Dr. P K Joshi, IFPRI presented on Sustainable and Resilient Farming System Intensification in Eastern Gangetic Plain: Lessons Learnt and Way Forward” at the workshop on “Policy Effectiveness for FEW Security in South Asia” organized by ACIAR at Canberra, Australia.

1. Sustainable and Resilient Farming System Intensification in
Eastern Gangetic Plain: Lessons Learnt and Way Forward
P K Joshi and Avinash Kishore
South Asia Regional Office
International Food Policy Research Institute
E-mail: p.joshi@cigar.org; Web: www.ifpri-org

2. Outline
 Key characteristics of Eastern Gangetic Plain (EGP)
 Opportunities in EGP
 Two case studies
 Groundwater and farm mechanization
 Conclusions and way forward

3. I
Key Characteristics of Eastern Gangetic Plain

4. Key characteristics of Eastern Gangetic Plain
 Endowed with best natural resources
 Abundant water; abundant sun shine;
abundant labour
 Agriculture is still subsistence and laggard
 Low productivity and profitability
 Concurrent twin problems of drought and
flood
 High risk in agriculture
 Highly vulnerable to climate change
 High poverty and under-nourishment
 Home of over 300 million poor peopleIndo-Gangetic Plain
Source: ACIAR

5. Constraints to Sustainable & resilient intensification
 Small holdings, scattered land holdings, and low economies of scale
 87% in Bangladesh; 90% in Nepal; 96% in West Bengal and 97% in Bihar are smallholder
 Poorly defined property rights, including share cropping laws
 Low investment in agriculture and capital deficit farming systems
 Fund allocation rating is low: 3.46-3.8 (1-6 scale) (IFAD)
 Intensification in capital deficit farming system is low and inefficient
 Over-emphasis on cereal-based farming system (rice and wheat)
 Vulnerable to high risks due to climate, markets and prices
 Poor governance
 Global percentile rating on governance range between 15-45%
 Weak institutions limits effectiveness of policies at local level

6. II
Opportunities in Eastern Gangetic Plain

7. Theory of change: Multi-pronged strategy
Technologies
InstitutionsPolicies
Food
Security
Land
Water
Gene
Energy

8. Promising technologies: huge opportunity
 Bridge yield gaps
 100-130% in rice, 80% in wheat and 94-
150% in maize
 Role of hybrids
 Example of SCH maize (7t/ha compared
to 2.5-3t/ha); same is rice hybrid
 Climate smart agriculture
 DSR, LLL, stress tolerant varieties
 Rice-fallow system
 13 million ha area is left fallow
 Solar pumps
 100% transplanting; non-solar <27%
 Irrigation cost for nursery preparation
 Solar farmers – 186 Rs/ha
 Non-solar farmers – 451 Rs/ha
 57% solar farmers took summer crops
compared to 28% non-solar
 Agricultural diversification
 Share of HVC in total value of Ag output
 Bihar: 60%
 West Bengal: 52%

9. Promising institutions and policies
Institutions
 Consolidating farmers
 Contract farming reduces transaction
costs and increases profits by 20-45%
 Industry shares risk by 80%
 Framer Producer Organizations
 Financing agriculture
 20% increase in credit increases food
production by 57%; income from crops
by 26% ; and saves water by 33%
 Groundwater and machine rental
markets
Polices
 High political will
 Water and energy pricing
 Trade policy, especially
machines and pumps
 Agricultural insurance
 Improves resilience and increase input
use (especially seed and fertilizer)
 Convergence of policies and
programs

10. III
Two case studies
Groundwater development and farm mechanization can be
entry point for sustainable and resilient intensification,
but there are challenges

11. Case study 1: Farm mechanization is increasing across EGP
0
5
10
15
20
25
30
35
40
45
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Growth in number of tractors and power tillers in the study districts (2005-15)
Madhubani -All Purnea -All Coochbehar-All Rajshahi -All Rangpur -All
Purnea
Madhubani
Higher tractor density in Bihar in spite of
lower cropping intensity (1.42) compared
to West Bengal or Bangladesh (1.80)

12. 6.21 6.47 6.76
7.21
9.32
10.14
11.83
16.34
18.37
0
2
4
6
8
10
12
14
16
18
20
2004 2005 2006 2007 2008 2009 2010 2011 2012
Hourly Wage (Rs) in Bihar
Year
Hourly
Wage
(Rs)
Paddy
price
(Rs/q)
Labor
used
(hour)
Total
wage
bill (Rs)
Yield
(Q/ha)
Gross
value of
produce
Rs/ha
Wage
share (%)
of GVP
2004 6.21 504 875 5433 23 11494 47
2005 6.47 478 831 5379 26 12331 44
2006 6.76 531 840 5676 25 13329 43
2007 7.21 632 771 5556 29 18318 30
2008 9.32 726 797 7423 27 19344 38
2009 10.14 856 768 7784 19 16244 48
2010 11.83 968 757 8954 19 18680 48
2011 16.34 830 797 13023 28 22881 57
2012 18.37 977 808 14842 24 23695 63
Rising wage rates and wage-share spurs on farm mechanization

13. Lessons learnt
• >90 % farmers in our sample used tractors or power-tillers
• Machine rental markets are critical for farm mechanization
• Paradigm shift from land rents to machine rents
• Rent transfer from small farmers to large farmers, who also own lands
• Existing subsidy regime and credit policies benefiting only those with
collateral
• Bangladesh has much less subsidy than India; farmers get cheaper power tiller from China
• Bangladesh rents lower by 60% despite high diesel prices
• More vibrant rental markets: serves larger area to more farmers; renter has more options
• More frequent use, even by sub-marginal farmers
• Opportunity: create machine service providers in agriculture
• Use technology to create competitive rental markets in farm machines
• Learn lessons from institutional innovations in renting farm machines
• Can India and Nepal learn from Bangladesh in mechanizing their
agriculture?
• EGP also need to learn institutional innovations in Western Gangetic Plain

14. Case study 2: Groundwater irrigation
• Rapid increase in groundwater irrigated area in EGP since 1980s
• Universal access to groundwater (capital cost of tapping GW is relatively low)
• 97-100% farmers in Bihar and Nepal terai
• 71-83% farmers in West Bengal and Bangladesh irrigated their land in last 1 year
• Water is easy to access, but irrigation is expensive
• Farmers over-economize on groundwater
• Low yields, low cropping intensity and high vulnerability to droughts or late onset of rains
• Diesel pump-sets are the main source of GW irrigation in Bihar, Nepal
terai and Bangladesh; WB moving to electrified pump sets
• Water markets are very important in EGP
• Only 2-15% farmers own pumps; majority of farmers get water from others
• But water markets are not competitive

15. 0
10
20
30
40
50
60
70
80
90
100
Madhubani Purnea
0
10
20
30
40
50
60
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Dhanusha Sunsari
0
10
20
30
40
50
60
70
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Rajshahi Rangpur
Bangladesh
0
5
10
15
20
25
30
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Coochbehar
Diesel pump Electric pump
Electric submersible
West Bengal
Bihar Nepal
Rising pump sets in Eastern Gangetic Plains

16. Pump rents high despite of rising pump density?
• Question: Why some owners not reducing
rental rates to increase capacity utilization;
capture local water market?
• Answer 1: Cost structure of diesel pump sets
• Low capital costs: $150 or less
• High variable cost: $ 1/hour (fuel) + Hassles
• Not much incentive to expand the capacity
utilization and the market-share
• Opposite case with solar and electric pumps
• Answer 2: Water markets are local oligopolies
• Hard to prove, but advent of the Chinese pump-sets
suggests so
• Cheaper and more fuel efficient, but charge just
about the same rental rate
35.25
36.96
38.6739.8340.9941.5 42 42.05
46.4 47.79
61.9
59.67
44.12
51.71 51.84
54.27
59.03
63.6 64.2
66.3
71.7
81.4
90.4
107.9
30
40
50
60
70
80
90
100
110
2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 2011 2012
Rental Rate of Pump-sets in Bihar
and West Bengal (2000-2012)
(Rs/hour)
West Bengal
Bihar

17. Lessons learnt
• Private investment in tube wells & pump-sets, and water markets
have ensured near universal access to groundwater irrigation
• Affordable access to irrigation is still a problem
• Water markets in EGP are not becoming competitive
• Unlikely to competitive as long as diesel is the main source of energy
• High cost of irrigation impedes sustainable intensification and
make less resilient to drought
• Import restriction on pump sets hurts smallholders, especially in
India

18. IV
Conclusions and Way Forward

19. Conclusions
• Number of technological, institutional and policy constraints impeding
sustainable intensification of EGP
• Water and farm mechanization would be entry point for sustainable
intensification
• Machine renting and water markets are evolving but inefficient and imperfect but will
play big role
• Machine rents and water prices are not declining despite expanding markets
• New phenomenon emerging from land rent to water and machine rent
• Conservation agriculture technologies for sustainable intensification are
conspicuous by their absence in the region
• Awareness, use and ownership of zero-till seed drills, laser land levelers,
drip/sprinkler systems is very low
• Capital subsidy alone won’t be enough
• Institutional innovations and intensive extension effort will help more

20. Way forward: integration with SDIP policy project
• Key policy and institutional barriers and needed reforms in food,
energy and water sectors
• Feasibility of adapting best practices on institutional innovations
in strengthening farm machine rental and water markets
• Alternative cost-effective options for diesel for groundwater use
(e.g. solar pump sets)
• Risks, coping mechanisms and financing need assessment
• Engaging private sector to expand machine rental and water
markets
• Enabling policies, and role of credit, subsidies, import and farm services
(including inputs)

21. Thank you