Too many Indians down on the
farm By Siddharth Srivastava
NEW DELHI - The government had to import
wheat to meet a shortfall in production, bringing
to focus an aspect of the Indian economy not often
discussed - agriculture, on which depend the
livelihoods of 600 million people (of a population
of more than a billion), on 250 million hectares
of farmland, which is an average of less than half
a hectare per person.
Ironically, some
sectors of India's economy are recording high
attrition rates due to job-hopping and acute
manpower shortages, pointing to a failure to
transfer human resources from agriculture to the
booming services sector that accounts for more
than 50% of India's gross domestic product now.
Despite the overwhelming
preponderance of the
population on the farm, agriculture contributes
less than 25% of GDP.
Corporate India has
registered the highest increase in salaries in the
world, non-resident Indians have overtaken Chinese
expatriates in the volume of remittances, and
there are visions of an Indian economy growing at
10% a year, though that prospect has been dampened
by the rise in oil prices. GDP growth in the past
three years has been more than 8%. Yet food
production and agricultural incomes have
stagnated.
Last year the farm sector grew
at 2.3% compared with industry at 8.3% and
services at 9.8%. To make matters worse, the
Meteorological Department has forecast a bad
monsoon this year, which could mean drought in
several areas. In the recent past, agriculture
produce has dipped dramatically in the face of
inadequate rains.
In 2002, India could
boast of huge grain surplus of 63 million tons,
the bulk of which was exported at a loss. Today,
wheat stocks are almost zero, with the government
having to import 3.5 million tons, which is
India's single largest wheat-import program in
several decades. The government is also
considering allowing user industries (cookies,
bread manufacturers, flour millers) to import
wheat directly. At the current rate of production
and consumption, the country is likely to end up
being a major importer of food grains in two or
three years.
Grain output in 2005-06 was
estimated to be at the 209-million-ton level
reached six years ago; wheat production peaked at
76.4 million tons in 1999-2000 and then declined
with this year's harvest estimated at 72 million
to 73 million tons. Rice production peaked at 93.3
million tons in 2001-02 and is estimated at 87
million to 88 million this year. The output of
pulses has stagnated at 13 million to 14 million.
Only coarse-grain production has risen a bit
because of new hybrid varieties.
Demand
continues to burgeon in the face of rising
population and incomes. The annual per capita
income in India has risen 62% in the past six
years, resulting in a 9% increase in consumption
of wheat in the past three years. ITC Foods plans
to double purchases of wheat amounting to a
million tons this year to feed rising demand for
cookies. Almost 2 million tons of cookies are
produced in India each year and consumption is
growing at 10-12% annually.
While experts
point at the failure of agricultural universities
to come up with new hybrid varieties of seeds to
increase productivity, dependence on the monsoon
and inadequate irrigation facilities, a distorted
farm regime is seen as a bigger problem.
Politically motivated benefits to farmers in the
form of free electricity and fertilizer subsidies
have resulted in environmental degradation of
land, causing production to flatten.
Because of free rural power, farmers pump
groundwater indiscriminately, and that has
resulted in wells drying up, water tables
plummeting and a skewed cultivation profile, such
as growing of water-guzzling sugar cane in
Maharashtra or rice in Punjab, both areas of low
rainfall. Cheap chemical fertilizer requires more
water and makes the soil fallow over time.
Farmers in India produce an average of
between 2.5 and 3 tons of wheat per hectare,
compared with about 5 tons in the US and China.
According to experts, if Indian wheat yields can
be increased to 3.5 tons per hectare, that would
raise production to 93 million tons without area
expansion, but this would require a big
improvement in the quality of seeds, fertilizer
application and water management.
"The
country will be a permanent importer of wheat from
this year onward," said Vijay Iyengar, managing
director of Singapore-based Agrocorp
International. "India may need to import millions
of tons of wheat in the coming years, as
consumption is rising while crop yields are almost
stagnant."
While improving irrigation
facilities and less dependence on monsoons are
critical factors, experts agree that a long-term
solution can be found only by shifting the
workforce out of agriculture to the industry and
service sectors. Exports from these sectors can
compensate for the costs of importing food to make
up for shortages. Creation of a sound education
infrastructure in the rural areas is essential for
people to avail themselves of job opportunities in
urban India.
Economist Swaminathan S
Anklesaria Aiyar said, "China has greatly improved
incomes by moving people out of agriculture into
industry and services. India must do the same.
China pays for this comfortably through
manufactured exports. Like China, India has a very
high population relative to its area. By 2020,
India too will be unable to grow or mine most of
the commodities it needs."
Another
proposed solution is switching from cereals to
high-value crops such as fruit, medicinal herbs,
bio-diesel crops (Jatropha and jojoba),
flowers, and vegetables that need less irrigation,
earn more income, can be exported and cause less
environmental damage. The import of food can be
balanced by the export of high-value commodities,
a model followed successfully by Chile, Israel and
Italy, which export cash crops such as fruit,
wine, olives and speciality seeds, and buy food
staples on the international market. So far, only
a fraction of fruits and vegetables produced in
India is processed, which calls for sustained
intervention.
Writing in the Economic
Times, P K Joshi of the International Food Policy
Research Institute says: "To check the imports, we
must be competitive in the era of globalization.
We need to monitor global markets and evolve
strategies to benefit the farming community.
Efforts should also be directed to harness the
global opportunities by exporting high-value
commodities and linking farmers with the
agribusiness. That would be the 'beginning of a
promising new era'."
Siddharth
Srivastava is a New Delhi-based
journalist.
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