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India Accelerating Agricultural Growth

India Accelerating Agricultural Growth. August 31, 2007 New Delhi. 70% of population, 75% of poor are in rural areas Agriculture: main source of livelihood for 60% of population Contributes about 20% to GDP Essential role in national food security.

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India Accelerating Agricultural Growth

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  1. IndiaAccelerating Agricultural Growth August 31, 2007 New Delhi

  2. 70% of population, 75% of poor are in rural areas Agriculture: main source of livelihood for 60% of population Contributes about 20% to GDP Essential role in national food security Agricultural Sector: Important for economic growth and reducing poverty

  3. Key Issues and Challenges • Slow down in agricultural GDP growth • From 3.5% in mid-80s to 90s to less than 2% in mid-90s to 2000s, • Poorest states (MP,Orissa, Rajathan), growth less than 1% • Lead to widening rural-urban income gaps • Low agricultural productivity • Crop yields are low relative to other countries, disparity in yields across states • Increasing natural resource degradation • Soil erosion, salinity, alkalinity, declining ground water levels • Partly due to fertilizer, power and irrigation policies

  4. Key Issues and Challenges • Subsidies crowding out productivity enhancing investments • E.g.irrigation, agric research, extension, rural roads, markets, electrification • Subsidies increased from 3% (70s) to 7% (2000s) of Ag GDP, public investments decreased from 3.4% to 1.9% of Ag GDP. Source: Chand and Kumar 2004

  5. GOI 11th Plan Priorities & Programs • GOI priorities: • Accelerate expansion of irrigated area and improve water management in rainfed areas; • Bridge the knowledge gap through effective research and extension; • Foster diversification to higher value horticulture, fisheries, and animal husbandry; • Increase foodgrain productivity for food security; • Facilitate access to credit at affordable rates; and • Improve farmer access to markets.

  6. GOI 11th Plan Priorities & Programs • Water Resources Mgt and Irrigation • Accelerated Irrigation Benefits Program to complete major/medium irrigation schemes • Challenges for state govts: • Weak institutional framework for efficient, sustainable and equitable allocation and use of water • Inadequate expenditures for O&M • Limited cost recovery encourages wasteful use of water, causing waterlogging/salinity problems • Free/highly subsidized power-contributing to declining GW levels • Rainfed areas (60% of cropped area) • National Rainfed Areas Authority to develop action plan • Challenges: consistency and coordination of multiple programs, weak implementation effectiveness

  7. GOI 11th Plan Priorities & Programs • Bridging Knowledge Gap • GOI increasing resources for strategic and location specific research • GOI and states scaling up ATMA approach to improve extension effectiveness • Additional central assistance (Rs 25,000 crores) for agriculture development based on state district agricultural development plans • Diversification of Production • to improve farmer income opportunities • GOI National Horticulture Mission, Bharat Nirman rural infrastructure development program (irrigation, rural roads, rural electrification), agricultural market development

  8. GOI 11th Plan Priorities & Programs • Foodgrain vs high value agricultural production? • Rising incomes driving demand for high value crops • 11th Plan: to achieve 4% ag growth target, need to increase foodgrain yields by 2-3% per year to ensure food security and compensate for possible shift to high value production • Measures to raise agricultural productivity for both foodgrains and high value crops are therefore critical

  9. GOI 11th Plan Priorities & Programs • Improving rural investment climate • Storage, movement credit controls removed • Pending reforms: institutional and policy framework for land • Liberalize land leasing • Update land records and modernize land administration • Fostering Rural Non-farm sector growth

  10. World Bank: Lending Assistance in Agricultural Sector • Improving agriculture productivity and competitiveness • Water resource management, irrigation system rehabilitation and modernization, strengthening institutions (WUAs) and regulatory framework (allocation and mgt) • Strengthening agricultural research and extension system • Improving market infrastructure and services • Improving natural resource management • Support for improved watershed management, participatory forest management, • Fostering institutions of the poor • Build institutions for the poor (SHGs), facilitate access to credit and links to markets

  11. World Bank Assistance to Agricultural Sector • Current portfolio: 21 projects, $3.4 billion • Analytical and Advisory Activities: recent studies • Re-energizing the Agricultural Sector to Sustain Growth and Reduce Poverty • Land Policies for Growth and Poverty Reduction • Unlocking Opportunities for Forest Dependent People • Taking Agriculture to the Market • India’s Water Economy: Bracing for a Turbulent Future • State agricultural sector reviews

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