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NEWS ALERTS | Indian agriculture yet to catch up with neighbours on public spending, indicates IFPRI report
Indian agriculture yet to catch up with neighbours on public spending, indicates IFPRI report

Indian agriculture yet to catch up with neighbours on public spending, indicates IFPRI report

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published Published on Apr 7, 2016   modified Modified on May 6, 2016

Amidst the prevailing gloominess over agrarian crisis, a recently released report says that the growth rate of agricultural output in both India and China were the same during 2008-2013.

The agricultural gross domestic product (GDP) of both these countries on an average grew at 3.3 percent per annum during that period.

The latest available data from the 2016 Global Food Policy Report, however, indicates that the neighbouring countries of Sri Lanka (4.7 percent), Nepal (4.5 percent) and Bangladesh (3.3 percent) exhibited higher average annual growth of agricultural output vis-à-vis India during 2008-2013.

The neighbouring countries like Bhutan (13.6 percent), Bangladesh (11.1 percent) and Nepal (9.6 percent) spent a higher proportion of their public expenditure on agriculture as compared to India in 2013.  

While China spent 9.5 percent of its entire public expenditure on agriculture, India spent around 6 percent of the same during 2013.

In 2013, the ratio of public agricultural expenditure to agricultural GDP in China was 23.4 percent, while that of India was 5.9 percent. That ratio for Bhutan (26.6 percent) and Bangladesh (8.2 percent) exceeded that of India.

During 2013, public agricultural spending in China was nearly 5.7 times that of India, when measured at billions 2005 PPP (purchasing power parity) dollars.  

Similarly, in 2013, per capita public agricultural outlay in China was nearly 5.2 times that of India, when measured at 2005 PPP dollars.

The per capita public agricultural expenditure in Bhutan and Sri Lanka exceeded that of India in 2013, when measured at 2005 PPP dollars.

The latest available data from International Food Policy Research Institute (IFPRI) report shows that agricultural research spending as a share of agricultural GDP stood at 0.50 percent in China in 2008 and 0.40 percent in India in 2009.

Agricultural productivity
 
The report from IFPRI states that land productivity in the country has almost doubled between 1990 and 2013, while in China it rose by 2.5 times during the same span.

Land productivity in India, however, stood at US$ 1,451 per hectare in 2013, whereas the same in China was US$ 1,148 per hectare.

India's performance in terms of labour productivity is poor as compared to China. Labour productivity in China has risen by 2.5 times between 1990 and 2013, whereas in India it grew by nearly 1.5 times.

Labour productivity in the country stood at US$ 951 per person in 2013, whereas the same in China was US$ 1,178 per person.  

It needs to be mentioned here that land productivity is the gross agricultural production per hectare of agricultural land, and labour productivity is the gross agricultural production per economically active person in agriculture. In the IFPRI report under discussion, both types of agricultural gross production are measured in constant 2004–2006 US dollars. Land and labour productivity measures for the individual countries were calculated by dividing total output by total agricultural area and the number of economically active persons in agriculture, respectively.

As per the 2016 Global Food Policy Report from IFPRI, the average annual growth in total factor productivity (TFP) during 2008-2013 was 2.3 percent in India as compared to 1.1 percent in China. However, China exceeded India in terms of average annual growth in TFP during the periods 1991-2000 and 2001-2007.

As per the IFPRI report, TFP is the ratio of total agricultural output (crop and livestock products) to total production inputs (land, labor, capital, and materials). This measure of the efficiency of agricultural systems in terms of output per unit of total input allows for comparisons across time and across countries and regions. An increase in TFP implies greater efficiency, meaning that more output is being produced from a constant amount of resources used in the production process.

The key findings of the 2016 Global Food Policy Report from IFPRI are as follows:
 
• The IFPRI report shows that while annual growth rate in agricultural GDP during 2003-14 was 3.7 percent, annual growth rate in GDP was 7.7 percent during the same span. It means that the growth of agricultural GDP could not keep up with growth in GDP of India.

• In mid-2014, the Indian government launched a financial inclusion programme, known as the Prime Minister’s Plan for People’s Wealth, to provide universal access to bank accounts. In a record period of 14 months, 187 million bank accounts were opened with combined deposits of about US$3.8 billion. The initiative is considered a prerequisite for direct cash transfers for food and fuel to targeted beneficiaries, and is expected to reduce public expenditure; however, these transfers have not been implemented as yet.

• India launched two new social security schemes providing access to insurance: (1) the Prime Minister’s Insurance Scheme for accident and disability coverage of up to Rs. 200,000 (approximately US$3,065) for an annual premium of Rs. 12 (approximately 18 US cents), and (2) the Prime Minister’s Life Insurance Scheme for term life coverage, also of Rs. 200,000, for an annual premium of Rs. 330 (approximately US$ 5.51).

• India launched a flagship irrigation programme with a planned outlay of Rs. 500 billion (about US$7.67 billion) over the next five years, with the primary objectives of expanding cultivable area under assured irrigation, improving on-farm water use efficiency, and promoting adoption of water-saving methods for more “crop-per-drop.” The scheme targets 50 million hectares and is expected to improve agricultural productivity, reduce risk, and enhance drought resilience.

• India has opted for iron-fortified pearl millet varieties and hybrids. Widespread consumption of these new varieties is expected to significantly improve micronutrient uptake, with positive effects on health and well-being.

• India has launched a new sanitation program—Clean India Mission—in 4,041 towns, to clean the streets, roads, and infrastructure, in order to address unhygienic conditions that are linked to disease and constrain improvements in nutrition and health outcomes.

• The South Asia region faced numerous challenges in its efforts to reduce food and nutrition insecurity in 2015, including a catastrophic earthquake in Nepal, social unrest in Bangladesh, serious drought in rainfed areas and unseasonable rainfall and hailstorms in irrigated parts of India, and severe heat waves and an unseasonable storm (dubbed a mini-cyclone) in Pakistan. These calamities killed several thousand people and substantially reduced agricultural production.

• In India, growing demand for dairy products is spurring an expansion in the cattle population. The global demand for beef is projected to increase by 95 percent between 2006 and 2050, with much of this growth occurring in countries where current per capita consumption is low, such as China and India. Beef has one of the lowest “feed-to-food” conversion efficiencies of commonly consumed foods. Only 1 percent of gross cattle feed energy and 4 percent of ingested protein are converted to human-edible calories and protein. As a result, beef uses more land and freshwater, and generates more greenhouse gas (GHG) emissions per unit of protein than other commonly consumed food. One-quarter of the earth’s land mass, excluding Antarctica, is used as pasture, and beef accounts for one-third of the global water footprint of farm animal production.

• Renewable energy technologies accounted for almost half of the world’s newly installed electricity generation capacity over the last two years. In addition, various countries, including India and Indonesia, have used lower oil prices as an opportunity to reduce fuel subsidies. For these and other reasons, including an economic slowdown in China, the relationship between global economic growth and emissions growth has weakened for the first time in at least four decades.

• An ongoing project in eastern India, run by the social enterprise eKutir, is working with micro-entrepreneurs to provide retail outlets and distribution channels to support both increased production of vegetables and increased access to a varied diet for poor households. By addressing constraints in the market distribution of vegetables, the project aims to reduce loss of perishable products and make the value chain more sustainable.

• In India, a partnership between PRADAN, a nongovernmental organization, and iKure, a social enterprise, is promoting vegetable and pulse consumption using a mix of seed provision and communication schemes. Pulses provide an important source of iron, and they offer a protein source that is relatively sustainable in environmental terms, with low carbon emissions and soil-degradation rates.

• Groundwater depletion is reaching critical levels in large food-producing areas, particularly in parts of China, India, Pakistan, and the United States.

• An example of a successful rural-urban link is India’s dairy grid, popularly known as Operation Flood. Small dairy farmers were linked to urban consumers in a chain of production, procurement, processing, and marketing. The dairy grid involved 13 million participants, including almost 4 million women, in the value chain as of 2008, giving them access to urban markets. Consumers also benefited, gaining access to more and better-quality milk.

• In India, more than 30 million smallholders have adopted weather-indexed insurance in recent years, enabling some farmers to shift toward more profitable farm production systems that may incur higher risk.

• One study found that smallholder farms in the Indo-Gangetic Plains of India that adopted zero-tillage systems became almost carbon neutral in the span of three years (from 2009 to 2012), as emissions from farming activities were counterbalanced by carbon sequestration. The same study showed that farmers’ incomes increased by almost US$100 per hectare per year with zero-tillage systems, mainly because of lower input and production costs.

• In India, where smallholders contribute 70 percent of the country’s agricultural production, more than half of the country’s agriculture is rainfed and is thus heavily dependent on a predictable monsoon season. When the monsoon arrived late in 2011, small farmers with fewer assets, higher risk aversion, and less access to irrigation and weather information were less able to respond effectively to the delay than farmers with greater assets.

• Smallholders also face policy-related constraints, such as distortionary price regulation and poor extension services. These barriers make it difficult for smallholders to build the resilience needed to prepare for, cope with, and recover from shocks, and to improve their welfare.

References

2016 Global Food Policy Report, IFPRI, please click here to access

Press release of 2016 Global Food Policy Report, IFPRI, 31 March, 2016, please click here to access
 
Miles to go for achieving food security, Inclusive Media for Change, please click here to access
 
Farmers' conference demands law for guaranteed income -Vineet Kumar, Down to Earth, 6 April, 2016, please click here to access 
 
Farmers’ meet demands law to guarantee income -KV Kurmanath, The Hindu Business Line, 4 April, 2016, please click here to read more
 
 
Image Courtesy: Himanshu Joshi


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