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Three cheers for Indian agriculture!

Jan 01 2014, 21:39 IST
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SummaryThe year 2013 is something to cheer about the performance of Indian agriculture

The year 2013 is something to cheer about the performance of Indian agriculture. Given the good rainfall, agricultural GDP in the 2013-14 agri-year (July-June) is likely to grow between 5.1% and 5.7%, almost three times higher than last year. New records in production and trade are being achieved. Take these: Horticultural production is likely to touch 269 million tonnes (mt) and perhaps for the first time going to surpass the foodgrain production (of 260 mt or so) in 2013-14. Milk production is likely to scale a new peak of 139 mt, and this commodity will be the biggest agri-commodity in terms of value, even bigger than rice or wheat. Cotton is likely to touch 37 million bales, and so on.

On the agri-trade front, our exports in 2012-13 were $41 billion against agri-imports of $20 billion, giving a net trade surplus of $21 billion. This feat is going to be repeated this year too. India is the largest exporter of rice, guar gum meal, beef (buffalo meat) and the second-largest exporter of cotton. India exported 22 mt of cereals, never done before in its history of more than 3,000 years! India’s ‘revealed comparative advantage’, as measured by the Balassa Index, is 1.6 against that of manufacturing at 0.98, indicating clearly that Indian agriculture is much more competitive globally than our manufacturing sector.

Behind the success of each of these commodities, in production and/or trade, is a fascinating story, the story of well-designed policies, or processes, or investments, or technology, but above all, the entrepreneurial spirit of our farmers. Let me narrate just three stories here, which have had a large impact on our agriculture and benefiting millions of farmers, consumers and the country at large. The idea is to distil lessons for future policy direction so that we can scale these up, with much larger gains.

First, let us talk about milk. In 1951, when the US was producing 53 mt of milk, India’s milk production was just 17 mt. In 2013-14, US milk production is likely to be around 91 mt and India at 139 mt! Project this for the next 10 years and see its implications. And so far, most of this is done by small farmers with an average herd size of about four cows and/or buffaloes. This is an outstanding example of inclusive growth, which the developing world with smallholders needs to emulate.

Verghese Kurien and his team were the people behind this but the political credit of this goes to Lal Bahadur Shastri, who spent a night (October 31, 1964) in a village in Anand talking to farmers till 2 am and decided the next day to scale up activities of AMUL by setting up the National Dairy Development Board in 1965, which later on launched Operation Flood to make India self-sufficient in milk. Shastri also gave us the slogan ‘Jai Jawan, Jai Kisan’. But so far, not more than 20% of this milk is being processed through the organised sector. Lesson: We need massive scaling up of processing activities, be it by cooperatives or domestic or international private players to reap the full benefits of this ‘white revolution’ and take it to its next stage.

Second, Atal Bihari Vajpayee extended the slogan of ‘Jai Jawan, Jai Kisan’ to include ‘Jai Vigyan’. The cotton story reveals the power of science (vigyan). In 2002-03, as per central government statistics, India produced only 8.6 million bales (Cotton Advisory Board estimates were somewhat higher) of cotton. This is likely to cross 37 million bales in 2013-14, giving an annual export of around 10 million bales valued around Rs 20,000 crore. All this was made feasible through Bt cotton (genetically modified), which came through the research of a big multinational seed company and was launched in India through its Indian partner. Today, more than 90% of cotton area is under Bt cotton varieties. Yet there are apprehensions about GM technology in policy circles and some NGOs, and the government has dithered on the Bt brinjal case. Lesson: While due transparency in the approval process is necessary, it needs to be done more expeditiously. Bold moves in biotechnology are necessary, from investments to linkages with private sector players and its proper extension to farmers, if we have to produce enough food, feed and fibre for a large and increasing population.

Third, let us talk about Pusa basmati. It has raised India’s basmati exports from less than 1 mt to about 3.8 mt in 2013. The annual additional benefit from this is anywhere from Rs 15,000 crore to Rs 20,000 crore. It was invented in the public sector through research under the Indian Council of Agricultural Research, with meagre resources. Just one good piece of research, by VP Singh and his team, gave 100 times more returns on investment than India did on all varieties of rice for several years. Lesson: Investments in agri-R&D have very high pay-offs. We need to significantly scale up our investments, and incentivise our scientists to convert their research into economic benefit for the country.

There are several other stories in Indian agriculture to be proud of. Yet, at times, we feel pessimistic whenever there is severe drought, or farmers commit suicide, or farmers agitate for better prices, and so on. Lesson: The agricultural glass is more than half full, and it can be filled even more if we make our agri-policies farmer-centric. It is not just the tonnage that is important, the smile on the faces of farming families is equally important. Only a happy family can give the best to the nation and make us all feel proud.

(Ashok Gulati is chairman of the Commission for Agricultural Costs and Prices. These are his personal views.)

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