Everything can wait, but not agriculture,‚ÄĚ Jawaharlal Nehru had said soon after India attained Independence. India has come a long way since then. Gone are the days of living ship-to-mouth during the 1960s when we had to depend on US foodgrain shipments to feed our poor. The Green Revolution of the ‚Äô70s improved agricultural productivity, and despite its limitations, helped India achieve self-sufficiency in foodgrain production and brought down food inflation.
However, it is equally important to ensure that productivity is increased in an environmentally sustainable way that generates livelihood. We may be surplus in rice and wheat and may not know what to do with this ‚Äėapparent‚Äô surplus ‚ÄĒ apparent because despite a surplus we still have high malnourishment ‚ÄĒ but we seriously lag in the production of pulses, oilseeds and proteins.
Due to a growing population, rising affordability and now the Food Security ordinance, the demand for food, particularly nutritious food such as milk, eggs and meat will be on the rise. Unless productivity is met with focus on these areas, high food inflation is here to stay. In the past few years, food inflation has remained at 10 percent and food forms almost 46 percent of the average Indian‚Äôs consumption basket. Continued neglect of agriculture can result in an environment of persistently high inflation, which, apart from creating macroeconomic instability, is also a tax on the poor.
The two aspects that need urgent policy attention to put Indian agriculture on a sustainable path are farm productivity and rural infrastructure.
In comparison with India, China produces two times more rice, 1.5 times more wheat and 3.5 times more coarse cereals per hectare. Even with a lower arable area, the value of China‚Äôs agricultural output is over three times that of India. All the more reason why agricultural growth needs to be driven by productivity increases.
One essential requirement to a healthier agricultural growth is water. With water fast becoming a scarce commodity, better water management through enhanced, but economic irrigation cover through efficient practices like drip irrigation will help.
This is where public investment needs to come in. Though rising in the past decade, private investment cannot be a substitute for public investment done in the nature of public good, such as creating embankments, irrigation networks, etc. In fact, private investments, particularly in irrigation, have led to indiscriminate use of ground water.
The second essential to increasing productivity is stepping up R&D efforts to come out with new seed varieties and better agricultural practices aimed at arid and semi-arid regions that missed out on the Green Revolution. Improved rural infrastructure will cut wastage and reduce high price volatility in perishables such and fruits and vegetables. According to a CRISIL estimate, almost 30 percent of fruits and vegetables perish in India annually and their prices fluctuate many times every year.
To develop vibrant agricultural markets, the government has to reduce its intervention in the pricing and movement of agricultural commodities and, instead, focus on developing market infrastructure in rural areas, where farmers can get fair prices for their products. In some eastern states, farmers do not even realise the minimum support price for paddy due to lack of markets. Improved infrastructure linked to well-functioning agricultural markets will also help narrow the yawning gap between farm prices and end-consumer prices.
However, improving agricultural efficiency will also need to go hand-in-hand with a concomitant attention to water management, soil conservation, nutrient balance and livelihood. We can ignore this holistic approach, but only at our own peril.
Views expressed here are the writer‚Äôs own