Ind. Jn. of Agri. Econ.Vol. 71, No. 4, Oct.-Dec. 2016
Indicative Outlines of Subjects Selected for Discussion at the 77th Annual Conference of the Indian Society of Agricultural Economics
The 77th Annual Conference of the Indian Society of Agricultural Economics will be held under the auspices of Central Agricultural University, CPGS, Barapani, Meghalaya during October 12-14, 2017.
The following subjects are selected for discussion:
- Input Delivery System including Irrigation and Other Services and their Efficiency – Role of Financial Sector.
- Relationship between Farm and Allied Non-Farm Sectors- Issues Relating to Linkages and /Future of Agriculture.
- Risks in Agriculture and Coping with Vulnerability including Vulnerable or Disaster-Prone Regions.
- Agriculture and Farm Livelihood in Disadvantaged Areas: Introspection of Socio-Economic Issues
Research Papers on the above themes are invited from members and other paper-writers for discussion at the Conference. The scope of each of the four themes is spelt out in the enclosed Indicative Outlines below. The Indicative Outlines are also available on the Society’s website www.isaeindia.org.
Three copies of each paper (not exceeding 3500 words or 10 pages), with its Summary in triplicate not exceeding 250 words need to be submitted. The last date for the receipt of the papers at the Society’s office is May 15, 2017.
INPUT DELIVERY SYSTEM INCLUDING IRRIGATION AND OTHER SERVICES AND THEIR EFFICIENCY – ROLE OF FINANCIAL SECTOR
Over the years, particularly from the middle of the 1960s marked as the beginning of Green Revolution, Indian agriculture has undergone gradual technological transformation raising the levels of productivity, though in varying degrees across the crops and regions, and placing the country that was precariously branded as living from ship-to-mouth, in not only a position of self-sufficiency and building reasonable buffer stocks in foodgrains but even achieving a model level of exports. All this was possible through Green Revolution which was essentially a revolution in input use in the form high yielding variety (HYV) of seeds, irrigation, fertiliser and pesticides to manage crops. The shift towards adoption of the improved agricultural technology which began in mid-sixties with wheat and then rice, and a few well-endowed regions like north-west and Tamil Nadu by the middle 1990s spread to several other crops, most of the regions and more importantly even to the small-marginal farmers. The spread was not only across the crops, regions but also across to the small holders was made possible because of huge public investment in agricultural infrastructure like irrigation facilities, promotion of research and development through a network of agricultural universities and research institutions, central and state seed corporations, a strong extension network and liberal subsidisation of seed varieties and fertilisers. The major burden of input delivery during this period of almost three decades was shouldered by the state with the objective of keeping the farm costs low to enable even the small-marginal farmers to be able to access the technology, to keep the food prices low as much as to reach the goal of self-sufficiency in foodgrains.
Since the mid-1990s, though there has been growing demand for agricultural inputs, the growing burden of subsidies combined with fiscal constraints arising out of the neoliberal reforms have unfolded several changes in the institutional arrangements in the input delivery system in the Indian agriculture. Paradoxically with spread of the new technology there was an increasing dependence on purchased inputs in agriculture, while there has been declining public investment in agriculture. The share of public sector in the gross capital formation (GCF) in agriculture which was about 43 per cent in the early 1980s drastically declined to about 15 per cent by 2010-11, even as the overall GCF in agriculture as a share of agricultural GDP increased from about 9 per cent to a little over 20 per cent during the same period. The growing capital intensity in agriculture, the growing share of marginal-small farmers reaching over 85 per cent of all holdings and the relatively declining role of the state in input supply raises serious challenges to agricultural development and especially the welfare of the small-marginal farmers.
It is in this context studies on the various dimensions of the changes in the input delivery system in the Indian agriculture and their implications for efficiency in the resource use and productivity, and for the considerations of equity in terms of accessibility to the marginal and small farmers become very important.
This note briefly spells out the state of each of the major agriculture inputs and the related institutional arrangements that exist. Contributions are invited on the adequacy, efficiency and the equity dimensions of these systems and their implications for growth of production, environmental health and welfare of the farming community. Though institutions may have larger connotations, for the present purpose, the reference is to organisations, regulatory laws and contracts. In a larger sense state and markets are the major institutions. Given the legal system, in the context of the delivery of agricultural inputs one could discern four broad institutional agencies, viz., state agencies, co-operatives, private or markets agencies, and non-governmental organisations (NGOs). Here co-operatives are used in a broader sense to subsume farmers’ or producers’ organisations and ‘other’ co-operatives like mutually aided co-operatives. The following description is a difficult choice, i.e., instead of bringing-in inputs under each of these institutions, what is done is to examine institutional arrangements for the delivery each of the major inputs. This difficult choice is because there is, as of now, no institution which brings several major inputs under its cover.
The major inputs described here include seeds, fertilisers, pesticides, agricultural machinery, credit, irrigation, electricity and information or extension. Institutional mechanisms under each of those inputs is sketched below.
Supply of ‘Quality’ Seeds
The primary of quality seed in enhancing agricultural production and productivity is well recognised. It is the HYV seeds that triggered the technological revolution in agriculture and hence in the early stages of GR public research institutions, universities, state departments, the central and state seed corporations played pivotal role in the production and distribution of quality seed. With the growing demand, the constraints on public investment and with the initiation of economic reforms and the extension of liberalization measures the seed production and distribution were opened up to private sector. By mid-1990s 100 per cent private foreign investment in the seed sector was permitted. During the last decade the share of private sector in making available the certified and quality seed has been consistently on the increase. According to the official estimates by 2014-15, against the total requirement of quality seeds for all major crops amounting to 343.56 lakh quintals, the availability was at a higher level of 351.77 lakh quintals. Of the total quality seeds made available, the private sector share stood at about 57 per cent. However, in the high volume and relatively low value crops like paddy, pulses, soya and groundnut the public sector share is much higher, while the private sector accounts for over 90 per cent in high value cross pollinated high profit hybrids for crops like cotton, maize, sunflower, jowra and bajra.
The channels of distribution of public sector seed are agricultural department line department regulated outlets and Primary Agricultural Co-operative Societies (PACS). The major concerns with the public sector delivery system relate to timeliness, adequacy and transaction costs. The private sector seeds are distributed through private input dealer outlets and select seed company outlets. The major concerns relating to the private sector seed supply are about the quality assurance and the price fixation. The liberalisation of private investment in the seed sector and the enactment of the Protection of Plant Varieties and Farmers’ Rights Act (PPVFRA) in 2001 attracted several multinational seed companies and emergence of large number of national companies into seed production. While the PPVFRA protects the breeders rights and private investment, often there are complaints about the spuriousness and high prices of seeds supplied by private companies. Regulation of seed companies vary from state to state often resulting in litigations. There are guidelines by the ICAR for seed producers but their effectiveness in operationalisation remain a grey area. Contributions on the field experiences of seed production and distribution both in public and private sector would be helpful in evolving appropriate intervention. One could also examine the implications of the official productivity to further liberalisation into a relatively uncertain domain as could be seen from the following observation: “Given the lack of evidence on negative consequences from Bt and other genetically modified (GM) crops, and the significant potential productivity, food security, and sustainability benefits, the corresponding regulatory frameworks and their implementation deserve rethinking” (Economic Survey, 2014-15).
The three major chemical nutrients are nitrogen, phosphate and potassium based fertilisers. Potash is entirely imported, while nitrogen and phosphatic fertilisers are mostly produced in India and private sector is a major player in both these fertilisers, though co-operative federations and public sector together account for about 50 per cent of nitrogen based fertilisers and about 40 per cent of phosphatic fertilisers. In the early stages of Green Revolution when there was a shift needed to move from traditional inputs to more chemical nutrients to increase production, fertiliser consumption was encouraged through incorporating a liberal system of subsidies. With the spread of GR technology there has been a phenomenal increase in the fertiliser consumption. The combined used of N, P, K increased from about 55 lakh tonnes in 1980-81 to 127 lakh tonnes in 1990-91, to 173 lakh tonnes in 2001-02 and to 225 lakh tonnes by 2014-15. Almost two-thirds (66.3 per cent) was nitrogen based fertiliser while phosphatic (24 per cent) and potash (10 per cent) based fertilisers accounted for about one-third.
There are serious questions raised about the use of fertiliser in Indian agriculture. The disproportionately high amounts of nitrogen based fertiliser used are supposed to cause nutrient imbalance and the marginal returns are seen as zero or even negative. The unbalanced use of fertiliser is seen as causing soil nutrition imbalance and environmental harm. On the other hand the effective rate of fertiliser subsidies have increased phenomenally from about 40 per cent of cost of production a decade ago to almost 70 per cent presently. What more, the per hectare application of fertilisers in the case of small marginal farmers are much higher than in the case of large farmers, which may imply more damage to their soil condition, instead of reaping better benefits. Though there has been efforts to bring about a nutrient based pricing the unbalanced consumption of fertilisers appear to be continuing and more contribution on these dimensions would help evolve appropriate approaches.
Pesticides production and distribution is largely in the domain of private sector. Private producers and private input dealers are the main source of delivery. There are grave concerns regarding frequent complaints about the spurious quality. The available evidence shows the per hectare use of pesticides are more in the case of marginal-small farmers and this may be due to lack of access to proper information. The environmental, health and price dimensions are the major concerns in the case of pesticides. There is need for more contributions on the regulatory system in the production, distribution and use of pesticides.
With the increase in shift of employment from agriculture to non-agriculture there was a net reduction about 30 million workers from agriculture, within a short period between 2005-06 and 2011-12. Though much of the decline in the labour force was due to withdrawal of female workers, labour shortage in agriculture is a fast emerging reality. There has also been increasing attention to the timeliness in farm operations and the conscious effort to increase work output per unit of time. Mechanisation also helps in the growing cropping intensity and diversification of agriculture. As a result there is growing demand for mechanisation. The use of power operated implements have been on the increase even in the case of small-marginal farms. The present level of farm mechanisation in India is estimated to be around 40 per cent as against more than 90 per cent of the developed countries.
While large farmers mechanisation is a question of access to credit availability, for the marginal and small farmers it is a question of access to machinery at reasonable rents. The need for appropriate custom hiring/renting institutions can play an important role. The Punjab example of PACS running Agro Machinery Service Centres (AMSCs) initiated in early 2000s, could serve as a model for organising custom hiring of machinery at fair rates to even small-marginal farmers. AMSC, are organised by PACS by certain own resources, accessing bank loans, and availing government 33 per cent subsidy on the recommendation of State Farmers’ Commission. The experience shows that hiring costs from the AMSCs are about 15 per cent less than hiring from private operators. It is also shown that AMSCs costs work our much lower than owner operation costs because of high capital costs to owners. The result of Government of India Sub-Mission on Agricultural Mechanisation initiated in the Twelfth Plan are not known but he results of efforts by Small Farmers’ Agribusiness Consortium in organising centres of custom living of machinery needs to critically studied.
Access to institutional credit to farmers is a critical input that would not only help smooth agricultural operations but also free the farming community from the burden of high interest rates of the non-institutional sources. Beginning with 2004-05 there was a phenomenal increase in the institutional credit to agriculture from Rs. 1.25 lakh crore to Rs. 8.45 lakh crore in 2014-15. The composition of the institutional credit progressively is in favour of short term production credit which constituted almost 80 per cent. However, in spite of the phenomenal rise in the institutional credit, the reach to the farming community was much below their credit needs. According to the NSSO 70th Round (2013) Situation of Agricultural Households in India, of the total outstanding debt of the farming community institutional credit accounted for about 60 per cent. In the case of marginal farmers it was only 47 per cent and small farmers 53 per cent. This suggests the dependence of marginal-small farmers on non-institutional sources is still very high. It is in this context necessary to examine progress made in extending Kisan Credit Cards (KCCs), and the implications of removing the difference between direct and indirect lending in reaching target of priority sector lending to agriculture.
On the institutional front the success of institutional credit reaching is shown to be better wherever there is group lending like self-help groups (SHGs). Though promoting farmers’ joint liability groups (JLGs) has been on the agenda of the banks and the government, there are hardly any detailed studies examining their success or causes for failure, so that these studies could help design appropriate strategies to reach the small and marginal farmers.
Irrigation and Electricity
Almost all the surface irrigation facilities in the form of canal and tank irrigation is provided by the state, while almost all groundwater based irrigation is privately developed by the farming community. Over the years there has been phenomenal growth in groundwater based irrigation which has come to account for almost 60 per cent of the total irrigation facilities in several parts of the country. Public irrigation is heavily subsidised by the state through very low or nominal water rates. The decline in the share of surface irrigation has not reduced the overall subsidy on irrigation because much of the privately created groundwater facilities are extended irrigation with help of electricity or diesel subsidies provided by the state. In many of the states electricity for agriculture is provided free. The questions raised are that charging of low or nominal water rates for irrigation under canal systems leads to inundation and wastage of water without any consideration of efficient utilisation of water. The alternative delivery mechanisms to improve the water use efficiency and productivity include charging on volumetric basis, regulating cropping pattern with the introduction of irrigated-dry crops etc. Similarly provision of free electricity for agricultural purposes not only results in wastage of water or inefficient use but also leads to groundwater depletion, soil degradation and severe environmental damages. The alternative strategies of efficient and equitable use of water resources are widely debated. Results of such studies would enrich this section.
Information and Advisory Services
Besides HYV and the fertilisers and pesticides, the information system built on an extensive network of agricultural extension served as the basic foundation of the Green Revolution. True in most of the developed countries have been privatised. But in a country of small farmer based agriculture, in the context of rapid changes in the agricultural technology and the threat of climate change sustain agricultural growth and farmers’ welfare with notoriety of 60 per cent of farmers having no reliable advisory at all? Are there any viable, reliable and small farmer affordable private farm advisory systems emerging in any part of the country that could serve as the basis for further development? If multi-agency system is an answer are there any initiatives in this direction? What are the ICT initiatives and their potential for nation-wide adoption.
In all these major agricultural inputs and their availability and accessibility there are wide inter-state variations because of agriculture at inconvenient junctures is left to be state subject. The diversity of experiences, however, may help learn lessons.
RELATIONSHIP BETWEEN FARM AND ALLIED NON-FARM SECTORS- ISSUES RELATING TO LINKAGES AND /FUTURE OF AGRICULTURE
With technological advancement the farm and non-farm linkages are getting stronger and multi-dimensional. Dependence of farm sector on the non-farm sector and vice-versa has increased. The two sectors play an increasingly complementary role in India’s rural economy.
Historically, the famous two-sector model developed by Lewis (1954) presumed that labour productivity of agriculture is zero and it involves low cost to transfer resources out of agriculture to high productivity industrial enterprises. This was supported by Hirschman (1958) who claimed that the linkages between agriculture and other sectors were quite weak, and that agriculture does not provide direct stimulus to new activities whereas industries were found to have strong spill-over effect throughout the economy. But Johnston and Mellor (1961) emphasised that agriculture deserves recognition as a producer of food and as a potential market for industrial goods. It was argued that linkages with agriculture were potentially quite significant, and were essential for the “rural-led strategy of development.” Mellor illustrated the production and consumption linkages between agriculture and non-farm sector. The labour market interaction effect between agriculture and rural non-farm sector was also postulated. The empirical evidence on off- and non-farm linkages with agriculture tend to be limited. The input-output studies while failing to include rural non-farm activities explicitly however, indicate that “forward” and “backward” production linkages from other sectors to agriculture are often quite important. Green revolution technology during late 1960s brought agriculture to the centre stage of debate on economic growth, and to the notion that agriculture could drive economic growth (Haggblade 2007, Mellor 1976, Johnson and Killby 1975). Further, increase in farm income brought by new technology in agriculture created consumption linkages via increased consumer demand for non-agricultural goods and services. It was also felt that agriculture demand-led industrialisation can generate superior growth and equity in contrast to industrialisation strategies.
Agriculture- Non-farm Linkages: In the Indian context linkages between agriculture and rural non-farm economy have been the subject of great interest. According to agriculture centric view, rise in industrial growth without any increase in agriculture growth can be transitory and in the long run industrial growth will slow down. The second view is that with diminishing share of agriculture in the economy, industry can grow on its own and the linkage between agriculture and industry is weak. The relationship between structure of economy and growth process is well known. An examination of the sectoral growth pattern reflects that the low growth rate in the industrial sector in the seventies was accompanied with low growth in the agriculture sector. The performance of all the sectors was reasonably good during the eighties, contributing to moderate economic growth. In the nineties, the higher rate of growth in the economy was driven by the tertiary sector. The industrial growth in eighties and nineties also corresponded to a relatively high agricultural growth rate. Departing from the long-term trend, in the 2000s-decade the growth in the industry sector accelerated to the unprecedented rate of 8.2 per cent, but the agriculture sector growth decelerated. In fact, the trend in the beginning of the current decade shows that while agriculture sector growth has picked up, industry has suffered a setback and growth has slowed down. This is a clear indication of weakening of linkage effect of agriculture on non-agricultural sector. This weakening of the inter-sectoral relationship calls for a fresh look at linkages among various sectors of the Indian economy.
The production linkages between agriculture and industry arise from the inter-dependence between the two for meeting the production inputs. Agriculture is the source of inputs for many industries, notably cotton textiles, sugar and agro-processing sector. Agriculture absorbs industrial products such as farm chemicals, agricultural machinery, fertilisers, irrigation pump-sets, etc. The consumption linkages between the two sectors are defined by an increase/decrease in the consumption of industrial goods and services with enhancement/decline in agricultural incomes. The production linkages between the economic sectors can be captured from the Input-Output tables published periodically by the Central Statistical Office. The input-output model describes the inter-dependence among the different producing industries of the economy and becomes a tool to measure degree of structural linkages. In 1979-80, to produce a unit of output in the agriculture sector required 0.160 units from itself and 0.068 units from industry. Over a period of nearly thirty years, the input proportion from industry has increased nearly one and a half times (to 0.150 in 2007-08). On the other hand, to produce one unit of industrial output, industry in 1980 required 0.130 units from agriculture and 0.345 units from itself. While the dependency of industry on itself in the longer time span increased further (up to 0.398 units in 2007-08), the picture altered considerably vis-a-vis agriculture sector. There was a sharp decline in the dependence on agriculture, requiring 0.028 units for a unit of industrial output up to 2003-04. The reduced dependence of industry on agriculture could be attributed largely to the decline in the share of agro-based industries in the economy. It is apparent that the industrial sector is becoming more broad-based and diverse, leading to a decline in the dependence on agriculture as a source of inputs, manifested in the weakening of industry-agriculture linkages.
Also from 2003-04 to 2007-08, the input requirement for industrial sector from agriculture has showed an upward trend from 0.028 to 0.082 — nearly a three-fold increase. It is possible that the weightage of agro-processing sector such as food-processing (both crop and animal husbandry based), textiles, etc. enhanced in the industrial output. As compared to 2003-04, some welcome changes have taken place in the industrial economy, such as increased dependence on industry of agriculture for inputs (notably hybrid seeds, farm chemicals), fertilisers, and machinery. In the recent times, the entry of multi-national companies has been noteworthy, and has been an important factor aiding the shift in the rural and urban consumers’ preference to processed agricultural commodities. Agro-processing and retail sector are also forging ahead in the era of structural reforms. The important fact is that the per unit dependence of agriculture on services has increased from 0.016 in 1968-69 to 0.023 in 2007-08 (Mehta, 2015).
However, such trends require further in-depth investigation. Important question to be addressed is why the slowdown in agricultural growth did not pull down growth in non-farm sector. What are the driving forces for its growth and for linkages between the two sectors? It is found that association between urban consumption and non-farm sector growth improved considerably after 1993-94. The association could be due to reversal of linkage from off- or non-farm sector to agricultural growth rather than linkage effect of agriculture on RNFE.
There is a growing recognition that rural agricultural and employment diversification creates prospects for reversal of linkage from non-farm to farm. The impact of growth of off-farm economy on agricultural productivity can be two-fold – (i). direct impact through the reallocation of inputs, mainly labour and other inputs which are complementary and (ii). Indirect effects through an increase in investible surplus resulting from an increase in the total household income. Growth of off-farm employment can have an impact on farm productivity for variety of reasons, e.g., reallocation of labour time, increase in less labour intensive crops leading to introduction of labour saving devices and the use of yield raising investments in agriculture.
Growth of non-farm economy is increasingly linked to urban income and its effect on urban demand for rural goods and services as well as consumption diversification in both in rural and urban areas. Chand et al. (2009) ascertained that ten per cent growth in urban consumption was associated with 4.6 per cent growth in agricultural income and nearly five per cent growth in rural non-farm employment. Thus further elaboration is required on the impact of urban growth on the growth of agriculture. In spite of dietary diversification, the demand for cereals and pulse is projected to grow on account of increase in population and growth of indirect demand. It is also envisaged that changes in markets will result from the growing use of cereals, sugar, oilseeds and vegetable oils to produce fossil fuel substitutes, ethanol, bio-diesel, thereby improving the terms of trade for agriculture.
Factors Influencing Farm and Off-farm Sector Linkages
Technological Progress: With mechanisation, input structure of farm sector changes (i.e. increased use of modern inputs such as HYV seeds, biotechnology, farm chemicals, fertilisers, implements, irrigation etc)., leading to corresponding increase in marketed surplus. Technological progress leads to commercialisation of the farm economy, and production and consumption linkages get a boost. This also raises the agricultural demand for off-farm services such as trading services, storage, transportation, communication etc. for the distribution and marketing of inputs and outputs. These advances enable producers to adopt novel production methods to supply to lucrative markets in the developed countries. To cut short, technological progress reduces the transaction costs associated with inter-business activity and through the agriculture supply chain. But this goes hand in hands with downward trending commodity prices, volatility, threats of decline in farm profitability. This raises the important question as to how can strategy be structured to capitalise on opportunities that offer positive poverty impact. Related issue is that agricultural diversification and commercialisation may result in serious environmental costs.
Globalisation: Trade liberalisation would lead to specialisation of resource use in accordance with the regional comparative advantages. However, crop specialisation due to free trade will be guided more by global price signals than long term efficiency considerations. It has been contested that non-price factors are more important than price factors and all round specialisation in superior cereals cannot compromise broad based, regional and sustainable practices (Kashyap and Mathur, 1999). The establishment of efficient input markets and setting up of appropriate research and extension systems thus assume prominence.
The high degree of market orientation of the farm economy in India is reflected in the transformation of the farm sector (fastest growing world agricultural markets are for fruits, vegetables, livestock products and other high-value commodities). Due to trade liberalisation there is growing demand for high-value crops and the entry of multinational companies into food market (retailing) and in agro processing industries. Modern warehouses for crops and cold storages for perishables, chilling and processing of milk products are being established in the rural areas, generating non-farm employment. It is true that small farmers possess inherent advantage (abundance of family labour) to leap frog to high value commodities fetching better returns. The main constraints nonetheless are scale economies, high market risks, safety norms, availability of credit etc. It is important to study how favourable environment can be created for such producers, that will ultimately have an impact on the agricultural production.
Urbanisation and Consumption changes: Urbanisation, and infrastructure facilities have an impact on rural diversification. For instance, it is established that the benefits of horticulture induced agricultural diversification percolated to the farmers situated in villages around the urban centres. Also, areas connected with roads and highways are emerging as production centres of high value commodities. Related phenomenon is that with industrialisation, cities and towns are growing in both number and size- this process has accelerated with the advent of globalisation. The share of high value commodities in total agricultural output is higher in urban and peri-urban areas than hinterlands due to high transportation costs, absence of appropriate infrastructures etc.
With increasing incomes and urbanisation, the dietary patterns are changing in favour of high value farm output (fruits, vegetables, fishery products, milk, meat eggs etc.) causing change in demand for agricultural products. The fact that has attracted the attention of the agricultural economists and policy makers is the declining per capita direct consumption of cereals both in urban areas and in rural areas. The consumption of high value food commodities has increased both in urban and rural areas and even amongst the poorest households. The fallouts of the income induced diet diversification as well as diet-globalisation influenced by urban growth are worth examining for agricultural sustainability aspect. It would also be useful for policy to examine the trends and changes in farm output and the constituent sub-sectors to get an idea of the changes taking place in the farm sector with the aid of ‘diversification’ and ‘transformation’ indices.
Agro-based industry and Retail trade: Agro-industrial development for value addition is a logical extension of agricultural development owing to an expanding network of forward linkages. Agro-processing sector has grown substantially during the post-reform period and contributed to income, employment and export. Much of this is in the unorganised sector. The entry of more integrated modern food chains could have an impact on the employment, particularly women’s employment. Procurement from farmers may help farmers secure an assured price, hence reducing risks of farming. The questions that need to be discussed are: will regional specialisation induced by food chains lead to unsustainable farming practices? What would be the impact on farmers’ incomes and sustainability? Will there be efficiency gains in Indian agriculture by organised retailing and development of forward linkages? Adequacy of policy environment and infrastructure networks for promoting vertical coordination and encouraging retailing and agro-processing sector also require to be examined. And the constraints therein too merit consideration alongwith the new institutional arrangements for this.
In the end it can be stated that to promote agricultural diversification and to strengthen the farm-firm linkages through appropriate policies and institutional arrangements (such as co-operatives, corporate farming, contract farming, warehouse receipts and forward markets) are utmost required. Such instruments enhance farmers’ access to technologies and information on markets, reduce transaction costs and induce vertical coordination with the markets.
Overall the papers can address the following questions as raised in the above narrative:
- Examine linkages between agriculture with other sectors of the economy.What are the driving forces for agricultural sector growth and for linkages with non-farm sectors?
- What are the drivers for influencing the supply side and the response of the production environment to meet the changing demands.
- How consumption pattern is changing and the drivers for the change on the demand side (eg., diversified primary sector, globalisation, urbanisation).
- Increased diversification and commercialisation of agriculture is linked to volatile commodity prices, threats of decline in farm profitability along with threats to sustainability and environmental costs. In this context examine how policies can be structured to capitalise on opportunities being offered.
- Compressing the supply change, also vertical integration decreases transaction costs for smallholders and leads to higher economic efficiency. What are the constraints in this transition and how farmers can be linked to agribusiness to share the benefits.
RISKS IN AGRICULTURE AND COPING WITH VULNERABILITY INCLUDING VULNERABLE OR DISASTER-PRONE REGIONS
India is predominantly an agrarian economy in terms of dependence of over half of its work force on agricultural sector for their living. It is well known that while the share of agriculture in gross domestic product has substantially decreased, similar decline in the dependence of workforce on agricultural sector has been rather very slow, resulting in slow growth in incomes of those dependent on agriculture for their livelihoods. Though the agricultural sector witnessed changing of farming practices, a reasonably good growth in crop output, and decline in poverty; but these were actually confined to a few regions and benefitted only a few groups of farmers, thereby resulting in rising inequalities. Farmers suffer with three kinds of disadvantages, i.e., (a) economic disadvantages in terms of landlessness, near landlessness, small size of land holdings and market related uncertainties; (b) social disadvantages in terms of gender, caste and ethnicity and related access to opportunities; and (c) ecological and regional disadvantages, such as farmers located in arid, semi-arid, rainfed, disaster-prone, poorly irrigated or geographically remote and inaccessible areas.
Related to such disadvantages, farmers in India deal with a significant amount of risks and uncertainties every year, which are numerous and diverse. These sources range from events related to climate and weather conditions to animal diseases; from commodity prices to changes in input prices; from technological risks to human risks; and from financial uncertainties to policy and regulatory risks. In recent years, risks related to climate change, frequent droughts and consequent crop failures have added to the woes of farmers. There is a little research about the full wallop of droughts as well as disasters on agriculture and its allied sub-sectors− crops, livestock, fisheries and forestry.
Various studies have attributed the prevailing agrarian distress mainly to the outcome of the liberalisation policies which prematurely pushed the Indian agriculture into the global markets. Reasons that have contributed mainly to agrarian crisis are: heavy dependence on expensive output and inputs, changed cropping pattern, growing costs of cultivation, volatility of crop output, market uncertainties, dearth of remunerative prices, indebtedness, negligence of agriculture by the government, and reduction of public investment. Additionally, technological factors, ecological, socio-cultural and policy related factors have contributed to the crisis. The growing urbanization and rapid expansion of infrastructure have created another set of challenges with farmers losing their land and livelihoods, and are ill equipped to cope with the situation.
The coping mechanisms to reduce such risks and vulnerabilities are largely in the domain of diversification of activities into on-farm and off-farm, integration of farm produces into value chains, technological interventions, insurance of farm produces, and minimum support prices to farm producers by the government.
The available literature shows three types of strategies to deal with risks and smooth household incomes by farmers, i.e. risk avoidance, risk transfer and risk reduction. An example of avoiding risk is moving out of a disaster-prone area. Further, transferring risk to a third party can be done through insurance. Examples of risk reduction are diversification of income and economic activities, and saving money or food. Micro insurance is also a risk management strategy and it entails that the poor pay regular small amounts of premium as a compensation for the uncertainty of a high exceptional loss. Migration is yet another strategy by the households to improve their income and mitigate agricultural risks.
Several development strategies have been implemented towards the development of agriculture and reducing risks and vulnerabilities of farmers. More recently, in 2016-17 annual budget, the Government of India has targeted to double the income of farmers by 2022 and devised a series of financial provisions for the development of agriculture and allied sectors. However, he past experiences show that there still exist several gaps in the approaches, strategies, access and equity towards this end. In the last few years, India has witnessed good growth in crop production and reduction in rural poverty ratio, but this development was not evenly distributed among various regions and sections of the Indian society. Only specific regions and few groups of farmers have been benefited by the improvement in the agriculture development. This shows a major concern for policy makers as it questions the issue of ‘identifying’ and ‘targeting’ of regions and groups. There have been numerous policies over the period in India for reduction in problems in rural areas, specifically agriculture sector. These included Intensive Agricultural Area Programme (IAAP), Small Farmers Development Authority (SFDA), Drought Prone Area Programme (DPAP), Desert Development Programme (DDP) etc. More recently, programmes like Rashtriya Krishi Vikas Yojna (RKVY), National Food Security Mission (NFSM) have been initiated to target the smaller and marginal farmers. There is diverse impact of these policies on different regions and groups. The policies that are currently designed are more favourable for well-endowed and irrigated areas, which excludes large number of farmers who work in backward regions or who belong to lower social classes, thus inadequate to reduce their vulnerabilities. The policies for agricultural development in disaster prone mountain areas are again adopted on a piecemeal basis with least concerns for sustainability.
The researchers in this theme can contribute their papers on following indicative sub-themes apart from the above overarching issues:
- Risks and vulnerabilities in agriculture—their nature, magnitude and impact on farm employment and income.
- Small and marginal farmers, income, indebtedness and agrarian distress.
- Diversification of livelihoods in rural areas.
- Climate change, droughts and livelihoods.
- Disasters and their impact on farm based livelihoods.
- Government policies and institutional support for agricultural development and reduction in vulnerabilities.
- Agricultural pricing policy, minimum support prices, crop insurance and their impact.
AGRICULTURE AND FARM LIVELIHOOD IN DISADVANTAGED AREAS: INTROSPECTION OF SOCIO-ECONOMIC ISSUE
The nature of agriculture and the livelihood process based upon it are diverse across the different agro-ecological zones/regions or states of India. Some of these zones/states/areas are considered to be agriculturally disadvantaged based on their topography and agro-ecology. These areas are characterised by difficult terrain, harsh climate and poor resource endowments. The developed production systems are generally high input based with some degree of mechanisation and irrigation facility; and the farmers are early adopters of different modern agricultural technologies. In contrary, the agricultural production systems in disadvantaged areas like the hills and mountains, coastal, dry and arid regions are underdeveloped; low/or zero level of input use, no farm mechanisation, and non-normal soils (e.g., highly acidic soils in hills or saline soils in coastal region) contribute to lower crop productivity. Moreover, poor infrastructure, history of lower level of policy support, higher frequencies of natural calamities like drought, flood or cyclone, add to the misery of agriculture and people dependent on it. These indicators of disadvantaged areas are often overlapping. Papers under this theme are expected to introspect upon different socio-economic vis-à-vis agricultural issues relevant to the disadvantaged zones /regions/areas of India.
All the farm households especially in the hills and coastal areas cultivate a large number of crops, some being wild species are not available in the regular modern markets, in homestead farm primarily for home consumption. This diversification of crops may not be for income generating purpose but for sustenance of household food security or livelihood. They barter their produce as well as seeds with neighbours or neighbouring villages in the remote locations. So, studies may be directed to understand the significance of homestead farming in the disadvantaged areas. Cereal crops like rice and maize are the main crops cultivated in the low or medium hills and the coastal regions. Winter vegetables, viz., cole crops: cabbage, cauliflower, broccoli; beans, tomato, carrot etc. are commonly grown in these areas. Potato is widely cultivated in Himachal Pradesh and Meghalaya. In North Eastern (NE) Himalayas ginger and turmeric are known for its quality and medicinal values. Large cardamom is cultivated at the comparatively cooler places at higher altitudes of Sikkim and Darjeeling. Fruit crops and floriculture play a great role in the hills and mountains. Fruits like kiwi, passion fruit, citrus, pineapple, walnut, peach, pear, apple, saffron etc in the hills; ber, amla, date palm etc. are common in the arid region. Many of these horticultural crops generate excellent returns to the farmers of these regions but the number of farm families engaged in these high value crops in large area which can generate sufficient marketable surplus is minuscule to the total number of the farmers. It will be important to understand the contribution of these crops in the income of the households at the micro level as well as contribution to the state or regional economy at the macro level. These crops not only have the potential to promote agribusiness but also they contribute to the nutritional security of these regions. Some of the states have taken up the initiatives to develop agro-tourism centre though the cases are limited. Papers may try to highlight the agri-horti-business potential and their role in the developmental trajectory of these disadvantaged areas.
Livestock and fisheries are an integral component of the farming systems and act as a cushion to the external shocks. The small ruminants are important in the arid regions for providing alternative livelihood to the tribal farmers of deserts of Rajasthan and Kutch of Gujarat. In coastal region of Sundarban the livestock dynamics is changing due to shift from cattle to small ruminants like Black Bengal goat and Garol sheep. Transhumance pastoralism, a unique livestock rearing system, is an age old tradition in Sikkim, Arunachal Pradesh, Ladakh etc. The banni buffalo of Kutch, mithun in Nagaland, yak in Arunachal Pradesh, Sikkim and Ladakh, sheep in Ladakh add to the diversity. These systems not only provide alternative livelihood opportunities but also enhance the social prestige of the rearing communities such as Maldhars of Gujarat, Raika and Gujjars of Rajasthan, Van Gujjars of Uttarakhand, Gaddi of Himachal Pradesh, Bakkarwal in Kashmir, Toda and Konar in Tamil Nadu; but evidences show that the younger generations are not interested in these enterprises anymore. Cold water fishery at the high altitudes, captured fishery in Loktak lake in Manipur or Dal lake in Srinagar, or open access fishery in the rivers and brackish water fishery in coastal areas are lifeline for the fishermen communities. These water bodies are under different biotic and abiotic stresses like climate change, population pressure, encroachment, increased tourism etc. Paper writers may try to capture the economics of these enterprises, challenges faced, strategies to safeguard them and possibility of mainstreaming these communities.
Distinct location-specific traditional farming systems can be identified in the disadvantaged areas. In the NE hills (excluding Sikkim) and in the hills of Karnataka and Andhra Pradesh jhum or shifting cultivation is still practiced though the area under jhum is declining due to government efforts. The shortening of jhum cycle is deteriorating the fertility of land and the jhum productivity. There are two schools of thought – one says jhum cultivation should be stopped and the other says the productivity of jhum land need to be improved as it is the way of life for the villagers of remote hills where alternatives are non-existent. They say it is an ingenious system of organic multiple cropping suited to high rainfall hilly areas. Alder based jhum agriculture In Nagaland is considered to be better in relation to soil erosion. Panikheti/Zabo in Nagaland is another form of farming system in which water is kept in the rice field throughout the cultivation period and fish is cultivated in the same field. Forestry, livestocks and water harvesting structures are other component of this system. Similarly, Apatani paddy cum fish cultivation is practiced by Apatani community in Zero of Arunachal Pradesh. These traditional systems better utilise the natural resources. Comparative study will be helpful to understand the viability and sustainability of these traditional farming systems and livelihood based upon them in the changing socio-economic context. Papers may elicit how policy provisioning can help to improve the productivities of these systems and improve the livelihood of the farmers engaged in these farming systems.
In the NE hills, famers traditionally do not use any chemicals and Sikkim has been already declared as organic state in 2016. Other NE state governments are also promoting organic agriculture which is considered to be sustainable. Now question arises whether the organic agriculture will be able to feed the population of these regions or will it be sufficiently remunerative for the famers in absence of dedicated markets for the produce. The old tea gardens in the NE and southern hills have suffered due to deterioration of the soil conditions as traditionally huge amount of chemicals are applied on tea plantations; and for many of them going organic is the only option for survival. Similar is the case for apple orchards in J&K and Himachal Pradesh. The dilemma is between sustainability and profitability. Many of the researchers say that in long term organic agriculture will be profitable too. The agricultural economists can work in these issues to suggest the policy decisions. They can also find out whether the agriculture in the disadvantaged areas are economically, socially, ecologically sustainable? What is the carrying capacity of the agricultural production system that may define the future of the agriculture of these regions? Conflict between ecological and economical sustainability is well known. So researchers may focus on what can be the trade off point. Not only farm level but district or state level sustainability assessment is also necessary for policy formulation.
Climate change is one of the biggest externalities to agriculture and the effect may become substantial in the disadvantaged areas due its fragile ecosystem and poor adaptation capacity making these regions comparatively more vulnerable. It has huge potential to affect the agriculture (i.e., crop as well as livestock) and the farming community and the livestock keepers. The effect may be positive or negative; like some areas (e.g. high altitudes) have become now suitable for some crops due to low snowfall and increase in temperature. Water is the most important natural resource input in agriculture in these disadvantaged areas, and become critical in the event of climatic variability. The migration time, duration and distance travelled are also changing in case of transhumance pastoralism due to increase in temperature in the Himalayan region. The effect of high temperature-humidity index (THI) and frequent cyclones in coastal regions heavily come upon the cattle rearing. It is necessary to estimate the impact of climate change on the disadvantaged agriculture and how it makes the farming community vulnerable. Researchers can find out whether the traditional farming systems are more resilient to climate change or not. Answers may be sought to the question whether the extension interventions in terms of promoting new varieties, crops or agronomic practices are helping to adapt and cope up with the changing climate.
The performances of these sectors have direct bearing on the livelihood and food security of the households as well as the regions. The functioning of public distribution system (PDS), newer schemes related to agriculture like distribution of soil health cards, Tribal Sub Plan (TSP), employment guarantee schemes (e.g. MGNREGA), and other schemes play a crucial role in the developmental process of these areas. The role of government agencies, Self Help Groups (SHGs), Farmer Groups or Non-Governmental Organizations (NGOs) cannot be over-emphasised in implementing them on the ground. Papers are invited eliciting the importance of these schemes in promoting agricultural livelihood and the role played by different agencies.
Small land holding, low use of input, use of traditional varieties, dependency on monsoon, absence of proper marketing facilities, low productivity lead to very low level of marketable surplus in these regions. Investigation is needed to understand that the price discovery mechanism for agricultural produce in this situation, which may not be purely based upon the demand and supply. The food grain available at PDS at lower price stabilises the food grain prices at the market. The local village market or roadside tiny shops where consumers stop to purchase the vegetables in remote locations has its own importance in running the local village economy. Hence, in this context the question of profitability is really an issue for the growth of agriculture or it is just a way of living and survival for the majority of the farmers in these areas?
Development of agriculture in any country is interlinked with the extension programmes implemented by the government. The success of the strategies depends upon its fitness to the behaviour of the target audiences and characteristics of the geographical terrains. Location-specific and gender friendly technologies need to be developed and diffused for the growth of agricultural sector and improving the livelihood of the farmers. For awareness creation and adoption of new technologies the extension strategies need to be modified as per the changing requirements. The cost benefit analysis is required before up scaling the ICT based extension further. Studies may be conducted on suitability and efficiency of different extension strategies for better dissemination of information and adoption of agricultural technologies in these areas.
Hence, the researchers can write empirical papers on macro and micro perspectives or conduct case studies on the following, but not strictly restricted to, topics relevant to disadvantaged areas.
1. Profitability and sustainability of different farming systems – their role in income generation and livelihood sustenance – sustainability versus profitability – conflict between economic or ecological issues
2. Livestock rearing, fishery sector in livelihood security – potential of spice, fruit, flower crops and agri-tourism in promoting agri-horti business
4. Role of different government schemes (PDS, soil heath card etc.) on agricultural development and livelihood security – role of different agencies such as government departments, farmer groups, NGOs etc.
5. Effect of climate change on disadvantaged agriculture – resilience of traditional farming systems- adaptation strategies.
6. Role of formal and informal markets for growth of agriculture.
7. Suitability of different extension strategies in the disadvantaged areas.