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  1. 1. Sowing Prosperity: Boosting Agricultural Productivity MANTHAN THEME : Team : SIDDHANT Members: Arun Soni Ashutosh Chandrakar Hansraj Palsania Mahaveer Bishnoi Sandeep Choudhary Govt. policiesResearch Extension MSP market economy industries
  2. 2. Technological Dynamics of Agriculture • Lack of marketing facilities and market linkages at grass root level • Lack of market linked policy Market Deficit • Capital Investment has not increased as required • Where as subsidy is increasing every year Investment Deficit • Since green revolution research have been unable to deliver a game changer • Where as our extension force has been unable to bring desirable changes Research and Extension Deficit • Credit outflow in the agriculture is increasing every year • Basic infrastructure like road, power are still lacking in many states Credit and Infrastructure deficit • Since independence our agriculture policy concentrates only on those crops which our important for food securityDiversification Deficit Macro- Economy Climatic Factors Global Factors Policy Factors Market Forces Performance of the agricultural sector  The performance of the agriculture sector is driven by several factors but rather than affecting the sector in isolation they interact with each other and consequently strengthening or weakening of specific trend  The dynamics for each crop is different in different geographies due farmer awareness and psych , cost structure , government infrastructure  So major constraints in the present era for boosting prosperity will be market deficit, investment deficit and research & extension deficit
  3. 3. Crop specific programme Cost of cultivation Contract Farming Market Price Availability of credit/ Insurance Yield Demand and supply regulation Market Openness Economic Growth Consumption Pattern Procurement by food processing industry Government policy on trade Public & Private investment in R&D Input usage (Fertilizer, Seed etc) Technology (Hybrid, GM crop etc) Food Retail Economic Growth Urbanization Policy on Contract Farming Government policy on crop focus Political Outlook Demand and supply situation Government policy on rural finance Penetration of Financial sector Penetration of Media & IT Labor Cost Input Cost Cost of fertilizer seed etc. Migration Cost of living Alternative Occupation Profitability Irrigation Quality of Land New crop technologies Awareness Cropping Pattern Cropping Intensity Input usage IntensityChanges in land use One factor alone – cropping factor is a function of several interrelated drivers and sub drivers and we need to understand this interrelation to solve the problems Interrelation among various factors
  4. 4. Govt. policies farmers MSP Supply Seed cost Fertilizer cost Export Import Water availabilityExtension activity Demand Crop/s taken up Market/s Creditor/ debtor Default/ not Economic status Nutritional level Children’s education status Middle man Market structure Market forces Dumping/ shortage Crop portfolio Export/ import level Developments Employment capability Food processing sector growth Development policies farmer farmerfarmer farmer Low Literacy rate Less funds availability Less technological advancement/ adaptation Less or short term & costlier manpower Highly volatile market Less or no market securities Lessor productivity due to high chemical toxicity Very less cropping intensity & Production Ineffective results Short term decision (for less than 6 months) Factors affecting farmer’s decision Common situations Decisions taken L E A D S TO Vicious cycle of farmer’s decision
  5. 5. Diversification Deficit 26584 25694 6346 8036 3915 24222 26197 5844 7227 3659 25701 27474 6168 7246 3815 Rice Wheat Total Vegetables Total Oilseeds Total Pulses 2008-09 2009-10 2010-11 2.3 4.1 0.8 0.9 1.1 1.1 1.4 2.1 2.6 0.5 0.6 0.7 0.6 0.9 1992-97 1997-02 2002-03 2003-04 2004-05 2005-06 2006-07 Potential Created Potential Utilised  Over the years rice, wheat sugarcane have received the focus for irrigation provision, mainly because of the government ‘s paranoia about achieving self sufficiency in food and other crops have been neglected Studies have shown that the income from the per hectare land is much higher incase of non food grain crops with respect to the food grains Overall profitability rises with increase in the size of land holding but access to credit can raise e profitability up to 50% With access to credit farmers with smaller land holdings were found to be more profitable Profit/acres (Farmers without credit) table Non Food Food Non Food Food <1 42500 4000 73500 5900 1-2 60000 4500 70000 5675 2-3 62000 5000 65000 5200 >3 65000 5000 62000 5200 Avg 57375 4625 67625 5494 Major and Medium Irrigation Potential Created Crop wise gross irrigated area In the latter half of the 90s growth in the irrigation potential is much lower than past More importantly the utilization has dipped by more than 30%
  6. 6. Deficit in the Research and Extension In Research Concerns  Major land mark in the field of agricultural research were green revolution and white revolution, which happened back in the 60s and 70s but after that we have not been able to deliver a landmark  Specially in case of pulses and oilseeds , our present varieties have been unable to change the production and productivity scenario  In spite of huge supply and demand gap , higher MSP than of cereals still does not want to grow t pulses and oilseeds  Availability of timely certified seeds In Extension Concerns  Our existing extension forces has not been able to deliver the desired results  Most of the extension program's fail to achieve the target due to lack of accountability and transparency  Ressource constraint at lower level and huge population to be served Proposed Solutions  To improve the transfer of technology at the grass root level, more and more private partners should be involved  This could be of to types a) Extension by Input Companies e.g. By Monsanto b) Extension by the procurement companies e.g. PepsiCo c) Private extension, e.g. In Jharkhand  This could be done by the entering into PPP model for providing subsidized inputs to the farmers and the input company will provide extension services to farmers  In case of company who are procuring large quantity of agricultural produce can be asked by making legislation to provide extension services necessarily  Both of this can be easily formulated and implemented by the Ministry of Agriculture at state level Proposed Solution Better seeds can increase the productivity between 40 to 60% but it can be much higher More and more private investment in the field of agricultural research should be encouraged States should come with special policies to increase the productivity of the major crop s eg. State Agricultural Universities should collaborate with private companies and foreign agricultural institute to develop new varieties for their state Focus needs to be shifted from the food grain crops to non food grain crops to increase the income from agriculture More competition should be promoted in the seed industry, so that new product development can be come the basis of success
  7. 7. Investment and Infrastructure Deficit 43319 99495 64033 62301 67199 2007-08 2008-09 2009-10 2010-11 2011-12 Subsidies in '000' crore 10805 13019 15947 18755 22107 24197 42737 44830 50118 54530 57530 61367 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Private Invstement Public Investement Fertilizer subsidy over the years Investment in agricultural sector over the years In ‘ooo’ crores Proposed solutions There is urgent need to increase the agricultural investment in new irrigation projects and improvement of the existing canal system Warehousing corporation should be provided with money to increase their capacity across the country Huge investment is required to develop cold storage chain across the country Studies have shown that investment in the creation of rural infrastructure such as road and power have more positive effect on the life of rural people than the other modest policy of employment generation Concerns Investment in the agriculture sector is much lower than the subsidy given to the sector Over the years gross capital formation in the sector is not encouraging In the rural areas infrastructure development is not adequate to carry out the industrial activities eg. Roads , Power etc
  8. 8. • Investment in Marketing infrastructure like warehouses, cold storage and primary processing for perishable products  Allow Private or Cooperative players for direct marketing at minimum prices at mandies  Independent regulatory authority at state level for registration of market functionaries at state level and online recording of trade and transection (Location, Volume & Price)  Single point levy & payment of market fee for market players  PPP for online management of market information and market Intelligence and setting up of Market Extension Cell at mandies  The Contract Farming Sponsor should be registered at prescribed district level officer with the contract specifications.  Protect farmers through provisions of Contract Farming at benchmark market prices  Designing of action plan for decentralized primary processing of perishable agri-products including setting up of commodity specific food processing parks with common facilities  No independent regulatory authority for agricultural marketing  Private or Cooperative players are not allowed for direct marketing  Limited access to market information and marketing opportunities available  Fragmented supply chain, poor cold chain & high post-harvest losses  Lack of fair price discovery mechanism Proposed Modification in Agricultural Marketing System Market deficit Problems in Agricultural Marketing System
  9. 9. Central Government (CACP) State Govt. State Govt. District District Block Block Block District State Govt. • 40% share • Crop selection for MSP • State list • Deciding MSP once in a year for 4 quarters (depending upon the growing seasons for particular states) • Non conventional short duration crops including pulses, oil seeds, medicinal, aromatic etc. • After few years conventional crops can also be added. • Crop identify • Give seasons for crop production • MSP announcement • MSP promotion through selected govt. dept. • Promotion bodies - ATMA, Zilla Panchayats • Can go for technological promotions as well. • Crop mapping Local promotion – including package of production, MSP, harvesting methods, & market address , organizational details. MSP will be decided by CACP once in a year depending upon the demand for a particular crop produce & can be announced at once but it will be state government’s duty to announce it quarterly to the farmers through promotion bodies during the sowing season of the preceding crop to let them decide the next crop. Central Govt. (40%) State Govt. (60%) Cost Sharing
  10. 10. District Village Village Village Small Entrepreneurs Processing Industries SHG Govt. schemes New PPP Venture FCI/ State warehousing corporation • Cultivation of selected crop • Information sharing with block level through a particular linkage • Collection of produces from villages & transfer it to FCI/SWC • Crop mapping & storage or future planning • Storage/ distribution from warehouse corporation to other state • Employment generation • Processing industry growth • Lessor wastage • SHG can be helped for production of processed products Supply produce for mid day meal using food security/ nutrition policies Joint schemes/ ventures for better development of the remote areas District District Industrial/ institutional procurement Through APMC Government release
  11. 11. Overall impact of the policy on the economy Central & State Govt. Farmers Industries • Increased overall productivity • Reduce dependency on imports • Higher export & higher foreign exchange • More industrialization • Surplus of 1 state fills other’s shortage • Self sufficiency in food • Growth of manufacturing sectors • Lessor wastage • Improved rural infrastructure • Growth of processing industries • Easy transfer of technology • High Food Wastage • Unemployment • Burden on central Govt. • Food security • Increased dependence on imports • Less productivity & production • Assured market with stable price • Positive attitude towards govt. policies • Less or no volatile market • Better extension services by private players • Better rural infrastructure – better life style • High cropping intensity – high annual income – better health status – better future education • Desired quality of commodity • In time supply • Predetermined prices • Improved rural infrastructure • Availability of product in bulk • Increased farm income will increase the purchasing power n hence higher growth of investors • Very volatile market • No securities • No marketing facilities & information • Poor govt. extension • Timely unavailability of inputs • Poor rural infrastructure • Less cropping intensity – low income • Highly volatile market • No/ less quality parameters • Fragmented cultivation areas • No changing policies • Poor infrastructure creates more problems • No/ less skilled people availanilty B e f o r e I M P L E M E N T A T I O N A f t e r
  12. 12. References: • Directorate of Economics and Statistics • Ministry of Agriculture • World Bank • Indian Journal of agricultural Economics • IMA research analysis • Mid tern appraisal of Planning Commission, 2009 • IBEF Agriculture Sector Report • International Water Management Institute • Ministry of Water Resources • Indiastat • Agrimarket • Agmark