OVERVIEW OF FOCUS AREAS FOR GOVERNANCE IN INDIAN AGRICULTURE

Dr.B.Gangaiah Centre for Good Governance18.12.2014Taj Deccan, Hyderabad

Definition of Governance

Governance is the exercise of economic, political, and administrative authority to manage a country’s affairs at all levels. It comprises the mechanisms, processes, and institutions through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations and mediate their differences. UNDP (1997)

Governance Components

Accountability and

Transparency

Improving

Service Delivery

Technology and System Improve

ment

Financial

Management and

Budget Sanctity

Public Service morale

Incentivizing

Reforms

Anti Corrupti

on

Rule of Law

STAKEHOLDERS IN GOVERNANCE

Judiciary

MediaPolitical

parties

Judiciary

Executive

Civil Society

Social Orgns.

Private Sector

Media

Legislature

Stakeholders in Governance

Governance is too important to be left to the government....

INDIAN AGRICULTURE – MACRO TRENDS

Agricultural land 183.6 m.ha (2001-02 ) - 182.0 m.ha (2010-11)

Arable land 157.35 m.ha (China-111.60 m.h) Share of agriculture in GDP 51.4% ( 1st Plan)

to 15.2% ( 11th plan ) and 13.7% in 2012-13 Percentage of irrigated area 17.1% (1950-

51) - 44.9% ( 2010-11). Cropping intensity 111.1 % (1950-51) -

140.5 % ( 2010-11). Average size of holding 1.33 ha( 2000-01) to

1.16 (2010-11)

INDIAN AGRICULTURE -MACRO TRENDS

Operational holdings 129 million( 2005-06) to 138 million in 2010-11(Ag.Cen 2011)

Investment in agriculture as percent of Agr.GDP - 6.9% in first plan to 18.86% in 11th plan.(2004-5 prices)

Public investment 4.9% (6th plan) to 3.5% in 11th plan

Private investment increased from 5.2%( 6th plan) to 15.1% in 11th plan

68.8 % of total population depend on Agriculture Contributes 12% of exports.

KEY AREAS FOR FOCUS Sustaining investment in Agri-

infrastructure Input delivery systems R&D and Extension Marketing Subsidies Institutional arrangements Technology Natural Resources management Climate change Human resources development

INVESTMENT:

Increasing investment in infrastructure-irrigation, Storage,transportation etc.

Sustaining investment in Public and Private- composition, quality and efficiency

About $18 billion spent on input subsidies and only $7 billion on irrigation, storage, R&D, extension in 2010-11(Mckinsey)

MARKETING & OUTPUT PRICES APMC inefficient, middleman exploitation- improve

competition from private use of ICT in price discovery-IFFCO Kisan Sanchar- Value Chain Devt from harvest to final consumption-from

Farm to plate linkages along the value chain- production- processing-

marketing- consumption Output prices-market determined, Government

determined(MSP). Distortionary effects of MSP,-encouraging inefficient

production- huge financial burden on the exchequer - no commensurate benefits to the farmers and consumers.

Need to reform the MSP regime towards encouraging efficient farming and diversification of farming systems.

The creation of an independent regulatory agency to set support prices within a fixed fiscal framework, responsive to consumer needs and preferences.

AGRICULTURE INPUTS

Input Delivery systems- low quality seeds, fertilizers, pesticides.

Credit supply-insufficient and delayed supply

Innovative credit delivery including mobile based, need and crop intensity based.

Labor Productivity- rising cost,MNREGA

RISK AND INSURANCE:

Risk in agriculture-production and marketing risks.

Production risk due to low irrigation and high dependence on weather(rainfall), poor quality of inputs, poor extension support.

Insurance coverage is only 17% Ranges of insurance products available

to farmers are insufficient and inadequate to meet the needs of large number of small and marginal farmers.

SUBSIDIES:

Subsidies- input and output subsidies in the form of fertilizer, Power, and investment subsidies,MSP.

Rationalization of subsidies is another important area for governance reforms

Bihar farmer Shri Deodhar Sharma was “we farmers do not need any subsidy for farming, what we need is good and assured quality farm inputs such as seeds, fertilizers, pesticides and above all these inputs should come to the farmers at the right time for right farming from certified suppliers. Also, we need the best of technology, best of irrigation methods in difficult times and uninterrupted supply of electric power”. Quoted in APJ Kalams speech at ICAR 84th Foundation Day speech 16,july 2012.

CLIMATE CHANGE

Climate change-challenge for Food Security in India.

Droughts, floods, erratic rains - greatest impact in rain-fed areas

India's crop yields could fall by 30% by 2050(IPCC)

Need for fundamental changes in our economic and social institutional architecture.

PRODUCTIVITY Productivity of Agriculture- low compared to

the world average and that of the best producers in the world. Half of average of China, Indonesia, Malaysia, and Thailand

Potential to raise yield growth from 2.0 to 5.5 percent annually over the next ten years- 10( Mckinsey)

Fertilsers, efficient water management, Seed Quality, precision farming, fertility of soil, better market access, improved post harvest logistics, human resources

We can be more efficient about what we grow, where we grow, and how we grow.

R&D-EXTENSION Our R&D investment of Agr-GDP-0.6%(2-3%)-

quality issue Need to look at alternative/complementary

models of service delivery An appropriate mix of Public and Private Models

of extension With proper R&D and extension can double the

average yield from 2.3 to 4.0 tonnes by 2022. Holistic approach, mobile extension(Gujarat). Fee-based private extension support to medium-

size and large farms with the capability to pay. Public extension for poor and remote areas. Need-based, location specific research,

Smallholder focused

TECHNOLOGY AND ICT ICT-huge improvements possible,

extension, precision farming already pilots available

Biotechnology – GM, other Farm mechanization Need appropriate governance and

Institutional arrangements with proper safeguards to ensure sustainability.

NATURAL RESOURCES "We have a growing global population

and a deteriorating natural resource base." -- Kanayo F. Nwanze, president of IFAD

Watershed development- State, GOI,NGOs

Overexploitation resulted in biotic and abiotic stresses leading to declining productivity.

Water use efficiency key - more crop per drop, conservation, quality of water

OTHERS Need to promote growth oriented Land

market Land records and Titling need updating, Secured Tenure- Secured Ownership of

land. Diversification- Horticulture and Animal

Husbandry to meet rising protein demand

Feed Stock, Genetic Improvement Fisheries: In-land, Deep Sea, Cultivated-

Sustainability

CONCLUSIONS Need a fresh look at the Policy & Governance

architecture. New Governance structure to be enabling, efficient

and collaborative partnerships of Government, private sector, civil society.

Promising strategies - forming partnerships with the private and social sectors, mobilizing community participation, using technology to streamline and efficient monitoring operations.

Enlightened leadership should facilitate this process. “For success in all your(our) missions you(we) have to become

creative leaders. Creative leadership means exercising the vision to change the traditional role from the commander to the coach, manager to mentor, from director to delegator and from one who demands respect to one who facilitates self-respect”- APJ Kalam

Thank you for

attention