Chapter 11: Footnote 2

My subsequent evaluation about a decade later may be accessed at the book’s website: http://www.amaverickinpolitics.com or by scanning the QR code at the end of this chapter.

AGRICULTURE AND ALLIED SECTORS

Mani Shankar Aiyar and Ashok Madhukar

1. Introductory Remarks
1.1 This review aims at outlining the current state of implementation of recommendations relating to the ‘Agriculture and Allied Activities’ sector in the North East Region Vision 2020 document released by then Prime Minister, Dr Manmohan Singh, on 2 July 2008.
1.2 In undertaking this review, the sections on ‘Agriculture and Allied Activities’ in the following documents have been consulted:

• Annual Report (2017-18) of the Ministry of Development of North Eastern Region (DoNER), Government of India;

• Draft North Eastern Council Regional Plan (2017-18 to 2019-20);

• Indian Council of Agriculture Research (ICAR): “Status and Way Forward for Accelerated Development of Agriculture and Allied sector in the Northeast India” (unpublished)

2.GeneralObservations
2.1 NER Vision 2020 is anchored on a ‘Vision Statement’ signed by all the Governors and Chief Ministers of NER, as well as the Chairman (Minister, DoNER) and Members of NEC, on 13 May 2008 at Agartala. In particular, paragraph 5 of the high-level ‘Vision Statement’ sought to accord to “Agriculture and Allied Activities” the status of “priority sector” in view of NER’s “very high dependence” on this sector.
2.2 To this end, the Vision Statement issued seven broad directives relating to:

• Modernization of traditional cropping patterns;

• Raising productivity of agro-horticulture crops to prevailing national standards;

• Promotion of horticulture and floriculture, as well as medical and aromatic plants and herbs, particularly those based on organic farming, to capture remunerative niche markets in India and abroad;

• Rejuvenation of tea gardens and the promotion of plantations for bamboo, rubber, spices and fruit;

• Forestry, and conservation of both forest cover and wild life;

• Progressive phasing out of jhoom; and

• Promotion of animal husbandry, fisheries (pisciculture), dairying and birdlife.

2.3 The Vision Statement also recommended the following nine measures for "market development and modernization of the rural economy”:

· Agriculture extension services;

· Land reforms;

· Rural credit and banking;

· Reforms of agro-cooperatives as recommended by the Vaidyanathan Committee;

· Agricultural link roads;

· Cold chains and cold storages;

· Export promotion through fiscal incentives;

· Non-farm rural employment.

2.3 Directly related to the development of the ‘Agriculture and Allied Activities’ sector, the importance of irrigation and flood control was highlighted with the emphasis on:

• Massive investment in irrigation and flood control;

• Water harvesting and moisture conservation;

• Drainage to prevent water-logging;

• Prevention of soil erosion, especially in hill areas.

2.4 To give substance to these broad general directions, the Vision document laid out a road-map for "Accelerating Agricultural Growth" [Chapter IV, section (d), of Volume I “General Strategies for the Region”, pp. 23-26] backed up by even greater detail in the Chapter titled “The Rural Sector” in Volume II “Sectoral Strategies for the Region” [Chapter IV, pp.47-98]

2.5 The next section of this Review compares Targets set in the Vision Document in 2008 to Achievements as currently recorded in official documents.

3. Targets and Achievements
3.1 Foodgrains:
The crux of the Vision 2020 strategy for agriculture was:
Increasing foodgrains output (principally paddy) to:
o 75 lakh MT by 2010

o 87 lakh MT by 2015

o 110 lakh MT by 2020

Actual output was just under 80 lakh MT in 2015 (7 lakh MT short of the target) but has declined from that peak to an estimated 76 lakh MT in 2017 and 2018 and is projected by ICAR to remain stagnant at that figure till 2020 (which would mean a shortfall of a staggering 44 lakh MT, growing every year).

This is principally because of the signal failure to meet targets set in Vision 2020 to raise productivity to:

1570 kg/ha by 2010

1610 kg/ha by 2015

1650 kg/ha by 2020

ICAR has calculated that average annual yields have stagnated at 1538 kg/year for the Region as a whole in the period 2012-13 to 2016-17, that is at lower than the 2010 target, 30 kg/ha below the 2015 target and nowhere near the 2020 target which was set at 102 kg/ha higher than the 2016-17 achievement.

3.1.2 The single most important reason for the Region continuing to suffer from low productivity is that area under High-Yielding Varieties, which would permit double cropping, is a mere 9.5 lakh ha or 35% of the sown area despite it having been demonstrated in Vision 2020 (see Box 4.1, p.53) that if HYV paddy, which takes 110 to 120 days to mature, is sown, then harvesting may be completed before the onset of floods in September to allow for the cultivation of numerous crops like mustard, wheat, sunflower, maize, lentils and pulses, and vegetables including potatoes, tomatoes, chillies, onion and garlic, followed by a second crop of paddy. Indeed, at para 4.6, Vol.II, Vision 2020 had held that with HYV “it is possible to increase crop intensity without irrigation”. It had earlier been demonstrated in Tinsukia district and some Tezpur villages that this could raise the paddy yield from 1.62 MT/ha to 6-8 MT/ha. Not only has this not been done, ICAR bemoans that “HYV seed replacement is extremely low”. Hence, NER remains “highly dependent on imports” for almost all foodstuffs.

3.1.3 ICAR traces this poor performance to the following factors that fly in the face of Vision 2020 recommendations:

o the “agricultural extension network” is woefully inadequate;

o “NPK consumption is low”;

o “indigenous plough” remains the “main farm implement” for well over 95% of farm activity;

o “irrigation covers only 11 per cent of sown area”;

o a much more imaginatively conceived Accelerated Irrigations Benefits Programme, differentiated to meet the varied requirements of different topographies in the Region, is still to be put in place;

o there is very little “total involvement of the community to guarantee success”, especially as Panchayat Raj Institutions and Autonomous District Councils and tribal Village Councils are not being harnessed to this task despite Vision 2020’s strong emphasis on the key importance of elected local bodies to mobilize local communities. ICAR describes the key role of these local bodies as the “sine qua non” for agricultural growth and regrets that they are not being deployed as they ought to be.

o too few “centres at strategic locations to supply reasonably priced quality seeds, fertilizers, pesticides and farm equipment”;

o inadequate “public investment and institutional credit”;

o banks and other credit agencies need to be more “proactive” in ensuring that all farmers get Kisan Credit Cards, and secure access to agricultural credit and micro-credit under NABARD’s SHG-Bank Linkage programme;

o inadequacy of warehouses, cold storages and cold chains;

o woeful shortage of agro-processing units for agriculture, horticulture and dairying;

o hopelessly inadequate marketing arrangements despite the North Eastern Regional Agricultural Marketing Corporation (NERAMAC)’s pioneering efforts in this regard;

o neglect of rural roads despite massive investments in highways;

o although Vision 2020 had pointed out that “95 per cent of the Region’s soil is acidic with pH value below 5.6”, not enough action on the ground to “neutralize soil acidity through soil testing and judicious application of lime”;

o massive strengthening required of Krishi Vigyan Kendras to at least one per district and ICAR’s institutional infrastructure in the Region to carry laboratory research findings to the famer in his field.

3.1.4 In short, although the high-level ‘Vision Statement’ sought a Second Green Revolution to break “the back of the Region’s poverty” for over 80 per cent of the population that lives in rural areas by according top priority to ‘Agriculture and Allied Activities’, in actual fact the sector is not prioritized, the bulk of investment by the Centre, the states, NEC and the private sector going into power and major road and bridge-building projects to the detriment of agriculture and the rural economy that supports upward of 80 per cent of the population.

3.2 Horticulture and Floriculture

3.2.1 The High-level Vision Statement at CM/Governor level had highlighted the key role of horticulture and floriculture in diversifying agriculture in the following words:

“Widespread promotion of horticulture and floriculture, as well as medicinal and aromatic plants and herbs, including organic farming, to capture remunerative niche markets abroad. Sikkim particularly would pursue its natural inherent competitive advantages in horticulture and floriculture”

3.2.2 Vision 2020’s Volume II “Sectoral Strategies”, Table 4.2(a) [p.52], hailing Horticulture and Floriculture as “The Next Step in Development” (p.55), identifies state-wise the horticulture products that enjoy the highest comparative advantage in the North East Region. These include:

· spices and condiments such as chillies, turmeric, ginger, large cardamom and organic pepper;

· flavouring agents such as bay leaf, rosemary, thyme, parsley and oregano;

· fruit such as passion fruit, pineapple, bananas and apple (as also strawberries, kiwi, papaya, cherry, jack fruit, guava, Kachai lemon, Khasi mandarin, star anise);

· nuts such as cashew nut, chestnut and walnut; and

· vegetables such as mushroom, potato, cucumber and brinjal.

(This list includes horticulture products identified by ICAR and given in the draft NEC Regional Plan).

3.2.3 Additionally, Table 4.3 (p.55) identifies no less than 40 medicinal plants with which NER – a “Treasure House of Medicinal Plants” - is blessed.

3.2.4 As Vision 2020 considered horticulture to be a “nascent sector”, there was little by way of a road-map beyond stressing the importance of the Government of India’s Horticulture Mission and the Centres of Excellence for Horticulture set up in states like Sikkim, Meghalaya and Mizoram. The 2018 Status report of ICAR, prepared a full decade after the Vision 2020 document, suggests that steps be taken to:

· prepare State-specific programmes based on “agro-climatic and altitudinal advantages”;

· establish, “on priority basis”, Small Farmers Horticulture Estates;

· promote “fruit grower Self-Help Groups” to provide credit support and upgrade technical skills;

· ensure “post-harvest handling, assembly, storage, processing, packing, transport” and “modern marketing” through public-private partnerships.

3.2.5 None of this is rocket science and one is left wondering why in the last ten years all this has not already been accomplished to make NER the horticulture capital of India.

3.2.6 With regard to floriculture, Vision 2020 (see Box 4.3, pp. 56-58, and para 4.9, p.63) highlights the prospects in foreign and Indian markets for:

anthurium

cymbidium

gladioli

roses

dendrobium

lilium

leather leaf fern

bird of paradise

3.2.7 However, there appeared to be in 2008 almost total dependence on one firm, Zopar Exports Pvt. Ltd, with a little assistance from APEDA and technical advice form the Dutch, for the production and marketing of cut flowers. Notwithstanding the emphasis in the ‘Vision Statement’, a decade later ICAR limits itself to recommending “feasibility studies” and an “action plan”. And the draft NEC Regional Plan also limits itself to recommending that a Floriculture Institute be set up in NER to “impart training in planting, selecting, packing, marketing and other aspects of the business of floriculture.” Should this not have been accomplished a decade ago?

3.2.8 In other words, over the period projected by Vision 2020, it appears that priority attention has not been given to the promising sector of floriulture, except perhaps in Sikkim.

3.3 Irrigation and Flood Control

3.3.1 Given that NER is among the least irrigated areas of India (just 11 per cent of net sown area) and is devastated every year by flooding in the plains and rain-induced soil erosion in the hill areas, both irrigation and flood control must be regarded as integral to agricultural performance in the Region. Water is abundantly available but has not been harnessed adequately for agriculture; at the same time, water is the biggest menace because heavy rains leading to soil erosion and heavy floods leading to catastrophe are an annual occurrence.

3.3.2 The High-level ‘Vision Statement’ was categorical:

“Irrigation and flood control, including drainage systems to prevent water-logging, are also directly associated with the spread of the Green Revolution.”

It went on:

“With large dams becoming increasingly unfeasible for social, environmental and technical reasons, attention must focus on other means of irrigation.”

Hence:

“Water harvesting, moisture conservation and prevention of soil erosion, especially in hill areas, is of crucial importance for the realization of their agricultural potential.”

Moreover:

“Floods cause havoc, wiping out gains of economic development virtually on an annual basis. (Therefore), massive investment, accompanied by imaginative technical innovation in irrigation and flood control must be integral to the spread of the Green Revolution.”

3.3.3 Vision 2020 regretted (Vol.I, p. 24 and Box 4.2. pp. 53-54) that numerous recommendations of expert committees and the establishment of the Brahmaputra Board had had “little effect on the devastating annual floods” and “had also failed to evolve a workable solution”. It went on to stress the root cause of “embankment failures” lying in “bureaucratic apathy” and “technical arrogance” that “exclude people’s participation”. The Rashtriya Barh Ayog had in 1986 “formulated a holistic plan with both long-term and short-term solutions to the issue” but “efforts to push through this plan were limited”. Therefore, the tendency was to start “living with the floods” and relying on local communities living on chars and chapories to develop “resilient strategies by incorporating a cognitive interpretation of flood events”.

3.3.4 Taking the realistic view that “absolute flood control and protection is not feasible” but “a reasonable degree of protection from flood losses” is possible, Vision 2020 (vol. II, pp. 96-97) recommended “a judicious combination of structural and non-structural measures” to tackle the problem. These in included reducing exclusive reliance on structures such as embankments, spurs, dykes, porcupines, bamboo cribs and permeable screens in favour of non-structural measures such as:

· multi-purpose storage reservoirs;

· watershed management;

· flood plain zoning;

· soil conservation;

· afforestation;

· real-time flood forecasting;

· stabilizing the flow in tributaries;

· reducing silt loads.

3.3.5 Ten years on, little seems to have changed. Neither the NEC draft Plan nor ICAR’s Status report have much to say on flood control. The Rashtriya Barh Ayog’s short-term and long-term solutions gather dust in forgotten cupboards. There is little evidence of the “massive investment, accompanied by imaginative technical innovation, in irrigation and flood control” called for by the ‘Vision Statement’. NER continues to learn to “live with floods”.

3.3.6 Reliance is now placed far more on the Accelerated Irrigation Benefits Programme (AIBP) and the Minor and Micro-Irrigation Programmes. Providing walls along bank deflectors; building bank revetments; storm water drainage; land reclamation devices etc. are the focus of attention for flood control and, for irrigation, watershed management, recharging ground-water, communitized and individual water harvesting schemes, and reclamation of natural and manmade lakes and ponds. While these steps are necessary and welcome, there is no dynamic thrust, as it were, towards rescuing the Region from having the lowest ratio of irrigated land to net sown area in the country.

3.4 Animal husbandry, Dairy development, Poultry and Fisheries

3.4.1 NER is largely non-vegetarian. While there is apparently substantial self-sufficiency in meat consumption, malnutrition indices indicate widespread protein deficiency. Therefore, cattle, goats, piggeries, fisheries, poultry (including wild birds) and, above all, milk production and egg production need special attention. Regrettably, Vision 2020 did not provide a detailed road map towards this end.

3.4.2 The draft NEC Plan and ICAR’s Status report, however, provide some pointers to what needs to be done:

· establishing Dairy Cooperatives for milk production as almost all milk consumed is imported from outside the Region;

· pushing the Kamarup, Srinidhi and Vanaraja variety of dual purpose poultry birds, to augment both the availability of chicken and, more importantly, eggs;

· Pati duck reared in household backyards;

· Availing of new breeds of Arunchali Yak, Lakhmi cattle, Sumi-Ne goat (“Nagaland long hair goat”);

· promoting community fodder farms and dry fodder banks;

· installing Artificial Insemination facilities at district level to promote six high yielding varieties of pig developed jointly by ICAR and Assam Agricultural University to triple productivity per pig to 150 kg;

· popularizing “Participatory Livestock Breeding Units”.

3.4.3 Although fish consumption is very high per capita, Vision 2020 said 55 per cent of NER’s consumption is met by imports from outside the Region. This is astonishing considering that NER is home to no less than seven major river basins. Recommendations by ICAR include:

· pond culture and cold water fisheries at higher altitudes;

· fish nurseries for quality fish spawns and fingerling production;

· ornamental fish;

· breeding protocols and proper marketing;

· Pen culture technology;

· E-atlases for fish hatcheries;

· Fish stock enhancement in Barpeta;

· Trout: hatchery at Shergaon, Trout Farm at Bomdilla, high altitude brown trout and snow trout at Sela and Tawang;

· ICAR Road Map for inland open water fisheries (abrillinat innovation);

· Socio-economic assessment of fishing in Rivers Dri, Tangon and Siang.

Excellent as these ideas are, they mostly exist as pilot projects or lab research waiting to be taken by extension services to the rural areas of NER.

3.4.4 For the diversification of economic activity in rural areas and the provision of supplementary income for the poor in rural areas, animal husbandry, dairying, poultry and pisciculture (fisheries) are not receiving the attention they warrant. Particular stress needs to be laid on dairy activities as these involve very high women’s participation, leading to women’s empowerment and greater gender equality.

3.5 Plantations

3.5.1 It was plantations, particularly tea plantations (and oil) that resulted in the North-East Region becoming the second most prosperous province in India (after Bombay province) during colonial times. Hence the pledge in the High-level ‘Vision Statement’ to promote:

“Plantations, especially for bamboo, rubber, spices and fruit, and the rejuvenation of tea gardens through small farmers and farmers’ groups”

3.5.2 We have dealt with spices and fruit in the summary and comments under “Horticulture”.

3.5.3 Tea

With respect to tea that remains the single most important plantation activity, Vision 2020, at Volume II “Sectoral Strategies”, section 4.14.3, pp.80-86, had made numerous recommendations to enhance production and productivity of tea where NER, a decade ago, accounted for 55 per cent of Indian area under tea and 53 per cent of all-India production, inter alia suggesting:

· Taking tea cultivation to non-traditional areas such as Karbi Anglong and NC Hills district in Assam; Lohit, Tirap, Changlang, current or potential areas in other states of NER (particularly Temi tea in Sikkim), involving both Tea Estates and small growers;

· Establishing new auction centres at Dibrugarh and Jorhat, in addition to the well-known and long-established Guwahati Tea Auction Centre;

· More widespread use, particularly by small tea growers, of the Tocklai Experimental Station at Jorhat (the oldest R&D centre for tea in the world) and the Tea Research Association’s centres in Upper Assam, Cachar and Tripura;

· The instensification of the Tea Board’s Special Development Programmes for:

- Replanating/rejuvenation of old, uneconomical sections;

- Assistance to small growers for new planting;

- Training, advisories, study tours, nurseries, SHGs;

- Modernization of tea factories;

- Improved management of tea estates to avoid

sickness and closure owing to remote control, uneasy

industrial relations, weak financials, and excessively

debt-oriented funding strategies;

- purposive registration of small growers, less than ten

percent having been registered in 2008.

· A detailed section on “The Way Forward” (pp. 85-87) followed.

3.5.4 This review has been unable to gather material to examine the extent to which the recommendations of “The Way Forward” for Tea Estates and small growers have been implemented over the last decade but the impression is that steady if slow progress has been maintained over the last decade.

3.6 Rubber

3.6.1 Although rubber is grown mostly in the southern states, nearly ten percent of area under rubber is located in NER, especially Tripura.

3.6.2 Vision 2020 (pp. 78-80, Vol. II) recommended :

· Extension of rubber area and rejuvenation of sick/immature plantations;

· Famers groups

· Location-specific agro-management

· Quality upgradation at the primary processing level

· Environment/soil protection

3.6.2 To this end, emphasis was placed on :

· Integrated Village Development

· Quality Planting Material Generation

· Processing and Quality Upgradation

· Human Resource Development, particularly to secure adequate trained manpower

3.6.3 Here again this review is unable to evaluate progress as plantations do not fall in the domain of either DoNER or NEC or ICAR but are the concern of the respective planation Boards and the Commerce Ministry. There is little indication of any dramatic development having taken place in rubber. Things are chugging along.

3.7 Coffee

3.7.1 Although Vision 2020 (Vol II, pp. 73-76) identified the potential for coffee plantations and small growers in NER, it was also acknowledged that, owing principally to long gestation periods and gaps in post-harvest and marketing facilities, not much more than 5000 ha had been brought under coffee cultivation in NER. There is a Special Area Programme of the Coffee Board for NER but not until there is a “bottom up extension approach” and “integration with other Central/State department programmes” can there be any real progress towards developing a “cluster approach” or “mixed cropping” or adding to the existing solitary coffee processing unit and involving NEREMAC in marketing. While a multi-pronged strategy involving “consolidation of coffee development” in “technically feasible regions” to promote a “cluster approach” is on the cards, the need for “capacity building”, “infrastructure support” and “financial support” have to be worked out before progress on the ground can effectively be made.

3.7.2 For reasons analogous to those set out at 3.6.3 above, this review is unable to make an evaluation of the progress made over the last decade, but an impressionistic evaluation indicates that coffee cultivation in NER is more a seductive dream than a ground reality.

3.8 Bamboo

3.8.1 Bamboo is, of course, grown on private plantations but is also abundantly available in natural forests, homesteads and groves. Vision 2020 pointed to 60 per cent of the nation’s bamboo resources (and 20 per cent of the world’s resources) being found in NER, with Mizoram in the lead, followed by Assam, Arunachal and Manipur. However, Nagaland and Tripura do not have much bamboo. There are at least 136 species of bamboo in NER, including 11 exotic species. While Vision 2020 estimated the business in NER bamboo in 2010 at Rs. 5000 crore, the National Mission on Bamboo Technology and Trade Development envisaged the ambitious and achievable target of at US $ 5,.5 billion by 2015.

3.8.2 Vision 2020 recognized that before these goals could be realized several constraints had to be overcome including:

· scientific methods for propagation and cultivation;

· lack of post-harvest treatment and technology;

· inadequate trained manpower;

· inadequate infrastructure;

· augmentation of primary and secondary processing facilities;

· conversion of bamboo/waste bamboo to activated carbon;

· process technology for bamboo boards;

· development of design and product initiatives, particularly for furniture; and

· organization of entrepreneurs’ meets.

3.8.2 While this review has not been able to access up-to-date information on NER’s bamboo economy, the impression gained from the literature that has been examined is that notwithstanding the huge potential for bamboo-based crafts in the informal sector to provide gainful non-farm employment to many lakhs of households to cater to handicrafts, building and reconstruction, food and medicinal products, energy production through gasifiers, and for the paper industry, bamboo looms no larger in the NER economy than it did a decade go. Just business as usual.

-------------------------------------------------------------

Strategic Plan : The Road Ahead

1. Strategic Approach

NER Vision 2020 : The document set the direction for the development approach in the North East. The enabling environment was to be provided by the Policies of the Central and the State Governments. The Institutional support came from NEC, NEDFI etc.

It was a great starting point for the NER development by giving the direction for the development of the region.

There is a need to identify and populate with specific need based and “Demand Driven” Programs and Projects to achieve the growth objectives.

Strategic Interventions to be identified to achieve growth targets have to set their:

1. Need and Objectives

2. Outputs and Outcomes

3. implementation schedules with milestones,

4. Monitoring mechanisms

5. Evaluation and their benchmarks

6. Institutional Capacity

7. Stakeholders their ownership and participation

8. Sustainability of the interventions

With over 80 % rural areas in the NER ,it is imperative that the focus to be on Rural Development with thrust on both farm and off-farm opportunities for development and economic growth.

Development initiatives should be integrated with the aspirations of the youth and create opportunities for employment and income generation for the youth to avoid social conflicts and migration pains.

NER- Vision 2020,as we go forward, should include the participation and ownership by the non-government key Stakeholders primarily

a) Private Sector

b) NGOs and other Civil Society based organizations

c) Industry, Trade and Commerce Organizations.

The Financial Sector plays a critical role and must be integrated in the intervention plans as we go ahead.

Rural Development, primarily agriculture based, continues to suffer the lack of access to inputs, credit, institutional support and access to markets.

2. Strategic Direction:

2.1 Agriculture Sector in NER

Agriculture sector is mainstay for growth and development of the NER economy. About 80 percent of region’s population is fully or significantly dependent on agriculture and allied activities for their livelihood. Hence, the sector plays an important role in the inclusive socio-economic growth and is critical for alleviating poverty and employment generation, particularly in rural areas. NER can become the food bowl for the country and its growth is also imperative for meeting the food and nutritional requirement of more than 1.2 billion Indians.

Agriculture, along with fisheries and forestry, is one of the major contributors to the national Gross Domestic Product (GDP). While at the national level, the agriculture and allied sectors contributes about 16.5 per cent of the GDP (2016 estimate), the share of the sector in Gross State Domestic Product (GSDP) is reportedly much higher in many states.

Share of Agriculture and allied Sector in GSVA (2014-15)

States

30% and above

Arunachal Pradesh, Madhya Pradesh, Nagaland

20-29%

Andhra Pradesh, Assam, Bihar, Manipur,, Odisha, Punjab, Rajasthan, Tripura, Uttar Pradesh

15-19%

Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Jharkhand, Meghalaya, Mizoram, Telangana, West Bengal

Less than 15%

Goa, Karnataka, Kerala, Maharashtra, Sikkim, Tamil Nadu, Uttarakhand

Source: Agricultural Statistics at a glance 2016, Department of Agriculture, Cooperation & Farmers Welfare

2.2 Emerging Opportunities

India is the one of the largest producers of agriculture products and contributes significantly to global agricultural output. The country alone accounts for 7.69 percent ($ 367 billion) of total global agricultural output (US $ 4,771 billion), second only to China ($ 1,005 billion). Being second largest in terms of agricultural land area in the world (17.35 million hectare), India is the largest producer of spices, pulses, milk, tea, cashew & jute and the second largest producer of wheat, rice, fruits & vegetables, sugarcane, cotton & oilseeds. Sustaining food security in India thus holds a larger implication for global markets.

NER, can be a natural food production centre with the abundant land, labour and water can become a natural food production centre and benefit from the emerging global opportunity.

The challenge is to support the NER with appropriate technology, access to funds and value addition for markets.

2.3 Connectivity

NER requires high quality connectivity- both for communication and movement of goods and people. Connectivity will be a critical factor for better economic returns on produce and services as well as for the benefits of the economic growth to reach out to the masses for the positive impact on the “Quality of Life” of the people of the region.

2.4 Land Pooling & Cooperative Farming: Small & Fragmented Land Holding

Over the years, the total net sown area in India has increased marginally from about 140.86 in 1970-71 to 141.43 million hectare in 2013-14[1]. While the number of operational land holdings has increased but average size of holdings has shown a steady declining trend over various Agriculture Censuses since 1970-71[2]. Between 1970 and 2010, the area operated as marginal landholdings (less than one hectare) increased from 14.5 million hectare in 1970-71 to 35.9 million hectare in 2010-11, whereas the number of marginal landholdings increased triple folds from 36 million in 1970-71 to 93 million in 2010-11. Majority of the farmers in the country are small and marginal with an average landholding size of about 1.15 hectare.

The fragmented and small size of holding results in low investment capacity of farmers limiting the adoption of mechanization in farm operations and reducing returns. Moreover, as majority of smaller land holdings are fragments of larger holdings that have been passed on within the family or have been informally leased by a large holder, formal lease agreements are lacking. Absence of land records limits farmers’ access to formal credit and avail benefits under government schemes such as input subsidies and crop insurance. Presence of informal tenancy also puts tenants at the risk of exploitation.

Significant efforts need to be made by the Governments in area of land reform such as framing of a “Model Land Leasing Law” that recommends that all lease arrangements be made formal,
[1] Provisional estimates: Directorate of Economic & Statistics. http://eands.dacnet.nic.in/PDF/Glance-2016.pdf

[2] Note: Whereas as the area operated as marginal landholdings increased from 14.5 million hectare in 1970-71 to 35.9 million hectare in 2010-11, the number of marginal landholdings increased triple folds from 36 million in 1971 to 93 million in 2010-11. Source: Agriculture Census 20110-11. http://agcensus.nic.in/document/agcensus2010/completereport.pdf

and gives tenant farmers access to benefits including farm credit, insurance and compensation for crop damage. Technology use in land mapping and digitization can contribute significantly in modernizing management of land records, minimize scope of land related disputes, enhance transparency in the land records and enable farmer to avail greater benefits.

Land Pooling should be encouraged as well as cooperative farming to benefit from the scale of operations and improve productivity of both land and labor. This will also over time increase the economic realization per unit of land and make farm and off farm activities in the rural areas sustainable.

2.5 Access to Agricultural Credit

Timely and hassle free access to credit is an important input for modernizing agriculture and increasing production. Agricultural credit is normally provided for crop loan (short-term) or term loan. In recent past, Government has undertaken various interventions to improve agriculture credit flow. Under the priority sector norms, the scheduled commercial banks have to give 40% of their loans to the identified priority sectors with a target of 18% disbursement for agriculture including 8% of Adjusted Net Bank Credit (ANBC) prescribed for small and marginal farmers[1]. Since 2003-04, the flow of agricultural credit has consistently exceeded the set annual targets[2]. Besides, under the Kisan Credit Card (KCC) scheme a cumulative number of live 754.64 lakh KCCs were issued by Commercial Banks, Cooperative Banks & Regional Rural Banks as on 31 March, 2016[3]. Though the overall flow of institutional credit has increased over the years, there are still several gaps in the system. Some of the key issues relating to agricultural credit include –

· Higher share of borrowing among small and marginal farmer from informal credit sources as moneylenders, family and friends than from formal institution

· Fragmented landholding and improper land records affecting process of verification and also monitoring & evaluation to ensure proper utilization of disbursed credit

· Uncertainty in production due to vagaries of monsoon resulting in low repayment capacity of small medium farmer

· Frequent debt relief waivers resulting in bad repayment habits and non-compliance with standard provisions affecting recovery performance of the banks

· Knowledge gap and lack of information access among farmer on the on-going credit schemes and benefits, interest rate, loan and repayment of loan process

Greater efforts are required for creating an enabling environment to improve farmers’ accessibility to credit. The support infrastructure in rural areas, particularly need to be strengthened. Technology use can play a significant role in spreading greater awareness and making credit access and repayment easier for farmers.
2.6 Access to Crop Insurance

Agriculture by default is a risky enterprise. Indian agriculture, with about 50% of net sown area under rained cultivation[1], is further prone to several vagaries of weather. Due to the high dependence on weather and other external factors, the risk of heavy loss due to weather related uncertainties is very high. Dominance of small and marginal land holdings and relatively low levels of adoption of new technologies further exposes the Indian farmers to greater risks. Internationally, crop insurance is considered an important risk mitigation strategy to insulate the farmers from production and price risks. Over the years, although there has been efforts to develop the agri-insurance sector in India, yet, there has been relatively low penetration of agri-insurance in the country due to some of the following persistent issues:

· Unawareness among the farmers on on-going scheme and benefits and resultant reluctance or relatively poor response in adoption of agri-insurance

· Lack of availability of reliable & adequate long period data on crop yields or weather data at granular level along with loss data for determining right premiums and indemnities

· Lack of digitized land record systems resulting in reduced transparency, risk of duplication, area discrepancy, delay in identification and settlement of claims, etc.

· Issue of discrepancies between sown area and insured area.

· Delay in availability of crop cutting experiments data; its quality and reliability impacting overall experience of crop insurance.

· Delays and inaccuracy in assessment of crop damage and follow-on disputes related to claim settlement

· Delayed settlement of claims and dissatisfaction related to accuracy

· Low level of penetration of agricultural insurance firms at micro level

· Relatively high premium rates/charges if the insurance cover is not subsidized

· Operational issues related to information management and inter-agency coordination

In consideration of the above challenges and limited coverage of earlier crop insurance scheme (National Agricultural Insurance Scheme, Modified National Agricultural Insurance Scheme and Weather Based Crop Insurance Scheme), the Government has recently launched a new crop insurance scheme, Pradhan Mantri Fasal Bima Yojana in 2016. In Kharif 2016, the scheme covered about 363.04 lakhs farmers and an area of about 374.83 lakh hectare. The scheme targets to double the percentage of farmer coverage to 50% by 2018. Efforts are also being made to develop IT driven web-based central insurance portal (www.agri-insurance.gov.in) that would integrate all concerned stakeholder on single platform and streamlining of operations of crop insurance scheme. By providing a single view of all data, the portal is expected to ensure effective actions in a time-bound manner, unify fragmented databases, eliminate manual processes and thus speed up insurance services delivery to farmers faster. Government is also trying to smoothen the Crop Cutting Experiment process by use of a mobile.
based application that not only decreased the time required to generate final data but also increased overall transparency of the process.

2.7 Farm Mechanization

While there has been a significant increase in farm power use in India, but overall level of mechanization along the production and post harvest operations remain lower compared to other developed countries. Traditionally most farmers rely on hand tools implements and animal drawn power which give relatively low output and also involves high cost of animal upkeep. One of the impeding factors in low level of technology adoption for farm mechanization has been the small, marginal and scattered farmers and their low investment capacity. According to the Agricultural Machinery and Manufacturers Association in India, tractor penetration is 38% for large farmers (with more than 20 acres), 18% for medium farmers (5-20 acres) and just around 1% for small and marginal farmers.[1]

With increase cost and shortage of labor availability for agricultural operations owing to rural urban migration and rising demand for labor in non-farm activities, the available labor pool needs to be used more judiciously. Mechanization of for production and post harvest operations can increases land and labor productivity by timeliness of operation and increasing work output per unit time. It also reduces cost of cultivation by enabling efficient utilization of various input resources as seeds, fertilizers, plant protection chemicals and irrigation water and facilitates sustainable intensification and timely planting of crops, leading to an increase in productivity. Significant efforts are being made by both central and state government for promoting and strengthening agricultural mechanization in the state under various schemes. Government is also supporting setting-up of custom hiring centres to improve near to farm access of machinery for farmers. However, desired level of mechanization are yet to be achieved across the states.

2.8 Agriculture Extension Services

Changing consumption pattern towards high value agri-produce provides income prospects for farmers. However, to benefit from such opportunity, farmers would need greater access to range of information related to production technologies, postharvest processes, markets linkages, information on price, government schemes, subsidies and support policies, financial & risk advisory etc. Agriculture extension services is therefore a critical function area for providing farmers with timely access to information and advisory services on best practices, technology, meeting with contingencies, market information etc. While, there are multiple functionaries in India that offers extension related services to farmers, however lack of functional autonomy, rigid hierarchical structures, poor technological innovative in delivery of services and coordination failures at multiple levels have resulted in an inefficient delivery of required services. With changing times more participatory and bottom–up systems need to be evolved and intensified to cater to multi-functional needs across the agri-value chain.

2.9 Market Access & infrastructure

Post harvest agricultural produce requires a robust storage to minimize losses due to adverse weather conditions or in the process of transportation/ marketing. The quantity of food which is wasted during the harvest and post-harvest processes in the country has increased over the past five years. The highest losses are observed in the case of fruits and vegetables (4.6%-15.9% of production in 2015), pulses (6.4%-8.4%) and oilseeds (5.3%-9.9%). Food wastage occurs at all levels of farming- the farmer, transporter, wholesaler and retailer. Some of the reasons for this wastage are crop damage, improper harvesting techniques, poor packaging and transportation, and poor storage. Some of the issues with the state of storage facilities in the country are inadequate capacity and poor conditions of storage. In cases where the storage capacity is found to be sufficient, the conditions of the godown are unfit, either because of the damp condition of the storage or because of its remote location.

Agricultural marketing in India also faces many challenges. These include lack of reforms in the State Agricultural Produce Market Committees (APMC) Acts, absence of private sector competition, lack of proper grading and packaging at the farm level, asymmetries in market information, large number of intermediaries from farm to market, non-issuance of sales receipts/invoices, post- harvest losses, etc.

Development of an efficient agricultural marketing system integrated with post-harvest infrastructure for primary storage and processing is therefore critical for optimizing resource utilization and better output management. Improved storage & marketing of produce can contribute to increase in marketable surplus by scaling down the losses due to inefficient post-harvest handling of produce and help the farmers to realize better prices. Besides, assured markets would encourage farmers to invest in use of modern inputs & scientific production practices for increased productivity and improved quality. It would also support them in planning their production according to the market needs/ demands and thereby reduce the demand-supply gap and minimizing price volatility. The growing trend of consumer demand of fresh fruits and vegetables further necessitates the urgency for development of a robust marketing infrastructure. Significant efforts are required for upgradation and establishment of physical infrastructure for storage, grading and standardization for quality control, primary processing, packaging, marketing etc. and also strengthening of the existing service platform for efficient dissemination market information. Against this backdrop, the Government has initiated many reforms, including the creation of an e-trading platform for a national agriculture market. Under the scheme, a common e-market platform is being created. This will be deployed in 585 regulated wholesale markets across the country in a phased manner during next three years.

2.10 Farmers Production Cluster

In order to build scale and brand with small and fragmented land holdings, it is essential to apply the principle of “Aggregation” for both inputs and outputs. Creation of produce based “Clusters” will facilitate low cost support system for inputs, skills and monitoring as well as provide a “Single Point” contact for the buyers and promote contract farming. AMUL is globally the best example for the success of this approach. Institutional and Individual capacity building will benefit both productivity and value addition for higher realisation for the produce. It will also create local employment and all round development of the Cluster area.

2.11 Role of Digital Technology in Transforming Indian Agriculture

Technology has played an important role in the growth of Indian agriculture sector. In the past, the Green Revolution (1966-67) paved the way for increasing agricultural productivity by promoting extensive use of high yielding varieties, fertilizer and pesticide inputs and irrigation leading to increased production and farm incomes. However, in view of the adverse impacts of the intensive farming on environmental balance and meeting the future food demands, India needs to adopt more sustainable and energy-efficient production methods that would lead to new levels of productivity breakthroughs and more importantly ensure optimal utilization of resources.

Globally the digital transformation has been accelerating due to the evolving consumer behavior and purchase dynamics, and India stands is no exception. Agriculture is a data-intense sector. Coupled with added diversity in Indian agro-climate, physical geography, linguistic and traditional practices, the vast available data sets offer significant challenge as well as opportunity to aid future performance and growth of the agriculture sector in the country. Apart from mobile and smartphones, technologies such as automation, decision support system, aerial imagery, sensors to record and access information like soil moisture, nutrient levels, temperature of produce in storage, sophisticated weather forecast instrument etc are widely being adopted globally. Advance data analytical techniques and artificial intelligence also hold tremendous potential to add value across each point of value chain starting from selection and purchase of agri-inputs, monitoring of crop health, soil and water quality, control irrigation and fertilizer use input, track market prices and linking buyers and sellers.

2.12 Digital Platform for Marketing

Establishing a digital platform will not only help improve yields but would also support meeting of the growing demand. Technology use can play a significant role in tracking the produce from farm to the market and in process act as enabler to reduce wastage along the value chain. Digital records can provide traceability of the agricultural produce to the last mile. It can also help addressing the issue of the price discovery. Technology can be used to create virtual platforms for data on volumes, prevailing prices, inventory levels etc. Such information access would support the buyers and sellers to make informed decisions and reduce barrier to the entry of new players and increase competition which would result in better price discovery. Eventually, it will help in bringing the production and consumption centers closer and would help in building sustainable partnerships to improve farming productivity. As Indian agriculture transitions to the next level, a holistic digital platform can help to achieve a quantum leap forward in performance of the sector.

2.13 Key Digital Technology Interventions

The Indian history and economy has been built on agriculture and even today the sector continues to play a pivotal role in for inclusive socio-economic development of the country. Indian agriculture is characterized by its diversity. The opportunities for the sector are enormous. Digital transformation in agriculture could contribute in establishing a firm foundation towards sustainable future of agriculture in the country and help achieve the objectives of the national food security in the most efficient, effective and equitable manner.

Digital technologies can be an effective tool for synthesizing the vast available agriculture related data, information, and providing real-time technological solutions to revive the sector and achieve the necessary scale at low cost and customized delivery. To strengthen the supporting framework for growth, it is also important to strengthen other factors that contribute to building interactivity with technology. Correspondingly, improving access to financial services and products (including savings, payments, credit, and insurance), at cost that is affordable for farmers and sustainable for the provider and provided in a responsible manner, is also important. Digital finance could thus be used as key tool to maximize the benefits from financial inclusion beyond just access to financial services. Besides, a suitable enabling policy framework is required to be developed to create a collaborative ecosystem to support technology-led agricultural growth and ease access and affordability of technology adoption among farmers.

The top five priority areas identified towards digital integration of agri-value chain include:

1. Addressing the issue of land records: Credit and insurance are important inputs for modernizing agriculture which help in hedging against the weather related risks and increasing production. Although agricultural credit has been rising every year, however extent of financial exclusion remains large, especially for small and marginal farmers, tenant, share-croppers and agriculture laborers. Digitization of farm land records should be taken up by states on a priority basis to increase formal credit flow, reducing processing time for loan and insurance claim settlements.

2. Leveraging digital technology for bridging information gap to increase productivity and linking of farm to market: While significant advancements are being made in development of digital tools for use in agriculture and allied sectors, however its adoption and use in still very small in terms of outreach. Greater support needs to be extended for improving access, adoption and effective use of digital technologies, services and applications to boost digitalization of agriculture. Also, increased investments are required to be made in development of digital infrastructure to meet existing and future demand and help bridge digital divides.

3. Financial inclusion through digital: The agricultural sector has traditionally remained underserved in terms of access to formal credit. Larger number of small and marginal farmer prefer to approach informal credit sources as moneylenders, family and friend as it is relatively easily accessible and seemingly less cumbersome than accessing credit from formal institution. However, with Indian financial services undergoing a technology transformation, Government has accelerated its approach to achieve financial inclusion with the help of digital technology in banking services. Increased digitalization of financial services can reduce transaction cost, credit processing time and aid significantly in expanding the reach of financial institution to cover more number of farming community across regions, including small and marginal holders.

4. Policy Interventions: Holistic guidelines and regulations should be developed to help bridge the digital divides in the fields of infrastructure, data security and digital skills and capacity building. Pro-investment policies should be adopted to stimulate investment and promote public private partnerships for development of digital infrastructure and increased package of service offering for agriculture sector. This will require concerted efforts and coordination among different levels of government departments as well as active participation of stakeholders from the industry, research and farming communities. Amidst these developments, ensuring protection of consumers in digital economy would also be critical to build the essential trust for long term development of technology driven markets.

5. Capacity building of stakeholders (including farmers) for digital literacy and awareness: Moving forward with increased digital inclusion, capacity building of stakeholders in digital skills is a critical pre-condition for them to actively access, participate and influence services delivery mechanism. Effective strategies and support infrastructure need to be developed to facilitate digital literacy and skills development among key stakeholders, especially marginal groups and women, to enable them to adapt and benefit from the opportunities of digital revolution
   
   
   20 Provisional estimates: Directorate of Economic & Statistics. http://eands.dacnet.nic.in/PDF/Glance-2016.pdf

   21 Note: Whereas as the area operated as marginal landholdings increased from 14.5 million hectare in 1970-71 to 35.9 million hectare in 2010-11, the number of marginal landholdings increased triple folds from 36 million in 1971 to 93 million in 2010-11. Source: Agriculture Census 20110-11. http://agcensus.nic.in/document/agcensus2010/completereport.pdf

   22 Source: Master directions on Priority Sector lending targets and classification. Reserve Bank of India. Updated as on July 28, 2016. https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=10497&Mode=0

   23 Source: Department of Agriculture Cooperation & Farmer Welfare. http://agricoop.nic.in/sites/default/files/Agriculture-Credit-Overview.pdf

   24 Source: Agriculture at Glance 2016-17. Department of Agriculture Cooperation & Farmer Welfare http://agricoop.nic.in/sites/default/files/Annual_rpt_201617_E.pdf

   25 Source: Prioritization of Rainfed Areas in India, Study Report 4, National Rainfed Area Authority, New Delhi, India. February 2012. http://nraa.gov.in/pdf/Rainfed-final.pdf

   26 Source: Mechanization, Chapter 5, Prices, Agriculture and Food Management, Volume 2, Economic Survey 2015-16. http://unionbudget.nic.in/es2015-16/echapvol2-05.pdf