Prime Minister Narendra Modi has time and again reiterated his commitment towards improving the state of farmers. Over the past couple of years, his government has been steadfastly pursuing institutional and infrastructural solutions to ensure that the ambitious goal of doubling farmers' income becomes a reality by 2022. The responsibility of actualising a lofty objective such as this lies equally with the private sector as much as it rests with those working tirelessly in the public sector.
Expeditious growth of India's agricultural domain can be achieved once the bottlenecks that are deeply embedded in the policy framework are resolved.
At its core, India's agricultural history exemplifies how the interests of the Indian farmer have been successively derailed over the last couple of decades. Instead of engineering an ecosystem where input costs - be it of seeds, fertilizers, agriculture equipment - are artificially controlled, the government of yesteryears have focused on offering peasants higher prices for their produce, thus effectively doing a disservice to them. Additionally, this system has only worked to shelter the Indian farmer from market dynamics, making him increasingly incapable of adapting to the demands of a competitive economy.
So, what ails farming in India?
Over the last few decades, India has achieved self-sufficiency in food grains and is among the top two producers of wheat, rice, sugarcane, cotton, milk, fruits, vegetables and spices in the world. Since 2000, rural per capita income has increased at a faster pace than urban per capita income. The FMCG companies also place higher reliance on rural India in terms of annual sales. In view of the above, India seems to have done well in respect to agriculture. But the grey-lining here is that other countries have performed better.
China produces 30 per cent more wheat and rice using 25 per cent less land than India. Japan and Korea have less landholding than India, but have higher yields. India's average consumption of fertilizer is less than that in Pakistan and China. India's per hectare consumption of agrochemicals is one of the lowest in the world. Further, Indian agriculture, which employs about 55 per cent of its total workforce, contributes merely 14 per cent to the total GDP. Clearly, there are reasons to believe that something is not happening right with agriculture in India.
Between FY15-FY18, Central government expenditure on agriculture sector is estimated at over Rs 1,200 billion, 16 per cent of which has been directed towards agricultural research and education.
According to Agricultural Science & Technological Indicators, India has the largest spending ($3 billion) on agricultural research and developmental activities in the world, followed by the Republic of Korea, China and The Netherlands.
However, as a share of Agri-GDP, India spends less than 0.4% on agricultural research. Clearly, when compared to nonagrarian economies like Singapore that dedicate almost 1.5 times the value of agricultural output to research, India has a long way to go to achieve its vision of spending 1 per cent of Agri-GDP.
According to the International Food Policy Research Institute (IFPRI), India has one of the largest and well-coordinated public agricultural research system in the world comprised of 111 research institutes under Indian Council of Agricultural Research, 62 State Agricultural Universities, 4 Deemed Universities, 3 Central Agricultural Universities and four Central Universities with Agricultural faculty. But with increased recruitment restrictions, university staff is overworked and has limited time available for research. Furthermore, weak linkages with the private sector have resulted in academic stagnation. While half of India's agricultural employment opportunities are in the private sector, yet curricula predominantly target the needs of the public sector. The weakening research capacity of agricultural institutes is undoubtedly an important institutional concern.
Under-utilisation of IT capacity is another critical issue. Despite being the world's IT hub, the emergence of farm technologies integrated with a robust information and communication technology framework is still at a nascent stage in India. Today, commercial R&D in agriculture is underway and is fast resulting in breakthrough innovations in improving yields, asset productivity, and sustainability.
Adopting advanced technology has helped small countries like The Netherlands and Israel to become food surplus nations. This has been achieved through innovative practices like climate-controlled farming, use of LED lighting to permit 24x7 cultivation, among others.
There are ample evidences within Indian agriculture - the Green Revolution (in grain production), the White Revolution (in milk) and the Gene Revolution (in cotton) to show how technology may be leveraged to achieve higher and sustainable growth. In each of these scenarios, the increase in production was achieved not through increasing land acreage but by use of improved techniques which resulted in improved yields. Clearly, there is a need to support agricultural extension efforts to disseminate knowledge about new technologies and techniques and to demonstrate their business case. Publicly funded agricultural extension has been a key historical link between agricultural R&D and farmers and ranchers in high income countries.
The success of technology adoption lies in customising to address particular challenges at the local level, supporting institutions and policies to create an enabling ecosystem, and harnessing the potential of these technologies to scale and commercialise within a defined time period.
We should give farmers the tools and technology that will solve their long-term problems… rather than steroid injections of 'higher prices'.
(This editorial was first published on DNAIndia.com)