to see the adverse impact of climate change. Various schemes that have been implemented under Technology Mission on Oilseeds and Pulses (TMOP) are: (a) Oilseeds Production Programme (OPP); (b) National Pulses Development Project (NPDP); (c) Accelerated Maize Development Programme (AMDP); (d) Post Harvest Technology (PHT); (e) Oil Palm Development Programme (OPDP); (f) National Oilseeds and Vegetable Oils Development (NOVOD) Board; and (g) UNDP Sub-Programme on Maize based Cropping System for Food Security in India. Under the resolution on agriculture undertaken by the National Development Council (NDC), there have been plans to amend the Agricultural Produce Marketing Committee (APMC) Act apart from more allocation of resources for the Accelerated Irrigation Benefit Programme (AIBP). There have been talk on the use of bio-fertilizers, organic manure and micro-nutrients, to enhance soil health. The Government of India is also promoting soil test-based, balanced and judicious use of chemical fertilisers, in conjunction with bio-fertilisers and organic manures to maintain soil health and its productivity, under the programme of Integrated Nutrient Management through various schemes. The NDC has also given a thought on launching a Food Security Mission. Although the Government of India has undertaken several steps to ensure agricultural development, but it is essential to cross-check how the projects are running at the ground-level. Ground-level credit flow for agriculture and allied activities has increased from the level of INR 1,25,309.00 crore in 2004-05, to the level of INR 1,67,775.00 crore in 2005-06. As against the credit flow target of INR 1,75,000.00 crore during 2006-07, INR 1,49,343.16 crore was achieved up to December 2006, thereby forming 85.34 per cent of the target. The Kisan Credit Card Scheme has been extended to the borrowers of long-term cooperative credit. A rehabilitation package of INR 16,978.69 crore has been announced for 31 suicide-prone districts in the states of Andhra Pradesh, Maharashtra, Karnataka and Kerala (India).

Conclusion

India hopes that the policies and programmes that have been undertaken are going to produce the desired results. But the issues related to the trade-related distortions, access to international markets, and tariff and non-tariff related barriers need to be mitigated at the right forum with the right kind of spirit. India should also ensure right to food, apart from striving for agricultural development.

References:
Reserve Bank of India, Annual Report 2006-07
Economic Survey, Ministry of Finance, 2006-07
Agriculture Strategy for Eleventh Plan, Planning Commission
Recommendations of the National Commission on Farmers
Resolution of the National Development Council of the Prime Minister of India
2006-07 Annual Report of Ministry of Agriculture, GoI

1 comment:

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