Co-author- Ranjana Roy
We have been great admirers of the ‘agrarian miracle’ that Gujarat achieved under the leadership of Narendra Modi (NaMo), when he was the chief minister of Gujarat from October 7, 2001, to May 22, 2014. Gujarat agri-GDP registered an unprecedented growth of 8% per annum during 2002-03 to 2013-14, way above that of all-India (3.3% pa). Interestingly, Gujarat’s agri-growth was even higher than that of Punjab during the heydays of Green Revolution (5.7% pa during 1971-85). Gujarat’s history of high agri-growth gave NaMo a big political dividend by returning him to CM’s office thrice! It was good economics and good politics!
So, when NaMo became the prime minister in May 2014, one was expecting a scaling up of ‘Gujarat model’ to many states, with due fine-tuning to suit the individual state’s characteristics.
But growth of all-India agri-GDP in the first three years of NDA rule plunged to just 1.8% pa, less than half of what was achieved in the last three years of the UPA rule. One of the factors behind this poor performance was deficient rains in 2014-15 and 2015-16. But 2016-17 was a bumper year, yet farmers suffered due to collapse in agri-prices. The advance estimates of 2017-18 also do not indicate much recovery, and four years of agri-growth under NaMo government may turn out to be around 2% pa. This will not auger well for 2019 elections, as agriculture employs 47% of work force, and poor agri-performance may turn out to be Achilles’ heel.
Anyway, here we focus on how to get Indian agriculture on at least 4% growth path, although it has potential to grow even at 5% or a bit more, as its productivity levels are still very low by international standards. The dream of doubling farmers’ income by 2022 cannot be fulfilled if agri-growth remains subdued at 2% per annum. So, what can NaMo do at this juncture? Should he set up another expert committee or just look back at his Gujarat’s agrarian miracle, learn some important lessons, and fine tune them for his endeavour at all-India level?
In order to answer these questions, one needs better diagnostics of Gujarat’s excellent agri-performance during NaMo period. Our in-depth research at ICRIER shows the following key drivers of agri-growth in Gujarat:
First, a bold decision by Atal Bihari Vajpayee Government to commercially allow the use of Bt cotton became a catalyst of change, and Gujarat benefitted most from it. From nowhere in 2002, Bt cotton spread to more than 90% of cotton area in Gujarat by 2014. Production at all-India level increased from 14 million bales in 2002-03 to 39.8 million bales by 2013-14, as per Cotton Corporation of India. India’s raw cotton export increased from a meager $10 million to $4,258 million by 2011-12, making India the second-largest producer and exporter of cotton in the world. A forthcoming study by Gulati and Ganguly (2017) shows that, cumulative gain from import saving, extra raw cotton export and extra yarn export, compared to the business as usual scenario, for the period of 2003-04 to 2016-17 is estimated to be $67.4 billion at all India level, with Gujarat claiming a big share. Remember, if exports of cotton were banned, this cotton revolution would not have fructified. Lesson: Access to best markets is as important as access to best seeds.
It may be worth recalling that the Bt cotton seeds came from a global seed company-Monsanto in association with its Indian partner Mahyco, and then multiplied by several licensees. In this context, it is interesting to see while China is taking over Syngenta for $43 billion to access best technologies for its farmers; the NaMo government is creating conditions where Monsanto type companies may quit, thus literally reversing the bold decision and benefits that the Vajpayee government bestowed to Indian farmers. Is this in farmers’ interest?
Another key lesson from Gujarat story is that of providing basic infrastructure: irrigation, power and road, which enabled easy adoption of Bt cotton, and benefited other crops and livestock sector, too. Check-dams, bori bandh and khet talavadi gave life-saving irrigation, while Jyotigram Yojana, separating feeders, etc, helped improve rural electrification. Another crucial infrastructure for agri-growth is all-weather roads. Currently, Gujarat has one of the best road-network in the country, with 930 km of road per 1,000 sq km of area, of which 89% are pucca/surfaced roads.
Good marketing institution is yet another important factor that propelled Gujarat agriculture, especially its dairy industry. The Amul model of directly buying milk from farmers’ cooperatives, processing and distributing through millions of outlets, ensures that farmers receive 75-80% of consumers’ price. This model is worth emulating to other commodities, especially fruits and vegetables, bypassing the mandi system. It is time to launch “Operation Veggies TOP (Tomatoes, Onions and Potatoes)” on the lines of “Operation Flood”.
So, what are the key lessons from CM Modi to PM Modi? First, enable farmers to access best technologies and best markets at home and abroad; second, invest in basic infrastructure that can give access to water for irrigation, power and rural roads; and third, create Amul-like institutions for other commodities to enable farmers to net the highest share of consumers’ price.
In this context, remember, export bans or high minimum export prices (MEPs) for agri-products, are anti-farmer; use satellites and drones to identify places appropriate for building check-dams across the country and use the MGNREGA workforce to build such check-dams. Ensure farmers get power either through the grid or solar panels, and supplement this with micro-irrigation (drips and sprinklers) to get more crop, per drop.