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Agricultural Transformation in Eastern India: Micro-level Evidences

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Dr. Ranjit Kumar, ICAR-National Academy of Agricultural Research Management, Hyderabad, India
Presented at the ReSAKSS-Asia conference “Agriculture and Rural Transformation in Asia: Past Experiences and Future Opportunities”. An international conference jointly organized by ReSAKSS-Asia, IFPRI, TDRI, and TVSEP project of Leibniz Universit Hannover with support from USAID and Deutsche Forschungsgemeinschaft (DFG) at the Dusit Thani Hotel, Bangkok, Thailand December 12–14, 2017.

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Agricultural Transformation in Eastern India: Micro-level Evidences

  1. 1. Dr. Ranjit Kumar ICAR-National Academy of Agricultural Research Management Hyderabad, India Agricultural Transformation in Eastern India: Micro-level Evidences Regional Conference Agriculture and Rural Transformation in Asia: Past Experiences and Future Opportunities Bangkok, Thailand. Dec 12th – 14th, 2017
  2. 2. Poor education, health & sanitation: • High IMR & U5MR • Low labour productivity Poor resources low quality assets poor quality inputs Low output & income Lack of awareness & Inaccessible govt. benefits: Obsolete/ no technology Poor Basic & Social infrastructure Restricting enabling environment EASTERN STATES: Bihar, Jharkhand & Odisha
  3. 3. EasternIndia BIHAR JHARKHAND Tot Popln 33 million (3%) Rur Popln 75.9% Marginal farmers 68% Avg land size: 0.41 ha ODISHA Tot Popln 41.9 million (3.5%) Rur Popln 83.3% Marginal farmers 72% Avg land size: 0.57 ha Tot Popln 104.1 million (9%) Rur Popln 88.7% Marginal farmers 91% Avg land size: 0.25 ha Home of 62 million poor
  4. 4. 0% 20% 40% 60% 80% 100% 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 BIHAR Agriculture Industry Service 4.86% 13.29% 11.39% GSDP growth: 10.01% CGR 0% 20% 40% 60% 80% 100% 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 JHARKHAND Agriculture Industry Service 8.37% 4.54% 11.39% GSDP growth: 7.9% CGR 0% 20% 40% 60% 80% 100% 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 ORISSA Agriculture Industry Service 2.66% 5.98% 8.72% GSDP growth: 6.6% CGR Sectoral performance in 3 states (2004/05 to 2014/15)  Agril performance has direct implications for overall economic development, particularly in rural areas.  During 2004/05 to 2014/15, share of agriculture (32%19% in Bihar; 24%15% in Odisha,  16% in Jharkhand)  Bihar needs to grow at its current rate of over 10% for the next 18 years in order to match Maharashtra’s current per capita income.
  5. 5. Items Annual growth in Value of Output from different commodities, % (2000/01 to 2013/14) Bihar Jharkhand Odisha India Cereals 11 11 13 11 Pulses 9 24 15 12 Oilseeds 11 26 10 13 Fruits and vegetables 7 15 10 11 Livestock 13 14 17 13 Fishery 14 11 11 12 Forestry 14 18 17 19 Agriculture in eastern states slowly diversifying Source: Central Statistical Organization • At state level, livestock and fishery are progressing well in these 3 states. • Jharkhand state is more resilient than other two in terms of diversity in performance.
  6. 6. y = 40.722x + 1371 y = 56.005x + 1028.4 y = 41.614x + 1022.8 0 500 1000 1500 2000 2500 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Productivity(Kg/hectare) Bihar Jharkhand Odisha ALL INDIA Linear (Bihar) Linear (Jharkhand) Foodgrain productivity in eastern India  The foodgrain productivity in some of the most-productive districts in India is more than 30-times the productivity in some of the districts in eastern states.  f(agro-ecological conditions, irrigation development, level of policy support, institutional factors, demographic features, etc.)
  7. 7. Average daily wage rate for male in ploughing Source: Labour Bureau • Implementation of MGNREGA has improved the bargaining power of agricultural labours. • Lack of farm mechanization further aggravating the situation for the farmers.
  8. 8. Micro-level evidence from VDSA (2010-2014) TWO VILLAGES FROM EACH DISTRICT • Bihar state Darbhanga & Patna • Jharkhand state: Dumka & Ranchi • Odisha state Dhenkanal & Bolangir Total: 480 Panel hhlds • Average family size: 4-5 • Worker-dependent ratio: 50% • Years of schooling : Female- 3 to 6 Male- 5 to 10 • Piped drinking water: 0 • Electrified household: 57 to 80% • At least 2-wheler: 2 to 12% VDSAvillages’Insights
  9. 9. Year Landless (<0.5 ha) Marginal (0.5-1.0) Small (1.0-2.0) Large (>2.0 ha) 2010 0.31 0.71 1.38 3.54 2011 0.30 0.69 1.38 3.56 2012 0.31 0.71 1.38 3.50 2013 0.30 0.70 1.39 3.40 No. of hhld 131 125 215 267 Change in landowning pattern (in ha per household) • Rural farming households are showing sign of exiting farming.
  10. 10. 0% 20% 40% 60% 80% 100% 2010 2011 2012 2013 Patna Paddy Wheat Pulses Vegetables Potato R/M Fodder 0% 20% 40% 60% 80% 100% 2010 2011 2012 2013 Darbhanga Paddy Wheat Pulses Vegetables Potato R/M Fodder Others 0% 20% 40% 60% 80% 100% 2010 2011 2012 2013 Ranchi Paddy Wheat Pulses Oilseeds Vegetables Potato 0% 20% 40% 60% 80% 100% 2010 2011 2012 2013 Dumka Paddy Wheat Pulses Maize Oilseeds Potato Vegetables Others 0% 20% 40% 60% 80% 100% 2010 2011 2012 2013 Balangir Paddy Pulses Cotton Vegetables Others 0% 20% 40% 60% 80% 100% 2010 2011 2012 2013 Dhenkanal Paddy Pulses Vegetables Others BIHARJHARKHANDODISHA VDSAvillages’Insights CHANGINGCROPPINGPATTERN
  11. 11. Land and livestock holdings LB- Landless labour; SM- Small; MD-Medium; LA- Large % Change in 2013 over 2010 -125 -25 75 175 LB SM MD LA LB SM MD LA LB SM MD LA BiharJharkhandOdisha No. of milch animals No. of draft animals % Irrigated area Operational holding (acres)  Landless class- more serious in farming;  Rural households are reluctant in livestock;  Land leasing market growing  Ecosystem should support it VDSAvillages’Insights
  12. 12. Non-farm income is better than farm income MEDIUM LANDLESS LARGE SMALL 2013-14 >$5000 p.a. BH- 17 JH- 07 OD- 06
  13. 13. Farm profitability of VDSA households -100000 0 100000 200000 300000 400000 500000 0 20 40 60 80 100 120 140 160 BIHAR (INR/hhld) Crop-2010 Crop-2011 Crop-2012 Crop-2013 -50000 0 50000 100000 150000 200000 0 20 40 60 80 100 120 140 160 JHARKHAND Crop-2010 Crop-2011 Crop-2012 Crop-2013 -50000 0 50000 100000 150000 200000 0 20 40 60 80 100 120 140 160 ODISHA Crop-2010 Crop-2011 Crop-2012 Rabi fallow as compared to kharif crop area, % Bihar Jharkhand Odisha 2010 -18.72 92.20 70.25 2011 3.24 95.92 66.09 2012 3.86 95.38 79.63 2013 3.81 93.00 79.28
  14. 14. Linking farmers to markets: Challenging task  Farmers sell the small surplus in local market low output price due to local glut during harvest time  Unawareness about price information in distant market  Fear of not able to sell on the same day in distant market  For perishable high value commodities, it is very important to clear the local glut. Marketlinkages
  15. 15. • The cereal-based cropping pattern may not be able to bring needed transformation. • Households need to augment their livelihood through other commercial agriculture- fruits, vegetables, poultry, milk production, etc. • More non-farm opportunities need to be created through public investment in road, electricity, storage & warehousing, value addition, etc. • Easier and efficient linkage with high income urban consumers market would be crucial for high value commodities. Key insights:
  16. 16. Agriculture Purchase of implements Purchase of livestock Social functions Consumption Education Medical Business Repay old debt Major repairs Purchase of land Marriage Drill well/bore well Others No. of households 50100150200250 50 SATRegion EasternRegion Informal loan Formal loan 100 ₹40K ₹42K₹67K ₹12K Credit need by the panel households, 2010-13 • In recent years, access to agricultural loan through KCC/ Micro- credit has improved. • Appetite for credit is much higher in other region. • Other than agriculture & vehicle loan, mostly borrow informally in eastern region. Accesstoinstitutionalcredit
  17. 17. 1 2 3 4 Mostly from SHGs, Co-operative and Friends & relatives for the Agricultural purpose Commercial banks, for purchase of livestock and agril. implements From formal sources for the agriculture and agril. implements Money lender, MFI and private banks for short term consumption purposes and long term agril implements • Smallholders and poor either don’t take loan or avail very costly loan from informal sources Accesstoinstitutionalcredit
  18. 18.  Production risk, caused by fluctuations in the occurrence and distribution of the monsoon has become typical feature for eastern states.  Crop/ livestock insurance in eastern India- negligible for smallholder farmers, who don’t take loan.  New Crop Insurance Scheme (PMFBM): uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops  The scheme is compulsory for loanee farmer  The scheme will be implementable on an ‘Area Approach basis’ (village/ village panchayat). Rainwater in the harvested paddy in Odisha village Hailstorm just before harvest of wheat crop in Bihar village Risk&Insurance Mitigating production risk
  19. 19. NAM: Progress in Jharkhand & Odisha Commodities Traded: Onion, Green gram, Chillies, Turmeric, Maize Total APMC under e-NAM : 10 Online APMC : 5 0.12 0.13 0.17 0.18 0.19 0.28 0.37 0.46 0.49 0.55 0.63 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 JHARKHAND 0 0 0 0 0 0 0.56 1.1 1.42 1.66 1.95ODISHA Commodities Traded: Tomato, Paddy, Mango, Lady finger, Mahua Total APMC under e-NAM : 19 Online APMC : 16 APMC Act was repealed in 2006 in Bihar. Newinitiatives
  20. 20. FPO/FPCs No. of registered FPOs (since 2012) • Bihar : 7 FPOs (Potato, Tomato, Cauliflower, Wheat, Lentil, Onion) • Jharkhand : 8 FPOs (Potato, Peas, Ginger, Cauliflower, Cabbage, French Bean, Brinjal, Peas) • Odisha : 5 FPOs (Cauliflower, Tomato, Cucumber, Cabbage, Brinjal, Bitter gourd) • Maharshtra has about 900 registered FPOs. Newinitiatives
  21. 21. Key learnings and opportunities for agricultural transformation … • Complete ecosystem- policy, institutions & infrastructure needed to bring innovation to transform rural economy in eastern India • Diversification and intensification both are imperative • Good governance in implementation of government programmes like, Crop Insurance, Soil Health Card Scheme, eNAM, Irrigation scheme, etc. • Digital disruption must: automation of data capture- production, price, assets- increase efficiency, reduce transaction cost, faster delivery. • Non-farm options: Primary value addition (storage, grading, pulping, etc.) in agriculture, as well as non-agri sector for increasing purchasing power to boost demand of value added food products. Accelerating pace of rural transformation in eastern states is compulsion, not a choice.
  22. 22. Thanks!

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