Challenges for Revival of Indian Agriculture

In India, economic growth has improved significantly during the past two and a half decades, particularly in the post-reform period. India is considered as one of the fastest growing economies in the world. However, the exclusion problems have not been addressed seriously by the government programmes and strategies. The experience of the economic reforms during the past 15 years indicates that while there have been improvements in the economic growth, foreign exchange, IT revolution, export growth, etc., the income distribution has been unequal and only some sections of the population have been benefited more from this higher growth and prosperity. In other words, real development in terms of growth shared by all sections of the population has not taken place. We have problems of poverty, unemployment, inequalities in access to credit, health care and education and poor performance of the agriculture sector. One of the excluded sectors during the reform period was agriculture which showed low growth and experienced more farmers’ suicides. There are serious concerns about the performance of agriculture sector in the country. The post-reform period growth has been led by the services. The commodity sector growth (agriculture + industry) has not been higher in the post-reform period as compared to that during the 1980s. The particular worry is the agriculture sector which has shown less than 2 per cent per annum growth during the past decade. Also, there is a disconnect between employment growth and GDP growth. In other words, employment is not being generated in the industry and services sector, where growth is high. On the other hand, GDP growth is low in the agriculture wherein a majority of people are employed. Thus, there has been a lop-sided approach to agricultural development in India during the past few decades. Growth may be higher during the past two decades, but the inclusive growth in terms of focus on agriculture has been missing1. It is like running a train with engine only without connecting a majority of the bogies and people to the engine. The role of agriculture in economic development is well known. Agriculture not only contributes to overall growth of the economy but also provides employment and food security to the majority population, which in turn reduces poverty in a developing country. Thus, if we want pro-poor growth and real development, high agricultural growth and rising incomes for farmers are essential. In recent decades, the context within which agriculture policy has to be developed and implemented, has undergone fundamental changes. The relationships operated for much of the 1960s and 1970s have changed. Globalization policies during the 1980s and particularly during 1990s and beyond have created many challenges for agriculture in developing countries. Some of the consequences and impacts of globalization in developing countries are: exposure of domestic agriculture to international competition, growth of non-agricultural sector and its impact on demand for agricultural products, urban middle class life-style changes, including diets, rising food imports, competitiveness and diversification of domestic production systems, vertical integration of the food supply chain, etc. (Prabhu, 2006). Because of demographic pressures, there has been a significant increase in small and marginal farm holdings. These farmers have to face the challenges of globalization. Risk and uncertainty have also increased as cultivation has spread to marginal lands. The diversification of agriculture has also raised concerns on food security. In recent years, there has been a concern regarding increase in the global food prices. Rise in crude oil prices has increased agricultural costs also. Increased use of food crops for biofuels has also pushed up their demand. The USA uses 20 per cent of its maize production for biofuels; Brazil uses 50 per cent of sugarcane for biofuels; and the European Union uses 68 per cent of its vegetable oil production for biofuels. Such large usages, by reducing the availability of these products for food and feed, have exerted pressure on their prices. Food prices have also increased due to low output stocks. International prices of wheat, rice and maize have increased significantly in the past two years. This is another challenge for India in maintaining its food security. This lecture is divided into three sections. Section 1 deals with the performance and problems of agriculture, while Section 2 discusses policy challenges for the revival of Indian agriculture. The last Section provides concluding observations.Agricultural and Food Policy,

Inclusive Growth in Andhra Pradesh - Challenges in Agriculture, Poverty, Social Sector and Regional Disparities

This paper deals with inclusive growth in Andhra Pradesh. Growth may be higher in the last two decades but inclusive growth or equitable development has been missing. It is like running a train with engine only without connecting bogies and people to the engine. According to us, important elements of inclusive growth are : agricultural growth, employment generation and poverty reduction, social sector (health and education) and reduction in regional and other disparities. In this paper, we concentrate on these four elements of inclusive growth. There seems to be some 'turn around' in the gross state domestic product (GSDP) of A.P. in the last five years. The average annual growth rate was 6.9% during 2002-07 and 7.8% during 2003-07. However, there are problems in the four elements of inclusive growth. Growth of agriculture particularly crop sector is very low. Employment growth in the postreform period (1993-94 to 2004-05) is the lowest in the country. The recent data shows that literacy levels are also low as compared to many other states. The National Family Health survey (NFHS III) indicate that A.P.'s rank for infant mortality is 11 out of 17 states in the year 2005-06. Growth rates in district domestic product (DDP) and per capita DDP shows that 7 districts of Telangana (Ranga Reddy, Nizamabad, Khammam, Hyderabad, Mahbubnagar, Warangal and Medak) and 2 districts of North Coastal (Visakhapatnam and Srikakulam) recorded higher growth rates than that of state average. On the other hand, all the districts in South Coastal and Rayalaseema and three districts of Telangana and one district of North Coastal showed lower growth than that of state average. However, one has to see the quality of growth in Telangana and Rayalaseema districts. We have examined whether A.P. can achieve Millennium Development Goals (MDGs). It is depressing to note that Andhra Pradesh will not meet MDGs in 10 out of 14 indicators. Thus, except in poverty, enrolment of boys and girls and drinking water, A.P. may not achieve millennium development goals in crucial indicators of education, health and sanitation at current rates of progress. The progress in MDGs for some regions and socially deprived sections like SCs and STs has been slower than the state average. This paper suggests several policies for improving inclusive growth in A.P. Economic growth may be improving but A.P. is lagging behind in agriculture, employment , human development and in reducing regional disparities. There is a need to operationalize a plan for achieving inclusive growth during the 11th Five Year Plan period and beyond in Andhra Pradesh. The action plan should cover the priority areas like agriculture, employment and social sectors. It should have a plan for removing economic and social deprivation across all regions. Also it should have a plan for socially disadvantaged sections.Gowth, Andhra Pradesh, agriculture, poverty, Social Sector, Regional Disparities

Food processing in Andhra Pradesh: Opportunities and challenges

There has been diversification of Indian diets away from foodgrains to high value products like milk, meat products, vegetables and fruits. Food-processing industry has been registering good growth since the past few decades and particularly after nineties. The conditions are now ideal for the growth of this industry. The central government has taken some steps to deregulate and encourage the sector after 1991. However, the role of states is vital. The government of Andhra Pradesh released a policy in November 2003. There are no major initiatives in the policy and still can be called a good beginning. As against the robust growth at the All-India level, the growth rate in net value - added in the nineties was almost the same as that in the eighties in the state.

Economic liberalisation and employment in South Asia

The main objective of this paper is to examine the impact of economic liberalisation on employment and labour incomes in South Asia. Specifically, it examines the impact on employment growth (total, agriculture, industry), unemployment, real wages, wage inequalities between skilled and unskilled workers, women’s employment and child labour. It also analyses whether labour rigidities have affected the employment growth in South Asian countries. The paper is divided into six sections. Analytical and theoretical issues on the subject of liberalisation and employment are presented in Section 2. The study proposes some hypotheses on these issues. They provide a backdrop for the empirical evidence presented in Section 3. We have used ‘before’ and ‘after’ approach in the empirical analysis. Some results based on CGE models for India are also presented. The conclusions from empirical evidence can be summarised as follows: • GDP growth seems to be slightly higher after liberalisation except in Pakistan. • The impact of external sector liberalisation may not be insignificant in South Asia as exports and imports rose faster than GDP in the region as compared to those for Sub-Saharan Africa and Latin America. • The share of informal sector increased particularly for services in India. • The rate of growth in private sector employment increased faster than in the public sector. The share of private sector in total capital formation in India increased significantly after liberalisation. • There was jobless growth for 1980s in the manufacturing sector for South Asia. The manufacturing sector showed higher growth in the 1990s for India. Micro surveys show some concern regarding retrenchment of workers in manufacturing employment. • Unemployment rates showed a mixed picture. It declined for India and Sri Lanka while it rose in Pakistan, Bangladesh and Nepal. • Incidence of poverty by workers in India shows that it declined for all workers but the rate of decline was lower for casual workers. • Real wage growth for agricultural labourers was lower after liberalisation. • Inequalities in income and consumption increased in most of the countries in the post-liberalisation period. The results from CGE models also show that inequalities increased. • Women’s participation increased but it is not clear whether they are better off in terms of work load and income. Child labour declined at macro level. One may have to go beyond poverty in explaining the variations in child labour. Section 4 analyses future scenario of employment and policies needed for raising productive employment and labour incomes. An agenda for research is presented in Section 5. More micro studies are needed to fully understand the impact of domestic and external liberalisation measures on employment and wages

Youth employment and unemployment in India

Increase in the share of youth population due to demographic `dividend' or the `youth bulge' seems to be one of the sources of future economic growth in India. Although with increase in school and college enrolment rates, the proportion of youth in the labour force has been declining, their high proportions in the labour force indicate that the problem of youth unemployment and underemployment would remain a serious policy issue for many more years to come in India. In this context, this paper examines the employment and unemployment situation of the youth in India during the last two-and-half decades viz., 1983 to 2007-08. It analyses the trends in labour force and workforce participation rates, unemployment, joblessness, working poor, growth and employment elasticities etc. The paper also offers policy recommendations for increasing productive employment and reduction in unemployment for the youth. The poor employability of the workforce would hamper the advantages due to demographic dividend if measures are not taken to improve the educational attainment and skill development of the youth.Youth Employment, unemployment, skill development, joblessness, demographic dividend, literacy, school education, vocational training

Food Processing in Andhra Pradesh Opportunities and Challenges

There has been diversification of Indian diets away from foodgrains to high value products like milk, meat products, vegetables and fruits. Food-processing industry has been registering good growth since the past few decades and particularly after nineties. The conditions are now ideal for the growth of this industry. The central government has taken some steps to deregulate and encourage the sector after 1991. However, the role of states is vital. The government of Andhra Pradesh released a policy in November 2003. There are no major initiatives in the policy and still can be called a good beginning. As against the robust growth at the All-India level, the growth rate in net value - added in the nineties was almost the same as that in the eighties in the state. Against this background, the study is taken up in the state of Andhra Pradesh with the following objectives 1. To study the opportunities and challenges in processing of rice, fruits and vegetables, oilseeds and livestock products 2. To study the working of contracts between processors and farmers 3. To identify the future areas 4. To recommend suitable policy options The contracts are working, on the whole, well in both oil palm in West Godavari and gherkin in Chittoor district of the state. The firms try to attract with favourable conditions initially, but later tighten them as a part of agribusiness normalization. Therefore caution is needed before a final conclusion can be drawn on the usefulness of contract farming in the state for the farming community. The contracts in oil palm 3 are widespread, covering many farmers and stabilized. The total extent under gherkin is very low. The contracts work through facilitator in gherkin. There are some signs of some mistrust between the facilitator-company and local farmers. The contracts are also evolving gradually to accommodate both parties. The participation of small farmers in oil palm cultivation is almost negligible. On the other hand, in gherkin, participation of small farmers was considerable. The contracts are oral and price is not assured in oil palm. In oil palm gardens, the depletion of ground water level is faster compared to other crops. In the case of gherkin, the processing industry is totally dependent on exports for sustenance, which may not be ideal. The establishment of an independent ministry of food processing and department, enacting of contract farming laws and providing for an efficient arbitration in cases of contract violation, encouraging NGOs participation in food processing sector, formation of product-wise farmers' associations, changing the animal slaughter laws and formation of some more agri-export zones for livestock products are some of the recommendations under institutional aspects. In the case of taxes and subsidies, the recommendations are - exemption from sales tax and market cess and relaxation of duties and taxes on packing material industry. Under research and training, large scale publicity to promote processed foods, undertaking demand driven research by developing processable varieties and required equipment, establishing food processing training centers, developing technology for the tiny food processing units, evolving marketing plan covering the recently emerging super markets, DWCRA bazaars, international markets etc., are some of the suggestions. In case of infrastructure, encouraging some large aseptic packaging units, establishment of a radiation technology plant, encouraging private sector in cold storages, precooling units, pack houses etc., establishment of training courses for service and repair of food processing machinery, formation of expert consultant committee and provision of one incubator are the major suggestions. Other major recommendations are provision of insurance facilities to all horticultural crops and livestock products, taking steps to ensure participation of small farmers in the contract farming, launching of a common brand of mango juice and enactment to regulate the feed industry and nurseries in the state.food processing, Andhra Pradesh, India

Socio-economic Impact of Transgenic Cotton

Agricultural and Food Policy,

Right to food in India

The objective of this paper is to examine right to food in the Indian context. We analyse the right to food in terms of availability, accessibility, adequacy and sustainability. These are examined in terms of equity and justiciability. The study is different from the earlier studies on food security as it is based on human rights approach. The issue of food is approached from the rights perspective. Progress is examined in terms of availability, accessibility (physical and economic). policies and Programmes are scrutinized in terms of obligation to respect, protect and fulfill (facilitate and provide).