Monday 31 August 2015

Agriculture Sector Challenges and Role of Technology - seeds, water and markets

Challenges in Agriculture sector:

  • Rain deficit in the current monsoon season stood at (-)12 per cent of the long period average (LPA)till August end - if it continues for 1 more month -- technically, like last year, this would also be a drought year. 
    • It would be the fourth back-to-back drought in the last 115 years.
  • For the last three years, the average agri-GDP growth rate is just 1.7 per cent, and if this year goes the same, it would be the worst performance for agriculture in the four years of the 12th Plan, which targets 4 per cent growth in agriculture.
  • It’s not just the weather that farmers are suffering from, it’s the great fall in commodity prices as well, from cotton to corn, soya bean to wheat, sugar to potatoes, resulting in a wipeout of farmer’s profits across the board. 
  • And where they could make some money through exports, as in onions and pulses, the government comes down heavily with export restrictions and controls
  • The government machinery is hyperactive in taming onion prices, but might one ask where it was when potatoes were being sold at less than Rs 2 per kg by farmers in UP and West Bengal? 
    • This smells of typical urban consumer bias. These are defunct policy tools of the mid-1960s, which the government is trying to use to manage today’s market economy
  • This has been an odd year, where instead of a delayed monsoon, it could be a late season drought. 
  • four states — Maharashtra, Bihar, Karnataka and Uttar Pradesh — are the worst hit in terms of productivity. 
    • account for over 1/3rd of India’s total foodgrain production. 
    • 5 crops — jowar, soyabean, tur, maize and cotton — are the most affected.

Justification for the need for TECHNOLOGY in Agriculture:

  • For agrarian miracles, three things are critical — seeds, water and markets. 
    •  Gujarat’s agrarian miracle (agri-GDP grew, on average, at 9.7 per cent during 2001-02 to 2013-14, even MP did well), was led by Bt cotton, supported by increased irrigation cover and access to Chinese markets.
      • The new Bt technology was a catalyst of change, and so was access to foreign markets, which made cotton a remunerative crop.
    •  What is happening now in cotton policy is interesting. One fine morning, a chief minister wakes up and orders that seed prices of Bt cotton be reduced in farmers’ interest. It has an infectious impact on other states, who issue similar orders
    • Then it catches on to licensees, who refuse to honour their contracts with the parent seed company. It becomes a legal mess. 
    •  PM invites global companies to come and “Make in India”. But if their contracts can’t be honoured, who will bring new technologies to India? And from where will the new revolution come without frontline technologies?
  • The message is clear: If we want to do our agriculture good and see our farmers prosper, we have to invest heavily in modern technologies — not only biotech but also precision agriculture — and in irrigation and water management. 
    • The Indian Council of Agricultural Research (Icar) is the apex agency to ensure generation of best technologies, and they have done wonders with Pusa basmati
      • Icar’s annual budget is less than a billion dollars for the whole country for all research, while Monsanto alone spent $1.7 billion on research last year. 
    • Thus, future technologies in agriculture will come more and more from multinational companies
  • Any country that has to access such frontline technology must come up with a credible legal institutional framework and work with mega investors and innovators to buy/ co-generate these technologies.
  • We have to provide unhindered access to markets, both domestic and foreign, by abolishing all controls on exports and movements across India 

 [Ref:Indian Express]


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