Food farming Issues

BY
MOHAN GURUSWAMY
FORUM FOR STRATEGIC INITIATIVES
NEW DELHI
The Looming Crisis in India’s
Agriculture.
06/12/17Centre for Policy Alternatives
1

The Green Revolution.
2
Rice Wheat
Coarse
Cereals Pulses
Total food
grains
Growth
Rate
1950-51 20.58 6.46 15.38 8.41 50.82 -
1960-61 34.58 11 23.74 12.7 82.02 4.90
1970-71 42.22 23.83 30.55 11.82 108.43 2.83
1980-81 53.63 36.31 29.02 10.63 129.59 1.80
1990-91 74.29 55.14 32.7 14.26 176.39 3.13
2000-01 84.98 69.68 31.08 11.07 196.81 1.10

Demand/Supply Gap in Million Tons
3
Rice Wheat Pulses Sugar Oilseeds
2004-05 2.3 -4.2 -0.9 -4.1 -4.6
2005-06 6.7 -0.4 -1.0 0.7 -1.9
2006-07 6.6 2.4 -1.6 8.3 -6.2
2007-08 6.2 2.2 -2.6 5.1 -4.0
2008-09 P 6.0 9.8 -2.2 -8.1 -4.7
2009-10 P -2.8 2.1 -2.3 -7.5 -6.0
P: Projected (-): Indicates shortage
Source: Estimated from data from Ministry of Agriculture and US
Department of Agriculture

Per-capita Availability of Food and Per-capita GDP.
4

The Importance of Agriculture in India.
Provides employment to 56.7% of the workforce of
over 460 million. Work force growing by about 8
million a year now.
Provides livelihood to 56% of population
Accounts for 18% of the GDP ($ 1.142 trillion in 2007
or $205 bn.). It was 42.8% in 1980 and supported
almost 60% of the population.
India’s population will stabilize around 2060 at 1.8
billion.
To support a 8-9% GDP growth, Agriculture needs to
grow at 4%.
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5
Centre for Policy Alternatives

A demographic dividend or burden?
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6

About 51.09% of the land is under cultivation.
21.81% under forest and 3.92% under pasture.
Built up areas and uncultivated lands occupy about
12.34% .
About 5.17% of the total land is uncultivated waste, which
can be converted into agricultural land.
The other types of land comprises up 4.67%.
The Intensity of Agriculture.
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7

Land use in India.
9

Potential and Actual Growth Rates in Agriculture.
10

What went wrong in the 90s?
The production growth has slumped from 3.19% in
the 80s to just 1.73% in the 90s. It is about 1.6% in
the 2000’s.
The growth in yield has halved from 2.56% in the
80s to 1.02% in the 90s
India’s yield rates are way behind other agricultural
countries
Per capita availability of cereals and pulses largely
unchanged since 1980, at about 420 and 36 grams
respectively.
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12

The current dismal performance of Agriculture.
13

Growth of Yield of Foodgrains (kg/ha) %/year.
14

Some International comparisons
India 2318
Brazil 3095
China 4904
Egypt 7269
Kenya 1662
Malaysia 3172
Mexico 2817
Poland 3087
Turkey 1949
USA 5886
Source: Dun & Bradstreet
Country
Agricultural
Productivity
(Kgs/hectare)
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15

Why Has Agriculture Suffered?
1. Declining Investment
2. Privatization of Irrigation Development
3. Fragmentation of Landholdings
4. Misdirected Subsidies
5. Inadequate Agricultural Infrastructure
06/12/17
17

Declining Investment in Agriculture.
Public investment in agriculture, in real terms, had
witnessed a steady decline from the Sixth Five-Year
Plan onwards. With the exception of the Tenth Plan,
public investment has consistently declined in real
terms (at 1999-2000 prices) from $ 14.20 bn
( Rs.64,012 crores) during the Sixth Plan (1980-85) to
$11.60 billion (Rs 52,107 crore) during the Seventh
Plan (1985-90) , $10 bn (Rs 45,565 crore) during the
Eighth Plan (1992-97) and about $9.5 bn (Rs 42,226
crore) during Ninth Plan (1997-2002).
Share of agriculture in total GCF at 93-94 prices has
halved from 15.44% to 7.08% in 2000-01
06/12/17
18

Declining Investment in Agriculture.
19

Declining Plan outlays for Agriculture & Irrigation.
I Plan (1951-56) 2378.00 14.89 19.14 34.02
II Plan (1956-61) 4500.00 11.13 13.10 24.24
III Plan (1961-66)) 8577.00 12.70 12.84 25.54
Annual Plans (1966-69) 6625.00 16.71 15.59 32.30
IV Plan (1969-74) 15779.00 14.70 16.34 31.04
V Plan (1974-79) 39426.00 12.34 10.71 23.05
Annual Plan (1979-80) 12177.00 16.40 30.82 47.22
VI Plan (1980-85) 97500.00 5.84 12.63 18.47
VII Plan (1985-90) 180000.00 5.85 10.93 16.78
Annual Plans (1990-92) 123120.00 5.89 7.77 13.67
VIII Plan (1992-97) 434100.00 5.18 8.44 13.62
IX Plan (1997-2002) 859200.00 4.94 7.41 12.35
X Plan (2002-07) 1525639.00 3.86 6.77 10.63
Share of
Agriculture
& irrigation
Source: Planning Commission
Plans
Total Plan
outlay
Share of
Agriculture
and Allied
Share of
Irrigation
06/12/17
20

Where is the money going?
In 2001-02 almost half of the amount allocated to
irrigation was spent on power generation
While it makes more economic sense to focus on
minor irrigation schemes, major and medium
irrigation projects have accounted for more than
three fourth of the planned funds
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21

Irrigated and Rainfed Areas.
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22

Detailed Land use Map of India.
06/12/17
23

India has nearly 30% of global annualized irrigated areas, and is the leading
irrigated area country in the World.
The total area available for irrigation (TAAI) for India at the end of 2000 was
between 101 Mha and 113 Mha.
41 percent was from major irrigation (major and medium irrigation schemes);
and
59 percent was from minor irrigation (groundwater, small reservoirs, and
tanks).
38 percent was from surface water and 62 percent was from groundwater.
The GIAM estimates about 67 percent of India’s cropland as irrigated and the
rest 33 percent rainfed.
Breakup of Irrigation in India.
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24

Privatization of irrigation development.
The entire increase in irrigated acreage in the last
decade has been facilitated by mostly private
investments in tube-wells and wells
Share of government canals and tanks in net
irrigated area has come down from 45.54% in
1980-81 to just 35.39% in 1999-00
Share of tube-wells and wells in net irrigated area
has risen from 45.70% in 1980-81 to 58.76% in
1999-00
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25

% of Irrigated Acreage by Source.
Govt Private
1980-81 37.32 2.17 8.22 45.70 6.59
1985-86 37.54 1.11 6.60 48.77 5.98
1990-91 35.34 1.00 6.13 51.42 6.11
1995-96 31.01 1.05 5.84 55.61 6.49
1999-00 30.66 0.78 4.73 58.76 5.08
Years
Source: Ministry of Agriculture
Other
Sources
Tanks
Tube-wells
and wells
Canals
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Sources of Irrigation.
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27

Irrigated area by source in 2000 (Area ‘000 ha.)
Canals Tanks Well Tubewell Other Sources Total
3348 940 1015 3319 835 9457
(35.4) (9.9) (10.7) (35.1) (8.8) (100.0)
3061 682 1611 3013 717 9085
(33.7) (7.5) (17.7) (33.2) (7.9) (100.0)
3645 654 2311 3555 806 10971
(33.2) (6.0) (21.1) (32.4) (7.5) (100.0)
3851 503 2845 3442 644 11286
(34.1) (4.5) (25.2) (30.5) (5.7) (100.0)
1762 178 1305 1364 296 4905
(35.9) (3.6) (26.6) (27.8) (6.0) (100.0)
15667 2957 9088 14694 3297 45704
(34.3) (6.5) (19.9) (32.2) (7.2) (100.0)
Major Size
Classes
Area Irrigated By
Marginal
Small
Semi-Medium
Medium
Source : Fertiliser Statistics, 1999-2000, The Fertiliser Association of India.
(): indicates percentage
Large
All Size Classes
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Distribution of operational holdings- sizewise.
1970-71 1990-91 1970-71 1990-91 1970-71 1990-91
35682 63389 14545 24894 0.41 0.39
(50.6) (59.4) (09.0) (15.1) - -
13432 20092 19282 28827 1.44 1.43
(19.1) (18.8) (11.9) (17.4) - -
10681 13923 29999 38375 2.81 2.76
(15.2) (13.1) (18.4) (23.2) - -
7932 7580 48234 44752 6.08 5.90
(11.3) (07.1) (29.8) (27.0) - -
2766 1654 50064 28659 18.10 17.33
(03.9) (01.6) (30.9) (17.3) - -
70493 106637 162124 165507 2.30 1.55
(100.0) (100.0) (100.0) (100.0)
Category
Number ( ' 000 ) Area ( ' 000 Hectares) Average Size
Marginal (Less
Than 1 Ha)
Small (1.0 to 2.0
Ha)
Semi-Medium
(2.0 to 4.0 Ha)
Medium (4.0 to
10.0 Ha)
Large (10.0 ha
and above )
Total
( ) : Percentage share of various categories to the total (vertical) of a particular year
Source : Fertiliser Statistics, 1999-2000, The Fertiliser Association of India
06/12/17
29

More holdings, more area but smaller.
30
Year Number of
holdings (in
million)
Area operated
(in million
hectares)
Average
area per
holding
(in
hectares)
1970-71 71.0 162.1 2.28
1976-77 81.6 163.3 2.00
1980-81 88.9 163.8 1.84
1985-86 97.2 164.6 1.69
1990-91 106.6 165.5 1.55
1995-96 115.6 163.4 1.41
Holdings at a glance, India

Distribution of land-holdings and area owned.
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31

State-wise, average size of holdings.
32

State-wise number (000’s) of holdings by size.
33

Inadequate Agricultural Infrastructure.
About 70% of India lives in rural areas and about
40% of rural habitations are not connected by all-
weather roads
Lack of proper transport facility and inadequate
post harvesting methods, food processing and
transportation of foodstuffs has meant an annual
wastage of $12 billion (Rs. 50,000 crores), out of
an out of about $83 billion or Rs.370,000 crores.
06/12/17
34

Misdirected Subsidies.
 While direct investments in the sector have
come down over the last decade, indirect
support (subsidies) to the sector has risen
rapidly in that period.
1. Food subsidy
2. Power subsidy
3. Fertilizer subsidy
06/12/17
36

Food Subsidy.
There is a pronounced bias in the government’s
procurement policy, with Punjab, Haryana, coastal
AP and western UP accounting for the bulk
(83.51%) of the procurement
The food subsidy bill has increased from Rs. 24.5
bn in 1990-91 to Rs. 175 bn in 2001-02 to Rs. 562
bn in 2009-10 or about 1% of GDP.
Instead of being the buyer of last resort FCI has
become the preferred buyer for the farmers
The government policy has resulted in mountains
of food-grains coinciding with starvation deaths
06/12/17
37

Power Subsidy.
The subsidy provided to agricultural consumers has
quadrupled from Rs. 73.35 bn in 1992-93, to Rs.
304.62 bn in 2001-02.
Free or highly subsidized power has meant that
farmers have slid to the bottom of the State
Electricity Board’s priority list
While the subsidy was launched to reach the lower
rung farmers, it has mostly benefited the well-off
farmers
06/12/17
38

Fertilizer subsidy.
The fertilizer subsidy has ballooned from a
mere Rs. 5 bn in 1980-81 to Rs. 132.50 billion
in 1999-00, and to Rs.1292.43 billion in 2008-
9
The fertilizer pricing has meant that it is a
producer subsidy and not a consumer subsidy
It has also resulted in an sub-optimal fertilizer
mix with too much urea being utilized
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39

Inadequate Agricultural Infrastructure.
About 70% of India lives in rural areas and about
40% of rural habitations are not connected by all-
weather roads
Lack of proper transport facility and inadequate
post harvesting methods, food processing and
transportation of foodstuffs has meant an annual
wastage of $11 bn (Rs.50,000 crores out of $82 bn
or Rs.370,000 crores output).
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40

The Indian subcontinent boasts nearly half the world's hungry people. Half
of all children under five years of age in South Asia are malnourished, which
is more than even sub-Saharan Africa.
The rural economy in S Asia is predominantly land based, absorbing nearly
70% of the total population. However, tough growing conditions for crops,
continuous fragmentation of holdings in these areas make them extremely
vulnerable to climatic fluctuations and low yield.
In the so-called “poverty square” of South Asia, more than half of the
farmland consists of marginal and small farms less than one hectare in size.
Moreover, because of rapid population growth, the average farm size in this
region has decreased by half every 15 years since 1960.
In India approximately 92 million households or 490 million people are
dependent on marginal or small farm holdings as per the 2001 census. This
translates into 60 per cent of rural population or 42 per cent of total
population.
The effects of climate change in the form of increased frequency and
intensity of drought and flood in the region threatens to affect most these
poor farmers, according to the United Nation's report 'The State of World
Population, 2009.
The flipside of the great growth story!
41

The writing on the wall!
42
Year GSAfg* Production
of foodgrains
according to
time trend
Production of
foodgrains if the
growth of
irrigation is 50 %
more per year.
2010 128.25 235.98 271.89
2025 125.06 268.88 322.65
2050 112.72 271.65 334.79
Projected values of gross sown area and production of food grains* in 2010, 2025 and 2050.

The central Indian tribal homeland, located between 18 and 25 degrees north
of the equator across the Indian subcontinent, operationally cover nearly 100
districts in eight states of the country. These district together account for about
55 million tribal people (roughly 70 per cent of India’s tribal population)
spread over 68 million hectares of geographic area.
They form about 7% of Indian population, however their share is very high
among the vulnerable groups like poor, hungry and small and marginal
farmers. An FAO study indicates a declining role of agriculture in household
food security which lasts for 2 to 6 months of the year for the majority of tribal
farming households. As per the study an average household in upland systems
is only able to meet 20 to 40% of their food requirements; those in the middle
system 30 to 40% and those in lowland systems between 50 to 70% of their
needs.
In the past, most tribals were able to cover most of the shortfall with foods
gathered from the forests. Forest degradation and curtailed forest access has
reduced the availability of natural foods, compelling these communities, to
depend more on purchased foods to meet their minimum survival needs.
Sharp rise in international cereal prices of late (2007-08) had also a profound
impact on the food security and increased vulnerabilities of the poor in S Asian
countries.
06/12/17Centre for Policy Alternatives 43
The plight of India’s tribal people.

Comparative Food Prices.
49

Comparative Food Prices.
50

MOHAN GURUSWAMY
CENTRE FOR POLICY ALTERNATIVES
NEW DELHI
Email: cpasind@yahoo.co.in
www.cpasindia.org
Thank you!
Centre for Policy Alternatives 06/12/17
52

The Red Corridor.
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53

Overlap of tribal homelands and mineral rich areas.
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54

Overlap of forest and mineral areas.
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55

•Net irrigated area (NIA) to Net sown area (NSA) is 14.98% in tribal area against
33.59% in Rest of India.
•Net area irrigated by major irrigation systems is 3.66% against 9.89% in Rest of
India.
•Net area irrigated by minor irrigation is 16.83% against 42.28% in Rest of India.
•Groundwater is 11.32% in tribal areas against 24.28% in Rest of India.
• Surface lift irrigation is 5.51% in tribal areas against 18.00% in Rest of India.
• Population below poverty line is 42.67% in tribal areas against 26.00% in Rest of
India.
• Value of agricultural output (In Rs/ha) is Rs. 2697.55 in tribal areas against Rs.
8578 /ha. in Rest of India
Comparison of Irrigated area in Tribal & non-tribal areas.
56

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