Agriculture-I

With about 17% contribution (2009) to the gross domestic product (GDP). agriculture provides livelihod support to about two-thirds of country's population. The sector provides employment to 57% of country's work force and is the single largest private sector occupation. Agriculture accounts for about 12.5% of the total export earnings and provides raw material to a large number of Industries (textiles, silk, sugar, rice, flour mills, milk products). Besides, the rural areas are the biggest market for low-priced and middle-priced consumer goods, including consumer durables. It means. if agriculture performs, rural demand is high. Rural domestic savings are an important source of resource mobilisation.
The agriculture sector is a crucial in maintaining food security and, in the process, national security as well. The allied sectors like horticulture, animal husbandry. dalry and fisheries, have an important in improving the overall economic conditions and health and nutrition of the rural people. Thus, any change in this sector, positive or nagative, has a multiplier effect on the entire economy.
Recognising the crucial role played by the agriculture sector in enabling the widest dispersal of economic benefits, the Eleventh Plan has emphasised that agricultural development is central to equitable and fast economic development of country.
Food deficit to food surplus
After remaining a food deficit country for about two decaded after Independence. India has become self-sufficient in foodgrains.
From the mid 1960s, food security improved with the introduction of high vielding varieties (HYVs) of crops, and the development of agriculture in frastructure for irrigation, input supply, storage and marketing. The HYVs motivated farmers to adopt improved production technologies with the use of water, fertilisers and agrochemicals. Besides the public sector rural infrastructure, farmers developed their own 'onfarm' resources. The extension support for production technology and the marketing support through procurement operations encouraged farmers to step up production. The production of various crop commodities has increased substantially, over the various Plan periods.
The foodgrain production in 2007-2008 was about 230mt-an unprecedented level. A large number of crops have seen record production. The following crops have registered a record production during 2007-08:
Foodgrains
Total production
Rice - 96.43 million tonnes
Wheat - 78.40 million tonnes
Pulses - 15.11 million tonnes
Oilseeds - 28.82 million tones
As compared to 2006 - 07, rice production is estimated to increase by about 3 million tonnes, wheat by 2.6 million tonne, coarse cereals by 6.8 million tonnes (mainly contributed by maize and bajra) and pulses by about 1 million tonne. The oilseds production is estimated to increase by 4.5 million tonnes (mainly contributed by groundnut and soybean):
Accounting for Success in Agriculture
The main factors for the all round success of agriculture have been
increase in net sown area
expansion of irrigation facilities
land reforms, especially consolidation of holdings
development and introduction of high vieling seeds
fertilizers
improved implements and farm machines
technology for pest management
price policy based on MSP and procurement operations
infrastructure for storage/cold storage
improvements in trade system
increase in investments, etc.
However, in spite of the spectacular achievements, various constraints and disturbing trends continue to hamper the requisite growth of the agriculture secotor.
Crisis and Challenge in Agriculture
One of the major challenges of the 11th plan is to reverse the deceleration in agricultural growth from 3.2% observed between 1980 and 1996-97 to a trend average of less than 2% subsequently. This deceleration is the root cause of the problem of rural distress that has surfaced in many parts of the country unemployment, underemploment, declining incomes, distress migration etc.
Low farm incomes due to inadequate productivity growth, high prices of inputs and lack of credit at reasonable rates pushed many farmers into crippling debt. Uncertainties have increased-prices, quality of inputs, weather and pests which coupled with unavailability of proper extension and risk insurance have led farmers to despair. This has also led to widespread distress migration, a rise in the number of female headed households in rural areas and a general increase in women's work burden and vulnerability.
To reverse this trend, corrective policies are being implemented under the 11th plan-focused not only on the small and marginal farmers who continue to deserve special attention, but also on middle and large farmers who suffer from productivity stagnation arising from a variety of constraints. Bharat Nirman with irrigation component is an example.
It is vital to increase agricultural incomes for reasons of employment; equity; food security etc. A second green revolution is urgently needed to raise the growth rate of agricultural GDP to around 4%. This is not an easy task since actual growth of agricultural GDP, including forestry and fishing, was below 2% for the 10th Plan period. The challenge posed, therfore, is to at least double the rate of agricultural growth.
Causes for low agricultural growth since mid-1990s
There are region -specific causes for the decelerating growth in the agriculture sector during the 1990s. Some of these are:
Low public investment in irrigation.
Poor maintenance of rural infrastructure, specially canals and roads.
Decline in investments in rural electrification and in its availability. This has greatly affected production in eastern India, where huge groundwater potential remains untapped.
Rising level of subsidies for power, water, fertilisers and food are eroding public sector investments in agriculture, besides encouraging inefficient use of scarce resources such as water. Thisfurther aggravates environmental problems leading to loss of soil fertility and decline in groundwater, which reduces returns on capital. Farmers then demand further subsidies to maintain the same level of production.
Inadequate credit support
Distortions brought in marketing mechanism
Continuing imbalanced use of NP & K fertilisers, (6.4:2.5:1) as against the desirable norm of 4:2:1 and increasing deficiency of micro nutrients in the soil.
Stringent controls on movement, marketing, credit, stock and export of agri-products that affect their profitability.
Controls on the agro-processing industry.
Poor extension service.
Remedies
In recent years, several new initiatives have been taken while included:
Announcement of National Policy for Farmers (2007).
Kisan Credit Card (1998-1999).
Creation of a Watershed Development Fund
Bharat Nirman
National Horticulture Mission.
Technology Mission on Cotton (1999-2000).
Implementation of the National Agriculture Insurance Scheme Rashtriya krishi Bima Yojana.
programmes for elimination of post-harvest losses
Lifting some of the restricutions and controls on the movement and storage and exports of foodgrains /agri produce.
De-reservation of the manufacture of some farm implements/machines from the smalscale industries sector
Vishesh Krishi Upaj Yojana : The objective of the scheme is to promote export of fruits, vegetable, flowers, minor forest produce, and their value added products, by incentivizing exporters of such products. Exporters of such products shall be entitled for duty rebates.
AEZs
Contract farming
Loan waiver to revive farming
NRAA was set up in 2006 (read ahead)
Nutrient based fertilizer subsidy (2008-09)
11th Plan and Agriculture: Some areas
Accelerating Agriculturel Growth
The crisis of stagnation in agriculture needs urgent attention. As pointed out by the National Commission on Farmers, we need a new deal that rebuilds hope about farming by making it a viable and profit-making enterprise. This involves finding larger public resources.
Concerns
Initially, public sector investment played a crucial role in the development of infrastructure like irrigation, electricity, agriculture research, roads, markets and communications. Investment in agriculture declined in the last three five year plans This decline was due to fall in public investment. This calls for a review of policies so that productive investment is made in capital formation. Diversion of scarce resorces from creation of productive assets-rural electricity, irrigation, credit and other agricultural inputs to subsidies needs to be resisted. The declining trend in public sector investment will need to be reversed by better targeting of subsidies. Following are the concerns:
Firstly, the share of agriculture in GDP has declined from 61% in 1950-51 to 17% (2009), whereas the dependence of population on agriculture has declined only marginally from 3/4ths to 2/3rds during the period. In all the developed countries. there has been a major shift of population from agriculture as an occupation to other sectors. However, this has not happend in India.
Secondly, the average size of holdings has reduced from 2.28 ha in 1970-71 to less than I ha in 2009 with the pressure on land increasing proportionately. Small plots do not permit introduction of modern technology due to high costs.
Thirdly, during the 1990s, foodgrains production growth rate and productivity growth rate declined: the growth rate of foodgrains production declined to 1.92% annum from 3.54% annum during 1980s. Similarly the growth rate of productivity in food grains decelerated to 1.32 % as compared to 3.33% annum during the 1980s. The per unit area productivity of our crop commodities is much lower as compared to that of the other major crop producing countries. There is also a wide gap in the yield levels among and within States.
Fourthly, during the 1990s, the policy of various States has been to increase production through subsidies on inputs such as power, water and fertilisers, rather than by building new capital assets in irrigation and power. These problems are particularlly severe in the poorer states. Lower Public investment and deteriorating quality of public services in agriculture are the major problems. The poor base of rural productive assets and poorer technological base because of past public/private patterns of spending has been recognised as a serious constraint in increasing production and productivity.
11th Plan strategy to raise agricultural output is based on the following elements:
Double the rate of growth of growth of irrigated area;
Improve water management, rain water harvesting and wastershed
development;
Reclaim degraded land and focus on soil quality;
bridge the knowledge gap throgh effective extension;
Diversify into high value outputs, fruits, vegetables, flowers, herbs and
spices, medicinal plants, bamboo, bio-diesel etc., but with adequate-measures to ensure food security;
promote animal husbandry and fishery;
Provide easy access to credit at affordable rates;
Improve the incentive structure and functioning of markets;
Refocus on land reforms issues.
Boosting agricultural productivity by making available institutional credit adequately and affordable, support for investments in land development structures, farm mechanistion, biotechnology, cold storages, value adding enterprises and marketing to improve productivity and profitability in Agriculture is the need of the hour.
Capital Formation in Indian Agriculture
Capital formation is one of the basic factors for increasing production. It means addition to the physical stock of dams, roads, power plants and other infrastructure. This is all the more important in agriculture where we are faced with the need of increasing production against vagaries of weather to keep pace with the increase in population. judicious use of natural resources for sustainable production of agriculture, adoption of advanced technology and development of infrastructure for facilitating all agricultural activities, ensuring food security in the broader sense of making adequate nutritious food available and accesible to all and making agriculture a profitable commercial activity at par with other industries in the arena of global economy are the problems that can be successfully tackled only with a strong capital base.
In is necessary to have a broader measure of agricultural capital formation which cann be called capital formation for agriculture in comparison with capital formation in agriculture.
As agriculture is getting diversified, there is a need to not only augment but also restructur the pattern of investment in agriculture. Historically, the public sector has taken the lead in directing the growth and pattern of agriculture investment. Steps should be taken to improve capital formation for agriculture in both Public and Private Sectors. Otherwise, it may be difficult to sustain the agriculture growth and rural purchasing power. Currently, irrigation accounts for the bulk of public investment in agriculture (above 90%).
The new atrategy of agriculture growth and diversification of agriculture from traditional crop cultivation to horticulture etc. would require more investments on cold storage, rural roads, communication, marketing and facilities, warechouses etc.
Simultaneously efforts should be made to revitalize agriculture through introduction of bio-technology and other innovation. This would require substantial increase in investment on research & development for agriculture.
Recent steps are showing positive results : gross capital formation in agriculture as a proportion of agriculture GDP improved from 11.1% in 2003-04 to 14.2% in 2007-08. The share of public investment in gross investment increased by over 11% points to reach 29.2% in 2004-05 relative to 1999-2000.
Efforts are being intensified to boost investment in agriculture. These programmes are likely to increase capital formation in agriculture by the public sector and induce the private sector to increase investment in agriculture. The improved availability of credit for agriculture and liberalized trade for agricultural products should enhance private investment in agriculture.
Governmnet stepped up public investment significantly for rural roads and rural employment programmes. Major measures taken for agricultural development through enhanced capital formation include the following:
A roadmap for agricultural diversification has been prepared with focus on horticulture, floriculture, animal husbandry and fisheries.
Strengthening of agriculture marketing infrastructure.
National scheme for the repair, renovation and restoration of water bodies.
Focus on micro irrigation, morco finance, micro-insurance and rural credits.
Setting up a Knowledge Centre in every village.
Setting up a National Fund for strategic agricultural research.
Provision of urban amenities in rural areas through creation of new growth poles
New fertilizer subsidy regime that is nutrient based so as to fortify soil
Bharat Nirman
Pradhan Mantri Gram Sadak Yojana
Loan waiver also will enable fresh investment as farmers become eligible for loans again due to write off.
National Policy for Farmers 2007
This Policy is intended to help in rejuvenating the farm sector and bringing lasting improvement in the economic condition of the farmers.
Background
The Government had constituted National Commission on Farmers in 2004 under the chairmanship of Dr. M.S. Swaminathan. the terms of reference of the Commission uncluded, inter alia, methods of enhancing productivity, profitability and sustainability of the major farming systems in different agro-climatic regions of the country and suggesting measures to attract and retain educated youth in farming and working out a comprehensive medium term strategy for food and nutrition security. The Commission submitted its final report in 2006.
Based on the recommendations made by the Commission, the "National Policy for Farmers-2007 "has been formulated by the Government of India. The policy, among other things, aims to improve the economic viability fo farming by substantially improving the net income of farmers in addition to improving productivity. profitability, land,. water and support services and provide appropriate price policy, risk management measures.
Main provisions in the Policy
Human Dimension : Focus to be on the economic well-being of the farmers than just on production and productivity and this is to be the principal determinant of Farmers policy
Asset Reforms : To ensure that every man and woman, particularly the poor, in villages either possesses or have access to a productive asset.
Income Per Unit of Water : Stress on awareness and efficiency of water use. The concept of maximizing yield and income per unit of water would be adopted in all crop production programmes
Drought Code, Flood Code and Good Weather Code : To be introduced in drought prone areas. flood prone areas and in arid areas respectively so as to maximize the benefits of monsoon and to be prepared for likely contingencies
Use of Technology : New technologies which can help enhance productivity per unit of land and water are needed. Biotechnology, information and communication technology (ICT), renewable energy technology, space applications and nano-technology to provide opportunities for launching an "Evergreen Revolution" capable of improving productivity in perpetuity without harming the ecology
National Agriculturel Bio-security System : To be set up to organize a coordinated agricultural bio-security programme (In our country, agricultural biosecurity covering crops, trees, and farm and aquatic animals is of even greater importance since it relates to the livelihood security of nearly 70% of the population, and the food, helth, and trade security of the nation)
Inputs and services-Soil Health : Good quality seeds and disease free planting material hold the key to raising small farm productivity. Every farm family to tbe issued with a soil Health Passbook
Support Services for women : When women work in fields and forests the whole day, they need appropriate support services like creches, child care centers and adequate nutrition
Credit & Insurance : Credit counseling centers to be established where severely indebted farmers can be provided a debt rescue package to help them out of debt trap. Need for both credit and insurance literacy in villages, Gyan Chaupals to help in the task
Setting up of Farm Schools to promote farmer to farmer learning and to strengthen extension services.
Gyan Chupals to be established in as many villages as possible to harness the help of Information and Communication Technology.
A comperhensive National Social Security Scgheme for the farmers for ensuring livelihood security by taking care of insurance needs on account of illness. old age, etc
Minimum Support Price (MSP) mechanisms to be implemented effectively across the country so as the ensure remunerative prices for agricultural produce
Market Intervention Scheme to be strengthened to respond speedily to exigencies, specific crops to be indetified
Community Foodgrain Banks : To be promoted to help in the marketing of unutilized crops
Single National Market : To developd a single National Market by relaxing internal restrictions and controls
Expanding Food Security Basket to include nutritious crops like bajra, jowar. ragi and millets mostly grown in dryland farming areas
Farmers of the future : Farmers may adopt cooperative farming, create service cooperatives, undertake group farming through self-help groups, establish small holders' estates, adopt contract farming and create farmers' companies. This is expected to increase productivity, efficiency of small farmers and would create multiple livelihood opportunities through crop livestock integrated farming systems as well as agro processing
A Cabinet Committee on Food Security is to be constituted.
Mechanism for operationalising the policy:
National Commission on Farmers
The National Commission on Farmers was set up in 2004 with the mandate to examine and recommend policies, programmes and measures on various issues confronting Indian farmers and to suggest appropriate interventions for improving the economic viability and sustainability of diversified agriculture, including horticulture, livestock, dairy and fisheries.
Sustainable Agriculture: Water Management and Irrigation.
The sustainable development of land and water resources becomes all the more important for the nation like India, which shares about 16% of the global population but has only 2.4% of the total land and 4% of the total water resource. Scarcity of water in rainfed areas is causing serious hardships. Ground water resources are dwindling fast dur to poor water harvesting leading to excessive run off and poor recharging of ground water. This is accompanied by excessive drawal/exploitation mainly to meet the household needs of growing population as also irrigation needs of new high yielding crops. The number of dark blocks/mandals where there is over exploitation of groundwater (over 85%) is increasing in most of the States with large rainfed areas (Andhra Pradesh, Karnataks, Rajasthan, Madhya Pradesh, Chattisgarh etc.) It this continues, the number of over exploited blocks will double over a period of every twelve and half years.
Water is a critical input for agriculture and this calls for more effective utilization of existing irrigation potential, expansion of irrigation of irrigation where it is possible at an economic cost, flood forecasting and better water management in rainfed areas where assured irrigation is not possible. The Bharai Nirman programme envisages creation of 10 million hectares additional assured irrigation during the 4years period (2005-2009).
Along with expansion of irrigation facilities, steps need to be taken to ensure that water is distributed equitable and taht it is uded efficiently. The pattern observed in the past where tail-enders are denied water because upper end-uses appropriate it for highly water intensive crops must be avoided. Participatory Irrigation Management (PIM) by democratically organised water user associations empowered to set water charges. collect and retain substantial part of it, would help to maintain field channels, expand irrigated area, distribute water equitable and provide the tail enders their just share of water. Experience in Andhra Pradesh and Gujarat has shown the effectiveness of such PIM.
Watershed management, rainwater harvesting and ground water recharge can help augment water availability in rainfed areas. Micro-irrigation is also important to improve water use efficiency.
Warabandi
Warabandi means fixing of turns of irrigation water for each farmer importance so as to make it available to its potential users, i.e. farmers most judiciouslly and equitably. "Warabandi" is a most appropriate, suitable, and successful method of irrigation water distribution below outlet to maintain equity and rightfulness among the users and make best and economical use of available water potential. The objective of this course is to acquaint the participants/trainees with the methodology of system of "warabandi", i.e. fixation of the turn and time and also provide them the most appropriate knowledge so that they are able to prepare water distribution schedules and to distribute slips (parchi) to the individual farmers. This course also creates a felling of importance and essential need of "Warabandi" to resolve conflicts among users in water distribution and help in solving many related problems. It also creates an atmosphere of economical and best use of available water generating water discipline, preventing malpractice and canal offences
Soil reclamation
It is necessary to offset the loss of agricultural land by bringing more land under cultivation. There is a large amount of degraded land that can be reclaimed through wastershed development. There is also a considerable amount of saline and sodic land, which can be brought back to cultivation with treatment. State governments should upscale using all the scope for convergence with other rural development programmes including, where possible, NREGP. Vast areas of cultivated land are acidic, where significant yield increases are possible through treatment using waste material from industry. There is sulphur deficiency in large parts of the country, but this can be treated effectively, particularly for pulses and oilseeds. More generally, Indian soils are relatively deficient in organic matter and are suffering ingequate manuring and composting, agravated in many regions by unbalanced use of chemical fertilisers. especially exessive application of nitrogen. This raises prospects of large yield increases by applying nutrients, including micronutrients, that have been seriously depleted.
Soil Health
Soil health is a critical factor for agricultural productivity and human helth. The following steps are being taken to improve it.
Government will issue Soil Health Cards to all farmers in the country detailing the deficiencies in the soil and the amount of fertilizers needed, Soil Health Cards would give farmers information about the quality of the soil and what is the normal quantity of fertilizer to be used for a particular crop. for this, setting up of 500 new soil testing laboratories and 250 new mobile soil testing laboratories had been sanctioned in the Budget for 2008-09. Studies have found the over-dose and injudicious use of conventional chemical fertilizers and pesticides affect soil fertility, vegetation, human and animal health. The government is also encouraging use of organic fetilizer and wormicompost as overdose of conventiaonal fertilizers has been found to affect fertility of the soil in many places. Land under organic farming has increased from 42,000 hectares in 2003-04 to 464,000 hectares currently.
Extension services
The National Commission on Farmers (NCF) has drawn attention to the knowledge deficit that exists at present and explains much of the difference between yields realised in experiments and what farmers actually get. One reason for this is the virtual collapse of extension services in most states,. Farmers are not fullly aware of the adverse consequences of unbalanced fertiliser use or of benefits of micronutrient application and soil testing to determine optimal nutrient requirements is hardly practised on a regular basis even by State Agriculture Departments. Similarly, although many new varieties of seeds and pesticides have entered the market during the last decade and farmers are using these, they do not appear to have significantly higher productivity and there are frequent complaints about quality. A problem is that input dealers, who have narrow commercial interests have emerged as the main vehicle for technology diffusion and farmers do not have access to reliable third-party advice which an effective and knowledgeable extension service should be able to provide. Lack of credit also pushes farmers to purchase inputs from local suppliers who often provide sub-standard inputs.
To overcome information gaps and for advice in contingencies such as pest-attacks, it is necessary torevitalise the extension system in a manner which links universities and best paractives effectively to farmers. States need to take urgent steps in this area. Central initiatives on this also need to be strengthened. Krishi Vigyan Kendras set up Indian Councial of Agricultural Research (ICAR), can be better used. Agricultural Technology Management Agency (ATMA) model of extension being promoted by Department of Agriculture & Cooperation (DAC) will deliver results.
The Department of Agriculture and Cooperation, along with NABARD, has introduced a scheme for establishment of agri-clinics / agri-business centes / ventures by the agricultural graduates.
The ICAR is also associated in agriculture extension activites not only through KVKs but also Institute Village Linkage Programme (IVLP) and also its institutes / centes all over the country. The interaction of KVKs activities with the State / district extension machinery is being strengthened. It is planned to strengthen linkages between reserach and extension to improve quality and effectiveness of research and extension system. The extension system, thus, is being revitalised and broad based through KVKs.
NGOs, farmers organisation, cooperatives, the corporatesector and agri-clinics / agri-business centress. KVKs and ICAR/SAUs units are designated nodal agencies for quality certification including organic products, bio-pesticides. The supply of inputs, agro-processing and trade through such cooperatives / companies is encouraged through the availability of credit with the help of NABARD.
The NFC has suggested ways to synergise at the village level, for example through Farmer Knowledge Centres, and this is alreday being implemented in some places with PRI and NGO help. Since synergies across line departments and Centrally sponsored schems can be derived best through district plans, the Planning Commission and Ministry of Panchayati Raj have begun strengthening the process of district planning. The cecent MoA initiative to set up technical bodies such as the National Fisheries Board and the National Rainfed Areas Authority should help to improve synergy.
Agri clinic and agri business centre
The Ministry of Agriculture, Government of India, in association with NABARD has launched a unique programme to take better methods of farming to each and every farmer across the country. This programmer aims to tap the expertise available in the large pool of Agriculture Graduates. Agri Clinic offers professional extension services to innumerable farmers.
Government is now also providing start-up training to graduates in Agriculture, or any subject allied to Agriculture like Horticulture, Sericulture, Veterinary Sciences. Forestry, Dairy, Popultry Farming, and Fisheres, etc. Those completing the training can apply for special start-up loans for venture
Agribusiness Centres would provide paid services for enhancement of agriculture production and income of farmers. Centres would need to advice farmers on crop selection, best farm practices, post-harvest value-added options, key agricultural information (including perhaps even Internet-based weather forecast), proce trends, market news, risk mitigation and crop insurance, credit and input access, as well as critical sanitary and phyto-sanitary considerations, which the farmers have to keep in mind.
Farmers could make use of the clinic to undertake soil testing and get professional counsel.
The programme was started in 2002 as a supplement to government's extension services.
ITC's e-choupal is another development in the fields of strengthening extension services.
Diversification to High Value Output while ensuring food security
Faster agricultural growth will require diversification into higher value output, e.g. horticulture, floriculture etc. This is partly because demand patterns are shifting in that direction but also because in many cases this is the most efficienty way to increase incomes of farmers from their limited land and water resources. Recognising this, National Horticulture Mission (NHM) was launched. The NHM ensures significant new interventions within agriculture, e.g. to ensure sufficient amounts of quality planting material suitable for different crops in different regions: and also preparation for structural changes in the relation between agriculture and non-agriculture.
Doversification into perishable commoditites requires an institutional structure which is conducive to developing effective marketing linkages from farms to ultimate buyers. This requires modern marketing paractices including introduction of grading, post-harvest management, cold chains, etc. For this purpose, besides providing for direct public investment in marketing infrastructure, NHM incentivizews larger private sector participation in marketing and processing.
Many states have taken steps to facilitate contract farming as way of assisting the process of diversification.
Some experts have expressed concern that subsidising shift of land from foodgrains to horticulture can be uneconomical and the cost of food security. Such fears are to be dealt with constructively as food prices shot up in 2008. International scarcities are high; prices have skyrocketed; and food security is a paramount need.
It is important to be sure that encouragement to diversification is not driven purely by subsidy but reflects a logical shift towards higher sustainable productivity.
Rainfed agriculture
The ministry of agriculture classified areas, which reveive less then 750 mm rainfall annually, and have less than 30% land uner irrigation (both surface and ground water) as drylands.
Rainfed regions are those where crop production is exclusively dependent upon rainfall. In India rainfed regions cover 177 districts and exist in all agro-climatic zones.
However, they are mostly concentrated in arid and semi-arid areas. Most of these districts are country's poorest. Rainfed regions account for 68% of the total net sown area in the country, according to the Union Ministry of Agriculture.
Rainfed agriculture plays an important role in India's economy. Rainfed crops account for 48% of the total area under food crops and 68% of the area under non-food crops in the country.
Nearly 50% of the total rural workforce and 60% of the livestock in the country are concentrated in the dry districts.
As opportunities for further agricultural growth in irrigated regions get exhausted. Food security and productivity growth in agriculture in India in the coming years will increasingly depend on improved utilisation of resources and productivity growth in rainfed regions.
Most agricultural lands in rainfed areas in Orissa, West Bengal, Bihar and Chhattisgarh suffer from sulpur and phosphorous deficiency. Thus soil has become acidic in nature. These areas need intervestions from agriculture scientists in dealing with the crisis.
For the last 35 years, most of the resources and attention have been diverted towards developing agriculture in drylands or areas, which get less rain (less than 700 mm). Areas, which get heavy rainfalls-like Orissa, West Bengal, Bihar and Chhattisgarh-have always been ignored. These areas mostly produce single crops-usually rice.
There is a huge opportunity in states such as Orissa, West Bengal, Bihar and part of Chhattisgarh to go in for a second crop. Promotion of appropriate cropping pattersn and livestock development is necessary. Development of suitable varieties and lab to land transfer is required.
Region specific watershed programmes need to be developed.
There is a need to divert a portion of the population dependent on agriculture to areas like fisheries, agro-processing and horticulture. Fisheries have a lot of potential in areas, which get good rainfall. It is quite clear that agriculture cannot sustain such a large mass of people in rainfed areas. The policy towards rainfed areas has to look beyond crop production and rainwater management.
National Rainfed Area Authority
National Rainfed Area Authority was set up in 2006 to coordinate the work of five ministries and improve productivity of the 85 million hectares of non-irrigated agricultural land-panchayati raj, rural development, agriculture, water resources and environment and forests. NRAA works under the agriculture ministry
The NRAA aims to build synergy among these ministries on their schemes, programmes and policies that are relevant to non-irrigated lands. It works for wholistic and integrated development of the rainfed areas.
The NRAA would prepare a national prospective plan, which would look at regional variations. The plan would be flexible and dynamic.
Drought
Drought is of the following three types
Meteorological drought is when the actual rainfall in an area is significantly less then the climatological mean of that area. The country as a whole may have a normal monsoon, but different meteorological districts and sub-divisions can have below normal rainfall.
India Meteorological Department (IMD) defines a rainfall range between 96 and 104% of the LPA as being "near normal", while 90 to 96% is considered "below normal", 104 to 110 per cent "above normal" above 110 per cent "excess" and below 90 percent "deficient".
Hydrological drought means market depletion of surface water causing very low stream flow and drying of lakes, rivers and reservoirs.
Agricultural drought means inadequate soil moisture resulting in acute crop stress and fall in agricultural productivity.
Droughts can throw out of gear the rural and notional economy. Cattle human beings and crops suffer a water shortage.
Drought occurs mainly due to failure of south-west monosoon (June-September).
With wide variations in agro-climatic zones, drought occurs somewhere in India each year. While parts of Rajasthan and Andhra's Anantput and Chittoor districts see two droughts in five years, western UP and northern Gujarat face it one in three years. Maharashtra alone has about a quarter of India's drought-prone districts. About 50 million Indians are affected every year.
Climate change is accelerating drought attacks. There were six between 1900 and 1950 and 12 in the following 50 years. We have already faced three droughts between 2000 and 2009.
There is an official checklist of symptoms to diagnose drought. The carly warning signs include delay in onset of SW monsoon, long 'break' within a monsoon, less rain in July, rise in fodder prices, fall in water reservoir levels. dwindling water supply, slower crop sowing.
Initially, government advises farmers to grow less water-seeking crops, increase fodder supply, and keep the Centre's National Crisis Management Committee (NCMC) informed.
It become an emergency when there is virtually no rain during the sowing period; monsoon withdraws mid-season; and a dry spell for more than a month. The deficit in rainfall by now grows and could be as much as 40% and crops start to with no water and axcessive heat.
The problem becomes acute and gets classified as a potential disaster when there is no rain for more than six weeks in a crop area, and the monsoon withdraws early leaving behind parched land and people.
If 20%-40% of India's area is affected, it is called a drought year. If more than 40% of the country is reeling from rainfall shortage, the met department calls it an All India Severe Drought Year.
The primary responsibility of catching the early signs. offering relief and managing droughts lies with states,
The situation may warrant loan rescheduling., insurance premium waivers. and relief from the Centre. The state's budget can come under severe strain.
Once a drought is declared, Central government stards considering deferring/rescheduling farm loans, moving water and fodder by rail, hiking food allocation to poor families, creating more jobs, importing foodgrains to meet likely demand-supply gap, and check inflation.
A ministerial task force is set up to take rapid decisions. Drought-declared states are monitored individdually and more carefully by the Centre. The Essential Commodities Act is used to prevent hoarding, and states get money for relief programmes.
Landless labourers and marginal farmers move to cities in search of casual jobs. Families with loans from moneylenders get further entrapped in poverty. Health suffers and schooling is disrupted as money dwindles. The impact on cities is by way of migration strees; declining farm growth pulls down industry, urban goods and services Proper water management, drought-resistant agriculture, income diversification, smarter subsidies and technology can ensure no one is left devastated by it anymore.
Drought-resistant varicties of seeds should be made available sufficiently.
"Can droughts be prevented? No. Rains could be even more erratic in future. Can the suffering be prevented? Sure. Better management can prevent a nutural calamity from becoming a social and economic catestrophe".
Rural credit
Nabard
The National Bank for Agricultural and Rural Development (Nabard) was set up in 1982, as the apex development bank for agriculture and rural development under an Act of Parliament. The bank began by taking over the agriculture credit functions of the Reserve Bank of India and the refinance function of the them Agricultural Refinance and Development Corporation (ARDC).
Nabard's mission is to "promote sustainable and equitable prosperity in rural India through effective credit support, related services, institution development and other innovative initiatives". Its prime function continues to be that of refinancing, supplementing the resources of co-operative banks, regional rural banks (RRBs) and commercial banks against the amounts lent at the grassroots level for agriculture and rural development.
Apart from its development role, Nabard has also been entrusted with certain supervisory functions in respect of c-operative banks and RRBs under the Banking Regulation Act, 1949.
Nabard manages RIDF.
RIDF is made up of the priority sector shortfalls of public sector commercial banks. which were assigned the task of channelling at least 18% of their total lending to agriculture.
The fund was set up in 1995-96 for providing loans to State government and state-owned corporations for projects relating to minor and medium irrigation, soil conservation, watershed management and rural infrastructure (such as roads, bridges and market yards). Investment projects under social infrastructure, such as construction of primary health centres/schools, providing drinking water, and so on, were also supported under the RIDF. (Read ahead).
Rural credit institutions
They comprise cooperative banks, RRBs and LABs.
Co-operative credit structure
Co-operative credit institutions continue to play a crucial role in dispensation of credit for agriculture and rural development.
She short-term credit structure is managed by State co-operative banks (SCBs)and district central co-operative banks (DCCBs). Primary agricultural credit societies (PACSs) are short-term co-operative credit institutions dealing directly with individual borrowers.
The long-term co-operative credit structure is managed by State co-operative and agriculture rural development banks (SCARDBs) and primary co-operative agriculture and rural development banks (PCARDBs).
RRBs
Regional rural banks were set up in 1975 under an Act of Parliament to exclusively cater to the credit needs of the rural population, especially small and marginal farmers. The ownership structure of RRBs is, the Central Government (50%). the state government concerned (15%) and the sponsor commercial bank (35%). The sponsor bank manages the RRB concerned. There are 196 RRBs spread over 516 districts with a branch network of 14,433. At the grassroots level, RFIs are under financial stress because of the prevailing agrarian crisis coupled with frequent droughts in the hinterland.
There are 11.55 crore farmer households in the country, of which, 9.27 crore belong to small and marginal farmers. Institutional rural credit is accessible to only around 50% of these farmers.
Nabard is now a maor shareholder in the Agricultural Insurance Corporation of India. It also has equity stake in NCDX (National Commodity and Derivatives Exchange) in association with other national-level institutions such as ICICI Bank, the LIC and the NSE (National Stock Exchange).
Promoting self-help groups reflects Nabard's capabilities in capacity-building and nurturing the rural credit delivery system.
Local area banks
LABs were started in 1996 with a view to providing institutional mechanisms for promoting rural savings as well as for the provision of credit for viable economic activities in the local areas. They are in the private sector. This is expected to bridge the gaps in credit availability and enhance the institutional credit framework in the rural and semi-urban area.
The bank shall be registered as a public limited company under the Companies Act. 1956. It will be licensed under the Banking Regulation Act, 1949 and will be eligible for including in the Second Schedule of the Reserve Bank of India Act, 1934.
The minimum paid up capital for such a bank shall be Rs.5 crore. The promoters contribution for such a bank shall at least be Rs.2 crore.
The area of operation of the proposed bank shall be a maximum of three geographically contiguous districts in one or more states. Backward and less developed districts are considered for area of operation of LABs.
Priority sector
The Government of India through Reserve Bank of India (RBI) directs certain type of lending from the Banks operating in India irrespective of their origin. RBI sets targets in terms of percentage (of total money lent by the Bank) to be lent to certain sectors, which would not have had access to organised lending market or could not afford to pay the interest at the commercial rate. This type of lending is called Priority Sector Lending.
Financing of Small Scale Industry, Small business, Agricultural Activities and Export activities fall under this category. This is also called directed credit 40% of net bank agriculture.22% is for the non-agri sectors.
Rate of interest charged on such loans is less. The targets and sub-targets set under priority sector lending for domestic and foreign banks operating in India are given below
RIDF
RIDF was introduced by Government of India during the year 1995-96 for implementation and timely completion of various rural oriented schemes/projects in the States which were languishing for shortage of funds. The fund i placed with NABARD for provinding loan assistance to the State. It is composed of priority sector shortfalls of public sector banks, as mentioned above.
Corpus of RIDF-XV in 2009-10 is Rs. 14,000 crore. There is separate window under RIDF-XV for rural roads with a corpus of Rs. 4,000 crore.
Nabard and SHGs
A pioneer in the self-help group (SHG)-bank linkage concept, Nabard has brought banking to the doorsteps of the poor people, especially the women. Beginng with a modest 500 groups in 1992, this programme today covers two million groups. touching 150 million people. Till December 31,2005, the cumulative finance disbursed by banks to SHGs amounted to Rs 8,319 crore; Nabard's refinance was more than Rs 4,000 crore on a cumulative basis.
SHGs represent a unique approach to financial intermediation. Self Help Groups (SHGs) are small groups of 10-20 members. These grups collect savings from their members and provide loans to them. These groups also obtain loans from banks and on-lend them to their members. SHGs are formed and supported usually by NGOs or banks or by Government agencies. Linked not only to banks but also to wider development programmes, SHGs are seen to confer many benefits, both economic and social. SHGs enable women to grow their savings and to access the credit which banks are increasingly willing to lend. SHGs can also be community platforms from which women become active in village affairs, stand for local election or take action to address social or community issues (the abuse of women, alcohol, the dowry system, schools, water supply).
Being made up mostly of women, their default rate is negligible. Group lending ensures peer pressure to rapay. Transaction costs are also dramatically reduced. With extension services and counseling, deployment of funds is effective.