Professional Documents
Culture Documents
Agriculture
Agriculture
Land Reforms
Great scarcity and uneven distribution of land
Focus of agricultural policies in the initial years was on institutional changes through land
reforms
Two objectives of land reforms in India
o To remove the impediments to agriculture that arise due to the character of
agrarian structure in rural areas
o To reduce or eliminate the exploitation of tenants/small farmers
Four main areas of land reforms in India
o Abolition of intermediaries (zamindars)
o Tenancy reforms
o Land ceilings
o Consolidation of disparate land holdings
Economic arguments for land reforms
o Equity
o Small farms tend to be more productive than large farms
o Owner cultivated plots of land tend to be more productive that those under
sharecropped tenancy
Abolition of zamindari was successful while the other three areas of land reforms met with
limited success
Operation Bargha. Also, LR in Kerala
Regional trends in LR
Effect of land reforms
o On tenants
Absentee landlordism declined
Tenancy declined. In some cases, tenants were evacuated from the land.
In some cases there was a drift of tenants into landless
Where tenants had not been evicted, tenancy was pushed underground
o On equity
o On productivity
o On agrarian power relations
The National Commission on Farmers has placed the unfinished agenda in land reform first
in its list of five factors central overcome an agrarian crisis
Way forwards
o Land reforms that make tenancy legal and give well defined rights to tenants,
including women, are now necessary
Subsidies
Talk about bringing urea under the Nutrient Based Subsidy (NBS) system and decontrolling
its prices
Downsides
o Fertilizer subsidy touched almost 1 lakh crore in 2008-09
o Promotes overuse of fertiliser and thereby catalysing soil degradation
o As a result, agricultural production in the bread baskets of the country has
stagnated, posing a threat to the food security of the country
o Drylands do not receive the benefit of crores of subsidy given in fertilizers
Government Intitiatives
Green Revolution
National Policy on Agriculture, 2002
National Policy for Farmers, 2007
o Major policy provisions include provisions for asset reforms, water use efficiency,
use of technology, inputs and services like soil health, good quality seeds, credit,
support for women etc
o Focus on millets as well
o
Irrigation
45 pc of nearly 175 mn ha of cropped area is irrigated
Trends
o Nearly trebled from 24 mn ha in 1953-64 to 75 mn ha in 1998-99
o It accounts for the largest part of total investments in the agricultural sector
o Importance of ground water as an irrigation source has also increased considerably
Uneven access
o Inter-regional variance
o Inequality in access within the farming population
Areas of concern
o Depletion of ground water
o Environmental concerns
o Costs
Steps to take
o Improving water use efficiency
o Water governance
o Economic incentives for efficient use
Govt Schemes
o Accelerated Irrigation Benefits Programme was started during 1996-97. It extends
assistance for the completion of incomplete irrigation schemes
o
In 11th FYP – refer previous section
Way Forward
Second green revolution (?)
Relook at all the issues offering forward and backward linkages in the agricultural production
cycle
Focus on oilseeds, pulses and coarse cereals
Coarse cereals: high nutrition, can be grown in dry areas, enhance fertility of soil in rotation
PDS should be reformed: coarse cereals should also be provided through PDS
Timely availability of credit at affordable costs
Wider extension of insurance facilities to the farm sector
Water and irrigation infrastructure
Drip irrigation
Organic manures should be popularized and their commercial production encouraged
Educate farmers about technology and agricultural techniques
Food Security
Food security should also incorporate nutritional security. This requires emphasising the
increase in production of pulses, fruits, vegetables, poultry and meat.
Interpreted broadly
Includes nutritional security which particularly incorporates maternal health and infant
health due to the involvement of the nutritional aspect
Also covers employment security (?)
Affordability, accessibility and availability
Food security seeks to address all the three dimensions of hunger: chronic, hidden and
transient
It also is the first step towards inclusive development
Irrigation
The total irrigation potential in the country has increased from 81.1 mn hectares in 1991-92
to 108.2 mn hectares in March 2010.
1996-97: Accelerated Irrigation Benefit Programme initiated
Reservoir Storage Capacity: 151.77 billion cubic metres
Agricultural Pricing
To ensure
o Remunerative prices to growers
o Encouraging higher investment and production
o Safeguard the interest of consumers by making sure that adequate supplies are
available
It also seeks to evolve a balanced and integrated price structure in the perspective of the
overall needs of the economy
Investment in Agriculture
FAO estimates that global agricultural production needs to grow 70 pc by 2050 in order to
meet projected food demand
Hence investment should grow by a whopping 50 pc
In India, public investment in agriculture has witnessed a steady decline from the 6 th FYP
onwards
Share of investment in agriculture has been between 8-10 pc
Most of this has gone into current expenditure in the form of increased output and input
subsidies
Though private sector investment has been increasing, it has not proved to be enough
Decreased public spending in creation of supporting infrastructure in rural areas has
discouraged private investment in this sector
Some of the measures could be
o Investment in general service like R&D, education, marketing and rural
infrastructure
o Increased investment in rainfed areas
o Private sector participation
o Increased investment for sustainable development
Uruguay Round multilateral trade negotiations were concluded after 7 years of negotiation
in December 1993
The WTO Agreement on Agriculture was one of the main agreements which was negotiated
Agreement on Agriculture contains provisions in three broad areas of agriculture
o Market Access
o Domestic Support
o Export Subsidies
Market Access
o This is the most important aspect of the negotiation because all countries restrict
market access while only few have export subsidies and domestic support
o This includes tariffication, tariff reduction and access opportunities
o Tariffication means that all NTTBs should be withdrawn (such as quotas, minimum
export prices etc)
o Adopts a single approach using a tiered formula
o Single approach: everyone except LDCs have to contribute by improving market
access for all products
o Sensitive products: All countries can list some sensitive products and are allowed
flexibility in the way these products are treated, although even sensitive products
have to see ‘substantial improvements’ in market access.
o Special and differential treatment
Purpose: for rural development, food security and livelihood security
Specifically, special treatment is to be given to developing countries in ‘all
elements of the negotiation', including ‘lesser’ commitments in the formula
and long implementation period
Special products: developing countries will be given additional flexibility for
products that are specially important for their food security, livelihood
security and rural development.
Special Safeguard Mechanisms: is intended to provide contingent protection
to poor farmers in developing countries from negative shocks to import
prices or from surges in imports. [Safeguards are contingency restrictions on
imports taken temporarily to deal with special circumstances such as a
sudden surge in imports. AoA has special provisions on safeguards. In
agriculture safeguards, (unlike normal safeguards) can be triggered
automatically when import volumes rise above a certain level or if prices fall
below a certain level; and it is not necessary to demonstrate that serious
injury is being caused to the domestic industry]
o AoA requires (from 1995)
36% average reduction by developed countries, with a minimum per tariff
line reduction of 15% over six years
24% average reduction by developing countries with a minimum per tariff
line reduction of 10% over ten years
Domestic Support (subsidies)
o AoA structures domestic support into three categories
Green Box
Amber Box
Blue Box
o Green Box
Non (or minimal) trade distorting subsidies
They have to be government funded and must not involve price support
They tend to be programmes that are not targeted at particular products
and include direct income supports for farmers that are not related to
current production levels or prices. They also include environmental
protection and regional developmental programmes. These subsidies are
therefore allowed without limits
o Amber Box
All domestic support measures considered production and trade fall into the
amber box
These include measures to support prices, or subsidies directly related to
production quantities
These supports are subject to limits which are allowed: 5% of total
production for developed countries, 10% for developing countries
Reduction commitments are expressed in terms of a “Total Aggregate
Measurement of Support” (Total AMS)
o Blue Box
This is the “amber box with conditions” – conditions designed to reduce
distortion
Any support that would normally be in the amber box, is placed in the blue
box if the support also required farmers to limit production
At present there are no limits on spending on blue box subsidies.
Export subsidies
o Developed countries are required to reduce their export subsidy by 36% (by value)
or 21% (by volume) over the six years
o For developing countries the % cuts are 24% (by value) or 14% (by volume) over 10
years
India’s commitment
o As India was maintaining QRs due to balance of payments reasons (which is a GATT
consistent measure), it did not have to undertake any commitments in regard to
market access
In India, exporters of agricultural commodities do not get any direct subsidy. Indirect
subsidies are given
Food Processing
Food processing is a large sector that covers activities such as agriculture, horticulture,
plantation, animal husbandry and fisheries
Ministry of Food Processing indicated the following segments within the Food Processing
industry:
o Dairy, fruits and vegetable processing
o Grain processing
o Meat and poultry processing
o Fisheries
o Consumer foods including packaged foods, beverages and packaged drinking water
Industry is large and has grown after 1991. However, of the country’s total agriculture and
food produce, only 2 per cent is processed.
FP has 9% share in manufacturing
Structure
o 42 pc: Unorganised
o 33 pc: SSI
o 25 pc: Organised
There has been a notable change in consumption pattern in India. Unlike earlier, now the
share and growth rates for fruits, vegetables, meats and dairy have gone higher
compared to cereals and pulses. Such a shift implies a need to diversify the food
production base to match the changing consumption preferences.
Also in developed countries it has been observed that there has been a shift from
carbohydrate staple to animal sources and sugar. Going by this pattern, in future, there
will be demand for prepared meals, snack foods and convenience foods and further on
the demand would shift towards functional, organic and diet foods.
Some of the key constraints identified by the food processing industry include:
In terms of policy support, the ministry of food processing has taken the
following initiatives:
Apart from these initiatives, the Centre has requested state Governments to
undertake the following reforms:
Plan Schemes
During the 10th Plan, the Ministry implemented Plan schemes for Technology
Upgradation/Modernization/Establishment of Food Processing Industries, Infrastructure
Development, Human Resource Development, Quality Assurance, R&D and other promotional
activities.
In the 11th Plan, it has been proposed to continue assistance to the above schemes with higher levels
of assistance. In the 11th Plan, the Ministry proposes to launch a revamped Infrastructure Scheme
under which it will promote setting up of Mega Food Parks, cold chain infrastructure, value added
centres and packaging centres. The Mega Food Park Scheme will provide backward and forward
linkages as well as reliable and sustainable supply chain. The emphasis will be on building strong
linkages with agriculture and horticulture, enhancing project implementation capabilities, increased
involvement of private sector investments and support for creation of rural infrastructure to ensure
a steady supply of good quality agri/horticulture produce. It will provide a mechanism to bring
farmers, processors and retailers together and link agricultural production to the market so as to
ensure maximization of value addition, minimize wastages and improve farmers' income. The Mega
Food Park would be a well-defined agri/horticultural-processing zone containing state of the art
processing facilities with support infrastructure and well established supply chain. The primary
objective of the proposed scheme is to facilitate establishment of integrated value chain, with
processing at the core and supported by requisite forward and backward linkages. It is envisaged
that the implementation of the projects would be assisted by professional Project Management
Agencies (PMA) from concept to commissioning. In 11 th Plan it is planned to support establishment
of thirty (30) Mega Food Parks in various parts of the country.
A vision, strategy and action plan has also been finalized for giving boost to growth of food
processing sector. The objective is to increase level of processing of perishable food from 6% to 20%,
value addition from 20% to 35% and share in global food trade from 1.6% to 3%. The level of
processing for fruits and vegetables is envisaged to increase from the present 2.2% to 10% and 15%
in 2010 and 2015 respectively. The Cabinet has approved the integrated strategy for promotion of
agri-business and vision, strategy and action plan for the Food Processing Sector, based on the
recommendations made by the Group of Ministers (GOM).
An Integrated Food Law, i.e. Food Safety and Standards Act, 2006 was notified on 24.8.2006. The Act
enables in removing multiplicity of food laws and regulatory agencies and provide single window to
food processing sector. Ministry of Health & Family Welfare has been designated as the nodal
Ministry for administration and implementation of the Act.
The Ministry has set up a National Institute of Food technology Entrepreneurship & Management
(NIFTEM) at Kundli (Haryana). The Institute will function as a knowledge centre in food processing.
Certificate of Incorporation of NIFTEM as a section 25 Company under the Companies act 1956 has
been obtained.
Weaknesses
Opportunities
Large crop and material base offering a vast potential for agro processing
activities
Setting of SEZ/AEZ and food parks for providing added incentive to develop
greenfield projects
Rising income levels and changing consumption patterns
Favourable demographic profile and changing lifestyles
Integration of development in contemporary technologies such as electronics,
material science, bio-technology etc. offer vast scope for rapid improvement and
progress
Opening of global markets
Threats
Affordability and cultural preferences of fresh food
High inventory carrying cost
High taxation
High packaging cost
Subsidies
Fertilizer Policy: Urea is the only fertilizer under statutory price control. Government of India has
introduced nutrient based subsidy with effect from 1st April, 2010 in respect of phosphatic and
potassic fertilizers. Under the policy, subsidy is based on the nutrient (N,P,K and S) content of the
decontrolled P and K fertilizers. Price of Urea has been increased by 10% while price of other
subsidized fertilizers are being maintained around current levels. Additional subsidy on
micronutrients has been introduced on Boron and Zinc, to begin with. In order to promote the
concept of balanced use of fertilizers and to encourage use of micronutrients, several fertilizers
fortifed with Boron and Zinc have been incorporated in the Fertilizer (Control) Order, 1985.