Agricultural Development for Reducing Poverty in India Policy Forum Dr. P.K. Mishra Secretary to Government of India Department of Agriculture & Cooperation Ministry of Agriculture Organized by IFPRI and ADB at the Asian Development Bank, Manila 9-10 August 2007

Some Aspects of India’s Agrarian Structure 72 per cent of the population (743 million) live in rural areas (2001) 121 million farm holdings (2001) 127 million cultivators and 107 million agricultural labourers Average size of operational holding: 1.3 hectares 82 per cent of operational holdings are small and marginal (less than 2 hectares) 60 per cent of the cultivated area dependent on rainfall

Magnitude of Poverty in India The percentage of population below poverty line declined from in to in and in * However, the number of poor was 321 m. in and 302/238 m. in % of poor people increased from 45 to 64 during , then declined to 34 by 1990, further increased to 37 by Since then it has a declining trend** * Planning Commission **FAO, 2007

Incidence of poverty highest among rural households engaged as agricultural labourers followed by non- agricultural labourers in all States Self-employed agricultural households have relatively less poverty compared to self-employed in non- agricultural operations Landless and marginal farmers are among the poorest Some Aspects of Rural Poverty in India: Source: Panda M. in Beyond Food Production, FAO, 2007

Households with access to irrigation have lower incidence of poverty (19.79%) compared to those without irrigation (30.71%) Higher incidence of poverty among scheduled tribes (ST) and scheduled castes (SC) Two-thirds of India’s poor are found in six States: –Uttar Pradesh –Bihar –West Bengal –Orissa –Madhya Pradesh –Maharashtra (map)

Growth of Overall GDP and Agriculture GDP In different Five Year Plans

Growth Rates of GDP and Decline in the incidence of Rural Poverty(%) Growth rates of Agri GDP and per capita total GDP significantly associated with decline in the incidence of poverty. The rate of decline in incidence of poverty is more when per capita income of more than 3 per cent is accompanied by a higher growth rate of Agri GDP.

Factors Influencing Poverty Reduction Sectoral and geographic (across States) composition of growth. Per capita income growth of more than 3 per cent after mid-1970s Agricultural productivity and increase in real wage leading to higher employment and income Higher government expenditure, particularly in rural roads, education and agricultural research Source: FAO 2007

Trends of Area, Production and Yield of Rice Area In Million Ha Production In Million Tns Yield Tns/Ha

Trends of Area, Production and Yield of Wheat Area In Million Ha Production In Million Tns Yield Tns/Ha

Trends of Area, Production and Yield of Pulses Area In Million Ha Production In Million Tns Yield Tns/Ha

Major Problems faced by Indian Agriculture Major Problems faced by Indian Agriculture Small Operational Holdings; Rain-fed Agriculture, Inadequate Risk Management; Stressed Land, Water and Genetic Resources; Declining Investment; Declining Resource Use Efficiency; Weak farmer-research Linkages; Institutional Support gap: Extension, Credit, Marketing; Uneven Growth across Regions, Crops and Category of Farmers; Inequities in Access and Entitlement.

Yield Augmentation Factors required to be addressed A. Soil Health and Nutrient ManagementB. Water Management C. Seed Management D. Farm Mechanization Soyabean 1.57 (Andhra Pradesh) 1.13 (Madhya Pradesh) 2.8 * In Major Producing States

11 th Plan Vision 11 th Plan Vision Broad Based, Inclusive, Faster Poverty Reduction, Bridging the Divide Economic growth  9 per cent overall Growth,  4.1% growth from Agriculture and allied sector  This implies much higher rate of agricultural growth than achieved during the 9th and 10th Plan Requirements  Address supply and demand side issues – Thrust on Supply  Evolve state and crop/produce specific strategies  Create non-farm employment opportunities in rural areas  Take measures to improve farmers’ income

Growth Simulation - 11 th Plan Higher growth momentum needed  in different crop segments  in different States and Regions.

Crop Sector ( Field crops and Horticulture) Area improvement Yield augmentation Non-Crop Sector Animal Husbandry and Dairy Fisheries Institutional Support  Extension  Credit  Marketing and Post- harvest Management  Risk Management  Price Support System Linking farmers to market Linking farmers to market Focus on low-productivity but high potential districts Focus on low-productivity but high potential districts Improve Farmers’ Income Improve Farmers’ Income Growth Drivers

Some Recent Initiatives National Horticulture Mission Bharat Nirman National Rural Employment Guarantee Scheme (NREGS) Agricultural Technology Management Agency (ATMA) National Bamboo Mission National Rainfed Area Authority National Fisheries Development Board Credit Policy: Flow of credit and reform of cooperatives Agricultural Marketing National Food Security Mission Additional Central Assistance Scheme to incentivise States

Policy Issues Increase Plan allocation: Centre & States, with incentives for States to increase their share Fertilizer Policy: e.g. nutrient based subsidy, organic and bio fertilizers; other subsidies Agricultural Insurance Credit and Cooperative Reforms: Vaidyanathan Committee Farmers’ Indebtedness: Radhakrishnan Committees, SF/MF access to credit Structural and legal reforms: e.g. Seeds Act, ECA, APMC Act Tax and tariff structure for sustainable production & processing Issues of MSP, Market Intervention and procurement Diversification vs. Food Security

Key Areas for the Days Ahead Agricultural Research Agricultural Research Extension and technology transfer Extension and technology transfer Diversification and food security Diversification and food security Post-harvest management and supply chain Post-harvest management and supply chain Managing agricultural risks: yield and price Managing agricultural risks: yield and price Rural non-farm sector Rural non-farm sector Appropriate Policy design and implementation Appropriate Policy design and implementation