Odisha is one of the rare states that has enjoyed long period of political stability and continuity of its economic policies since March 2000, when Naveen Patnaik took over as chief minister for the first time. Odisha is also blessed with abundant natural resources, especially minerals, forests, and ground-water. Given all this, it should have been one of the richer states of India. But ironically, it is not. Its per capita income is the fifth-lowest and poverty the sixth-highest among the states.
Odisha’s per capita income (R24,928 in FY14) hovered around 62% of the all-India average (R39,904). Although it is much better than that of Bihar (R15,506) and Uttar Pradesh (R19,233), it remains way below the top-performing states like Sikkim (R83,527), Maharashtra (R69,097), Haryana (R67,260) and Gujarat (R63,168). In terms of poverty, one-third of Odisha’s population is poor, compared to 22% at the all-India level and just 7% in Kerala, 8% in Sikkim and Punjab, 11% in Haryana, and 16% in Gujarat (all 2011-12 figures, as per Planning Commission estimates based on Tendulkar poverty-line).
In its quest to industrialise quickly, Odisha is hosting a mega event, the ‘Make in Odisha Conclave’ at the end of this month. Capital Bhubaneswar also tops the list of the first 20 smart cities to be developed under the Smart Cities programme of the Union government. These are laudable initiatives. But the case of Dana Majhi, who had to carry the corpse of his wife on his shoulders for 12 kilometers due to his sheer poverty, raises a moot and strategic question: What is the best way to eliminate poverty soonest?
In this context, our research at Icrier reveals that higher productivity and income in agriculture may still hold the key for faster alleviation of poverty. This is particularly so, as 91% of poverty in Odisha is rural, and more than 60% of its workforce is engaged in agriculture. But unfortunately, during the five years from 2010-11 to 2014-15, Odisha’s agri-GDP recorded an annual average growth of a mere 0.9%, compared with a robust 14.2% in Madhya Pradesh and 7.1% in even Bihar. Further, Odisha’s productivity in rice, the main crop of the state, is less than 2 million tonnes (mt)/hectare, while Punjab’s is 4 mt/ha, Haryana’s is 3.2 mt/ha and Andhra Pradesh’s 3 is mt/ha. This is surely discomforting. So, how can one turn around Odisha’s agriculture and alleviate rural poverty faster?
First, give farmers better control over water, especially irrigation. Odisha has about 39% of its gross cropped area irrigated (compared to the all-India average of 48%, and above 95% in the Punjab-Haryana belt). Odisha has large (70%) untapped groundwater potential and about 50% untapped potential from major and medium irrigation schemes. While this is a bane holding back Odisha’s agri-growth, it can be a boon tomorrow with some strategic interventions. Luckily, much of Odisha’s groundwater reserves, as shown in the accompanying graph, are at a depth of just 2-5 meters, which can be tapped economically if there was ample supply of power to the agriculture sector in the stae. Unfortunately, it supplies only 1.3% of its total power to agriculture, resulting in a meagre consumption of less than 20kwh/ha, compared with 766 kwh/ha at an all-India level, 1,742 kwh/ha in Tamil Nadu and 1,456kwh/ha in Punjab! This reflects gross neglect of agriculture. Such a situation typically arises when supplying power to agriculture through the grid increases the losses of discoms as power tariffs for agriculture are generally zero or highly subsidised. Diesel turns out to be too expensive for farmers. Under such a situation, almost a million hectare of land remains fallow. The solution may be in large-scale installation of solar irrigation pumps, which can now supply power at R4.50 to R6/kwh. Odisha receives solar radiation of around 5.5 kwh/sq mtr and 300 days of clear sunny days. Solar power in rural areas can also help build value-chains, including cold storages, for high-value agriculture, especially milk and fruits and vegetables, in which Odisha has done relatively better.
The next critical thing for Odisha is to focus on paved roads. Roads provide linkages to output and input markets, increase labour mobility, and give very good returns to farmers. As per Odisha’s Economic Survey (FY15), surfaced roads as a percentage of total road length remained in the range of 20-30%, compared to almost 90% in Gujarat, Punjab and Haryana. In fact, almost 46% of villages in Odisha do not have all-weather roads connectivity. This severely hampers farmers in getting the best price for their produce and inputs.
The third factor to focus on would be to incentivise faster diversification of agriculture, toward high value products such as livestock and fruits and vegetables and promote their well-coordinated value chains, a la the Amul model in the case of milk and the Venketshwera/Sugana hatcheries model in case of poultry.
Just these three interventions—tapping groundwater irrigation through solar power, providing paved roads, and incentivising diversification toward high-value agriculture—can bring rich dividends and alleviate poverty in Odisha much faster. Incidentally, our research also shows that in Punjab, during the heydays of the Green Revolution (from 1970-85), irrigation, roads and procurement system played pivotal role in propelling agri-growth and reducing poverty. Odisha will be better off if it keeps this lesson in mind. In fact, it can lead to a second Green Revolution from the East, as prime minister Modi had wished for during his visit to Odisha early this year. Spreading resources too thinly across several schemes may not give big bang for the buck.
Ashok Gulati is Infosys chair professor for agriculture, and Pallavi Rajkhowa is a consultant, Icrier. Views are personal.