Innovations in Agriculture and needs for Skill Development Tirthankar Nag, IMI Kolkata

Introduction Increasing focus on Farm productivity Farm incomes Sustainable agriculture Inefficiency and overuse of resources (Banik, 2015) Average Monthly Income and Expenditure Per Agricultural Household in 2013 Rs./month per household Size in Hectares Income from Wages Net Receipt from Cultivation Net Receipt from Farming of Animals Net Receipt from Non-farm Business Total Income Consumption Surplus /Savings <0.01 3,019 31 1,223 469 4,742 5,139 (397) 0.01–0.40 2,557 712 645 482 4,396 5,402 (1,006) 0.41–1.00 2,072 2,177 477 5,371 5,979 (608) 1.01–2.00 1,744 4,237 825 599 7,405 6,430 975 2.01–4.00 1,681 7,433 1,180 556 10,849 7,798 3,051 4.01–10.00 2,067 15,547 1,501 880 19,995 10,115 9,880 >10.00 1,311 35,713 2,616 1,771 41,412 14,445 26,967 All India 2,146 3,194 784 528 6,653 6,229 424 Source: (Chandrasekhar & Mehrotra, 2016)

Agenda Challenges and Innovations Skilling Needs

Innovation Evolutionary economics and strategic management have influenced the innovation discourse. The theory of the firm mentions knowledge as an important driver. The resource based view views knowledge based capabilities as a competitive asset and a driver for innovation and growth (Almeida & Phene, 2012). Even with similar resource endowments, there may be a wide heterogeneity in performance (McGahan & Porter, 1997). Some studies attribute the difference in performance to certain unobserved or latent factors or capabilities (Rumelt, 1991). In fact certain capabilities play a key role in influencing innovation pathways (Penrose, 1959). Dynamic capabilities focus on capabilities related to change and innovation (Teece, Pisano, & Shuen, 1997). There is general agreement that innovation requires knowledge, ingenuity and focus and is capable of being practiced (Drucker, 2002). Others simply describe innovation as ‘ideas that create the future’ (Kanter, 2006). Christensen’s classic ‘Disruptive Innovation’ could perhaps be interpreted as those which would make products and services more accessible and affordable.

Agriculture and Allied Sectors in India % of Agriculture, forestry & fishing in Gross Value Added by economic activity Source: National Account Statistics, MOSPI constant 2011-12 prices

Labor productivity and wages Transition in composition of output and occupation from agriculture to non-farm Worker productivity (at current prices) across different worker categories in India (Rs./worker) Year Agricultural labour Cultivator Farm workers Non-farm rural workers All rural workers Urban 1970-71 821 1,114 1,018 2,294 1,203 3,829 1980-81 1,788 2,425 2,216 6,248 2,878 8,456 1993-94 5,040 12,271 9,410 25,822 12,947 38,934 1999-00 9,246 22,807 17,059 51,789 25,380 89,180 2004-05 10,480 25,183 19,933 82,990 37,273 1,20,419 2011-12 33,937 77,144 62,208 1,71,836 1,01,755 2,82,515 Source: Indiastat

Crop Productivity, Tonnes/Hectare Source: OECD

Rice Productivity, Tonnes/Hectare Source: OECD

The Agri Value Chain Sowing Seeds (native, commercial. Hybrid, GMO) Equipment Finance Labor Growing Fertilizers Insecticides Pesticides Irrigation (sprinkler, drip, others) Harvesting Information – weather, practices, markets Market access and logistics Post Harvesting Procurement Produce marketing Processing & Retail Machinery Advisory

Sowing Seeds Equipment Sowing Practices Farm saved seeds to commercial/certified seeds Hybrid/BT seeds for certain crops Equipment Farm mechanisation Sowing Practices Precision farming Seeds used in lakh quintals Source: CMIE

Growing Fertilizers in in lakh tonnes Pesticides in in thousand tonnes Source: CMIE Fertilizers and agrochemicals per hectare are on the rise, though much below other economies.

Harvesting and Post Harvesting Information through digital devices Weather information Crop Insurance Crops Cumulative wastage (%) Cereals 4.65 – 5.99 Pulses 6.36 – 8.41 Oil Seeds 3.08 – 9.96 Fruits & Vegetables 4.58 – 15.88 Milk 0.92 Fisheries (Inland) 5.23 Fisheries (Marine) 10.52 Meat 2.71 Poultry 6.74 Post harvesting losses Storage Market Access Financing Source: Ministry of Food Processing Industries

Cropping Patterns Region Present System Net return (Rs/ha Other cropping possibilities Net return (Rs/ha) Kahikuchi, Assam Rice-wheat 16,749 Rice-toria 22,333 Chhattisgarh 30,291 Rice-potato 67,496 Ambala, Haryana Soyabean-wheat 29,851 36,399 Sorghum-wheat 13,602 Maize-wheat 22,188 Nasik, Maharashtra 33,378 Rice-groundnut 46,504 Wardha, Maharashtra 25,008 Soyabean-gram 32,327 Faridkot, Punjab 50,388 Rice-mustard 66,887 Ludhiana, Punjab 52,537 63,352 Source: Shukla & Shukla, Scope and Limitations of Crop Diversification in Indian Agriculture, 2007

Penetration of Innovations Sowing Growing Harvesting Post Harvesting Process & Practices Sowing techniques Optimizing cropping systems Irrigation – drip irrigation etc. Harvesting time Logistics & Supply Chain Inputs Quality of seeds Agrochemicals Balanced usage Water and energy Storage Procurement, distribution & retail Finance Credit markets, Microfinance Kissan Credit Cards Crop Insurance Market price Technology Agrotech – seed quality, BT Equipment Farm mechanisation Information systems

Agenda Challenges and Innovations Skilling Needs

Skilling Needs Urban migration and wage differentials towards non farm jobs Skilling for maintaining and learning from Traditional Practices In Indonesia, there is a practice of agriculture and pisciculture being carried out together during cultivation. Understanding information systems Information about crop yields, crop substitution possibilities, price trends of crops, alternate cropping methods for increasing yield of crops etc. Skilling for yield improvement Increasing access to other markets like seeds, fertilizers, pesticides, water etc. through improved credit delivery systems. Skilling for understanding pricing signals Increasing access to product markets and establishment of backward/forward linkages. Skilling for understanding and leveraging risk coverage mechanisms. Skilling for understanding the agriculture supply chain

Skilling Needs Skilling for adopting new technology Skilling for tapping farm credits and understanding interest rates and other conditions Access to credit markets Assessing credit quality is a major issue for the lender in the case of farm credits Signalling mechanisms and proxies

Thank You Contacts International Management Institute Kolkata, 2/4 C Judges Court Road, Alipore, Kolkata - 700 027. Thank You Contacts Tirthankar Nag t.nag@imi-k.edu.in +91 9748753373