economist presentation- 1

8/7/2019 Economist Presentation- 1

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The Role of public sector

Agriculture & Rural Policies

Profile of India

byDr. Sarala Gopalan,

National Institute of Agriculture, India


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Agriculture - An important Source of Foreign Exchangeand Revenue

Share of Agriculture Exports to total merchandiseexports more than 50% for 55 developing countries.

Indian Agricultural Exports account for 15% - 16%of total Indian Exports.

Expenditure on Food accounts for over 1/3rd of the household

expenditure in developing countries.

In Developed countries - accounts for a small anddecreasing portion of household income.


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Indias Position in World Agriculture during 1999Item India World Indias Position

% Share Rank

Area (Million Hectares)

Arable Land 162 1381 11.7

Irrigated Area 59 271 21.8 First .

Population (Million)

Total 99 5978 16.7

Agriculture 553 2575 21.5 Second

Economically Active Population (Million)

Total 437 2911 15.0

Agriculture 263 1317 20.0


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Indias Position in World Agriculture during 1999

Item India World Indias Position

% Share RankCrop Production (Million Tonnes)

Total Cereals 230 2064 11.1 Third

Oilseeds - Groundnut 7 33 21.2 Second

Rapeseed 6 43 14.0 Third

Fruits & vegetables (Million Tonnes)

Vegetables & Melons 59 629 9.4 Second

Fruits excluding Melons 39 445 8.8 Second

Potatoes 23 294 7.8


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Profile of Indian Agriculture

Only 28% of cropped area is irrigatedRest is rainfed. Failure of monsoon could throw India intodrought-poverty syndrome

Green Revolution occurred in the Indus basin, which hashelped attain self sufficiency of food production

The Indo-Gangetic and Brahmaputra valley have notbenefitted from the Green Revolution, for lack of adequateinvestment in irrigation infrastructure and flood controlmeasures. Hence low productivity in this region except

Western U.P.(Dr.Swaminathan)

Ground water Potential not fully utilized, though there areareas of excessive exploitation, with its own problems.

contd


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History of World Trade in Agriculture

Investment required for creating processing & marketinginfrastructure

Inputs of technology required in large measure

Intensive Research & Extension work for modernizingAgriculture needs to be done


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International Trade

India is a big commodity producer.

It also remains largely a commodity exporter;Tea:exported as plain black tea in 40 Kg deal-wood casesCoffee: Largely exported as beansMarine products: Shrimps and prawns exported in 2 Kginstitutional packs in frozen condition

Value added production is urgently needed to benefitproducers and create more employment Government Support required for value added production


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In overall world Trade India is a negligible PlayerIn world trade in agriculture Indias role is much lesser

Trade Liberalization, pitted against heavily subsidizedproducts of imports, would throw millions of survival farmers intoserious economic distress

Products in which India has comparative advantage are alsothose in which other developing countries have comparativeadvantage. So, trade liberalization would result in trade-warbetween developing countries.

Trade liberalization in the present status of Indias agriculturedevelopment would also inhibit building of export capability inthe long term.

contd


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What should Government do?

Invest in infrastructure (Irrigation, processing, storageand marketing) where farmers cannot by themselves investbecause of the vast size of investment required.

Facilitate access to technology by investments inresearch and extension

Desist from Policies based on mere ideologies, which

may throttle economic viability of farmingEncourage cooperative efforts among farmers,minimizing Government interference and role of middlemen (Anand example)


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Promote productivity by supporting private investments throughincentives (cash subsidy/tax concession etc.) in capital intensive

farming activities, like replantation of tea, coffee etc plantations

Promote value addition as mentioned earlier

In Rural Development huge public expenditure is incurredunder a plethora of schemes. Part of the expenditure also goesfor rural infrastructure like link roads, minor irrigation facilities etc.Synergy should be built up in creation of this infrastructure withareas of farming activities. As former Finance Minister,

Mr.Chidambaram observed, our rural development schemes arelargely expenditure oriented; Expenditure is not necessarilyinvestment; All Rural Development expenditures should beinvestment oriented.


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India has been seen by some as a wrecker ofTrade liberalization talks in Cancun. This is not anaccurate assessment. When Mr.Arun Jetley

enquired in Cancun whether the DevelopmentAgenda was meant to be an agenda for thedevelopment of Developed countries, he was notindulging in negotiation rhetoric. On the other handhe was only reflecting the hard realities and groundtruths of the status of agriculture in India, which Ihave attempted to present before you, and on which650 million people are dependant.


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International trade negotiations should beinformed by the reality that it is a positivesum game in which everybody can winand that the South and North are not

adversaries, but inter dependent entities.


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Thank you


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A new approach needed now modern technology, biological

inputs, precision farming and conservation of land and waterresources

High yielding and disease-resistant varieties but not genet-engnd.

More investment in infrastructure, research and extensionNew preservation processing and distribution techniquesAlso, agriculture should provide more sources of income to farmers

Diversification and value addition required.

contd


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Thank you


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THANK YOU

economist presentation- 1

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