Policy Brief:

Options and Priorities for Agriculture in India on the Eve of the Twelfth Five-Year Plan

Prepared by Srijit Mishra in consultation with S Mahendra Dev

Ritika Palit, Sanjay Prasad, Upasana Sharma and D Suganthi

Indira Gandhi Institute of Development Research, Mumbai

Supported by

Planning Commission

Food and Agriculture Organization

The World Bank

Policy Brief: Options and Priorities for Agriculture in India on the Eve of the Twelfth Five-Year Plan1
1 December 2011

Introduction The Indira Gandhi Institute of Development Research (IGIDR), Mumbai and the Institute for Human Development (IHD), New Delhi with the support from the Planning Commission, Food and Agriculture Organization (FAO) and The World Bank conducted a two day workshop on 'Policy Options and Investment Priorities for Accelerating Agricultural Productivity and Development in India' at the India International Centre, New Delhi during 10-11 November 2011. Besides the inaugural session (where Dr Abhijit Sen, Member, Planning Commission delivered the keynote address), there were six technical sessions, viz., agriculture in the global perspective, agricultural growth, agricultural investments, technology, marketing and structural transformations, and three panel discussions on perspectives from the states, government perspectives and the way forward. Based on these deliberations, some policy aspects are raised on the eve of the twelfth fiveyear plan. Issues and concerns While agricultural productivity and development is an important question, there could be different perspectives such as increasing foodgrains production, providing livelihood security for more than half the population dependent on agriculture or efficiency in resource use of not only land but also water and other inputs. All these have their own rationale, but they can conflict with each other and that is the challenge for planning. In addition, questions of food inflation in recent times and the ongoing debate on food and nutrition security as also crop diversification, efficiency of small holdings and soil fatigue are also relevant concerns. Learning from others Drawing on the comparative study with a focus on Brazil, China and Indonesia, the lessons for India is to focus on research in facilitating appropriate technology, sprucing up the research and extension systems, emphasis on diversification and investment in infrastructure. At a global level, increasing hunger, adverse impacts on production on account of climate change and shift in acreage to biofuels among others are matters that are also pertinent for India. Growth in agriculture: variation across states After a period of deceleration from mid-90s, there has been a revival in agricultural growth in the eleventh plan, but this revival is being backed by a technology that is increasing the cost rather than reducing it, which jeopardises the livelihood sustainability of the mass of people dependent on agriculture. There are differences in priorities and policies across states and agro-climatic regions and the planning at the centre should take this into note. In particular, the rainfed regions and districts with lower productivity need special attention. The Rashtriya Krishi Vikas Yojana (RKVY) should be bottom-up in spirit and not just in letter, that is, start planning from the village level by involving the local communities based on their requirements. Investments in agriculture: public and private Public investments should sustain the momentum on irrigation, research & development, and rural roads; focus on rainfed and eastern region; and find ways to make fixed capital efficient among others. The policy environment to facilitate private corporate investment should also look into appropriate regulatory and institutional issues. Farmer household level private investment is complementary to public investment, but for this to happen, appropriate credit facilitation should be provided by the formal banking institutions keeping the marginal and small farmer in mind. Further, research should be encouraged with farm level data. The unit level data maintained by the Department of Economics and Statistics (DES) and used by Commission for Agricultural Costs and Prices (CACP) should be made available to researchers so as to help in the policy deliberations and planning process.

This has been prepared by Srijit Mishra in consultation with S Mahendra Dev and with inputs from Ritika Palit, Sanjay Prasad, Upasana Sharma and D Suganthi.

Technology: a critical link New technological developments are required to improve production and this necessitates change in agricultural education, facilitating research that has to be integrated with on-field training and extension education, draws on farmers' innovations and incorporates the ecological concerns among others. For all these, appropriate additional investment is required in research and development. There should be ample scope to integrate Agriculture Technology Management Agency (ATMA) to the needs of the states with a focus on providing appropriate services, as required by the farmers. Efforts should be made to reduce yield gaps from research station potential to on-farm demonstration to actual farm outputs. Independent of the inputintensive cultivation, the alternative paradigm of rainfed cultivation with a focus on soil organic matter, supplementary irrigation, seed bank, millet production along with small ruminants and fisheries among others may be promoted on a pilot basis under the twelfth five-year plan in some selected blocks of backward rainfed districts. This also requires building up of farmer-friendly institutions to facilitate their livelihood security. Market: beyond efficiencies In recent years, Agriculture Produce Market Committee (APMC) laws have been enacted or are in the process of being enacted in most states, but some of the variation across states need to be bridged with subsequent amendments and the enacted laws need to be properly implemented and where there are no laws, appropriate regulatory structures need to be put in place. There is a case to empower marginal and small farmers by expanding their choice set so that they benefit from market transactions and this may be possible through pro-poor value chains, and appropriate contracts that are situation-specific to guard them against price and income shocks. Risk mitigation at the household level has to be based on diversification and low external input technologies. There is a need for appropriate insurance instruments crop insurance at the farm level and weather-based insurance to factor in different stages of crops life cycle and input requirements. Village studies: multiple perspectives required The changing technological and market scenario as also socio-economic intervention is also bringing about a lot of changes in rural India. Revival of village studies from multiple perspectives would help complement our understanding from large scale surveys and macro data. Such studies need to be encouraged. The way forward On the eve of the twelfth five-year plan, the challenges for agriculture are multiple climate change, foodgrains production, technology fatigue, resource use efficiency, food inflation, and livelihood security for those dependent on agriculture among others. It requires coming together of many domains and perspectives, as has been shown in this workshop wherein one received support from the government and multilateral organizations involving researchers from Indian as well as International institutes with an attempt to initiate a conversation between agricultural scientists and economists. Alternative technologies emphasizing on sustainable and conservation practices with a focus on rainfed regions need to be explored. This has to be complemented with appropriate institutions: (1) those that organize farmers from the village level to aggregate their input and market requirements, (2) those that help to leverage scientific developments and the claimed potential with on-field outcomes at the farmer level through appropriate research and extension structure that are bi-directional in nature and also take into consideration the local situation both agro-climatic as also socio-economic, and (3) those that facilitate collection and analysis of quality data at the micro (farm or household level including village studies), meso (regional or state-specific studies) and macro (aggregate economy level studies) level. There is also a case to bring together the concerns of agricultural development with that of rural development. The task ahead is daunting. To quote Robert Frost, And miles to go before (we) sleep, And miles to go before (we) sleep.