“STATE OF INDIAN AGRICULTURE 2011-12”

A report on ‘State of Indian Agriculture 2011-12’, tabled in the Lok Sabha on Tuesday, 13 March 2012. The report, first of its kind, has emphasised on development of rain-fed agriculture, irrigation, creating infrastructure support for marketing and ensuring increased credit flow to farmers among others. It calls for the need to bridge the yield gaps through technology input and other interventions, while placing thrust on raising productivity. The report has called for enhancing investment in agriculture and leveraging technology to boost the country's farm sector growth in the years ahead. It called for institutional reforms in research set up to make it more accountable and geared towards delivery, conservation of natural resources such as water and land among others.

“Achieving a 8-9 per cent growth in overall GDP may not deliver much in terms of poverty reduction, unless agricultural growth accelerates. The agriculture growth has to be kept at the centre of any reform agenda or planning process, in order to make a significant dent on poverty and malnutrition and to ensure long-term food security for the people.    ”

INCREASE INVESTMENTS

·         Stating that contribution of agriculture to overall Gross Domestic Product (GDP) has halved in the past two decades to around 14.5 per cent in 2010-11 from about 30 per cent in 1990-91, the report noted that such a trend is expected in any development process of the economy. Such a trend suggests that non-agriculture sectors have been receiving higher investments over the plan periods. Keeping in view the high population pressure on agriculture for their sustenance, there is need to increase in investments, he said.

·         In 2009-10, private sector investment in agriculture stood at Rs 1.09 lakh crore, constituting 82 per cent of the total investment in the farm sector. Total investment in agriculture was as low as 2.7 per cent of gross domestic product (GDP), when the total investment rate was 36.6 per cent. Of that 2.7 per cent, as much as 2.3 per cent came from the private sector. The rest was from the public sector and this proportion has been stagnant since 2005-06.

·         The agriculture survey highlighted the need for improving credit penetration among small and marginal farmers. It noted that Small farmers continue to resort to informal lenders (despite KCCs), as the current system of institutional credit to farmers suffers from non-farmer friendly practices, delays in credit delivery and collateral problems.

WATER USAGE

Cautioning on the impact of water scarcity, the report calls for efficiency in water usage. It estimates that even a rise of 5 per cent irrigation efficiency can increase the irrigation potential by 10-15 million ha.

FOOD INFLATION

·         The report said that the principal factors behind the higher levels of inflation in the recent period are constraints in production and distribution especially in high value items such as pulses, fruits and vegetables, egg and meat.

·         Increase in prices can be attributed to both supply and demand factor, it said, adding the per capita availability of some of the items such as cereals and pulses have been declining resulting in some pressure on their prices.

·         "The enduring solution to price inflation lies in increasing productivity, production and decreasing market imperfections," the report said.

MINIMUM SUPPORT PRICES

·         The report said that there is also a need to improve the efficacy of minimum support price (MSP) to control the prices.

·         The main objective of MSP is to ensure remunerative prices to the growers for their produce with a view to encourage higher investment and production and evolve a balanced and integrated price structure in the context of overall needs of the economy while safeguarding the interest of consumers by making available supplies at reasonable prices.

·         It said that there is a need to extend the price support mechanism effectively across the country and invest in building market infrastructure in the states.

INTERMEDIARIES

·         The report highlights the whole chain of intermediaries in agricultural markets that reduces 'farmer’s share in consumer’s price', while benefiting the retailers with 'high marketing margin', as a major challenge.

·         “Inefficiency in the wholesale markets results in a long chain of intermediaries, multiple handling, loss of quality and increase in the gap between the producer and consumer prices. There has been a lack of investment in the logistics of the retail chain, leading to a fragmented market chain,” the report points out, underlining that 'some reform' initiatives by the states have failed to attract private investment in agricultural marketing infrastructure.

FOOD GRAIN PRODUCTION

·         On the record grain production, the report says that during 2010-11, production was 244.78 million tonne. As per the second advance estimates for 2011-12, total production is estimated at a record level of 250.42 million tonne, which is 5.64 million tonne higher than the last year's production.

·         Production of rice is estimated at 102.75 million tonne, wheat 88.31 million tonne, coarse cereals 42.08 million tonne and pulses 17.28 million tonne. Oilseeds production during 2011-12 is estimated at 30.53 million tonne, sugarcane 347.87 million tonne and cotton 34.09 million bales (of 170 kg each). “Despite inconsistent climatic factors in some parts of the country, there has been a record production, surpassing the targeted production of 245 million tonne of foodgrain by more than 5 million tonne during 2011-12,” the report has stated.

MARKETING

·         It further said that the farming community requires facilities for efficient marketing including scientific storage so that wastage and produce deterioration are avoided.

·         "The states need to implement market reforms in their entirety to provide effective marketing channels to the producers," it added.

·         The report said that inefficiency in the wholesale market is leading to loss of quality and increase in the gap between the producers’ - consumer prices.

·         Further, the report said that India should "try hard" for the successful conclusion of stalled Doha Round of talks under the WTO.

RESEARCH

·         Another area in which the Budget could lay some emphasis is involvement of the private sector in seed development and research, mainly transgenic.

·         Rs 150-200 Crore nationwide programme to develop India’s own transgenic cotton crop, with the active involvement of the private sector, is required.

·         The Indian Council of Agricultural Research has already placed a proposal for genetic research on developing indigenous biotech crops, with more properties than the current versions of, for instance, genetically modified cotton.

PUBLIC PRIVATE TIE-UP

·         The report said that the Government needs to raise public investment, besides playing a catalytic role to attract more private sector investment.

·         Officials said the Budget could also lay down the framework for enabling public-private partnership in the UPA government’s flagship programme for the farm sector, the Rashtriya Krishi Vikas Yojana. The draft framework for such a proposal involves corporate help in developing integrated agricultural development projects, comprising a minimum of 5,000 farmers.

·         “The average investment per farmer will have to be a minimum of Rs 1,00,000, of which half will be provided by the government and the rest has to be mobilised by private companies,” officials said. He said corporate and big companies would be free to have projects encompassing all activities of farming from production to marketing, but the project span would have to be three to five years.

BUDGETARY PROVISIONS FOR 2012-13

·         Plan Outlay for Department of Agriculture and Co-operation increased by 18 percent.

·         Outlay for Rashtriya Krishi Vikas Yojana (RKVY) increased to Rs. 9,217 crore in 2012-13.

·         Initiative of Bringing Green Revolution to Eastern India (BGREI) has resulted in increased production and productivity of paddy. Allocation for the scheme increased to    Rs.  1,000 crore in 2012-13 from Rs. 400 crore in 2011-12.

·         Rs. 300 crore to Vidarbha Intensified Irrigation Development Programme under RKVY.

·         Remaining activities to be merged into following missions in Twelfth Plan:

Ø  National Food Security Mission

Ø  National Mission on Sustainable Agriculture including Micro Irrigation

Ø  National Mission on Oilseeds and Oil Palm

Ø  National Mission on Agricultural Extension and Technology

Ø  National Horticultural Mission

National Mission for Protein Supplement

Rs. 2,242 crore project launched with World Bank assistance to improve productivity in the dairy sector. Rs 500 crore provided to broaden scope of production of fish to coastal aquaculture.

Agriculture Credit

Ø  Target for agricultural credit raised by `1,00,000 crore to `5,75,000 crore in 2012-13.

Ø  Interest subvention scheme for providing short term crop loans to farmers at 7 per cent interest per annum to be continued in 2012-13. Additional subvention of 3 per cent available for prompt paying farmers.

Ø  Short term RRB credit refinance fund being set up to enhance the capacity of RRBs to disburse short term crop loans to small and marginal farmers.

Ø  Kisan Credit Card (KCC) Scheme to be modified to make KCC a smart card which could be used at ATMs.

Agricultural Research

A sum of Rs. 200 crore set aside for 

incentivising research with rewards.

Irrigation

Ø  Structural changes in Accelerated
Irrigation Benefit Programme (AIBP)
being made to maximise flow of benefit
from investments in irrigation projects.

Ø  Allocation for AIBP in 2012-13 stepped up by 13 per cent to Rs. 14,242 crore.

Ø  Irrigation and Water Resource Finance Company being operationalised to mobilise large resources to fund irrigation projects.

Ø  A flood management project approved by Ganga Flood Control Commission at a cost of Rs.439 crore for Kandi sub-division of Murshidabad District.

National Mission on Food Processing

Ø  A new centrally sponsored scheme titled “National Mission on Food Processing” to be started in 2012-13 in co-operation with State Governments.

Ø  Steps taken to create additional food grain storage capacity in the country. 

Agricultural Research

A sum of Rs. 200 crore set aside for incentivising research with rewards.

Irrigation

Ø  Structural changes in Accelerated Irrigation Benefit Programme (AIBP) being made to maximise flow of benefit from investments in irrigation projects.

Ø  Allocation for AIBP in 2012-13 stepped up by 13 per cent to Rs. 14,242 crore.

Ø  Irrigation and Water Resource Finance Company being operationalised to mobilise large resources to fund irrigation projects.

Ø  A flood management project approved by Ganga Flood Control Commission at a cost of Rs.439 crore for Kandi sub-division of Murshidabad District.

National Mission on Food Processing

Ø  A new centrally sponsored scheme titled “National Mission on Food Processing” to be started in 2012-13 in co-operation with State Governments.

Ø  Steps taken to create additional food grain storage capacity in the country.