India can learn agri-policy lessons from China Editorial 25th Oct’19 FinancialExpress

Headline : India can learn agri-policy lessons from China Editorial 25th Oct’19 FinancialExpress

Details :

India and China have similar challenges in agriculture:
  • India and China are the most populous countries in the world, having a population size of 1.35 billion and 1.39 billion, respectively, in 2018.
  • With limited arable land [about 120 million hectare (m ha) in China, and 156 m ha in India], both face the challenge of producing enough food, fodder, and fibre for their population.
Followed many similar methods to increase output:
  • Both have adopted similiar methods to get more food from limited land, including:
    • Modern technologies in agriculture, starting with High Yielding Variety (HYV) seeds in the mid-1960s
    • Use of more chemical fertilisers
    • Increased irrigation cover
      • China’s irrigation cover is 41% of cultivated area, and India’s is 48%.
      • As a result of this irrigation, China’s total sown area is 166 m ha compared to India’s gross cropped area of 198 m ha.
But China produces more output than India:
  • Even with much lesser land under cultivation, China produces agricultural output valued at $1,367 billion—more than three times that of India’s $407 billion.
Lessons for India from China in agriculture:
  • There are three important lessons for India, if it is to catch up to the levels achieved in China.
 
I) Increased spending on Agriculture Knowledge and Innovation Systems
  • Agriculture studies have revealed that the highest impact is from investments in agriculture Research and Education (R&E).
  • China spends more:
    • China spends a lot more on agriculture knowledge and innovation system (AKIS), which includes agri R&D, and extension.
    • China invested $7.8 billion on AKIS in 2018-19, amounting to 5.6 times the amount spent by India ($1.4 billion).
    • Presently, India invests just about 0.35% of its agri-Gross Value Added (GVA) whereas China spends 0.8%.
  • India needs to spend more:
    • For increasing total factor productivity, India needs to increase expenditure on agri-R&Dwhile making the Indian Council for Agricultural Research (ICAR) accountable for targeted deliveries.
  • Note: Better seeds that result from higher R&D expenditures generally demand more fertiliser. China’s fertiliser consumption in 2016 was 503 kg/ha of arable area compared to just 166 kg/ha for India, as per World Bank estimates. Consequently, China’s productivity in most crops is 50 to 100% higher than India’s.
II) Better incentive structure to farmers through agri-marketing reforms
  • The incentive structure, as measured by Producer Support Estimates (PSEs), is much better for Chinese farmers than Indian ones.
  • The PSE concept measures the output prices that farmers get in relation to free trade scenario, as well as input subsidies received by them.
    • The PSE concept is adopted by 52 countries that produce more than three-fourths of global agri-output.
  • China’s PSE much higher to India:
    • For Chinese farmers, PSE was 15.3% of gross farm receipts during the triennium average ending (TE) 2018-19.
    • For the same period, Indian farmers had a PSE of -5.7%.
    • In a way, this reflects that Indian farmers had been net taxed, not subsidised, despite high amounts of input subsidies.
  • Due to restrictive trade and marketing practices in India:
    • This negative PSE (support) comes due to restrictive marketing, and trade policies that do not allow Indian farmers to get free trade prices for their outputs.
    • This negative market price support is so strong that it exceeds even the positive input subsidy support the government gives to farmers through low prices of fertilisers, power, irrigation, agri-credit, crop insurance, etc.
  • China’s experience that high MSPs do not work:
    • India can take a leaf out of Chinese bad experience from high MSPs.
    • China, in fact, used to give procurement prices to farmers that were much higher than even international prices.
    • The result was massive accumulation of stocks of wheat, rice, and corn that touched almost 300 million metric tonnes (MMT) in 2016-17 (see graphic).
    • As a result, they had to incur large expenditure for withholding these stocks without much purpose.
    • Having learnt lesson, China dropped the price support scheme for corn, and in fact, have been gradually reducing support prices of wheat, and rice.
  • India should learn from China and move away from high MSPs:
    • Indian government has been trying to jack up minimum support prices (MSPs) for 23 crops.
    • As a result, India’s stock situation in July 2019 was 81 MMT as against a buffer stock norm of 41 MMT.
    • India needs to reduce the gamut of commodities under the MSP system, and keep MSPs below international prices.
    • Else, India will also suffer from the same problems of overflowing granaries as China did.
  • Marketing reforms are necessary in India:
    • To improve this situation, large-scale agri-marketing reforms (APMC and Essential Commodities Act) need to be carried out.
III) Implementation of single direct income support scheme:
Single input subsidy scheme in China:
  • China has combined its major input subsidies in a single scheme that allows direct payment to farmers on a per hectare basis, and has spent $20.7 billion in 2018-19.
  • This gives farmers freedom to produce anything, rather than incentivising them to produce specific crops.
  • Inputs are priced at market prices, encouraging farmers to use resources optimally.
India offers heavy input subsidies apart from direct benefits:
  • India spent only $3 billion under its direct income scheme, PM-KISAN, in 2018-19.
  • On the other hand, it spent $27 billion on heavily subsidising fertilisers, power, irrigation, insurance, and credit.
  • This leads to large inefficiencies in their use, and has also created environmental problems.
India needs to consolidate subsidies into a single scheme:
  • It may be better for India to also consolidate all its input subsidies and give them directly to farmers on a per hectare basis, and free up their prices from all controls.
  • This would go a long way to spur efficiency, and productivity in Indian agriculture.
Conclusion:
  • If India needs to learn these three lessons from China, i.e., to invest more in agri-R&D and innovations, improve incentives for farmers by carrying out agri-marketing reforms, and collapse input subsidies into direct income support on a per hectare basis.
  • Through this, India can benefit its farmers and put agriculture on a high growth trajectory.
Importance:
GS Paper III: Indian Economy
Section : Editorial Analysis

Smart farming: Agriculture data can reap a bumper harvest Editorial 25th Apr’19 FinancialExpress

Headline : Smart farming: Agriculture data can reap a bumper harvest Editorial 25th Apr’19 FinancialExpress

Details :

Dependence on government for agriculture data:

  • Agricultural statistics is not easy to collect and compile, hence the dependence on the government.
  • But this data suffers from the issues of timeliness, reliability and integrity.
  • Yet, since it is only source, there is no option but to use government data.

Huge data in various silos:

  • Data available with the government in various silos, not correlated, and often not inter-operable. .
  • This includes data on land, ownership of lands, weather and rainfall, irrigation, electrification, crop-wise sowing, production and yield, fertiliser consumption, market arrivals and prices from APMCs,wholesale and consumer prices, procurement, etc.
  • Then there are the new ‘data-driven’ schemes like soil health, PM crop insurance, PM KISAN etc, which have important data.

Issues with data:

  • Data collection:
    • The elaborate exercise of collection of primary data (collected by a researcher from first-hand sources) on even those crops (rice, wheat, etc) that have established systems still has design errors and implementation gaps.
    • Crops like sugarcane and cotton are more difficult.
  • Compilation:
    • Even the compilation and publishing of data needs to be improved.
  • Delays:
    • For example, it is is well known that data related to sowing or crop-cutting always comes late.

 

Agriculture data has been used by policymakers:

  • A large volume of data related to agriculture exists, but in a number of segregated silos. They are collected at different intervals of time for different purposes. This data is collated, summarised and published by various government agencies.
  • Historical data sets have been used extensively for analysis, understanding trends, estimating impacts of weather and policy on crops and prices, etc.
  • These have helped policymakers and researchers to suggest changes in policy prescriptions, and design, implement and monitor schemes.

But has not helped the farmers much:

  • But the policy prescriptions and scheme have not helped farmers take timely decisions to increase their income or even reduce losses in the event of a change in the situation.

Due to focus on macro indicators:

  • Rather than providing micro level data to help the farmers, what is happening currently is that modern technology is being used to give ‘unsolicited’, often irrelevant, advice based on macro indicators.
  • Most advice, though scientifically correct, is not farmer-specific, and is of limited use.

 

Need micro-level data for farmers to benefit:

  • The farmer will be better off if provided with specific crop, soil ,weather and market information advisories.
  • This requires micro-climate details like rainfall, moisture levels, soil fertility, etc, are mapped along with his crops as also advisories on fertilisation and irrigation schedules, pest control measures and market trends are given on time.
  • Today’s technology is capable of doing this in real time.

This information can be provided by tech entrepreneurs:

  • Modern technology enables using of data in the agriculture sector to help farmers take more informed decisions and further the prosperity and income of farmers.
  • Young technology entrepreneurs today can offer farmers specific solutions using data from the sky, the soil and the market.

But they need help:

  • These new start-ups can help the farmers if two core issues are addressed:
    1. Access to existing data
    2. The revenue model

 

Way forward:

  • Give open, but ‘limited’ (limited on account of privacy and national security issues) access to primary data in the government.
  • Provide technical backing to agri start-ups and enable a revenue model to enable them to participate in the extension space.

 

Importance:

GS Paper III: Economy

 

Section : Editorial Analysis

Brief about Bio-fortification

Consider the following statements

1.     Biofortification is the process by which the nutritional quality of food crops is improved through agronomic practices, conventional plant breeding, or modern biotechnology.

2.     Conventional fortification differs from Biofortification in that conventional fortification aims to increase nutrient levels in crops during plant growth rather than through manual means during processing of the crops.

Which of the given statement/s is/are correct?

a     1 only

b     2 only

c      Both

d     None

Explanation:

Solution (a)

Fortification is the practice of deliberately increasing the content of an essential micronutrient, i.e. vitamins and minerals (including trace elements) in a food, so as to improve the nutritional quality of the food supply and provide a public health benefit with minimal risk to health.

Biofortification is the process by which the nutritional quality of food crops is improved through agronomic practices, conventional plant breeding, or modern biotechnology. Biofortification differs from conventional fortification in that biofortification aims to increase nutrient levels in crops during plant growth rather than through manual means during processing of the crops. Biofortification may therefore present a way to reach populations where supplementation and conventional fortification activities may be difficult to implement and/or limited.

Examples of biofortification projects include:

·      iron-biofortification of rice, beans, sweet potato, cassava and legumes;

·      zinc-biofortification of wheat, rice, beans, sweet potato and maize;

·      provitamin A carotenoid-biofortification of sweet potato, maize and cassava;

·      amino acid and protein-biofortification of sourghum and cassava.

Discuss the applications of biotechnology in the agriculture and allied sectors.

Approach

Introduce by mentioning the need for biotechnology in agriculture and allied sectors

Explain how biotechnology can be used in agriculture and allied sectors.

Conclude appropriately.

Model Answer :

Agriculture along with its allied sectors is the largest source of livelihood in India. Biotechnology can be instrumental in improving productivity and modernising these sectors. The National Biotechnology Development Strategy 2015-2020 has a special focus on the agriculture and the allied sectors.

The applications of biotechnology are manifold in this regard:

Crop farming:

oProductivity of the crops is enhanced using genomics information and interfaces with wide hybridisation, molecular mapping, etc.

oCrops can be made less input intensive and less prone to biotic and abiotic stresses.

oNutritional value of the crops can also be enhanced.

Animal Rearing:

oThe health and productivity of Livestock and Poultry can be enhanced.

oBiotechnology can ensure good breeding and reproductive technologies.

oDisease resistance in indigenous stocks e.g. cattle, chicken, buffalo, sheep pigs etc. is being enhanced.

oFeed and fodder enrichment can be done by enhancing its nutritional value.

Aquaculture:

oMicro-diets being developed for larviculture, which is used as food for fish stock.

oEnrichment of aqua-feed with microbial enzymes which is cost effective at the same time.

oEnsuring the health of the aquaculture environment and of the aquatic animals

oDNA marker technology is being used in various species for trait characterisation related to growth, disease resistance and salinity tolerance and could be exploited for enhancing productivity

Medicinal and Aromatic Plants:

oBiotechnology helps in understanding the mechanism of action of medicinal plant based drugs, understanding the biosynthesis pathways for commercial application, botanical pesticides & insecticides and studies on genetic diversity.

oGenomic resources on medicinal and aromatic plants can be generated to enhance the content of the therapeutically important products.

oMedicinal and aromatic plants based products can be developed for human and animal healthcare.

There are a number of more applications of the biotechnology in the agriculture and the allied sectors which can significantly contribute towards the goal of doubling the farmers’ income in near future. The need to the hour is efficiently leveraging the present technology and adequately investing for innovative research in this area.

Everything about Agricultural Crisis

The main reasons for farm crises are:

  1. Slow agriculture growth:
  • Agriculture shrank to just 18 percent of the GDP in 2013-14; and further shrinking is projected given agriculture’s lower growth rate compared to other sectors.
  • The agriculture growth rates have been unsteady in the recent past.
    • 2012-13: 1.5%
    • 2013-14: 5.6%
    • 2014-15: (-) 0.2%
    • 2015-16: 0.7%.
    • The provisional estimate puts it at 4.9% in 2016-17.
  • The trend reflects the distress in the agriculture sector.

  1. Land assets:
  • As per Agriculture census 2010-11, the average farm size in India is small, at 1.15 hectare, and since 1970-71, there has been a steady declining trend in land holdings.
  • The small, marginal and semi-medium land holdings (less than 4 hectares) account for around 70% of land holdings in term of area and around 95% of total numbers.
  • As per the Socio-Economic and Caste Census (SECC) 2011 around 30 percent of rural households are landless.
  • This predominance of small operational holdings is a major limitation to reaping the benefits of economies of scale.
  • Since small and marginal farmers have little marketable surplus, they are left with low bargaining power and no say over prices.
  1. Population on farming
  • While share of agriculture in GDP is declining, the percentage of population dependent on agriculture observe very slow decline.
  • Still around 70 percent of its rural households still depend primarily on agriculture for their livelihood.
  • This huge population dependency is one the main reason for farm crisis.
  1. Risk involved
  • The agriculture sector is characterised by instability in incomes because of various types of risks involved in production, market and prices.
  • Crop production is always at risk because of pests, diseases, shortage of inputs like seeds and irrigation, which could result in low productivity and declining yield.
  • Agriculture still remains largely rain fed (around 52%) and vulnerable to the vagaries of the monsoon. And so are the fates of millions of Indian farmers.
  • Because of the perishable nature of produce and inability to hold it due to poor storage infrastructure, produced have very low resilience.
  • Hence, these issues lead to absence of mechanism in which farmers can protect themselves against adverse circumstances like surplus-shortage scenarios or insure against losses.
  1. Increase in input cost
  • Along with the slowdown in agricultural growth, the costs of farm inputs such as fertilisers, seeds, mechnisation, electricity etc., have increased faster than farm produce prices.
  • The cost of capital too has increased manifold over the years.
  1. Remunerative Price
  • The government’s economic survey for 2016-17 points out that the price risks emanating from an inefficient APMC market are severe for farmers in India.
  • Farmers face price uncertainties due to fluctuations in demand and supply owing to bumper or poor crop production and speculation and hoarding by traders.
  • The lower than remunerative price in the absence of marketing infrastructure and profiteering by middlemen adds to the financial distress of farmers.
  1. Credit system
  • The predominance of informal sources of credit, mainly through moneylenders, and lack of capital for short term and long term loans have resulted in the absence of stable incomes and profits.
  • Further, it leads to defaults and indebtedness which turned agriculture into an unprofitable occupation and deepened the crises.
  1. Uncertain policies and regulations
  • Uncertain policies and regulations such as those of the Agricultural Produce Market Committee (APMC Act), besides low irrigation coverage, drought, flooding and unseasonal rains, are some other factors that hit farmers hard.

Way forwards

  • While the farming sector has its own set of risks, like any other economic activity, to increase and ensure stable flow of income to farmers it is vital to manage and reduce the risks by analysing, categorising and addressing them.

Pandit Deendayal Upadhyay Unnat Krishi Shiksha Scheme

It was launched to promote agricultural education.
Under the scheme 100 centres are opened with a fund of Rs.5.35 crore.
“Attracting and retaining youth in Agriculture (ARYA)” is a project sanctioned by the Indian Council of Agriculture (ICAR) and is being implemented at Krishi Vigyan Kendra (KVKs).
The main objective of the project was to provide complete knowledge and skill on processing, value addition and marketing of coconut and banana products through capacity building programmes involving research and development organizations.

Krishi Vigyan Kendras

  1. Krishi Vigyan Kendras (KVKs) are agricultural extension centers created by ICAR to provide various types of farm support to the agricultural sector.
    It is created to serve as a single window mechanism for addressing the technology needs
    of farmers and acts as a link among researchers, extension functionaries like NGOs and
    farmers.
    The farm support includes farm advisory service including climate resilient
    technologies,training programme for NGOs and front line demonstration and on Farm
    testing.
    KVK operates under the administrative control of State Agricultural University(SAU) or
    central institute.