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OVERVIEW OF FOCUS
AREAS FOR GOVERNANCE
IN INDIAN AGRICULTURE
Dr.B.Gangaiah
Centre for Good Governance
18.12.2014
Taj Deccan, Hyderabad
Definition of Governance

Governance is the exercise of economic, political, and administrative
authority to manage a country’s affairs at all levels. It comprises the
mechanisms, processes, and institutions through which citizens and groups
articulate their interests, exercise their legal rights, meet their obligations
and mediate their differences. UNDP (1997)
Governance Components
Financial
Accountabilit Improving Technology and Manageme
nt and
y and
Service
System
Transparency Delivery
Improvement
Budget
Sanctity
Public
Service
morale
Incentivizing
Anti
Rule of
Corruption
Reforms
Law
STAKEHOLDERS IN GOVERNANCE
Legislature
Executive
Judiciary
Stakeholders in
Governance
Judiciary Media
Social
Orgns.
Media
Private
Sector
Governance is too important to be left to the
INDIAN AGRICULTURE – MACRO TRENDS
Agricultural land 183.6 m.ha (2001-02 ) 182.0 m.ha (2010-11)
 Arable land 157.35 m.ha (China-111.60 m.h)
 Share of agriculture in GDP 51.4% ( 1st Plan)
to 15.2% ( 11th plan ) and 13.7% in 2012-13
 Percentage of irrigated area 17.1% (1950-51) 44.9% ( 2010-11).
 Cropping intensity 111.1 % (1950-51) - 140.5
% ( 2010-11).
 Average size of holding 1.33 ha( 2000-01) to
1.16 (2010-11)

INDIAN AGRICULTURE -MACRO TRENDS
Operational holdings 129 million( 2005-06) to
138 million in 2010-11(Ag.Cen 2011)
 Investment in agriculture as percent of Agr.GDP 6.9% in first plan to 18.86% in 11th plan.(2004-5
prices)
 Public investment 4.9% (6th plan) to 3.5% in 11th
plan
 Private investment increased from 5.2%( 6th plan)
to 15.1% in 11th plan
 68.8 % of total population depend on Agriculture
 Contributes 12% of exports.

KEY AREAS FOR FOCUS




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




Sustaining investment in Agri-infrastructure
Input delivery systems
R&D and Extension
Marketing
Subsidies
Institutional arrangements
Technology
Natural Resources management
Climate change
Human resources development
INVESTMENT:
Increasing investment in infrastructureirrigation, Storage,transportation etc.
 Sustaining investment in Public and Privatecomposition, quality and efficiency
 About $18 billion spent on input subsidies
and only $7 billion on irrigation, storage,
R&D, extension in 2010-11(Mckinsey)

MARKETING & OUTPUT PRICES


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APMC inefficient, middleman exploitation- improve competition
from private
use of ICT in price discovery-IFFCO Kisan SancharValue Chain Devt from harvest to final consumption-from Farm to
plate
linkages along the value chain- production- processing-marketingconsumption
Output prices-market determined, Government
determined(MSP).
Distortionary effects of MSP,-encouraging inefficient productionhuge financial burden on the exchequer - no commensurate
benefits to the farmers and consumers.
Need to reform the MSP regime towards encouraging efficient
farming and diversification of farming systems.
The creation of an independent regulatory agency to set support
prices within a fixed fiscal framework, responsive to consumer
needs and preferences.
AGRICULTURE INPUTS
Input Delivery systems- low quality seeds,
fertilizers, pesticides.
 Credit supply-insufficient and delayed
supply
 Innovative credit delivery including mobile
based, need and crop intensity based.
 Labor Productivity- rising cost,MNREGA

RISK AND INSURANCE:
Risk in agriculture-production and marketing
risks.
 Production risk due to low irrigation and
high dependence on weather(rainfall), poor
quality of inputs, poor extension support.
 Insurance coverage is only 17%
 Ranges of insurance products available to
farmers are insufficient and inadequate to
meet the needs of large number of small
and marginal farmers.

SUBSIDIES:

Subsidies- input and output subsidies in the form of
fertilizer, Power, and investment subsidies,MSP.

Rationalization of subsidies is another important area for
governance reforms

Bihar farmer Shri Deodhar Sharma was “we farmers do
not need any subsidy for farming, what we need is good
and assured quality farm inputs such as seeds,
fertilizers, pesticides and above all these inputs should
come to the farmers at the right time for right farming
from certified suppliers. Also, we need the best of
technology, best of irrigation methods in difficult times
and uninterrupted supply of electric power”. Quoted in APJ
Kalams speech at ICAR 84th Foundation Day speech 16,july 2012.
CLIMATE CHANGE
Climate change-challenge for Food Security
in India.
 Droughts, floods, erratic rains - greatest
impact in rain-fed areas
 India's crop yields could fall by 30% by
2050(IPCC)
 Need for fundamental changes in our
economic and social institutional
architecture.

PRODUCTIVITY
Productivity of Agriculture- low compared to the
world average and that of the best producers in
the world. Half of average of China, Indonesia,
Malaysia, and Thailand
 Potential to raise yield growth from 2.0 to 5.5
percent annually over the next ten years- 10(
Mckinsey)
 Fertilsers, efficient water management, Seed
Quality, precision farming, fertility of soil, better
market access, improved post harvest logistics,
human resources
 We can be more efficient about what we grow,
where we grow, and how we grow.

R&D-EXTENSION

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Our R&D investment of Agr-GDP-0.6%(2-3%)-quality
issue
Need to look at alternative/complementary models
of service delivery
An appropriate mix of Public and Private Models of
extension
With proper R&D and extension can double the
average yield from 2.3 to 4.0 tonnes by 2022.
Holistic approach, mobile extension(Gujarat).
Fee-based private extension support to medium-size
and large farms with the capability to pay.
Public extension for poor and remote areas.
Need-based, location specific research, Smallholder
focused
TECHNOLOGY AND ICT
ICT-huge improvements possible, extension,
precision farming already pilots available
 Biotechnology – GM, other
 Farm mechanization
 Need appropriate governance and
Institutional arrangements with proper
safeguards to ensure sustainability.

NATURAL RESOURCES
"We have a growing global population and a
deteriorating natural resource base." -Kanayo F. Nwanze, president of IFAD
 Watershed development- State, GOI,NGOs
 Overexploitation resulted in biotic and abiotic
stresses leading to declining productivity.
 Water use efficiency key - more crop per drop,
conservation, quality of water

OTHERS
Need to promote growth oriented Land
market
 Land records and Titling need updating,
 Secured Tenure- Secured Ownership of land.
 Diversification- Horticulture and Animal
Husbandry to meet rising protein demand
 Feed Stock, Genetic Improvement
 Fisheries: In-land, Deep Sea, CultivatedSustainability

CONCLUSIONS

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Need a fresh look at the Policy & Governance
architecture.
New Governance structure to be enabling, efficient
and collaborative partnerships of Government,
private sector, civil society.
Promising strategies - forming partnerships with the
private and social sectors, mobilizing community
participation, using technology to streamline and
efficient monitoring operations.
Enlightened leadership should facilitate this
process.
“For success in all your(our) missions you(we) have to become creative
leaders. Creative leadership means exercising the vision to change the
traditional role from the commander to the coach, manager to mentor,
from director to delegator and from one who demands respect to one
who facilitates self-respect”- APJ Kalam
Thank you
for
attention