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1 Agriculture productivity in India Released in the Souvenir of Global Economic Summit 2015 Three Day conference on Food security. November 19 to November 21 By R.Kannan Hinduja Group Agriculture in India has taken great strides after Independence. We had a green revolution whereby, we witnessed substantial improvement in productivity and after, the productivity levels have stagnated. The share of agriculture, which was at one point in time constituted more than 50% of the GDP was down to less than 14%. The contribution of Agriculture to GDP will reduce in the coming years considering the fact that Services sector will grow at 10% p.a and Industry is also likely to catch up with the recent initiatives by government. Compared to the above growth rates and the goals for future growth, we are aiming a growth rate of only 4% pa. in agriculture which is much below the growth targets for Industry and Services and also below the potential of agriculture growth. Despite India emerging as one of the players in Agriculture in the global arena, the productivity of crops compared to the world best is half in some products and one third in few other products. There is also a significant variation in productivity of crops between states. The following trends were observed in Agriculture production and productivity, which makes us consider various options for improvement in productivity in agriculture. Average growth rate of Agriculture and allied sector in India Between to was the highest for MP followed by Puducherry and Jharkhand with a growth rate of 9.56%, 9.04% and 8.59% (P) MP Puducherry Jharkhand

2 Average growth rate of Agriculture and allied sector in India Between to was the lowest for Chandigarh followed by Kerala and Goa with a growth rate of -3.87%, -0.52% and 0.15% (P) Chandigarh Kerala Goa There is a wide variation in Agriculture growth in various states and a state like Chandigarh, it was showing a constant decline. Percentage share of Agriculture in India GDP (%) at constant ( ) Prices was as follows: Share in GDP Percentage Growth of GDP at constant ( ) prices for agriculture sector was as follows: Growth % India s position in world agriculture in 2012: India with a share of 2.4% of world s agricultural area ranks seventh after Australia. Russia is at top position. India s position in Wheat and paddy production is second after China where as it ranks third in rapeseed production after Canada and China. Indi is at second place after China in groundnut production. India s contribution in world Paddy production is at 21.38% compared to China s 27.90%. Yield of India is KG/ha while China has Kg/ha in paddy. India s contribution in world wheat production is 14.13%, compared to China s 18.02%. Yield of India for wheat is kg/ha while China has kg/ha. India ranks fourth in Maize production with a yield of kg/ha. While USA ranks first with a yield of kg/ha.

3 The reasons for Poor agriculture productivity are : 1. Large number of small farms with low productivity and high cost. 2. Poor farmer training / Low skilled farmers. 3. Poor Farm management practices. 4. Unremunerative prices to farmers. 5. Less importance given to agriculture compared to Industry and services. 6. APMC act. 7. Low technology adoption. 8. Poor water management. 9. Resistance to using genetically modified crops. 10. Poor post harvest infrastructure resulting in wastage. There is a big scope for increasing the productivity of agriculture in India at farm level, post harvest and at the distribution stages. The following action plans could be taken up for achieving a higher level of productivity. 1. Growth target for agriculture. We have to set a stretch target of 6% growth for the entire country till we achieve the best productivity in the world in each crop. The targets at the national level should be broken down in to targets for each state and district. Once the targets are set, detailed action plan in terms of what is to be done in each district should be outlined with clear milestones for each District Agriculture Officer. 2. The focus should be on crops and states where agriculture productivity is low and there is a need to set a positive growth target for each state and crop. 3. In Central and State budgets, there should be separate allocation in the annual budget for productivity improvement initiatives. 4. Best practice sharing. Within India itself, some of the states are well advanced in agriculture and they have better productivity and farm management practices compared to other states. The best practices should be documented, including the case studies of successful farming and these should be shared with all the District Agriculture officers. We can also learn from the best practices from other parts of the world.

4 5. Since the average size of the land holding is showing a declining trend, the economies scale for farming is also showing an unfavourable trend and concepts like producer co-operatives modeled on the basis of Amul Experiment could be adopted across India. The concept of cooperative farming to achieve economies of scale could be adopted across the states. To start with each milk co-operative in the state can also start a co-operative for farming,where members who are engaged in farming can form part of this co-operative. By achieving economies scale, the cost of production of crops would come down. 6. Skill Development mission has been created for many of the manufacturing industries. On the similar lines, a skills development mission for farming to impart the best training to farmers could be considered by the government. 7. The penetration of mobile has become all pervasive today and this medium could be used very effectively to communicate to farmers on the Market price of their produce which will help them to realize a better price. This process has to be facilitated by modifying the APMC act, enabling farmers to sell their produce to any buyer. When farmer realizes, better price, the need for input and output subsidy also will go down, which will help to reduce the subsidies incurred by the government. This will improve the balance sheet of both the state and Central governments. 8. Technology adoption. Since most of the farmers are marginal farmers, they are not able to adopt the latest technologies of farming. Once a cooperative model evolves, it would be easy to adopt better technologies for farm management. 9. Irrigation management. At each district level, they have to identify scope for building water resources, implementing participatory irrigation management and adoption of micro irrigation systems. 10. India has 13 mn h.a of cultivable waste land. Action plans could be identified to expand the farming into these areas, this will help in increasing the production of crops. 11. Post harvest, lot of wastage is reported in India, which reduces the realization on sale of products. Now there are efforts to improve the post harvest supply chain including creation of cold chain across the country. A country wide, state wise and district wise strategies to be developed for post harvest management of crops. The savings from post harvest management could be used for improving the productivity of farms.

5 12. The food processing industry in India is still in the take off stage and there is a big scope for improving the productivity through setting up food processing units linked to farms. Here private sector can play a major role. 13. Private sector also can play a major role in aggregation of farmers through contract farming as well as direct procurement of produce for retailing. 14. Government has to reallocate a part of the subsidy budget for farm productivity and bring in Systems, procedures and policies to improve the productivity. it has to play a catalytic role by giving equal emphasis on Agriculture and its growth and use agriculture as one of the pillars of high GDP growth. 15. Already there are schemes for Agricultural credit and insurance and all these schemes could be reviewed to encourage and support higher level of agricultural productivity in the system. By involving all the stakeholders and communicating to them the role, they can play in improving the agriculture productivity and facilitating the regulatory and policy measures, India should be able to achieve an annual growth of 6% in Agriculture, till it reaches optimum productivity levels. Through join efforts of all the stake holders, India will be able to achieve desired productivity. ( Views expressed are personal views)