Prospects for the Convergence of the Lagging Regions with more Progressive Regions of India P K Joshi and Anjani Kumar South Asia Regional Office International Food Policy Research Institute E-mail: [email protected] ; Web: www.ifpri-org
Prospects for the Convergence of the Lagging Regions with more Progressive Regions of India
P K Joshi and Anjani KumarSouth Asia Regional Office
International Food Policy Research InstituteE-mail: [email protected]; Web: www.ifpri-org
Outline
Key characteristics of lagging regions
Opportunities in lagging regions
The way forward for converging lagging
regions with prosperous regions
Key characteristics of lagging areas
Abundant water; abundant sun shine; abundant labour
Agriculture is still subsistence and laggard
Concurrent twin problems of drought and flood Increase risk in agriculture
High poverty and acute under-nourishment
Lagging regions: crowded and risky (e.g. Bihar and Odisha)
Most backward states with high poverty (43% Bihar and 46% in Odisha) Low urbanization (11% in Bihar and 17% in Odisha)
97% holdings in Bihar and 92% holdings in Odisha are smallholders Occupy 76% area in Bihar and 70% in Odisha
Average size of smallholders is 0.3 ha in Bihar and 0.8 ha in Odisha
Crop sector contributes 58% in Bihar and 70% in Odisha Yield gaps are very high (131 to 300% of rice in Bihar)
Low cropping intensity 1/3 of total 13 million ha rice-fallow lands
Meager investment in agricultural research and extension < Rs 10 per thousand population
5
Smallholding and rural poverty
PovertyLow (<30%) High (>30%)
Smal
lho
lde
rs
Lo
w (
<85%
Gujarat, Haryana, Karnataka,
Meghalaya, Maharashtra, Nagaland,
Punjab, Rajasthan, Sikkim
(22% smallholders & 21% poverty)
Arunachal Pradesh, Jharkhand, Madhya Pradesh,
Manipur, Chhattisgarh
(10% smallholders and 17% poverty)
Hig
h (
>85%
) Andhra Pradesh, Goa, Himachal
Pradesh, Jammu & Kashmir, Mizoram,
Tamil Nadu, Tripura and Uttaranchal
(25% smallholders and 11% poverty)
Assam, Bihar, Odisha, Uttar Pradesh, West
Bengal
(43% smallholders and 51% poverty)
• Low income generating opportunities, high dependency in agriculture and low agricultural productivity• Poor infrastructure and weak institutional arrangements• Poor Social development Indicators (Rural literacy, toilets, urbanization, HDI)
6
Climate change and vulnerability: place of lagging states
Vulnerable to climate change Very high and high category of vulnerability
Rajasthan, Uttar Pradesh, Madhya Pradesh, Bihar, Gujarat, Karnataka, Maharashtra
Rise in temperature, decrease in July rainfall, increase in drought years
Madhya Pradesh, Karnataka
Decrease in July rainfall and rise in minimum temperature and drought year
Bihar and Maharashtra
Vulnerability compounded by poverty in Bihar
Vulnerability increases and adaptation capacity decreases from west to east Highest adaptive capacity in Punjab and Haryana
High adaptation due to irrigation, ability to use inputs, electrification and better road network
7
Climate change: implications on production and prices
0
5
10
15
20
25 23
16
13 13
10
5 5
Rise in prices due to 10% drought
Rise in prices
Climate change affects food production and raise their prices and make people more poor Most affected laggard areas and smallholders
Prices of major rainy season crops will increase due to drought
Demand will go down due to rise in prices
Rice by 5.5%; and 2-4% for other commodities
India might import 15 million tons of rice due to 20% drought in 2020 Affect global prices significantly
Adverse effects on poverty
8
Source: Kumar, et al 2013
Bridge yield gaps (kg/ha)
Crop / YearBihar Odisha
TE 2000/01 TE 2010/11 TE 2000/01 TE 2010/11
Paddy Average yield 1,495 1,290 1,130 1,600
Potential yield 2,748 2,960 2,142 2,448
CV (%) 31.1 32.4 24.4 20.4
Wheat Average yield 2,147 2,197 1,351 1,346
Potential yield 2,957 3,389 2,000 2,000
CV (%) 16.4 19.1 25.7 24.0
Maize Average yield 2,201 2,758 1,182 1,124
Potential yield 3,861 5,354 2,123 2,800
CV (%) 26.3 34.1 30.2 45.8
Pulses
Average yield 882 873 399 479
Potential yield 1,514 1,543 673 721
CV (%) 21.5 24.1 24.9 17.8
Connect invention to innovation: potential of hybrid rice
Yield range, t/ha
Average yield, t/ha
Districts
< 5.00 4.67 West Singhbhun (4.81); Dumka (4.29); Chatra(4.92)
5.0 – 6.0 5.75 Ranchi (5.72); Godde (5.64); Koderne (5.90)
6.0 – 7.0 6.33 Lohardaga (6.03); Shibganj (6.89); Palamau (6.06)
> 7.00 7.43 Bokaro (7.54); Gharwa (7.06); Dhanbad (7.98); Pakur (7.07); East Singhbhum (7.54)
Emerging hybrid maize in Bihar, yields (t/ha)
1.7
2.41
2.63
3.18
5.66
6.66
0 1 2 3 4 5 6 7
Rainy
Winter
Local Composite Hybrids
Promote climate smart agriculture: farmers’ preferences to various technology interventions
Bihar 1. Laser land Levelling
2. Rain water conservation
3. Systems of Rice Intensification
4. Green manuring
5. Crop Diversification
6. Crop Insurance
Investment and its impact on crop sector
Item Unit Current 20% Investment
% Change
Production m t 10.89 17.11 57.00
Income b Rs 107.00 135.30 26.00
Employment m days 403 435 8.00
Water use 000 m c m 33.45 22.43 -33.00
Income LS b Rs 35.00 53.86 53.00
Emission M t CO2 eq 14.80 13.26 -10.00
5. Harness potential of rice-fallow
Extent of rabi-fallow area
1.2
1.72.2
4.4
9.5
11.6
0
2
4
6
8
10
12R
ice-
fallo
w a
rea, m
ha
Ori
ssa
W B
engal
Bih
ar
MP
4 St
ates
Ind
ia
31
37 37
78
47
38
0
20
40
60
80
Rab
i fa
llo
w a
s o
f
kh
arif
ric
e. %
Ori
ssa
W B
eng
al
Bih
ar
MP
4 St
ates
Ind
ia
18 1015
1938
Orissa W Bengal Bihar MP Other
Agricultural diversification: Share of food commodities in value of agricultural output, %
1990/
91
2000/
01
2009
/10
Paddy 20 13 11
Wheat 14 11 9
Maize 3 3 2
Pulses 7 3 2
F & Veg 14 36 24
L’stock 30 25 42
Others 12 9 10
Diversification towards livestock
sector
F & V and L’stock shares 66% in
Value of Agricultural Output
Declining size of holdings
Rising demands
COMFED (dairy) Membership up
17.282 m in 1999/00
48.96 m in 2010/11
Milk collection up 281.08 th kg/day in 1999/00
608.38 th kg/day in 2006-07
Number of markets per million cultivators across districts in India
Markets per million cultivars
Category % districts
< 1.0 50
1.0 - 2.0 28
2.0 - 3.0 10
3.0 - 4.0 3
> 4.0 9
Options to link farmers with markets: develop value chains
Farmers’ markets
Self-help groups
Farmers’ cooperative
Contracting farming
Farmer Producer Organization
Warehouse receipts
Role of financing institutions
Role of private sector
Commodity markets
Hedging
Physical transactions
Virtual transactions
Foreign direct investment (FDI)
Agro-processing 100 percent in equity
Seed development and production
Single brand retail 100%
Multi-brand retail
51%
Conditions for FDI in multi-brand retail:
50 % in backend
30% procurement from SMEs
Food sector received only 3.3% of the gross FDI flow in India between 2000 and 2010
Seed sector: Cargill, Syngenta, Monsanto
Processing sector Britannia; Nestle; Kellogg; PepsiCo., Perry
Major players in back-end Wal-Mart cash & carry
Metro cash & carry
Food service restaurants (single brand) KFC; Pizza Hut; Dominoes; McDonald’s etc
The way forward
Land reform
Change ceiling laws; land lease system
Market linkages, post-harvest reforms and agro-processing
Develop markets and institutions; minimize risk, promote agro-processing
Minimize agricultural risks and adapt climate change
Climate smart agriculture, agriculture insurance
Pro-smallholder agricultural research agenda
Farm mechanization, energy, and climate smart agriculture
Convergent innovation
Converse policies, programs, technologies, markets, social mobilization
Non-farm employment opportunities
Reduce dependency in agriculture by generating off-farm employment opportunities22