India\\\'s agro-sector looks to a fast and consistent revamp

Let us have a look at what the latest budget says: With the shadow of the El Niño looming over the Indian monsoon, there are legitimate concerns about its likely impact on agricultural production and, consequently, prices of food products. What is significant is that over the last decade, Indian agriculture has become more robust with record production of food grains and oilseeds. Increased procurement, consequently, has added huge stocks of food grains in the granaries. India is one of the world's top producers of rice, wheat, milk, fruits, and vegetables. However, given that India is still home to a quarter of all undernourished people in the world, and since on an average almost half the total expenditure of about half the households is on food, increasing the efficiency of the farm-to-fork value chain is crucial to eliminating poverty and malnutrition.
LACK THE REALISTIC TOUCH: The reality --- in India's planning this is nothing uncommon --- sets the high targets to ultimately become a laggard!  Most of the plans lack the realistic touch inasmuch as various sectors' target-fixing cannot ignore the spatial dimensions, regional peculiarities and other related sociological factors. Politics is seen pushing back the economic positives. But economics is rather used for achieving the political purposes.  Not only is this the reality in India, but in the entire developing world. Either the projects are not taken up, or when they are, the rate of progress remains at a palpably lower level - cost escalation is rewarded! What is more, the projects completed are not subsequently followed up, and supervised adequately, as a result of which the same assignment is to be repeated within a short span of time involving more expenses.
This is a reality in the farm sector as well. Target for the 12th Five Year Plan has been, no doubt, nicely placed. But the rate of growth remains traditional in nature and not much achievement could thus be there yet as a result. Can it be said with confidence that another big setback will not to be there again by March, 2017, when it comes to achieving the target!
The potentialities still are so high - the neighbours' envy. How many countries are there in the world that can produce grapes twice a year! The quality of many horticultural crops enables India to remain largely unbeatable in the global market. In spite of the competition becoming intense - hotter and hotter - we are able to retain the markets for many agro-commodities. The flipside - we have to remain content with less than 1 per cent share in global trade in agro-commodities!
So the question of complacency is not at all there, rather the time is ripe for looking at the inhibiting factors. It is very difficult to understand why the output of pulses (main protein source for the vegetarians) hovers around 13 - 18 million tonnes since the 1960s. It is still considered as a 'second grade' citizen - though there is no doubt that a number of programmes have been taken by the government. Poor implementation continues to hit them hard.
The point here is that had we been one of the grain bowls (still the scope remains) by now, we could have reaped large benefits from the rising international prices of the agro-commodities. The most important factor on this score is that demand for such commodities - especially the food grains --- would never come down; rather it is all set to go up over time. Population upsurge coupled with growing demand from industrial sectors could keep the demand factor at reasonably high level.
Whatever it is, the lead is to come from the two giants - India and China. As a matter of fact, the world has to depend on these two regions in the days to come. China has, of late, also been putting stress on this sector, clearly realising those big industries alone or an export-led growth ultimately hinge heavily on how the food factor extends support. For India, fortunately, any sort of 'negligence' has not been there - the missing factor remained at not properly exploring the resources at a quicker pace. Had it been so, by now we could have ruled the world in so far as many such commodities are concerned. A lot thus depends on realistic assumptions / projections.  
One has to become a dependable supplier so as to retain the market entry gained - sometimes exporting cotton in a bigger way while in the subsequent years remaining almost aloof from exporting, catering to only the mills' demands. For onions the same thing has prevailed.
Most of the least developed economies depend on a handful of such agro-commodities and, in any way if the export market is hit (like during the recent recession) the export earnings suffer.
Agricultural risk management has now thus emerged as a key area.
Food security is such an area, where no compromise can simply be made. Either one becomes self-sufficient in the vital areas or suffers.
That is why the urgent need is to go for the overall farm development efforts. For that matter, needless to say, the infrastructure holds the key. The loss incurred during the entire production process, inclusive of the damages done to the unscientific threshing, rat menace, field loss, can be minimised. Without proper training imparted to the farmers as regards post-harvest technology, not much can be expected on this score. Connectivity between the producing zones and the selling zones calls for immediate reinforcing. Buy-back arrangement is obviously a good process provided the actual producer receives the legitimate benefits in due course.
That is why agricultural modernisation has no alternatives. Areas under cultivation cannot be raised continuously even if the fallow lands are brought within cultivation. Not more than 10 per cent a year cannot be brought under cultivation as such. The question is regarding the availability of quality seeds, bio fertilisers' applications, and, finally, technological consolidation of holdings. Efficient water use process is another area that deserves attention. Here also scientific planning regarding exploration of ground water holds the key to success as indiscriminate use gives rise to other problems. Surface water utilisation has also not been optimally done.
In fact, the problems are so vast that every aspect requires individual care. Fortunately, India is blessed with a number of good agricultural universities, the personnel having the necessary knowledge backed by government encouragement plus skilled farmers. But where is the harm to learn more from the rich experiences in the West and the countries like Israel? Water management is something that we have to learn from them, among others, for example.
The upshot is that the relevant countries which have not attached enough importance to this score had to bear the brunt. It is also a fact that overnight success is not more than a wishful thinking. Systematic planning is the only way out. And for that matter the tools of regional planning can be readily made use of. Learning about regional peculiarities must be the starting point of any realistic decision-making on this score. Economic factors alone cannot give a full-fledged guidance as the strength of non-economic factors counts no less. There is always the gap between the cup and the lip. Initiating change has never been an easy matter, and change-resisting factors also count.
The budget, however, shows some hopeful signs. At the same time, it is to be also seen that mere allocation of funds does not serve the purpose. If the overall coordination is not there - between the institutional lenders and other development wings like electrification, irrigation, roads, among others, not much can be achieved tinkering around the traditional modes.
It is crystal clear that to become a strong force in the international markets, a good production base is a must. If the produced items cannot be stored as per requirement and then the stored items are not timely made use of (agro-goods are perishable in nature), lots of potentialities would get lost --- including the huge investments made.
The Food and Agriculture Organisation (FAO) in its 'Cereal Supply and Demand Brief' of June, 2014, has also forecast a comfortable global scenario for 2014-15 with high stocks-to-use ratios of cereals and stable prices.
On a positive note, the budget views that there appears to be no cause for alarm on the El Niño front as India is well placed on food grains' availability, with record domestic production and huge stocks in the central pool. Let us keep our fingers crossed!
Dr. BK Mukhopadhyay is a management economist and an international
commentator on contemporary business and economic affairs.
[email protected]