National priority should be to shift from ‘land productivity’ to ‘irrigation water productivity’ and give special thrust to Micro Irrigation

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New Delhi, July 4, 2019 : The Economic Survey 2018-19 suggests that “focus should shift from ‘land productivity’ to ‘irrigation water productivity’. Devising policies to incentivize farmers to improve water use should become a national priority. Thrust should be on micro-irrigation that can improve water use efficiency”. In India according to the Asian Water Development Outlook, 2016, almost 89% of groundwater extracted is used for irrigation. “There is a major concern whether the present practice of ground water use can be sustained as the depth of ground water level continues to drop. The cropping pattern in India is highly skewed towards crops that are water intensive. The incentive structure like MSP, heavily subsidized electricity, water and fertilizer have played a significant role in misalignment of crop pattern”. The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman tabled the Economic Survey 2018-19 in Parliament today. The Survey lays special emphasis on the agriculture and food sector as a large proportion of population is engaged in it despite the reduction in its contribution to overall growth. The Survey says that “agriculture is critical for the country’s food security”.

Around 89% of groundwater extracted is used for irrigation and crops such as paddy and sugarcane consume more than 60% of irrigation water. The costs of fertilizers are key determinants of profitability of farming. The fertilizer consumption which was continually increasing since 2002 has shown a declining trend after 2011. Fertilizer response ratio has been declining over time indicating declining responsiveness of soil fertility to fertilizer application. The Economic Survey suggests use of optimal dose based on soil health status, promotion of neem coated urea, promotion of micro nutrients, promotion of organic fertilizers and promotion of water soluble fertilizers. Organic and natural farming techniques including Zero Budget Natural Farming (ZBNF) can improve both water use efficiency and soil fertility. The main aim of ZBNF is to eliminate chemical pesticides and promote good agronomic practices that are eco-friendly and less water consuming.

Over the years, several new challenges have emerged before the sector. With fragmentation of agricultural land holdings and depletion of water resources, the adoption of a resource efficient ICT based climate smart agriculture can enhance its productivity and sustainability. With decline in size of landholdings in agriculture, India has to focus on resource efficiency especially in smallholder farming to attain sustainability. The Economic Survey proposes that a combination of resource efficient method, dynamic cropping patterns, climate change responsive farming and intensive use of ICT should form the backbone of farming in India. For a safe and food secured future, the agriculture sector has to undergo tremendous transformation from the philosophy of ‘green revolution’ led productivity to ‘green method’ led sustainability.

The Economic Survey states that “the gross value added in agriculture has improved from a negative 0.2% in 2014-15 to 6.3% in 2016-17 and then declined to 2.9% in 2018-19. While the crops, livestock & forestry sector showed fluctuating growth rate over the period from 2014-15 to 2017-18, the fisheries sector has shown rapid growth from 4.9% in 2012-13 to 11.9% in 2017-18. The average annual growth rate in agriculture and allied sector has remained at around 2.88% during 2014-15 to 2018-19. However, the volatility of output growth has declined significantly over the past 60 years. The share of agriculture, forestry and fishing sector in the Gross Value Added has seen a steady decline over the years from 15.4% in 2015-16 to 14.4% in 2018-19. The decline was mainly due to decline in share of crops in GVA from 9.2% in 2015-16 to 8.7% in 2017-18.

The Gross Capital Formation (GCF) in agriculture and allied sector as a percentage of GVA saw rise to 17.7% in 2013-14 but declined thereafter to 15.2% in 2017-18. The GCF in absolute terms increased from 2,51,904 crore in 2012-13 to 2,73,555 crore in 2017-18 at 2011-12 prices. While the share of public investment registered an increase from 2014-15 and maintained an upward trend till 2016-17, the share of private investment in GCF shows a decline during this period.

Talking about the pattern of agriculture land holding in India, as per Phase I result of Agriculture census 2015-16, the Economic Survey states that the number of operational holdings has increased to 14.6 crore in 2015-16 from 13.8 crore in 2010-11, thereby registering an increase of 5.1%. The share of marginal holdings (less than 1 ha) increased from 62.9% in 2000-01 to 68.5% in 2015-16. While small holdings (1 ha to 2 ha) decreased from 18.9% to 17.7% during the same period. Large holdings (above 4 ha) decreased from 6.5% to 4.3%.

Women play a significant and crucial role in agriculture including crop production, livestock production, horticulture, post harvest operations, agro/social forestry, fisheries etc. The share of operational holdings cultivated by women has increased from 11.7 % in 2005-06 to 13.9% in 2015-16. The marginal and small holdings operated by women farmers together constitute 27.9% of total operational holdings cultivated by women.

Highlighting the importance of bringing resource efficiency in smallholder agriculture, the Economic Survey enumerates several important factors and also lays down the main policy changes required. These include increasing Irrigation Water Productivity (IWP) by adopting improved methods of irrigation and irrigation technologies, increasing sustainability through organic and natural farming, economizing the use of fertilizers and pesticides, improving infrastructure and access to markets and adopting appropriate technology for smallholder farm.

The access to timely credit or finance is a critical determinant of profitability of agriculture. Lack of access to credit facilities has severe impact on agricultural productivity. The regional distribution of agriculture credit in India is highly skewed. When compared to western and southern States, the hilly, north-eastern and eastern States are at a disadvantage. The Economic Survey suggests that the provision of agriculture credit should take care of the needs of small and marginal farmers who constitute a majority in these regions.

Talking about the allied sector which includes animal husbandry, dairying and fisheries the Economic Survey emphasizes that to transform the rural economy greater emphasis should be given to the allied sector with the major focus on dairy, poultry, fisheries and rearing of small ruminants. The performance of allied sector in terms of growth and employment has been more robust and sustainable as compared to the crop sector. Fisheries is a fast growing sector that employs more than 14.5 million people. While enhancing income through livestock development and fishery sector it is significant that this must be undertaken without comprising the needs of the future generation by overexploiting/depleting marine resources.

Food security exists, as per the FAO, when all people at all times have physical and economic access to sufficient, safe and nutritious food that meets the dietary needs and food preferences to ensure an active and healthy life style. India’s food security challenges lie in the areas of low GDP per capita, sufficiency of supply, public expenditure on R&D and protein quality. While India ranks number 1 in nutritional standards, there is a need to further improve management of food supply. The Central Government takes several steps to prudently manage foodgrain stock while ensuring adequate availability of foodgrain for the entire nation. The Economic Survey suggests addressing the issue of burgeoning food subsidy bill for sustainable food security operations. It also suggests greater use of technology in food management and computerization of targeted public distribution system (TPDS).