1. Column: Learn from Madhya Pradesh

Column: Learn from Madhya Pradesh

A strong procurement system, among other things, helped the state record unheard-of agri-growth rise

By: and | Published: December 7, 2015 12:24 AM

Shivraj Singh Chouhan completed 10 years in office as the chief minister of Madhya Pradesh (MP) last week. The most outstanding achievement of these ten years is the excellent performance of the state in agriculture: MP’s agri-GDP grew at 9.7% per annum during FY06 to FY15, even surpassing the record-holder, Gujarat, which grew at 7.7% during FY06-FY14. The last five years have been even more spectacular. Agri-GDP has grown at 14.2% per annum. No wonder, MP got the Krishi Karman Award from the President three times in the last five years.

It is important because MP is primarily an agri-state, with almost 70% of its workforce engaged in agriculture, much above the all-India average of 55% (as per 2011 Census). Given such a large dependence on agriculture, focusing on agriculture is not only good economics but also good politics. When the largest number of people gain from growth, it gives political legitimacy for pushing the reform frontier further. The masses also reward such political leadership—in the case of MP, by bringing back the Chouhan-led government three times in a row.

But the high agri-GDP growth rates of the state have been challenged by Congress leader (and former chief minister) Digvijay Singh, who claims that the numbers maybe fudged. His doubt, prima facie, seems legitimate as such high growth numbers are not commonly heard with regards to agriculture. This made us dig a little deeper into the agri-performance of the state, and analyse the sector from both, the input and output sides. The evidence largely supports the high growth performance of the state’s agri-GDP.

Look at the irrigation ratio, which increased from 30.6% in FY05 to 41.2% in FY14, an increase of 35% in ten years. Fertiliser consumption per hectare increased from 53.4 kg to 83 kg in FY15, an increase of 55%. Tractor sales, which are reported by private companies—the government has no role in that data—increased from 28,500 in FY06 to 87,100 in FY15, a spectacular growth of more than 200%. The Seed Replacement Rate (SRR) for the major crops has also increased substantially, leading to better productivity of these crops. SRR for wheat  increased from 8.8% in FY05 to 27.2% in FY14; for soybean, from 12.5% to 32.3%; for gram, from 2.3% to 15.8%; and for paddy, from 3.4% to 22.6%. Today, Madhya Pradesh is the largest producer of certified seeds in the country, producing 4.4 million quintals of these. There is, thus, ample evidence from the input-side that supports relatively high agri-growth rates in the state.

Evidence from the output sector also strongly supports this high performance. Wheat production increased from 7.2 million tonnes (mt) to 12.9 mt, an increase of 79%. Soybean production increased from 3.7 mt in FY05 to 7.8 mt in FY13, but fell to 5.2  mt in FY14. The yields of all the major crops have risen. Yield of rice increased from 720 kg/ha to 1,474 kg/ha; of wheat, from 1,735 kg/ha to 2,405 kg/ha; of soybean, from 835 to 1,293 kg/ha; and of gram, from 928 kg/ha to 1,219 kg/ha—between FY05 and FY14.

Apart from the growth in output of food-grains and oilseeds, the horticulture and livestock sectors, too, showed spectacular improvement. Milk production increased by 75%, from 5.5 mt in FY05 to 9.6 mt in FY14, and meat production more than doubled in the same period. The production of horticulture crops increased from 1.2 mt in FY06 to 5.7 mt in FY14, an unprecedented increase of 375%!

What led to this transformation of agriculture in the state? Among the many measures taken, one that stands out is the strong procurement system erected for wheat. This incentivised the state’s farmers to increase the production of wheat while improving the irrigation ratio. While Madhya Pradesh contributed only 2% of the total wheat procurement in India in TE2002/03, the contribution went up to 24% by TE FY14. It is competing with Haryana and Punjab, and there is still lot of potential.

There are several other factors that one can list which drove the overall agri-growth in the state, but the most important is the leadership’s focus on the sector. Chouhan seems almost oath-bound on making the state’s agriculture a profitable business. His first move was to fix roads, power and irrigation. Now, he is focusing on agri-markets and crop insurance. In perishables, he wants to have milk and horticulture corridors, and is looking at the value-chains in efforts to fill the missing links. He is ready to open up the land-lease markets and rationalise mandi taxes and commissions, all of which are steps in the right direction.

But 2015 has not been a good year for agriculture in Madhya Pradesh. Half the state has been hit by back-to-back drought. There is perhaps no other chief minister across India who sent 164 IAS, IPS, and IFS officers to the field to talk to farmers, understand their problems and suggest solutions. And this information was systematically distilled, vetted by experts, and announced for implementation by the CM. This was done with the utmost humility and sincerity. This is a rare and commendable instance in the Indian political landscape. It raises the hope that farmers will not be left in lurch during crises.

Would the prime minister, Narendra Modi, and his team take a leaf or two from what is being done in MP and implement some of those moves at an all-India level to benefit millions of our farmers and farm labour? They are looking towards national leadership with hope, but so far, in the last 18 months, that hope has not been tangibly realised on the ground. Rural distress is deepening by every day. It is a wake up call!

Gulati is Infosys chair professor and Malhotra is a research assistant, ICRIER. Views are personal

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