Economic Highlights

New Delhi, 15 March 2007

Need To Revamp Set-Up

Farm Productivity Holds the Key

By Dr. Vinod Mehta

The Economic Survey and the budgetary proposals have rightly drawn the attention of the country to the lopsidedness in our economic growth.  The manufacturing and the service sectors are doing very well while the agricultural sector is not doing very well.  The year 2003-04 witnessed a record agricultural production; almost 19 per cent increase in the foodgrain production and a record oilseeds crop.

This has not been sustained in the subsequent years, which partly explains the current spurt in the prices of essential commodities like wheat, rice, edible oil and pulses.  The continuous fall in their production for the last three years was indicative enough of the crises and inflationary prices.  The situation could have been avoided through timely imports; but this at best is a temporary solution. The real solution lies in increasing the productivity of these essential commodities which are ridiculously low by world standards.

If we compare the productivity of Indian agriculture to that of the productivity in other countries, we will find that Indian agriculture is way behind them.  Take for instance China, which can be our competitor in the international agricultural market.  With only 100 million hectare of agricultural land, China is producing 400 million tonnes of grain while India with its 146 million hectares of agricultural land produces on an average 108 million tonnes of food.

If we take the production per hectare of individual crops we will find that we are much behind other countries.  The average production of rice per hectare in India is around 1,756 kilogram, compared to 5,475 of North Korea; we are harvesting only 2117 kilogram of wheat per hectare compared to 7,716 by the Netherlands.  Similarly, India produces 1606 kilograms of corn per hectare compared to 9091 of corn per hectare by Greece.

Take soybean and groundnut, it is the same story.  The production of soybean per hectare in India is 804 kilograms compared to 3,453 kilograms in Zimbabwe.  As for groundnut India harvests only 929 kilograms per hectare compared to 4,600 kilograms per hectare harvested by Israel, that is to say that Israel is getting five times the groundnut per hectare as against India.  Similarly, India produces 15,817 kilograms of potatoes per hectare compared to 45,349 produced by Belgium.  As for sugarcane India produces 65,382 kilograms per hectare as against 135,448 kilograms per hectare produced by Peru.

If we take these comparisons seriously, which we as a nation should, then India has a lot to explain and lot to do. Good feel factor will not deliver results here.  It may be all right to have occasionally a record harvest and overflowing granaries in a relative sense but we are just able to meet the domestic demand for foodstuff and may have surplus to see us through one or two bad harvests.  For a country, which also looks forward to entering the international agricultural market in the near future this is not enough.  It is necessary to have a substantial surplus of agricultural products every year on a fairly continuous basis if we are to emerge as one of the important exporters of agricultural products in the world like Australia or USA or EEC countries and also meet our own domestic demand.

The figures also show that the potential of increasing agricultural productivity is immense.  If other countries can get three to five times the production per hectare of any agricultural product why can't India at least double its output per hectare of the agricultural produce?  The potential for such an increase exists and there is no reason why India cannot achieve this. 

Another point that emerges is that in spite of the fact that India is spending so much on agricultural research, we have not yet been able to produce seeds of high yielding varieties of international standards--seeds which can change the face of Indian agriculture.  There has to be some match between the funds we spend on agricultural research and the actual results we get in the form of produce per hectare.

The figures also reveal that India is not using its agricultural inputs to the optimum level.  A country like China which has less cultivable land than India has developed one of the best water management systems to get the maximum advantage. Similarly, Israel has turned desert into an arid land again mainly through its water management system.  A country like Netherlands which can grow one crop a year because of cold weather and snow makes the best use of its inputs to get the maximum output per hectare.

The lessons which the experience of other countries in the field of agricultural sector holds for us are that we have still a long way to go to tap the full potential of our agricultural sector and that by following an appropriate strategy we can increase our produce of agricultural products several-fold.

There is no getting away from research in the agricultural sector.  We will have put in all our efforts to develop high yielding varieties of various kinds of agricultural products which can go well with the kind of weather conditions we have in India. This research will have to be extended to allied activities like animal husbandry, fishing and plantation.  But the kind of bureaucratic environment that exists in our agricultural research institutes is not conducive to research that is needed for the development of high yielding varieties of crops or milch animals. 

The number of suicides in the ICAR in the past goes to show how callous we are towards the agricultural research scientists.  Therefore, as a first step we must revamp the setup of our agricultural research institutes and agricultural universities and fix some goals for the development of high yielding strains of food crops, edible oil seeds, sugarcane etc. Increasing allocation for agriculture research is not enough. We have to deliver results.

But pending the development of our own high yielding strains, we should make the best use of available high yielding seeds of various crops that are available in the international market.  If the seeds being sold by the multinational companies can substantially raise the agricultural productivity per hectare, why should not the country go in for the use of such seeds immediately, even if they are expensive?  The use of such seeds would also increase the earnings of the farmers.  What the agricultural research institutes can do is help identify the seeds being sold by multinational companies which would be more suitable to Indian climatic and soil conditions and would yield the maximum produce per hectare.

The country also needs to pay attention to the irrigation system.  Fifty years after independence our agriculture is still dependent on rainfall and any shortfall in rainfall during any year can severely upset our crop targets.  And whatever water we have for the agricultural sector, most of it goes waste because of mismanagement.  A large number of countries have gone in for drip irrigation system, which at the moment can be said to be the best irrigation system for a number of crops.  Therefore, we need to rethink our irrigation policy and either develop our own system or scout for one available with other countries and if possible outright buy the technology and implement it.

The development of agriculture has been uneven in the country; some states like Punjab and Haryana have gone through the phase of green revolution while states like Orissa and Bihar have yet to go through this phase.  This implies that we have still a vast untapped potential for the development of agriculture in the country.  Instead of having an all India agricultural strategy it may be more meaningful to have region cum state specific agricultural strategy within the overall general national agricultural strategy so that the specific local cultural, social and economic factors could be taken into account for the rapid development of the agricultural sector.

To sustain the high growth rate of the manufacturing and the service sector we will have to push up the growth of the agricultural sector by focusing on increasing the productivity.---INFA

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