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MANAGEMENT RESEARCH PROJECT Interim Report (IR)
Project Details: Title of the Project: “Decline in the share of agriculture in Indian GDP: A boon or bane for the economy. And role of Agro-Marketing in the revival of agriculture.” Area of the project: Agro-Marketing
Objective of the Project:
i) To find out factors affecting growth of agriculture sector. ii) To find out the effects of decline in agriculture sector on the Indian
iii) To find out solutions for the revival of Indian agriculture sector after
analyzing different Interventions adopted in India and different countries.
iv) To find out how Agro-Marketing can help in the revival of Indian
agriculture sector and how to use it for overall change in the agriculture sector?
Description of the Project in Brief: Since, 60% of Indian population still depends on agriculture sector and it provides base for many of the industries so it becomes matter of great importance to have a substantial growth in this sector. As,agriculture in India is not in the healthy situation so finding out the factors responsible for this is very important. Not only this, but finding out the solutions for the revival for the agriculture is also significant and in this regard to have a broader view on the concept of Agro-Marketing and to find out the best possible use of Agro-Marketing for the revival of agriculture sector is essential. Methodology:
Secondary data will be collected from the books, internet, agribusiness journals and magazines.
Overview of Indian Agriculture along with its Marketing and Financial aspects:
Agriculture is the backbone of Indian Economy. About 65% of Indian population depends directly on agriculture and it accounts for around 22% of GDP. Agriculture derives its importance from the fact that it has vital supply and demand links with the manufacturing sector. During the past five years agriculture sector has witnessed spectacular advances in the production and productivity of food grains, oilseeds, commercial crops, fruits, vegetables, food grains, poultry and dairy. India has emerged as the second largest producer of fruits and vegetables in the world in addition to being the largest overseas exporter of cashews and spices. Further, India is the highest producer of milk in the world.
BROAD CHARACTERISTICS OF AGRICULTURE:
Agriculture in India is in the hands of millions of peasant households, a bulk of which comprise tiny land holdings with preponderance of owner cultivation. There is hardly any direct government intervention in the production and investment decisions of the farmers but the government does influence the legal, material and economic environment in which farmers operate (Vaidyanathan 1996). Though tremendous progress has been made to exploit irrigation potential in the country still two third of area under cultivation is unirrigated and there is thus heavy dependence of production on vagaries of nature i.e. rainfall. Irrigated areas have experienced sharp increase in productivity level and large part of output at such farms is for market. On the other hand, productivity in unirrigated areas has remained either stagnant or experienced very small growth and most of the farmers in such areas produce for subsistence purpose. At overall level, agricultural growth remained slow (below 3 percent) in the Country. Apart from that, agricultural growth remained confined to a few well endowed pockets which has created regional disparities.
STRUCTURE OF INDIAN AGRICULRURE:
India’s agricultural area is vast with total arable and permanent cropland of 170 million hectares in 2003- 2005. It has the second largest arable area in the world after the United States. OECD in it’s 2007 agricultural policy monitoring report notes that Indian agriculture is dominated by a large number of small scale holdings that are predominantly owner occupied.
The average size of holding in the late nineties was about 1.4 hectares and continues to decline, as farms are usually divided on inheritance. Out of India’s 116 million farmers, around 60% have less than 1 hectare and together they farm 17% of the land. The share of medium to large farms (above 4 hectares) is very small at just over 7% of all holdings, but these farms account for around 40% of the land. The implication is that many of the very small farms are subsistence holdings, with low investment and little productivity growth.
PHASES IN AGRICULTURAL POLICY:
The period from 1950/51 to mid 1960s which is also called pre green? Revolution period witnessed tremendous agrarian reforms, institutional changes and development of major irrigation projects. The intermediary landlordism was abolished; tenant operations were given security of
farming and ownership of land. Land ceiling acts were imposed by all the states to eliminate large sized holdings and cooperative credit institutions were strengthened to minimize exploitation of cultivators by private money lenders and traders (Radhakrishna 1993). Land consolidation was also affected to reduce the number of land fragments. The biggest achievement of New Agricultural Strategy, also known as green revolution technology, has been attainment of self sufficiency in food grains. Since the green revolution technology involved use of modern farm inputs, its spread led to fast growth in agro input industry. Agrarian reforms during this period took back seat while research, extension, input supply, credit, marketing, price support and spread of technology were the prime concern of policy makers (Rao 1996). Two very important institutions, namely Food Corporation of India and Agricultural Prices Commission, were created in this period in the beginning of green revolution period, to ensure remunerative prices to producers, maintain reasonable prices for consumers, and to maintain buffer stock to guard against adverse impact of year to year fluctuations in output on price stability. These two institutions have mainly benefited rice and wheat crops which are the major cereals and staple food for the country. The next phase in Indian agriculture began in early 1980s. While there was clear change in economic policy towards delicensing and deregulation in Industry sector, agriculture policy lacked direction and was marked by confusion. Agricultural growth accompanied by increase in real farm incomes led to emergence of interest groups and lobbies which started influencing farm policy in the country. There has been a considerable increase in subsidies and support to agriculture sector during this period while public sector spending in agriculture for infrastructure development started showing decline in real term but investments by farmers kept on Moving on a rising trend (Mishra and Chand 1995, Chand 2001). The output growth, which was concentrated in very narrow pockets, became broad- based and got momentum. The rural economy started witnessing process of diversification which resulted into fast growth in non foodgrain output like milk, fishery, poultry, vegetables; fruits etc which accelerated growth in agricultural GDP during the 1980s.This growth seems largely market driven.
RECENT TRENDS IN INDIAN AGRICULTURE:
Though green revolution has been widely diffused in irrigated areas Throughout the country, the dry land areas have not seen benefit of technological breakthrough as witnessed through green revolution technology. Of late, improved varieties of oilseeds and course cereals have provided some opportunities for productivity growth in dry land areas. A new phase was started in India’s economic policy in 1991 that marked significant departure from the past. Government initiated process of economic reforms in 1991, which involved deregulation, reduced
government participation in economic activities, and liberalization. Though much of the reforms were not initiated to directly affect agriculture sector, the sector was affected indirectly by devaluation of exchange rate, liberalization of external trade and disprotection to industry. Then came new international trade accord and WTO, requiring opening up of domestic market. Initially there were strong apprehensions about the impact of trade liberalization on Indian agriculture which later on turned out to be real threat for several commodities produced in the country. All these changes raised new challenges and provided new opportunities that required appropriate policy response. Besides, last two decades had witnessed mainly price intervention that had a very limited coverage, and there was a sort of policy vacuum. Because of this, there was a strong pressure on the government to come out with a formal statement of agriculture policy to provide new direction to agriculture in the new and emerging scenario. In response to this, government of India announced New Agricultural Policy in July 2000.
India has Monsoon climate in which a year has been divided into two distinct seasons of summer and winter. Rainfall occurs mainly in summer.
Weather Forecasting System:
India has a strong weather forecasting system developed and maintained by Indian Meteorological Department (IMD). Apart from weather forecasting and severe weather warning, it also gives agro meteorological services to farmers in India.
Agro Climatic Zones:
India has diverse agro-climatic zones from north to south and from east to west. It has been divided into fifteen different agro-climatic zones, which signifies its diversified agricultural production from tropical to temperate crops.
Rice, Wheat, Sugarcane, Oilseeds, Pulses, Cotton, Jowar, Bajra, Ragi, Tea, Coffee, Coconut, Cashew, Rubber, Spices, Cauliflower, Onion, Cabbage, Mango, Banana, Sapota, Acid lime.
Indian Agriculture is characterized by small and marginal operational holdings. About 85% of total cultivated land has been fragmented into less
than 10-hectare land. About 60% of farmland is less than 4 hectare in size.
Extent of Mechanization:
Mechanization in Indian agriculture is still at rudimentary stage showing regional variation. But it is increasing over the years. Power availability for carrying out various agricultural operations, which is one of the indicators of mechanization, has been increased.
Tea, Coffee, and Natural rubber are the main plantation crops in India that contribute in Indian export to a considerable extent. India is the largest producer and consumer of tea in the world. It contributes 4% to global coffee production and enjoys a niche market by producing both arabica and robusta coffee. In rubber also, it ranks third in production and fourth in consumption of natural rubber in the world.
India has a great potential in the production of horticultural crops, which includes fruits, vegetables, spices, floriculture, and plantations. Acreage under horticulture is around 20 million hectares. India is the second largest producer of both fruits and vegetables in the world. It occupies first position in the production of cauliflower, second in onion, and third in cabbage.
India ranks first in the world in milk production, which was around 100 million tones in 2006-07.Strong networks of Milk Cooperatives, have been instrumental in this phenomenal performance of dairy sector in India. Presently, 1.13 lakh village level cooperative societies spread over 265 districts in the country form part of the national Milk Grid. This Grid links milk producers throughout India and consumers in 700 towns and cities. De-licensing of dairy sector in 1991 has directed considerable amount of private funds both from inside and outside country in this sector especially in manufacturing facilities while investment in cooperative sector are concentrated largely in procurement and processing of milk. Livestock: Livestock sector contributes about 27% of the G.D.P. from agriculture and allied activities. This sector has excellent forward and backward linkages, which p-promote many industries and increase the incomes of vulnerable groups of the society such as agricultural labourers and small and marginal farmers. India possesses the second largest livestock population in the world.
Fishing, aquaculture and a host of allied activities are a source of livelihood to over 14 million people and a major source of foreign exchange earner. In 2005-06, this sector contributed about 1% of G.D.P. and 5.3% of G.D.P from agricultural sector.8, 118 k.m. of coastline gives geographical basis for the development of marine fishery sector and cultural factor boosts the inland fishery sector in India.
Credit: Availability of adequate credit is vital for every sector and agriculture is not an exception. In India, Commercial Banks, Cooperative Banks, and Regional Rural Banks (RRBs) are responsible for smooth flow of credit to agricultural sector. But a huge unorganized market exists for credit to agricultural sector in India, which provide timely fund to this sector but at the exorbitant rate of interest. Among organized credit disbursement to agriculture commercial banks play a vital role with a share of about 70% where as cooperative sector and RRBs contribute 20% and 10 % respectively.Kisan Credit Card (KCC) scheme was introduced to provide adequate and timely support from the banking system to the farmers for their cultivation needs. This scheme has made rapid progress and more than645 lakh cards issued up to October 2006. The 'Farm Credit Package' announced by the Government of India in June 2004 stipulated doubling the flow of institutional credit for agriculture in ensuing three years.
Insurance is a prime necessity to mitigate uncertainty that persists in Agriculture. In India, agriculture is still affected by such factors, which are beyond control of human being. So, there is a great need for agricultural insurance in India. Keeping this in mind, Government of India in coordination with the General Insurance Corporation of India (GIC) had introduced National Agricultural Insurance Scheme (NAIS) from Rabi 19992000 seasons. The main objective of this scheme is to protect the farmers against losses suffered by them due to crop failure on account of natural calamities. Agricultural Insurance Company of India (AICIL) which was incorporated in December 2002 took over the implementation of NAIS. AICIL introduced Rainfall Insurance Scheme called 'Varsha Bima' during 2004 southwest monsoon period. Varsha Bima provided for five different options suiting varied requirements of farming community: 1. Seasonal rainfall insurance based on aggregate rainfall from June to September. 2. Sowing failure insurance based on rainfall between June 15 and August 15. 3. Rainfall distribution insurance with the weight assigned to different weeks June and September. 4. Agronomic index constructed on the basis of water requirements of crops. 5. A catastrophe option covering extremely adverse deviation of 50% and above in rainfall during the season.
Marketing of Agricultural Products:
Form of Markets exists in India: Agricultural markets in India are dominated by the existence of unorganized and unregulated agricultural mandies with the presence of a large number of middlemen and widespread prevalence of malpractices. Absence of proper warehousing facilities in the villages, lack of proper transportation facilities and infrastructure such as rails and good quality all weather roads and ignorance about the market prices of their products are some of the important factors for exploitation of farmers from middle men. They are forced to sell their products to these middlemen at the farm gate at throwaway prices. Agricultural Market Reforms in India: Ministry of Agriculture had formulated a model law on agricultural marketing in consultation with State/Union territory Governments to bring about marketing reforms in line with emerging trends. This model act enables establishment of private markets/yards, direct purchase centers, consumers/farmers markets for direct sale, and promotion of publicprivate
Partnership (PPP) in the management and development of agricultural markets in the country. It also provides for exclusive markets for onion, fruits, vegetables, and flowers. Regulation and promotion of contract farming arrangement has also been made a part of this legislation. A provision has also been made for constitution of State Agricultural Produce Standard Bureau for promotion of grading, standardization, and quality certification of agricultural produce. So far, 15 States and 5 Union Territories have amended their Agricultural Produce Marketing Committee (APMC) Act to derive the benefits of market reforms. E-Chaupal: E-Chaupal is a business platform consisting of a set of organizational Subsystems and interfaces connecting farmers to global markets. It has been initiated by International Tobacco Company (ITC) who are quite active in agricultural sector in India. This e-chaupal business platform consists of three layers each of different level of geographic aggregation. Each of the three layers is characterized by three key elements: 1. The infrastructure (physical or organizational) through which transaction takes place. 2. The entity (person or organization) orchestrating the transactions, and 3. The geographical coverage of the layer. The first layer consists of the village level kiosks with internet access (echaupals), managed by an ITC trained local farmer and within walking distance (I-5 kilometers) of each target farmer. Each cluster of five villages gets an e-chaupal, which is justified by sparse population in rural India. The second layer consists of a brick and mortar infrastructure called hubs managed by the traditional intermediary who has local knowledge/skills called a Samayojak and within tractorable distance (2530 kilometer) of then target farmer.
Agricultural Commodities Exchanges:
To introduce future trading in agricultural commodities in India, two commodity exchanges have been introduced in 2003 for future trading. They are, National Commodity & Derivatives Exchange Limited (NCDEX) and Multi Commodity Exchange of India Limited (MCX). These exchanges are majorly dealing in agricultural commodities. They are involved in forward trading to mitigate price risks of the farmers.
International Trade & Indian Agriculture:
Agricultural Export: India's total exports of agricultural and allied products at $10.5 billion in 2005-06 constitute 10.2% of its export share. Developed country markets account for nearly 35% of India's agri-exports. In agricultural exports there are varied performances across commodities. Contribution of various agricultural commodities in world exports has been listed below. *Source: NCTI based on UN-ITC Trade Map Data. Export of Marine products, which after a decline in 2003-04 had picked up in subsequent years, grew by 6.3% in April- October-2006.In terms of export earnings, among marine products, frozen shrimp contributed to be the largest export item, followed by frozen fish, Product Percentage share in World Export :Lac, gums, resins, vegetable products 10 Vegetable planting materials, vegetable products 4.9 Coffee, tea, mate & spices 3.7 Marine products 2.3 Residues, waste of food industry, animal fodder 2.1 Cereals 1.3 Fruits & nuts 1.1 cuttlefish, squid, and dried items. European Union accounted for the largest share of India's export of marine products, followed by US and Japan. This sector, however, faced a number of
hurdles in the major export destinations. Indian shrimp imports to USA have been subject to anti dumping duty of 10.17% from August 2004. In European markets, India's marine products have been facing problem due to multiplicity of standards-in addition to the EU's own standards, the standards of each of the own member states.
Agricultural Imports and Exports:
Agricultural import contributes about 3% in total merchandise import to India. Major imports during April-October 2005 included vegetable oils (US$ 1237.3 million), raw cashew nut (US$ 287.8 million), pulses (US$ 281.8 million) and sugar (US$ 138.7 million).Vegetable oils and pulses are largely imported to augment domestic supplies and raw cashew is imported for processing and re-exports, as domestic production is not adequate to meet the demand of processing capacity installed in the country. L Agri Export Zones: In the Export Import (EXIM) Policy 2001-02, the Government of India announced the proposal to set up Agri-Export Zones for the purpose of developing and sourcing raw materials and their processing/packaging leading to final exports. The concept essentially embodies a cluster approach of identifying the potential products and the geographical region in which such products are grown and adoption of an end to end approach of integration of the entire process, right from the stage of production to consumption. 1. Removal of distorting subsidies and protection by developed countries to level the Playing field, and 2. Appropriate provisions designed to safeguard food and/or livelihood security, and to meet the rural development needs in developing countries.
Indian Council of Agricultural research (ICAR) is an apex body in India at the national level, which promotes science and technology programmes in the area of agricultural research, education, and extension education. Agriculture and Employment: bout 65% of Indian population is dependent on agriculture for their livelihood. This sector has strong
forward and backward linkages and its performance affects each and every sector of the country. Sustainable Agriculture: Organic Farming: In the recent decades, there is an increasing demand of organic foods in the developed world. Organic farming is an important pillar of sustainable agriculture, which is beneficial for producers and consumers both. India has a great potential for organic farming using traditional wisdoms prevailing in the villages of India. In fact, a large section of Indian agriculture uses more or less organic method of farming using minimum level of chemical inputs. Promotion of organic farming in India could prove beneficial to increase share of Indian agricultural export in the world export.
INDIAN AGRICULRURE: ITS ISSUES AND CHALLENGES
Although agriculture contributes only 22% of India’s GDP, its importance in the country’s economic, social, and political fabric goes well beyond this indicator. The rural areas are still home to some 72 percent of the India’s 1.1 billion people, a large number of whom are poor. Most of the rural poor depend on rain-fed agriculture and fragile forests for their livelihoods. The sharp rise in food grain production during India’s Green Revolution of the 1970s enabled the country to achieve self-sufficiency in food grains and stave off the threat of famine. Agricultural intensification in the 1970s to 1980s saw an increased demand for rural labor that raised rural wages and, together with declining food prices, reduced rural poverty. Sustained, although much slower, agricultural growth in the 1990s reduced rural poverty to 26.3 percent by 1999/00. Since then, however, the slowdown in agricultural growth has become a major cause for concern. India’s rice yields are one-third of China’s and about half of those in Vietnam and Indonesia. With the exception of sugarcane, potato and tea, the same is true for most other agricultural commodities. The Government of India places high priority on reducing poverty by raising agricultural productivity. However, bold action from policymakers will be required to shift away from the existing subsidy-based regime that is no longer sustainable, to build a solid foundation for a highly productive, internationally competitive, and diversified agricultural sector.
ISSUES AND CHALLENGES:
NEW AGRICULTURAL AGRICULTURE: POLICY AND CHALLENGES IN INDIAN
The challenges facing Indian agriculture can be grouped in four categories
relating to: (1) Growth (2) Sustainability (3) Efficiency and (4) Equity. There are also other important concerns like food security, livelihood, employment, improvement in standard of living of agricultural population. Addressing these challenges requires efforts on several fronts like incentive structure, infrastructure, technology, market development, extension, regulations, input supply, tenancy etc. New agriculture policy should address above challenges through efforts in abovementioned areas and also provide direction to the future of agriculture in the country. The National Agricultural Policy (NAP) document aims to attain output growth rate in excess of 4 percent per annum in agriculture sector based on efficient use of resources. It seeks to achieve this growth in a sustainable manner and with equity. The Policy resolution than describe in detail the strategy and policy alternatives which are grouped under the following heads: 1. Sustainable agriculture 2. Food and nutrition security 3. Generation and transfer of technology 4. Inputs management 5. Incentive for agriculture 6. Investment in agriculture 7. Institutional structure 8. Risk management
Slow Down in Agricultural and Rural Non-Farm Growth: Both the poorest as well as the more prosperous ‘Green Revolution’ states of Punjab, Haryana and Uttar Pradesh have recently witnessed a slow-down in agricultural growth. Some of the factors hampering the revival of growth are:
Poor composition of public expenditures: Public spending on agricultural subsidies is crowding out productivity-enhancing investments such as agricultural research and extension, as well as investments in rural infrastructure, and the health and education of the rural people. In 1999/2000, agricultural subsidies amounted to 3 percent of GDP and were over 7 times the public investments in the sector. Over-regulation of domestic agricultural trade: While economic and trade reforms in the 1990s helped to improve the incentive framework, over-regulation of domestic trade has increased costs, price risks and uncertainty, undermining the sector’s competitiveness. Government interventions in labor, land, and credit markets: More rapid growth of the rural non-farm sector is constrained by government interventions in factor markets -- labor, land, and credit -- and in output markets, such as the small-scale reservation of enterprises.
Inadequate infrastructure and services in rural areas.
Weak Framework for Management and Irrigation:
Inequitable allocation of water: Many states lack the incentives, policy, regulatory, and institutional framework for the efficient, sustainable, and equitable allocation of water. Deteriorating irrigation infrastructure: Public spending in irrigation is spread over many uncompleted projects. In addition, existing infrastructure has rapidly deteriorated as operations and maintenance is given lower priority.
Inadequate Access to Land and Finance:
Stringent land regulations discourage rural investments: While land distribution has become less skewed, land policy and regulations to increase security of tenure (including restrictions or bans on renting land or converting it to other uses) have had the unintended effect of reducing access by the landless and discouraging rural investments. Computerization of land records has brought to light institutional weaknesses: State government initiatives to computerize land records have reduced transaction costs and increased transparency, but also brought to light institutional weaknesses. Rural poor have little access to credit: While India has a wide network of rural finance institutions, many of the rural poor remain excluded, due to inefficiencies in the formal finance institutions, the weak regulatory framework, high transaction costs, and risks associated with lending to agriculture.
Weak Natural Resources Management: One quarter of India’s population depends on forests for at least part of their livelihoods.
A purely conservation approach to forests is ineffective: Experience in India shows that a purely conservation approach to natural resources management does not work effectively and does little to reduce poverty. Weak resource rights for forest communities: The forest sector is also faced with weak resource rights and economic incentives for communities, an inefficient legal framework and participatory management, and poor access to markets.
Weak delivery of basic services in rural areas:
Low bureaucratic accountability and inefficient use of public funds: Despite large expenditures in rural development, a highly centralized bureaucracy with low accountability.
PRIORITY AREAS FOR PROBABLE SOLUTIONS: Growth prospects:
Agricultural growth is essential for the sector’s progress and for overall growth of Indian economy. This growth rate is also a sort of essential condition for improving living standard of those who are dependent on agriculture. The main goal of National Agricultural Policy to achieve growth rate higher than four percent seems to be formidable task particularly when we look at historical rate of growth in Indian agriculture. As can be seen that growth rate in Indian agriculture in the post Independence period is found to be 2.55 percent per annum. This growth rate includes contribution of technological breakthrough of green revolution and major expansion in irrigation and in area under cultivation. Out of these three sources of output growth the scope for expansion of cultivated area is much more limited in future compared to that experienced in the past. Net cultivated area (NCA) has become stagnant at 142 million hectares (Table 2) and unless serious efforts are launched to bring wastelands under cultivation there would be no scope to expand NCA. However cultivated area as such can be expanded by raising more
number of crops on the same piece of land i.e. by raising crop intensity. This expansion depends heavily on provision of irrigation. Source of data: National accounts Statistics, various issues.
Ultimate Irrigation potential:
This shows that tremendous efforts are needed in development of irrigation in the country to help attain growth rate stipulated in National agricultural Policy. This would require very sharp increase in public investments in agriculture, which has remained either stagnant or followed decline during the last two decades. It would not be an exaggeration to say that for creating such a magnitude of irrigation potential would require trebling of public investments in real terms. Second, expansion of irrigation through conventional means like major irrigation projects is likely to face resistance from various environmental groups. Growth rate results presented in Table 1 indicate that among all the five decades in post independence India, highest growth rate is realized during the decade of 1990s. This is the result of three factors. Main factor underlying high growth during the last decade is diversification towa rds horticultural crops. Horticultural crops showed trend growth rate close to 6 percent, which helped agriculture sector to attain growth rate of 3.28 percent. Second, the decade of 1990s has witnessed highest expansion in gross irrigated area. Third, favourable terms of trade for agriculture are considered as another factor for favourable growth during 1990s.It would also be seen from Table 1, that, after area expansion effect of 1950s, non horticultural crops never showed growth rate exceeding 2.5 pe rcent. In contrast to this, horticultural crops, livestock and fishery have shown the potential to grow at the rate of 4-5 percent for a long time. A simple exercise done by us reveal that due to large difference in productivity per unit of land a one percent shift in area from nonhorticultural crops to horticultural crops raises overall output of crop sector by 4 percent.. A slight acceleration in growth rate for the whole decade of 1990s should not be taken as a sustainable achievement as there are worrying signs of slowdown in growth rate of almost all the sub sectors of agriculture during the second half of decade of 1990s.
The policy aims to promote technically sound, economically viable, Environmentally non – degrading and socially acceptable use of country’s natural resources – land, water and genetic endowments. This indeed is a tall order.
Status of land resources of India is presented in Table 3. Out of 304.9 million hectare area for which land use information is available item 1 and 2 cannot be considered for biotic production. This leaves 264 million hectare area that can be considered for some sort of biotic production. Out of this 142.2 million hectare area is under cultivation. The challenge relating to this land area is to maintain its fertility status and protect against degradation due to soil erosion, chemicalisation, waterlogging and salinisation and alike problems. In the remaining area, sum of items 6 to 10 can be taken to represent maximum wasteland area, assuming forest with poor cover and permanent pasture and grazing grounds are more or less bereft of vegetative cover. This comes to 79.5 million hectare which is more than half of the size of area under cultivation. NAP proposes to put this so called wasteland to use for agriculture and afforestation, but it does not elaborate any strategy to do so. Most of this land requires heavy capital investments to make it productive. Such investments can either come from corporate sector or from government but serious apprehensions have been expressed to allow corporate sector to control these lands. Enough care is also needed to ensure that some proportion of common property waste lands remains around all habitation to serve the community needs and needs of resource poor rural populace. Some innovative mechanisms like leasing such lands to local households needs to be evolved to make productive use of wastelands. Land Use pattern in India: Category Area: 1. Area under non agricultural uses 2. Barren and uncultivable land 3. Net sown area 4. Forest land under good tree cover 5. Misc. tree crops and groves 6. Forest lands under poor tree cover 7. Cultivable wastelands 8. Current fallows 9. Old fallows 10. Permanent pastures and grazing lands 11. Total of above It needs to be noted that wastelands in India are not confined only to items 6 to 10 in Table 3. According to the information provided by the Department of Land Resources in the Ministry of Agriculture, GOI, 175 mha area suffers from degradation.
Water resources are becoming extremely scarce as demand for water for Agricultural, industrial and household uses are increasing rapidly. It is often quoted that future wars would be fought over water and water would be the source of maximum local conflicts. As India has only 4 percent of world water resources and 16 percent 11 share in population (Iyer 2001) water scarcity is more acute in the country compared to world average. The pressure on water resources is increasing with population
growth, Urbanization and improvement in living standard. According to some scholars availability of ground water for irrigation would emerge as a critical bottleneck for self sufficiency in food grain by the year 2020 as demand for irrigation would exceed its availability by nearly 30 percent (Chopra and Golder 2000). Similarly, National Commission for Integrated Water Resource Development Plan has projected that requirement for irrigation water in India would grow by more than 50 percent by 2050. Evidence is accumulating that water table in several states is getting depleted at a fast rate. Based on various assessments it is concluded that even after fully exploiting available water resources water supply can match the demand only if there is a big improvement in efficiency of irrigation
Plant and Animal Genetic Resources:
NAP expresses concern about the narrowing and erosion of India’s plant and genetic resources in the last few decades. Here two important concerns are missing.One; NAP does not stress quality improvement in livestock through use of better quality indigenous germplasm. There is strong fascination in the country for exotic germplasm, particularly of cattle, at the cost of ignoring rich germplasm of domestic Breeds for improving productivity and quality of livestock. Experience of cross 12 breeding with exotic stocks of cattle is showing its own hazards in some areas where infertility among cross bred is leading to hordes of stray cattle in the countryside. Two, there is not enough awareness about breeding aspects in the country. Often same bull continues to be used in one locality for lifetime which results in inbreeding and genetic decline. There needs to be some guidelines with Panchayati Raj institutions for taking care of healthy breeding practices.
Food and nutrition security:
Food and nutritional security has remained central to India’s agricultural and development policy since Independence. However, importance being accorded to food and nutrition security has receded during 1990s because of two reasons. One, there was accumulation of very large stock of grains in government stock after April 1998 which had posed very serious problem of disposal in domestic and international market. This has also caused serious burden on state exchequer. If India had not experienced very severe drought during the year 2002, which caused 14 percent (30 million tonne) decline in food grain production, then country was going to have tough time to clear Excessive stock of grains. Two, all kind of reduction in cereal consumption is being wrongly attributed to phenomenon of dietary diversification which involves structural shifts in demand from cereal to horticultural and livestock feed, without distinguishing between diversification by choice or diversification under distress. A closer look at the household consumption data and macro data on availability of cereals for consumption reveals
very disturbing trend in food and nutrition security during 1990s. It is found that per capita energy and protein intake declined very sharply during 1990s and percent of population getting energy and protein below the minimum threshold level has increased. Main implication of these findings is that growth in food production should not be accompanied by increase in per unit costs. Thus, sustaining nutrition and food security require reduction in average cost of food grain production in real terms.
Generation and Management:
Use of new Technologies can play a very big role in the revival of Indian Agriculture:
NAP calls for according very high priority to evolving location specific and Economically viable improved varieties of agricultural and horticultural crops, livestock species and aquaculture. There is added emphasis on regionalization of agricultural research based on identified agro climatic zones. These priorities and emphasis are important in a country like India, which has continental diversity and where technology is the main driver for output growth. But this itself may not be enough. This is evident From experience of technology generated during last three decades and its
adoption at farmers fields. National Agricultural Research System (NARS) has a very wide network of research and technology network and there is hardly any agro ecological pocket which does not have NARS institute or research station. Similarly, annual reports of ICAR and State Agricultural Universities are replete with achievements in terms of new varieties in almost all regions. But this has not helped in bridging huge gap between what is attainable through these technologies and what is actually attained at farmers field in most of the crops and states. This is evident from the information presented in Table 5 on yield gap. The yield gap was measured by taking the percent by which gap between attainable yield and actual yield exceeds actual yield. Measures of Impact of science Agriculture and Rural Development and technology in India:
The M.S. Swaminathan Research Foundation undertook a study on the ‘Measures of Impact of Science and Technology: Agriculture and Rural Development’ with the principal objective of analyzing significant technologies that have been developed in the public research system pertaining to the major sectors of the rural economy of India over the post-independence period. Crop husbandry, animal husbandry, fisheries, forestry, irrigation, health, drinking water and energy have been the areas of concern. IN the context of economic reforms under way in India since 1991, it would be of interest to explore the role played by the Indian state in the development of significant technologies pertaining to the major sectors of rural economy during the post-independence period. Such a study becomes especially relevant in the context of assessments made by the Human Development Report of 2001 of the United Nations Development Programme (UNDP) concerning the technological achievement of various countries, including India. The UNDP Report: The UNDP Report set forth a methodology to calculate what it called a Technology Achievement Index (TAI) on a global scale, intended to serve as an indicator of the progress made by different member states of the United Nations in the area of technology achievement. The indicators Used for developing TAI were based on the following components: 1. Technology creation • Patents granted to residents • Receipts of royalties and license fees 2. Diffusion of recent innovations • Internet hosts
• High and medium technology exports 3. Diffusion of old innovations • Telephones • Electricity consumption 4. Human skills • Mean years of schooling • Gross tertiary science enrolment ratio. Using the above measures of technology achievement,India was ranked 63rd among the 72 countries considered.The indicators chosen to reflect technological achievement were largely related to profit-driven research, while the dominant sector of research in India has been in the public domain, carried out in institutions and universities supported through public funds. The significant role played by public-domain research in achieving progress across various sectors of the rural economy of India during the post-independence period has not been taken into account by the UNDP while assessing the country’s performance. The MSSRF study: Shortly after the publication of the UNDP Report, and possibly in part in the light of the report, the Office of the Principal Scientific Adviser to the Government of India supported a series of studies under the umbrella title ‘Measures of Progress of Science and Technology in India’, to examine the progress made in various sectors in India during the post-independence period. The study whose findings are discussed in this article, was a part of this series. This study was carried out at the M.S. Swaminathan Research Foundation (MSSRF), Chennai (The MSSRF study was carried out by a team of researchers comprising Drs R. Rukmani, Indumathi M. Nambi, S. John Joseph, M. Prabhu, K. N. Sevakumar, K. Susheela, Mr V. Senthilkumar, Mr Karuna Krishnaswamy and Ms N. Thenmathi). The principal objective of the study has been to analyse significant technologies developed since independence in the public research system in the areas of crop husbandry, animal husbandry, fisheries, forestry, irrigation, health, drinking water and energy as well as to examine the impact triggered by these technologies. Let us now turn to a brief discussion of key technological interventions in each major sector and their impacts. Crop husbandry: The MSSRF report discusses developments in the crop husbandry sector, where the varietal improvement programme has been identified as the catalytic technology. The ICAR system, with its elaborate network of research activities, has developed and released more than 3300 high yielding varieties and hybrids pertaining to various crops1. A detailed analysis of the nature and extent of development of the varietal improvement programme has been undertaken with regard to some selected crops: rice and wheat among major cereals, maize and sorghum
among nutritious millets, soybean and sunflower among oil seeds, potato among vegetables and sugarcane and cotton among non-food crops. The most important aspect of the varietal improvement programme in India is that the germplasm received from international research institutions has been used to develop varieties suitable for Indian conditions. Irrigation: The study has provided an overview of irrigation development since the 1950s and examined the role of technology in irrigation development. Expansion of irrigation in the country is in part related to a conscious policy decision of the government to invest in irrigation works and in part to development of technologies. Several technologies, major and minor, have played a crucial role in the development of irrigation in the country with regard to harnessing, distributing and managing water resources as well as in conserving and quantifying available water. The design and construction of dams in India have undergone several modifications based on new scientific inputs and experience over the years. Technology has enabled construction of large dams even in areas susceptible to seismic activity, which is a major breakthrough, particularly with regard to the flood-prone northeastern states. As regards sub-surface irrigation, highspeed drilling technology has replaced traditional, shallow dug wells by modern, deep borewells in hard-rock areas. This discussion shows that either the technologies having higher yield potentialare not actually suitable at farmers field or enough effort is not made to take the technologies from labs and experimental station to farmers field. Technology policy needs to address the issue whether technologies being generated are less appropriate or there is weakness in technology transferring extension system. Strategy for technology generation and transfer should be of two types. A lot can be achieved by effective dissemination of already existing improved technologies. Generating more technologies of same potential as existing ones have would not be of any help. There should be accurate assessment of existing technologies. Then, reasons for these technologies not reaching intended users need to be identified. New technologies need to be developed in frontier areas. Similarly, because of growing competition due to globalization, technological up gradation assumes greater significance. This should be done through application of modern science taking advantage of advances in molecular biology and other sciences. Over the years, interactions of NARS scientists with science institutions in the western world have weakened. This needs to be reversed to enable our scientists to benefit from advance knowledge originating in western institutes. Harnessing benefit of technology generation requires well developed system for sales and distribution of seeds and plant propagation material. Till now public sector dominates multiplication and supply of seed and plant propagation material but it is highly inadequate to meet the emerging and growing needs and demand. There are also
reports of some decay in public system distribution of seeds etc. on account of several reasons. The advantage of this is being taken by unscrupulous private trade. There is a need to promote competition in seed sector by encouraging large scale private sector participation in seeds business.
SATELLITE REMOTE SENSING AND GIS APPLICATIONS IN AGRICULTURAL METEOROLOGY AND WMO SATELLITE ACTIVITIES: M.V.K. Sivakumar and Donald E. Hinsman Agricultural Meteorology Division and Satellite Activities Office World Meteorological Organization (WMO), 7bis Avenue de la Paix, 1211 Geneva 2, Switzerland Agricultural planning and use of agricultural technologies need applications of agricultural meteorology. Satellite remote sensing technology is increasingly gaining recognition as an important source of agrometeorological data as it can complement well the traditional methods agrometeorological data collection. Agrometeorologists all over the world are now able to take advantage of a wealth of observational data, product and services flowing from specially equipped and highly sophisticated environmental observation satellites. In addition, Geographic Information Systems (GIS) technology is becoming an essential tool for combining various map and satellite information sources in models that simulate the interactions of complex natural systems. RELEVENCE OF SATELLITE REMOTE SENSING APPLICATIONS IN AGRICULTURAL DEVELOPMENT: AND GIS
Agricultural planning and use of agricultural technologies need application of agricultural meteorology. Agricultural weather and climate data systems are necessary to expedite generation of products, analyses and forecasts that affect agricultural cropping and management decisions, irrigation scheduling, commodity trading and markets, fire weather management and other preparedness for calamities, and ecosystem conservation and management. Agrometeorological station networks are designed to observe the data of meteorological and biological phenomena together with supplementary data as disasters and crop damages occur. The method of observation can be categorized into two major classes, manually observed and automatic weather stations (AWS). A third source for agrometeorological data that is gaining recognition for its complementary nature to the traditional methods is satellite remote sensing technology. Remotely sensed data and AWS systems provide in many ways an enhanced and very feasible alternative to manual observation with a very short time delay between data collection and transmission. In certain countries where only few stations are in operation as in Northern Turkmenistan (Seitnazarov, 1999), remotely sensed data can improve information on crop conditions for an early warning system. Due to the availability of new tools, such as Geographic Information Systems (GIS), management of an incredible quantity of data such as traditional digital maps, database, models etc., is now possible. The advantages are manifold and highly important, especially for the fast crosssector interactions and the production of synthetic and lucid information for decision-makers. Remote sensing provides the most important informative contribution to GIS, which furnishes basic informative layers in optimal time and space resolutions.
Incentive for agriculture: Agricultural policy repeats the policy concerns echoed in the beginning of green revolution to provide favorable economic environment for promoting farm investments through (1) removal of distortions in the incentives (2) improvement in terms of trade with manufacturing (3) external and domestic market reforms. This is most important area for policy actions. The document states only the intention but does not elaborate how it would be achieved. Some reforms which government has initiated in this area are (a) liberalization of land lease market (b) proposal to change regulation to promote contract farming and private markets. Liberalization of land lease market has been quite misunderstood in India. It is taken to imply that it would lead to transfer of land from small and marginal farmers to big farmers and also adversely affect interest of tenants. Reality is just opposite of this. It is the small and marginal farmers who lease in and lease out much more than large farmers. Also, the need for leasing in land is much greater at small and marginal farmers to make their holdings viable. Land lease laws in the country are such that if there is legal or documentary evidence of leased in land, the lesser can face problem in evicting the lessee. Because of this, the landowners, who have land to lease out, either do not lease out his/her land for fear of loosing control over it or tenancy is totally concealed. Because of this, most of the small and marginal farmers are deprived of raising the size of their operational holdings when they cant lease in. When they leasein in a concealed manner they cant get advantage of credit etc. Similarly, large number of small and marginal farmers who do not find farming viable and find some other attractive voc action, but do not want to sold their land, avoid renting out land. This way, because of adverse legal implications of leased land market, small and farmers are sufferers in several ways. The fears related to security of already existing tenants due to liberalisation of land lease market are also misplaced as their interest can be safeguarded by exempting them from the new regulation. Investments in agriculture: The purpose of investments in agriculture is to generate capital in the form of infrastructure, improvement in quality of natural resources and assets, and creation of productive assets for promoting long run growth and improving efficiency in production and marketing. This investment in any sector comes from two sources viz. public and private. While public investment is meant mainly to create infrastructure, private investment is used mainly for assets formation and for improvement in quality of existing assets. Traditional agriculture and agriculture in underdeveloped
countries is generally starved of investment resources because private capital is deterred by the risk involved in agriculture (Schultz, 1964) and institutional investment has also been meagre (Shonfield, 1960). Therefore, special efforts and attention are required to direct and induce public and private investments in agriculture in underdeveloped countries.In the recent years there has been renewed interest in public and private investments in Indian agriculture. This has been induced by serious concern for secular decline in public investments in Indian agriculture, which began in the early 1980s. This adverse trend did not reverse even during 1990s (Table 6 and Fig. 1 and 2). GFCF in the public sector showed some improvement during mid 1990s but again declined during late 1990s. GFCF public sector as percent of GDP agriculture has declined to 1.56 percent compared to more than two percent during early 1990s . This shows that infrastructure development for agriculture sector failed not only to keep pace with growth of the sector but lagged far behind the growth in the sector. There is some comfort that like the decade of 1980s decline in public investments did not cause decline in private investment even during 1990s. Institutional structure: NAP advocates land reforms by focusing on consolidation of holdings, redistribution of surplus/waste land among landless, tenancy reforms, development of lease market and recognition of women’s rights in land. Other areas listed for policy attention are private sector participation through contract farming, assured markets for crops especially for oilseeds, cotton and horticultural crops, increased flow of institutional credit, strengthening and revamping of cooperative credit system. Out of these, some policy concerns like land lease market have already been discussed at length in section 4.5 above. Land consolidation has assumed greater importance due to large scale fragmentation of land holdings due to division of inherited property and certain other factors. Division of land parcels into smaller pieces scattered over space has become so complex that their consolidation by revenue authority, as witnessed during first two decades of planned development in some states, would not help much but would leave it free to revenue officials to use their authority to show favours and disfavours. The best way to encourage land consolidation would be to encourage mutual transfers of land by providing incentives like complete waiving or nominal stamp duty in land transactions that lead to land consolidations. Risk Management and Management Reforms: Price fluctuation and natural calamities are recognised as main factor for imparting instability to condition of farmers. NAP suggests Agriculture Insurance Scheme covering all farmers and all crops throughout the country with built in provision for insulating farmers from financial distress. Other measures suggested under this are (1) enhancing flood
proofing and drought proofing through (2) ensuring remunerative prices through announcement of MSP and (3) future trading in agriculture products. Risk proofing in agriculture through insurance is a very complicated process. Covering all crops and all farmers through this seems to be gigantic, rather ambitious task. Technological and infrastructural solutions are more appropriate in the Indian circumstances. Announcement of MSP in itself does not ensure that farmers get remunerative price or price above the ceiling level. Obviously, ensuring that farmers do not receive price below MSP requires some mechanism to buy produce if market price happens to be lower than MSP. This mechanism exists only in a few states and for a few crops. Because of this, some regions have benefited too much where government procure produce and some got nothing for same crops, from system of MSP (Chand 2003b). It is also not feasible to guarantee MSP by making procurement of produce by official agencies in the event of fall in market prices below MSP everywhere and for all the crops. Therefore, alternatives like deficiency price payment, as suggested by some studies (Chand 2003a) needs to be used to make MSP effective over large number of crops and over large region. Future trading is being allowed in more and more agricultural products in India with a view to minimize price fluctuations and for hedging price risk. It is difficult to conjecture about the impact of future trading in reducing price risk for farmers because basis of future trading itself is price fluctuation. Second, success of future trading would require that government intervention does not influence normal course of price. Thus, future trading and government intervention in influencing behaviour of prices through MSP and issue prices would not go together. Therefore some clear policy is needed on price intervention and future trading. Under the management reforms, proposals like moving away from schematic approach to macro management approach and working out effective partnership between the Centre and States are worth implementing.
Enhancing agricultural productivity, competitiveness, and rural growth: Enhancing productivity: Creating a more productive, internationally competitive and diversified agricultural sector would require a shift in public expenditures away from subsidies towards productivity enhancing investments. Second it will require removing the restrictions on domestic private trade to improve the investment climate and meet expanding market opportunities. Third, the agricultural research and extension systems need to be strengthened to improve access to productivity enhancing technologies. The diverse conditions across India suggest the importance of regionally differentiated strategies, with a strong focus on the lagging states. Improving Water Resource and Irrigation/Drainage Management: Increase in multi-sectoral competition for water highlights the need to formulate water policies and unbundle water resources management from irrigation service delivery. Other key priorities include: (i) modernizing Irrigation and Drainage Departments to integrate the participation of farmers and other agencies in irrigation management; (ii) improving cost recovery; (iii) rationalizing public expenditures, with priority to completing schemes with the highest returns; and (iv)allocating sufficient resources for operations and maintenance for the sustainability of investments. Strengthening rural non-farm sector growth: Rising incomes are fueling demand for higher-value fresh and processed agricultural products in domestic markets and globally, which open new opportunities for agricultural diversification to higher value products (e.g. horticulture, livestock), agro-processing and related services. The government needs to shift its role from direct intervention and overregulation to creating the enabling environment for private sector participation and competition for agribusiness and more broadly, the rural non-farm sector growth. Improving the rural investment climate includes removing trade controls, rationalizing labor regulations and the tax regime (i.e. adoption of the value added tax system), and improving access to credit and key infrastructure (e.g. roads, electricity, ports, markets). Improving access to assets and sustainable natural resource use: Balancing poverty reduction and conservation priorities: Finding win-win combinations for conservation and poverty reduction will be critical to sustainable natural resource management. This will involve addressing legal, policy and institutional constraints to devolving resource rights, and transferring responsibilities to local communities. Improving access to land: States can build on the growing consensus to reform land policy, particularly land tenancy policy and land administration system. States that do not have tenancy restrictions can
provide useful lessons in this regard. Over the longer term, a more holistic approach to land administration policies, regulations and institutions is necessary to ensure tenure security, reduce costs, and ensure fairness and sustainability of the system. Improving access to rural finance: It would require improving the performance of regional rural banks and rural credit cooperatives by enhancing regulatory oversight, removing government control and ownership, and strengthening the legal framework for loan recovery and the use of land as collateral. It would also involve creating an enabling environment for the development of micro-finance institutions in rural areas. Strengthening institutions for the poor and promoting rural livelihood PRICE AND MARKETING: Even after agricultural production has been raised to its highest possible level and all cultivable land has been brought under the plough, the lot of the actual tiller of the soil will not improve as long as he is unable to get a fair price for his produce. As matters stand, the cultivator has to accept low And unremunerative prices because: (a) The general level of prices of agricultural commodities falls rather steeply during a depression (and depressions are rather too common in India!) and (b) The distributive organization is such that a very large proportion of the price paid by the ultimate consumer goes to middlemen. That there have been violent fluctuations in the prices of farm products during the twentyyear period between the end of the last war and the beginning of the present one will be patent to anyone who has studied the course of prices of at least the principal agricultural commodities. This may have been of some advantage to the urban consumer arid the capitalist-user of agricultural products, but it has been the cause of untold misery and suffering of the agriculturist-producer. Instances are not rare of cultivators having been compelled to sell off their produce at fantastically low prices in order to meet the dues of the State or the demands of the moneylender. As regards the distributive organization, it has been costly and defective, always operating to the disadvantage of the producer and unduly enriching middlemen and financiers only. PROBABLE SOLUTIONS MARKETING: FOR THIS PROBLEM OF PRICE AND
* For example, under the Milk Marketing Scheme in England and Wales (before the War), the producer received only 42% of the price paid by the consumer, but 41% of the difference was covered by expenses of processing. In India, although the producer gets more, i.e., 60% of the price paid by the consumer, hardly 1% of the difference represents any processing costs. In actual practice, the price of agricultural commodities is determined in this country, not so much by their cost of production as by the expectations of supply and anticipations of probable demand by certain groups of wholesale dealers, Buyers at secondary markets and in the villages are guided by these prices as determined by wholesale dealers and pay the sellers at the mandi or the village accordingly. The latter make a further reduction on this price to cover their costs, risks and profits and the price that the cultivator producer ultimately gets is far removed from the price he would have received if the ordinary economic forces had free play. The price mechanism works backwards and not forward. The producer becomes puzzled and resentful because he feels he has been cheated of a large portion of his legitimate due. Another factor which disturbs the Price Mechanism, in so far as the primary cultivator is concerned, is the frequent adoption of economic policies without due consideration of the repercussions they would have on primary prices. Very often, imports of competing commodities have been permitted notwithstanding the fact that the internal price-levels of those commodities were already on the downward grade.
Backward Integration – Emerging Business Model:
The generic value chain of the food processing industry from raw materials to retail to the consumer, is shown below.Traditionally, different players across the value chain played the different roles and worked more or less independently. Recently, the trend has been towards increasing integration and collaboration across players in the value chain, to garner mutual benefits. Such integration is being driven by the manufacturers, who are looking to integrate backward and establish linkages with both raw material producers (farmers) and aggregators/logistics providers. These links have led to two new models emerging in the sector – Contract Farming and Terminal Markets. These are further discussed below. Contract Farming: Contract Farming is an agreement between the food processor (contractor), who is typically a large organized player, and the farmer, whereby the farmer is contracted to plant the contractor’s crop on his land. He also agrees to harvest and deliver to the contractor a quantum of produce, based upon anticipated yield and contracted acreage at a preagreed price. The food processor provides inputs in terms of technology and training to the farmer, to improve the yield and quality of the produce. This results in a win-win situation that generates a steady source of income for the farmer and eliminates supply shocks and assures good quality farm inputs which are crucial for the processor. The Government of India has been actively encouraging contract farming endeavours. Terminal Markets: A Terminal market is a central site, often in a metropolitan area, that serves as an assembly and trading place for agricultural commodities. Here there are different options for disposing off the produce. It can either be sold to the end consumer, or to the processor, or packed for export, or even stored for disposal at a future date. It thus offers different options to farmers under a single roof. Typically, terminal markets operate on a hub and spoke model where the markets form the hubs, and are linked to different collection centres (spokes) that are located close to the production centres. The typical value chain structure for a terminal market, as well as the key activities and corresponding infrastructure requirements at each level, are depicted in the figure below: The Government of India is looking to promote terminal markets, as a means of integrating domestic produce with retail chains. There are plans to set up such markets in eight cities across five states, at a cost of US$ 131 million. The cities being considered are Mumbai, Nashik, Nagpur, Chandigarh, Rai,Patna, Bhopal and Kolkata.
FURTHER SUGGESTIONS: If we go behind the objective facts, we would find that the fundamental obstacle to any scheme of agricultural improvement in this country is the Ill-health, sloth and inertia of the cultivator. The ill-health of the cultivator is due partly to his ignorance and the insanitary conditions under which he lives (it is well-known that public health measures are still in a rudimentary stage of development in this country) and partly to his extreme poverty and consequent malnutrition. His sloth and inertia, on the other hand, are the results of years of habit coupled with the belief that what* ever he does to improve production, owing to the curious interplay of certain social and economic forces, be himself shall never be able to reap the benefit thereof. In any scheme of agricultural reconstruction, therefore, these fundamental obstacles will have to be taken into account and squarely faced. Secondly, in any framing and execution of a plan for agricultural reconstruction, we should bear in mind the tragic fact that so far no attempt has been made to keep the farmer in continuous touch with the work of the research institutions and to help him in all practicable ways to apply the results of research on his farm. The contrast in this regard between what Soviet Russia has been able to achieve and our failure in India is too glaring to need emphasis. While in Russia an organic link has been established between the farmer and the State institutions engaged in agricultural research, in India the two still work in deplorable isolation from each other. Here, the research institutions and demonstration farms appear to function in an atmosphere which has little or no relation to the actual conditions under which agriculture is carried on, and the cultivator, for his part, has a deep distrust of anything new that is sponsored by Government. The wall of isolation that separates the cultivator at present from the State research institutions and farms must be pulled down. In the plan of the future, the State must actively organize large-scale farming units and prove by demonstration on the cultivators' plot or plots that scientific farming (i.e., better agronomic practices and management) is profitable not merely to the farm as a whole but to every member thereof. To sum up, large-scale farming, practical demonstration of better cultural practices technological improvements, better facilities for the disposal of his produce and a guaranteed minimum price for his produce so as to leave him a decent margin of profit all these must be provided for simultaneously, if the Indian cultivator is to be lifted out of his present stupor. In these, the State must play an increasingly bold and imaginative part, going even to the extent of compelling any dissentient minority to fall in line with the general programme of development. Whether this would mean the "liquidation" of the objecting minority, as was done with the Kulaks in Soviet Russia, no one can foretell at this stage. But it is obvious that certain drastic powers will have to be assumed by the State. Past experiments in better farming, in voluntary consolidation of holdings and in the carrying out of the results of researches on the fields of cultivators by persuasion have almost always ended in failure. The lesson,
therefore, is obvious. There must be authority to carry out plans of reconstruction and to compel all to fall in line. If India is to meet in full its obligation to make available to all its people at least the minimum of food, clothing and shelter, without which, in the wois of 'President Roosevelt, life itself would be. Impossible, mere must be increased production and better distribution of agricultural commodities an ideal which can be secured only by the wholehearted participation of all the sections of the community in a national plan. The document on National Agricultural Policy released by Government of India in July 2003 contains set of policy intentions of government. In order to implement those intentions a concrete and time bound action plan was needed but that is missing. The document is quite comprehensive in expressing what ought to be done in agriculture; this is a first step in giving policy direction. The subsequent step is, how and when policy goals and objectives would be achieved. In most of the cases the NAP is not silent on this, nor, there is any follow up document on this. This is the reason that in More than three and half years after release of NAP no serious action is initiated on most of the aspects. It is highly desirable to prepare action plans at the Centre and at the State level in quantitative terms to implement the new policy agenda in a time bound framework. For instance, to achieve 4 percent annual growth rate in agriculture certain planning and strategy has to be there on how much growth in each crop/enterprise in various states is visualized. How much growth this would require in inputs, irrigation, credit etc. There is no such follow up action plan and it is assumed that setting goals with change in overall policy environment would automatically help in achieving the goals enshrined in new policy. Besides action plan on quantifiable goals, a time schedule for change in qualitative policy aspects like changes in regulations is also needed. Achieving the goal of high growth (more than 4 percent) through efficient use of resources and promoting sustainability and equity would require area specific strategies. Past experience shows that this can be achieved by promoting area specific Specialization taking into accounts the groundwater status, soil health and other micro characteristics. This often results in diversification at country level. The advantages of specialization pockets are (i) it is useful in harvesting advantages of scale economy and (ii) it is easy and less costly to develop infrastructure to boost one or few commodities, rather than many commodities. Raising productivity in already agriculturally advanced regions would involve more cost in terms of inputs compared to underdeveloped regions as the developed regions are at a higher level on the production frontier. Since the domestic supply would be facing competition from imports, the emphasis should be on increase in productivity in a cost effective manner. This, in turn, require paradigm shift from output growth or maximizing production to efficient growth. The twin goal of increase in productivity and efficiency can be achieved by harness sing potential of
Underdeveloped regions and through development of specialization pockets. The focus must shift to area specific enterprises as has been the case of dairying in Gujarat, rice-wheat in Punjab, apple in sub-temperate West Himalayan region, grapes in Nasik region of Maharashtra, mangoes in Rayalseema region of Andhra Pradesh. Large scope exists for raising productivity of most of the crops by ensuring that improved technologies already developed in various states are adopted by farmers. Efforts in technology generation go waste if it is not disseminated to end users. This requires rigorous efforts on extension front. Competitive global liberalization has thrown new and formidable challenge to compete with international technologies. Facing this challenge would require vigorous efforts in domestic R&D. Some countries have very effectively applied tools of biotechnology to raise yield, reduce cost of production, and improve quality. India needs to learn from the experience of such countries and should encourage new yield enhancing and cost reducing technologies without getting bogged down in the debates on transgenic and genetically modified products. There is no mention of Organic farming in NAP. Organic farming offers an alternative method pf production that can be suitably exploited to benefit some segment of farmers. There are frequent reports of pesticides and chemical residues beyond safe limits in various foods. The main reason for this is indiscriminate use of agricultural chemicals. Farmers need to be educated about proper use of various agro-chemicals.
VALUE CHAIN FUNCTIONS AND ACTORS: This section describes the functions in the value chain as well as key actors who perform those functions. It includes the key technical support services of (1) Research and development/extension, (2) Input supply and (3) Certification, in addition to financial services. These descriptions, for the most part, apply to both organic sesame from Rajasthan as well as other organic crops in India. Research & Development (R&D)/Extension: R&D in organic agriculture has been conducted mostly by universities and research organizations, with funding support from state and national government agencies. Some NGOs also conduct extensive research on organic production and post-harvest techniques (e.g. Morarka Foundation) and provide a range of technical extension and support directly to farmers. Public sector extension for organic agriculture from the Ministry of Agriculture is limited. Input Supply: Organic farmers use a variety of bio-fertilizers (e.g. vermicompost and farmyard waste) and bio-pesticides (e.g. neem-based products, cow urine, peppers and medicinal herbs) to improve
productivity, but use of agro-chemicals is strictly prohibited. Farmers require on-going technical assistance in the proper preparation and application of these bio-inputs, especially when converting from conventional to organic production. Until these farmers are able to sufficiently produce their own inputs on-farm, they must purchase them from a variety of suppliers. Local farmers and NGOs skilled in bio-input production techniques have become small-scale bio-input suppliers— selling excess production (especially vermi-compost and other biofertilizers) to neighboring farmers. Many of the large conventional agricultural input companies in India (e.g. NAFED, Hindustan Lever and Excel Industries) also sell a line of products suitable for organic production and act as large-scale bio-input suppliers. All inputs used in certified organic farming—including seeds, fertilizers and pesticides—must comply with the same standards for organic production. This is especially important for seeds used in organic production since international standards require strict seed traceability. Production: Available data for organic agriculture in India is often inconsistent and contradictory, and should be considered illustrative only. It is estimated that approximately 5,147 farms in India are producing organic products on 37,050 total hectares (which is 0.03 percent of total agricultural area in the country).7 According to the latest statistics from ADEPA, India exported 31 different organic products which totaled 6,792 metric tons valued at Rs 7,123 lakh ($16.1 million). Procurement/Consolidation: Organic products are typically procured from farmers and consolidated by the following market players:
• Medium- and large-scale farmers (e.g., Amit Spinning)—They play similar intermediation roles by consolidating their own production with adjacent small-scale farmers (often on a contract farming basis) and then selling directly to exporters. • Private intermediaries (e.g., Agrocel Industries)—These entities do not have their own major sources of production but rely on procurement from small-scale farmers on a contract basis. The majority of organic products are sold to exporters or to specialized domestic traders, but approximately 15-25 percent of total production is sold via the conventional mandi agricultural marketing system with little or no price premiums paid to the producers. The mandis are a government-regulated rural marketplace where agricultural commodities are sold by auction. Initially established by the government to facilitate direct trade for small-scale farmers, the mandis are now generally viewed as inefficient. Processing: There are very few processed organic agricultural exports.8 There is some semi-processing (i.e., cleaning and hulling) of organic oilseed crops including sesame carried out by small- and medium/largescale exporters in-house. Due to the certification requirements for processing of exports, it is not usually out-sourced to stand-alone processors. Exporting: There are a variety of exporters of certified organic agricultural products from India. The medium/large scale exporters are generally focused on specific organic products (e.g., IITC—tea and Maikaal bioRe—cotton) while smaller-scale exporters market a wider range of products. With a few exceptions (i.e., ITC), most organic exporters specialize in certified organic products and have limited trade in conventional agricultural products. Exporters also perform the function of labeling and packaging as these must also be certified. Certification: The process for organic export certification is usually initiated and managed by the exporter, intermediary or medium/largescale farms. They are the ones who pay for the inspection services of a certification firm. The cost to these firms of certifying smaller-scale farmers, especially those located on contiguous plots, can be reduced by pursuing group rather than individual farm certification (this entails conducting certification based on a statistical sampling of the grouped farms). Individual small-scale farmers do not have the economies of scale to justify export certification on their own. Importing: The major buyers of organic agricultural products from India are traders/wholesalers in the importing countries. Although specialty retailers and supermarkets are important marketing channels for organic products in these countries, Indian exporters typically do not sell to them directly. Europe is the main market for certified organic exports from India but specific trade varies by country. The Netherlands is the biggest buyer of sesame, but many Indian exporters see the U.S. organic market as the one with the highest export growth potential. International wholesalers/traders of organic agricultural products in the
Financial Services: Small business startups are generally funded with personal and/or family funds, and credit is available as an embedded service provided to contract producers by the contracting firm (see Inter-
firm Cooperation, below). Bank financing is available to larger enterprises and to producers with assured markets. INTER-FIRM COOPERATION All of the inputs, farming practices and processes used to produce an organic product must meet the organic standards of the importing country. Unlike conventional agricultural production and marketing in India, there is a high degree of inter-firm cooperation among all participants and at all levels in the organic agricultural products value chain. Since traceability is a major principle of organic agriculture, the relationships between exporters, intermediaries and producers are very close. Not only does information flow down the chain, but access to inputs, the provision of technical extension and market intermediation are also embedded in these relationships. The organization of organic agricultural trade in India can be grouped into four general models: NGO intermediary, private intermediary, integrated producer and integrated exporter (see figure 3, below).
REFERENCES: Chand Ramesh (2001). Emerging Trends and Issues in Public and private Investments in Indian Agriculture: a Statewise Analysis, Indian Jn. of Agril. Economics, vol. 56 No.2, 161-184, April – June 2001.
Agricultural Interventions adopted in different countries and possible solution for Indian Agriculture on that basis:
Brief Introduction Clustering Intervention:
Caribbean governments and private sector agencies, supported by International Development Organizations, are being encouraged to promote small business, increase supply capacity, expand value adding and build competitive value chains in agriculture. Support is expected to be forthcoming from the Economic Partnership Agreements (EPA) which emphasizes the importance, inter alia, of ‘supporting conditions for increasing investment, private sector initiative and enhancing supply capacity, competitiveness and economic growth’. Further, its Development Cooperation Pillar prioritizes ‘support measures to promote private sector and enterprise development (especially small entrepreneurs) and enhance Competitiveness and diversification’ and ‘diversification of CARIFORUM exports of goods and services via new investment & development of new sectors’. Governments and private sector agencies, supported by
International Development Organizations are expected to put in place various financing offering, including micro-financing and specially established business development support units, to achieve these objectives. While primary production, generally, does not rank as high on the areas for support as value-added products, these initiatives do offer some stimulus to expand farm production. Building farm supply capacity the start of the value chain – will be a pre-requisite for successfully developing the business of agriculture in the Caribbean. In a ‘buyerdriven’ world, the worst nightmare for these buyers, be they importers, wholesalers, supermarkets, hotels, or consumers, is supplier failure through the over reliance on importer/distributor supply systems.2 Also, in a buyer-driven world, the business of agriculture is not about helping marginal poor farmers. A prosperous agricultural sector feeds industrial development, supports the services sectors and is a prerequisite for food and nutrition security. These are essential to promote employment, economic growth and sustainable development. As consistently emphasized by Chelston Brathwaite, Director General of IICA, agriculture contributes to three fundamental aspects of development, namely: national food security; national social stability; and environmental protection. Agricultural development is not about helping 3 Clustering for competitive value chains in agriculture marginal poor farmers; the agricultural sector is a strategic sector of every CARICOM economy. The new approach to economic development through Clustering: Clusters have attracted the interest of policy makers wanting to boost innovation in industrial growth sectors, such as, biotechnology and telecommunications, as well as to support local economic development in disadvantaged countries and regions7. Hundreds of cluster initiatives have been launched in virtually every region of the world, and the number is growing. These initiatives, which take a wide variety of forms, are now an accepted part of economic development. However, there is surprisingly little systematic knowledge of these initiatives, their structure, and their outcomes. As more and more resources are devoted to efforts to foster cluster development, and more particularly, the formation of new businesses, the need to understand best practices has become urgent. Therefore, it is necessary to determine those best for entrepreneurship and business development along the process from idea conceptualization, to start-ups to full establishment of business. More specifically, the need to outline and understand the process of implementing these best practices for the development and growth of agribusiness clusters in the Caribbean region is critical.
The Jamaica Cluster Competitiveness Project (JCCP): To address the country’s deteriorating economic performance, the government of Jamaica launched its National Industrial Policy (NIP) in 1997. By 2002 it was determined that the NIP had not succeeded in delivering growth for Jamaica or fostering a sense of partnership between the public and private sectors. It was recognized that collaboration improved the chances of being competitiveness, at the firm level, nationally, regionally and internationally. In this context, the JCCP, a twoyear pilot project managed by the Jamaica Exporter’s Association (JEA)was launched in September 2002 with a focus on three of its targeted sectors; Agribusiness (sauces and spices), Tourism and Entertainment. Source: From http://www.iica.int
Role of NGO’S and CBO’S in Agricultural Marketing in Developing countries: AGRICULTURAL MARKETING IN
DEVELOPING COUNTRIES: Economic reforms have had sweeping impacts on agricultural markets in Developing countries. In general, state intervention has been reduced, notably with respect to: 1. The abolition or sharp curtailing of parastatal marketing boards; 2. Depreciation of formerly over-valued currencies rendering developing Country exports more competitive and imports more expensive; 3. A reduced public role in agricultural services, especially in subsidized Credit, input and extension networks;
TYPES OF MARKETING INTERVENTION:
As indicated in the previous section, there are many different ways in Which NGOs or CBOs may intervene to improve access to Agricultural Markets. In this section interventions are discussed in eight non-exclusives Categories that describe aspects of the intervention strategy: 1. Intended beneficiaries 2. Skills and training 3. Access to agricultural inputs 4. Agro-processing technologies 5. Marketing linkages 6. Credit programmes 7. Marketing information 8. Holistic approaches .
Precision Farming as an Agriculture Intervention :
Precision Farming • Precision farming originally developed for large farming units, such as those found in the United States. has been adapted to the needs of smallscale farms in Asia, which in some countries have an average size of only one hectare (2.6 acres). • Three technology levels: 1. Describing variability 2. Using variable-rate technology (VRT) for adjusting Agricultural inputs to site-specific requirements 3. Applying a decision-support system (DSS). How Precision Farming Works?
Japan has recently developed automated measuring variability within fields, using a real time soil spectrophometer. • Satellites collect the data. • It is now possible to apply precision farming to small as well as large farms, and make it part of Asian rural development programs. Taiwan has a strong island-wide soil testing service, Small-scale rice farmers in Taiwan improve their fertilizer applications by know the nutrient status of their soils, particularly with regard to nitrogen, phosphorus and potassium (N, P and K). • Decision support systems are being developed which
will provide site-specific fertilizer recommendations. • Initially, detailed information for farmers will be provided through the existing agricultural information services. • Later, this information will be directly available to Farmers over Internet. Source: From http://www.agnet.org
INTERVENTIONS ADOPTED BY THE SAINT LUCIA BANANA INDUSTRY:
OBJECTIVES: It is recognized that the production of quality bananas for a market consisting of the UK multiples currently represents the most cost effective use of the natural resources available within Saint Lucia for the generation of foreign exchange income for the island. It is also recognized that this Market will become increasingly competitive within the next five years. In the light of the above, given the external challenges and internal constraints, the Government’s strategy for the Banana Industry of Saint
Lucia is intended to promote the growth of an efficient industry that is able to compete in a liberalized world market on a sustainable and competitive basis, by the following strategic priorities: 1. The creation of an enabling environment to allow local savings and finance to be revolved Within the industry and to attract further investment into the industry. 2. The provision of an adequate regulatory framework to provide the necessary security to both Small- and large-scale investors, and to promote stability within the industry. 3. The liberalization of the industry to promote competition and efficiency at all levels. 4. The promotion of bananas in traditional and non-traditional markets. LIBERALISATION: The banana industry in Saint Lucia has already undergone extensive liberalization with the passing of the Saint Lucia Banana Growers Association (Dissolution) Act of 1998. Further liberalization measures will be introduced to allow for the fullest participation of all stakeholders in the industry. These will include: RE-ENGINEERING OF MARKETING ARRANGEMENTS: The Government of Saint Lucia will continue its lobby for the implementation of the salient aspects of the various studies of the current marketing arrangements for Windward Islands Bananas with a view towards increasing efficiencies, eliminating all unnecessary costs and layers, and maximizing the net returns to the growers. Greater integration between the operations of GEEST and WIBDECO will be sought, and WIBDECO will be encouraged to re-engineer its organizational structure and business functions to allow it to deal effectively with the strategic challenges facing the industry. INPUTS AND SERVICES SECTOR: The role of the inputs and services supply sector in the banana industry has been, hitherto, largely restricted to the growers’ associations. This has been due to the cess account system, and the fact that the associations have generally been the prime source of credit for banana growers. Hence, the associations have controlled funds for inputs or services and the functions have remained largely “in-house”. PROMOTION OF BANANAS AND BANANA PRODUCTS: The activities to be undertaken under this component will be supportive of on-going efforts aimedat securing continued access to traditional markets
in Europe and widening the access for Caribbean bananas and their byproducts to other markets. AGRICULTURAL DIVERSIFICATION: Given the challenges facing the Banana Industry, there is an urgent need to reengineer the agricultural sector to facilitate its evolution into an internationally competitive market oriented sector. The strategic priority will be to foster growth and stability in the Agricultural Sector by the following avenues: § Identify and develop alternative sources of income generation § Decrease the dependency on a single crop for foreign exchange § Explore and exploit niche markets for non-traditional products § Optimise the employment opportunities within the agricultural sector MARKETING: The retail operations of the St. Lucia Marketing Board will be privatized. A Marketing Agency will be established, initially within the Ministry of Agriculture, Forestry, Fisheries and the Environment (MAFFE), that will be responsible for facilitating the trade of agricultural produce. This Agency will oversee the implementation of a system of grades and standards for all agricultural commodities offered for sale domestically and externally, and will source market opportunities for local agricultural products INFRASTRUCTURE: Improvements will be made to the infrastructure required to support agricultural activity. Farm Access Roads will be rehabilitated through the existing Farm Access Road Project, which is a joint initiative between the MAFFE and the Ministry of Communications, Works, Transport and Public Utilities. External funding agencies, such as the Caribbean Development Bank, will also be encouraged to invest in the rehabilitation of off-farm infrastructure. ACCESS TO CAPITAL: The Rural Economic Diversification Incentives Project (REDIP) currently being implemented by the MAFFE has been found to be an effective tool for providing greater access to credit for agricultural enterprises. This project will be broadened and strengthened to allow it to make credit available to a wider cross-section of beneficiaries and for an expanded range of agricultural projects. SUPPLY OF INPUTS: Input supply, consistent with what has taken place in the privatized banana industry, will take place in a competitive, privatized environment. In order to make inputs more easily accessible by farmers, the strategy
will encourage and facilitate the establishment sustainable community-based input supply outlets. GRADES AND STANDARDS:
The St. Lucia Bureau of Standards will be strengthened to ensure that there is compliance with established standards. Additionally, a national campaign of public information and education will be initiated to sensitise the public to the importance of ensuring strict adherence to grades and standards and the benefits of such standards. AGRO-PROCESSING: The development of an agro-processing sub-sector will be encouraged and facilitated through cottage industry. This approach is expected to be more sustainable and viable than one that involves the establishment of large state-run multi-processing enterprises. Therefore, cottage industry development will be encouraged by providing access to credit and facilitating easier access to the required inputs (including packaging material). ORGANIC FARMING: The global market for organic products has experienced exponential-like growth over the past few years, and indicators point to a continuation in this trend in the near future. Therefore, the agricultural diversification strategy will seek to exploit this market. Already, many domestic production systems predispose themselves to easy adaptation to the requirements for organic farming, and these will be further developed. TECHNOLOGICAL ADVANCEMENT: An effective diversification strategy is highly dependent on the generation, adaptation and transfer of appropriate technologies. Technological input is necessary for sharpening the competitive edge of local industry. Consequently, national research and development capacity will be Strengthened, and wherever and whenever possible, effective linkages will be cultivated with regional and international technology institutions. FOOD SECURITY AND SAFETY: Initiatives designed to enhance consumer preference for locally produced food items will be promoted. The Buy-Local Campaign initiated by the Ministry of Commerce, Industry and Consumer Affairs will be used as one such vehicle to achieve this objective. Additionally, a system will be established for the routine monitoring of the integrity of agricultural produce.
SANITARY AND PHYTOSANITARY MEASURES: In order to ensure strict adherence to all aspects of agricultural health, effective certification and inspection systems will be instituted. NATURAL RESOURCE MANAGEMENT: Initiatives that promote sustainable use of the country's natural resources will be pursued. In this regard, due consideration will be given to the development of eco-tourism and agro-forestry enterprises. Additionally, careful attention will be paid to critical elements such as integrated watershed management and soil conservation. Where necessary, the institutional capacity for natural resource management (including review of legislation and enforcement capability) will be strengthened. INSTITUTIONAL CAPACITY BUILDING: Multi-partite relationships within the sector that are conducive to the effective implementation of the diversification strategy will be enhanced. Initiatives in this respect will include the development and adoption of an agriculture sector policy and plan and the finalization of institutional reviews of the MAFFE and allied agencies. Source: From Website of Government of Saint Lucia
Biodynamic: An Agricultural intervention adopted by Australia
Biodynamic: Bring life to your soil and farm
Building carbon and nutrient rich humus into the soil is the common foundation of all good farming; increasing quality production through improved soil health and higher soil water retention, providing drought and flood tolerance. To achieve this biodynamic farmers work with soil and plants as living, dynamic manifestations of a relationship between two poles. The earth is the physical element, and the sun and cosmos is a non-material element extending to the farthest expanse of the universe, providing the energetic stimulus for life on earth. To enhance both these influences biodynamic farmers use two sprays, horn manure 500 as a soil
spray, enhancing soil biology, plant vigour and rooting depth, and horn silica 501 as an atmospheric spray, increasing photosynthesis and improving quality. Small amounts are sprayed sparingly over the land, promoting more balanced plants less susceptible to insect and fungal attack. Insect, fungus and weed problems are viewed as symptoms, or messengers, of imbalances in soil and stress in plants. Biodynamic farmers find that addressing the stress proves more effective than shooting the messengers. Use of these two sprays quickly brings renewed life and character to the farm. A second element to biodynamic growing is using the rhythmic energies of the Moon and planets. We all use the daily and annual Sun rhythms as a matter of course in our lives. It is well known that the moon is connected to the tides but less well known is that it also works with all fluid elements in soil and plants. Biodynamic farmers widen their observations and rhythmic practices, learning to include these extra terrestrial influences in farm work. They use astronomy, the physical stars in the sky, not astrology. These astronomical influences exist independent of our willingness to work with them; you may notice that some plantings germinate fast, some slow, some bolt to head while others remain inactive. Working with the rhythms of the Sun, Moon and planets can lead to understanding these variations in growth patterns. Farmers who plan their farm work to include these rhythms find great enjoyment and excellent results, lightening the work and optimising production.
Source: From Webpages of Ministry of Agriculture of Australia
AGRICULTURAL DEVELOPMENT STRATEGY ADOPTED BY JAMAICA:
Source: From the Webpages of Ministry of Agriculture of Jamaica.
Agribusiness Management Thailand Orchid cooperative:
Thailand is regarded as an agricultural country. The agricultural sector has played an important role in contributing to the economy of Thailand throughout history. Although the contribution of the agricultural sector to the Thai economy is decreasing, agriculture is still important, with 41% of the total land area or 21 million hectares devoted to agriculture. Agriculture is the main occupation of the Thai people employing about one-third of the labor force. The history of agricultural cooperatives in Thailand can be traced back to 1914, when the Thai economy opened to international trade. In 1916, the Thai government created the first cooperative society, it was known as a "village credit cooperative". With a view to facilitate financing support to cooperatives and their members, the government set up the "Bank for Cooperative" in 1947. In 1966, the "Bank for Agriculture and Agricultural Cooperative (BAAC)", a state enterprise, was established to be a financial center for agricultural cooperatives as well as individual farmers. In 1969, the government changed the status of agricultural cooperatives from unlimited societies to limited ones. This year, the Agricultural Cooperative Federation of Thailand was also established as the apex agricultural cooperative of the country. Current situation of Agricultural co-operatives in Thailand: As of January 2006, the Cooperative Movement of Thailand was composed of 6,712 primary cooperatives with an individual membership of 9,684,508 or about 14% of the total population of the country. The cooperatives in the agricultural sector occupied the largest. It had a total of 4,137 primary cooperatives with 5,950,809 individual members. These represented more than 60% of the total primary societies as well as the total individual membership of the cooperatives of the country. The cooperative intends to participate in both national and international orchid exhibitions. With this approach customers will get to know more about the company and the customers network will then enlarge. The cooperative does not encourage giving the discount rate system since the margin is extremely small. Yet the promotion method the cooperative plans to use is to giving additional free amount of orchids when purchasing.
Source: From Website of Thailand Orchid Co-op limited
BIOTECH CROP AS AGRICULTURAL INTERVENTION:
Global Status of Biotech Crops in 2004: 2004 is the penultimate year of the first decade of the commercialization of genetically modified (GM) or transgenic crops, now often called biotech crops, as referred to consistently in this Brief. In 2004, the global area of biotech crops continued to grow for the ninth consecutive year at a sustained double-digit growth rate of 20%, compared with 15% in 2003. 90% of the beneficiary farmers were resource-poor farmers from developing countries, whose increased incomes from biotech crops contributed to the alleviation of poverty. USA, Argentina, Canada, Brazil, China, Paraguay, India, South Africa, Uruguay, Australia, Romania, Mexico, Spain and the Philippines. During the period 1996-2004, the accumulated global biotech crop area was 385 million hectares or 951 million acres, equivalent to 40% of the total land area of the USA or China, or 15 times the total land area of the UK. The continuing rapid adoption of biotech crops reflects the substantial improvements in productivity, the environment, economics, health and social benefits realized by both large and small farmers, consumers and society in both industrial and developing countries.
AGRICULTURAL STRATEGIES CAROLINA (U.S):
Agricultural practices accounted for only 7%, or 9.53 megatons, of North Carolina’s total GHG emissions in 1990 (Figure 9-1). While this is a small percentage, the sector is a significant contributor of methane (CH4) and nitrous oxide (47% and 39%, respectively). Overall land use changes, including conversion from and to farmland, also account for 2% of the state’s nitrous oxide emissions. Such emissions can be reduced through Improved agriculture and land management practices. This chapter outlines a number of strategies that target such improvements. If implemented, CH4 management and recovery measures could help North Carolina achieve emissions reductions of at least 199,000 tons eC02. When further combined with more fuel-efficient farming techniques and better fertilizer management practices, the eCO2 reduction potential for agriculture is somewhat larger, but still relatively small in comparison to the other sectors. Agriculture is a significant economic sector in North Carolina. In 1997, the state ranked 15th nationally in number of farms, with 2.7% of the nation’s total. It also ranked 4th in generation of farm income, gleaning $3.5 billion or 7.1% of the country’s total farm gains. In terms of cash receipts for commodities, North Carolina was positioned 7th in the United States, bringing in $8.3 billion or 4.0% of the nation's earnings that year. The state’s leading farm commodities include broilers, hogs, tobacco, and greenhouse nursery crops (O'Leary Morgan et al 1999). Currently, North Carolina leads the nation in production of tobacco, turkeys, and sweet potatoes.
Emissions Reduction Strategies:
While there is room for emissions reduction in numerous agricultural practices, improvements in North Carolina’s farming energy efficiency, CH4 management/recovery, and fertilizer management have the greatest potential for overall emissions reduction. This section will explore the effectiveness of these three main sets of strategies, with emphasis placed on CH4 management and recovery. The research structure is as follows: 1. Strategy: Increase usage of energy efficient farming practices 2. Strategy: Increase usage of CH4 management and recovery systems at swine and cattle Production facilities 3. Strategy: Implement Best Farm Management Practices
Results: Modeling these measures indicates that CH4 recovery and conversion to biofuels are extremely effective in reducing greenhouse gas emissions. The capture of CH4 through digester technologies alone equates to an emissions reduction of 86,610 tons eCO2 by the year 2010. Fuel switching to the 500 billion Btu’s of electricity recovered prompts an additional savings of 113,000 tons eCO2. It should be kept in mind that the 1.5 trillion Btu CH4 recovery potential reported by the Energy Division is a conservative estimate, as it is based on the amount of CH4 farms can “economically recover” (North Carolina Energy Division circa 1990s). If government subsidies, tax credits, or other initiatives could be used to make implementation of such measures more economical for farmers, emissions reduction potentials could increase considerably. References: Agricultural Research Service.1982. Energy Research for the Farm. Agriculture Information Bulletin Number 447. U.S. Department of Agriculture: 1982.
AGRI-BUSINESS OPPORTUNITIES: CAN HELP ECONOMIC GROWTH AND IN UNEMPLOYMENT
OPPORTUNITIES IN THE INDIAN FOOD PROCESSING INDUSTRY: Indian food processing industry has seen significant growth and changes over the past few years, driven by changing trends in markets, consumer segments and regulations. These trends, such as changing demographics, growing population and rapid urbanization are expected to continue in the future and therefore, will shape the demand for value added products and thus for food processing industry in India. The Government of India’s focus towards food processing industry as a priority sector is expected to ensure policies to support investment in this sector and thus attract more FDI.Some of the sectors which are relatively more attractive include Fruits and Vegetables, Meat, poultry and fisheries, dairy products, snack foods and ready-to-make items. India, having access to vast pool of natural resources and growing technical knowledge base, has strong comparative advantages over other nations in this industry. Also, the Government has provided various incentives such as capital subsidies and tax exemptions for boosting investments in these segments. However despite the various aspects making these sectors attractive certain success factors are crucial in reaping their potential. These include, scale and supply chain efficiency, brand competitiveness and effective marketing, deploying superior technology, product innovation and pricing. The Government also encourages many participative models such as terminal markets and contract farming arrangements to benefit the various stakeholders. Many private players participating in these arrangements have been successful. Also, the various states realizing the importance of this industry from an employment as well as revenue generation perspectives have been extremely forthcoming in bolstering growth in this industry.
MARKETING OF FFV: Marketing plays an important role not only in stimulating production and consumption, but in accelerating the pace of economic development. The marketing system plays a dual role in economic development in countries whose resources are primarily agricultural. Marketing comprises all the operations, and the agencies conducting them, involved in the movement of farm-produced foods, raw materials and their derivatives from the farms to the final consumers, and the effects of such operations on farmers, middlemen and consumers. Agricultural marketing deals with all the activities, agencies and policies involved in the procurement of farm inputs by the farmers and the movement of agricultural products from the farms to the consumers. The agricultural marketing system is a link between the farm and the non-farm sectors. It involves all the aspects of market structure or system, both functional and institutional, based on technical and economic considerations, and includes pre and post-harvest operations, assembling, grading, storage, transportation and distribution. The expansion in the size of farm output stimulates forward linkages by providing surpluses or food which requires transportation, storage, processing, packaging and retailing to the consumers. Increasing demands for money with which to purchase other goods leads to increasing sensitivity to relative prices on the part of the producers, and specialization in the cultivation of those crops on which the returns are the greatest, subject to socio-cultural, ecological and economic constraints. It is the marketing system that transmits the crucial price signals. The fruit and vegetable marketing in India is highly decentralized
having wide capacities. There has been concern in recent years regarding the efficiency of marketing of fruits and vegetables, and that this is leading to high and fluctuating consumer prices and only a small share of the consumer rupee reaching the farmers. It is overviewed by many committees and reports that Indian farmers are good producers but not good marketer.
Interim Findings & Observations of the report: After observation and analysis of Agricultural Interventions adopted in India and other countries, it can be concluded that Indian Agriculture requires improvement in each of its component. They may be termed as: 1. Agriculture Infrastructure 2. Research and Development 3. Government role: Control System 4. Increased and sufficient participation from Multi National Companies in Agriculture 5. Need of implementation of Agro Marketing 6. Need of adopting various Agricultural Interventions as Biotech crop, Clustering and Contract Farming. Probable models for the revival of Indian agriculture has been suggested and drawn in the “Priority areas and Probable solutions for Indian agriculture section” as well as in “Agriculture Interventions adopted in different countries” section on the basis of the issues and problems it is facing. Since, Indian agriculture is very important aspect for the economic growth of India and also for the solution of lots of problem so revival of Indian agriculture is of great importance. On the basis of the findings from the Interim Report, it can be concluded that this sector requires attention not only from government and corporations but also from the talents available in our country. There is immediate need of collaboration of Management and Technology for its revival so that its issues can be handled effectively and efficiently. There might be lots of Models for the revival of Agriculture sector but real revival can take place only when there will be awareness for this issue and farmers will be able to know the wrong and right aspects for their fields. So, along with implementation of these models, there is immediate need of increasing Agriculture Education among the farmers.
I will submit the following reports as per the scheduled dates given below:
Evaluation Component Project Proposal Interim Report Final Report
Dates Planned 11 August, 2009 08 December, 2009 09 March, 2010
Faculty Guide name:
Prof. Vinay Pratap
Signature of the student:
Interim Report has been divided in six major parts:
1. Overview of Indian Agriculture Sector. 2. Indian Agriculture: Issues and Challenges. 3. Priority areas for Indian Agriculture and probable solutions. 4. Different Interventions adopted in different countries and probable solution for its revival 5. Agri-Business opportunities as a component for growth of Indian economy and unemployment solution. 6. Interim Findings & Observations of the report.
ENROLLMENT NO. - 08BS0004012
REPORT ON“Decline in the share of agriculture in Indian GDP: A boon or bane for the economy. And role of Agro-Marketing in the revival of agriculture.”
Prof. Vinay Pratap
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