18 February 2010

"India's agriculture: need for evergreen revolution" by Dr M S Swaminathan in WSJ

Two reasons why agriculture is important to India:

One, 66% of Indians work in this sector.  India cannot “emerge” until the quality of life improves for farmers.

Two, food security is important to any country.  Production and storage of food cannot be left to market forces of supply and demand.  Most countries, including USA, provide subsidies to farmers to ensure market forces do not drive them away to other sectors or other products (such as cash crops).

India moved successfully from producing 800 kg/hectare to 3,200 kg/hectare 42 years back thanks to Green revolution.  Dr M S Swaminathan played a key role in achieving this.  His views on the challenges India faces, as articulated in this interview with Wall Street Journal are important:

One:  India, unlike China, has not focused on water management.   60% of our farm production depends on rainfall.   We need storage of water and bridging of supply across geographies and across time.

Two:  Growth has not weaned farmers away into alternative livelihoods.  Population dependent on farming has increased over time.  Farm sizes have shrunk (80% of farms are less than 1 hectare in size).   We need to follow the examples of China, Japan and Netherlands and create farm co-operatives without challenging ownership.  (Farmers would not cede ownership of land).  We need a management revolution.  We did this in milk industry.  We need to do this in agriculture. 

Three:  Farming continues to be a risky business; a big bet on monsoon, land, pests, storage, distribution and prices.  Insurance is available only to 7% of farmers.   93% suffer risks.  More than 50% of the farmers, as a result, are indebted.  

Four:  Farmers do not have access to medium/long term low cost credit.  Annual loans do not reduce farm risks; and have actually increased business for moneylenders.  We need the equivalent of an HDFC, dedicated to farm loans. 

Five:  Our support prices are just not enough.  If farmers lose incentive to produce, our social system would collapse.  Dead consumers do not generate demand.  (We are not talking of trade distorting subsidies.  Only 7% of our production gets exported).

Six:  We hold 50 million tons of food grains in store.  We need to build worldclass storage facilities for holding this stock.  We need to extend storage to legume grains and pulses too.

Seven:  We need to create Special Agricultural Zones that would serve as the granaries of the future.

Dr Swaminathan elegantly summarizes that we need to add “brain” and “bank” to the “brawn” in agriculture.  Seventy years ago another great Indian, Mahatma Gandhi, urged us to marry “intellect” to “labor” in agriculture.

We need a political heavyweight with management background to focus on agriculture.  Our green revolution would turn into an evergreen revolution.

1 comment:

KAS said...

Thought provoking interview though i read it late. In my previous job with AVT, I have seen the agri situation 98-2004. completely rain dependent and land holdings are even go to 1 acre/person. If you total the bund between two land itself goes to 1000s of hectares - what we are losing. Though Govt announces free power - but irony is no power for more than 10-15 hours.Only affordable goes for diesel pumps. Pesticide companies dump their product and teaches all bad practices to farmers to get quick return. No big change has since then other than the micro credit (I don't know whether it is a bubble). The ex of white revolution is more relevant here.