Agricultural scenario
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A comprehensive overview of the research by AERCs and the concerns about Indian agriculture
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GLIMPSES OF INDIAN AGRICULTURE — Macro and Micro Aspects: Edited by R.S. Deshpande, Vijay Paul Sharma, R.P.S. Malik, Brajesh Jha, S. A. Ansari; Academic Foundation, 4772/73, Bharat Ram Road (23 Ansari Road), Daryaganj, New Delhi-110002. Rs. 2395 (A set of two volumes).
D. Narasimha Reddy
Early in the years of planning the need for a wider base for research into diverse conditions of agriculture in India was realised. Towards this end, in 1954 the scheme of regional Agro Economic Research Centres (AERCs) was launched by the Union Ministry of Agriculture with the main objective of conducting research into specific agro-economic problems which are of special interest to the governments both at the Centre and in the States. Over the years, these Centres — at present, there are 15 of them in the country — have completed more than 2000 research studies. The two-volume set under review is the first instance of AERC studies being brought into public domain and the focus is on the issues covered in over a hundred studies during the period 2000-2004. The first volume is on macro issues (31) and the second on state-specific micro issues (74). Since space does not permit even a brief mention of all the studies, some of the major issues that have come for wider debate in the post-reform period are considered here.
Impact
The first study discusses the impact of various policy and non-policy variables on the growth of crop output in the post-reform period. Referring to the lowest growth of crop production between 1995-96 and 1999-2000, it identifies the slowdown in public sector capital formation in agriculture and adverse terms of trade as the major causal factors. There is a substantive study on the WTO, competitiveness and bounded tariff requirements of Indian agricultural commodities. It shows that the cost of production in India is higher than, for instance, in the U.S. for most of the commodities (except soyabean) due to low yields. In addition, the Indian farmers receive very limited assistance compared to their counterparts in developed countries. Hence to protect the Indian farming and to ensure food security, the current levels of tariff are not high enough in the case of rice, wheat, cotton and corn. With continued increase in the demand for foodgrains and serious constraints on the supply, the study estimates that by 2020 India would fall short of self-sufficiency level by 10 per cent. With the persistence of high level of domestic support in developed countries for foodgrains, there is a threat of import of corn and wheat. At the WTO level, there is need for India to insist on reduction in overall domestic support to agriculture to the de minimus level and for special safeguard measures for developing countries like India.
Another study looks into the impact of agricultural trade liberalisation and related reforms on domestic food security. Since 1991, there were two major changes. On the external front, there has been removal of quantitative restrictions, reduced tariffs, removal of canalisation of imports and entry of private trade in agricultural exports and imports. On the domestic front, there has been disprotection of foodgrains by raising Minimum Support Price (MSP) close to the global market level. As a result, during the period 1993-94 to 1999-2000, prices of cereals in real terms increased at 1.6 per cent whereas prices of non-cereals actually declined. The growth rate of cereal prices was 50 per cent higher than the rate of growth of general prices. Since cereals account for one-third of total food expenditure, there was adverse effect on cereal consumption, especially by the poor. There has also been an increase in undernourishment. It is cautioned, that unless proper corrective measures are taken to step up foodgrain production and purchasing power of the farming community, food security is likely to be under threat.
A study making a detailed analysis of the MSP of different crops in the 1990s, brings out clearly that policy decisions turned out to be discriminatory, favouring certain regions and certain crops. The declared MSPs have been in tune with the changes in the costs in the case of paddy, wheat, groundnut and gram. But, in the case of coarse grains like jowar, bajra and ragi, and cotton the changes in MSP have been less than the rise in costs. Similarly, the regions that gained consistently have been Punjab, Haryana, Uttar Pradesh and Madhya Pradesh.
‘Slow growth crops’
An entire section deals with what is called ‘slow growth crops’ that include oilseeds and pulses. India is the fourth largest edible oil economy in the world. But, there has been no breakthrough in productivity in oilseeds. In fact, in the post-green revolution period, the growth rate of oilseeds production has been lower than in the years preceding it. The result is that, since mid-1970s, 30-35 per cent of total demand is met by imports. The Technology Mission on Oilseeds in 1986 did bring about a breakthrough in oilseeds production for the next decade but since 1999-2000 there has been serious problems. Much of the oil production in the country is from dry and rainfed areas. In spite of genuine doubts about competitiveness of Indian oilseeds, there has been a relaxation of trade in oilseeds. The study points to the need for adequate tariff guards as well as region-specific focus for increasing oilseeds production.
Another paper draws attention to the food and nutrition dimensions of certain oilseed crops like rape-seed and mustard with supplementary produce like greens rich in vitamins and iron, and also supply of domestic fuel. These are especially important for poorer sections who depend, to an extent, on non-monetary sources of food and fuel. Pulses are yet another important crop sector where the supply has been deficient to an extent of about 20 percent. Like oilseeds, pulses are also mostly grown in marginal lands and here too there has been hardly any breakthrough in productivity over the years.
With agriculture being part of the liberalised trade regime under WTO, the question often raised is about the export potential of India’s agriculture. One of the studies that goes into this aspect shows that the post-GATT regime is also marked by a number of regional or Preferential Trade Agreements (PTAs). Since India is not a member of any major PTA, it does suffer disadvantage in global market. However, there has been growth in overall agricultural exports from India, accounted for mainly by marine products. Tea, cashewnut and spices have maintained growth but coffee has been badly hit. Spices form another important segment of agricultural export. India accounts for about 44 per cent of the world’s area under spices, but as a study included here shows its share in production is only 14 per cent. Here again a serious problem of low productivity. Horticultural products like fruits, vegetables and flowers are high potential areas still lacking a critical mass in terms of exports.
Summary
The second volume contains micro studies that deal with region-specific crops, input markets, dryland agriculture with focus on coarse cereals and emerging sectors like horticulture, floriculture, dairy and livestock. Many of these studies are presented in the form of summary statements. True, as observed by A. Vaidyanathan in the foreword, “fuller presentation of data and analysis would have made them more interesting and useful.” But, the main objective of these two volumes is to draw the attention of policy-makers and researchers to the existence of such rich and valuable material scattered across the AERCs in the country. The sponsoring organisations and the editors have done a yeoman service to all those engaged in research in agricultural economics by conceiving this book project.
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