Professional Documents
Culture Documents
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Dr. S. Jeevananda Reddy
Dr. S.J. Reddy
Hyderabad
4th November 2011
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Table of Content
Table of Contents Preface Introduction Chapter 1: Agriculture issues Agriculture Technology Past: Traditional Technology Present: 1st Green Revolution Technology Few components of present agriculture Inputs subsidy related issues Chemicals in Farm runoff related issues Seeds related issues ICARs Vision 2030 Future: Green green Revolution Technology Need Green and not yellowish- blue-green Cooperative Farming System related issues Organic Farming system related issues Farmers Innovations related issues Chapter 2: Climate Change issues What is Climate Change? Natural variations Man induced variations Global Yearly Mean Temperature variation Glaciers retreat, sea level rise Unusual events Chapter 3: Agriculture in the perspective of Climate Change Crop production scenario General issues Global issues National issues Specific issues Climate change scenario Global Angle National Angle Regional/Local Angle Chapter 4: Suggestions & Conclusions References Appendices: I. Pollution related issues II. Energy related issues III. Water resources related issues IV. Genetically modified crops issues V. Approach paper to the 12th 5-year plan: Suggestions & Comments VI. Urban slums/Urban Properties
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Preface
Globalization is the process through which rich becomes richer and poor becomes poorer, irrespective of where they live. The degree of this effect varies with the strengths in the areas of technology, logistics, infrastructures, and finally on the quality of governance. This process is amplified further by economic reforms in India. The process of globalization in agriculture is motivated by World Bank, International Monitory Fund, and all-powerful multinationals (MNCs) from the West. Most unfortunately, now the UN Agencies also joined this bandwagon along with CGIAR, Oxfam, etc. Many a times Noble Prize legitimizing the bad research that serve the vested interests, is the cause of major ills of the society & environment. Here it is pertinent to note what Mahatma Gandhi said India has enough resources to fulfill everyones need but it cant fulfill one persons greed. This is quite valid for present state of affair in Indian agriculture scenario. The present green revolution technology reached a plateau in terms of productivity; and its negative impacts on environment were clearly understood by 1980s. In developing countries around 80% of the cultivated area is still at the mercy of Rain God. Now, these vested interest groups wanted to destroy the agriculture even in this zone, where subsistence farming is the livelihood of millions of people around the world, which may lead to starvation and thus suicides with the increased costs of production under the new scheme. The increased yields in green revolution dont translate into food security. The success of green revolution was due to heavy government incentives and yet it is not a sustainable agriculture. The yield gap between research station yields and yields in farmers fields are large as high as 50% and more. Yet, national and international media under the slogan of food security is pushing hard the concept of 2nd green revolution in line with the present green revolution technology under the disguise of genetically modified crops & hybridization of paddy --- maize seed to monopolize seed industry by MNCs in developing countries. In India, unfortunately government agencies are also supporting this greed. The Director General of ICRISAT/Hyderabad, one of the thirteen institutions of CGIAR, also initiated a campaign in this direction forgetting their own research priorities, which inspired me to write this book. With the present green revolution technology, crop based drought, a new concept entered into the definition of drought hither to be associated with the weather. Unfortunately we look at short term gains forgetting the damage to environment and health of life forms on a long term with disastrous consequences. Floods are causing damage to environment by dumping sewage, pesticides, fertilizers and other contaminants in to waterways. Hospitals now understood are responsible for high level of greenhouse gases releases 10% of greenhouse gases of USA; in Canada 1100 hospitals per year releases greenhouse gases of 1.1 million tons of carbon dioxide equivalent, etc --. The Western Tink-Tank and media tell us that GM is the only way to achieve the food security in developing countries. At the same time European Union nations are thinking loudly to ban GM in terms of research-seed-food completely but our leaders-scientists-farmers leaders that sub-serve the interests of Western MNCs following the foot-steps of Western TinkTank. Rice is the most heavily subsidized crop followed by wheat and cotton that severely affected crops & cropping systems that served subsistence farming in developing countries in which more than 60% of rural population are depending. Also this increased the gap between dry-land and wet-land agriculture year after year. With the green revolution technology extension services collapsed, which was hither to a link between research and farmers and yet Vision 2030 of ICAR has become of the MNCs by the MNCs and for the MNCs.
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Animal husbandry played vital role in household food security in rural India under traditional agriculture. This system was affected severely with the present green revolution technology with poor quality fodder. Yet, government of India allocated hundreds of crores of rupees to extend this technology into Northeastern states under the disguise of food security, which are hither to practicing traditional and organic farming. The unhealthy food of paddy and wheat produced under huge government subsidy is supplied again under huge subsidy in PDS. This affected severely the millet based dry-land crops area and use of millet based healthy diet for human and animal. As a result, the native land races of these crops are in great danger. There is no procurement system for most crops other than paddy & wheat that are grown under high subsidy. Under economic reforms more thrust is placed on the development of urban infrastructure that helped strong rural to urban migration as a result of rural economy is in doldrums. Corporatization of agriculture is the hidden agenda of this mechanism. Though the studies emphasize the importance of climate change in agriculture in reality many a times it is used as an adjective. Most of the so-called top scientists of the world make statements on climate change from air while attributing unusual events in weather to global warming. Scientists started attributing weather impacts on production to climate change. Weather & climate a short term change are different from climate change a long term change or trend. This does not find a place. Now-a-days everything goes as per model predictions, more particularly under global warming, which is one component of climate change, though scientists say on one side that We cant be 100% certain that this interpretation is correct because the data are limited and models are imperfect and yet they present sensational conclusions on the other. With such statements from the authors there is significant divergence on the credibility of the computational models, especially among scientists with deep understanding of the quality of complex models. It is not that they don't value models; they do for trends and a way to frame ones thinking, but not in terms of predicting specific numbers, globally, regionally and locally. After December 2009 Copenhagen climategate, UN Secretary General Ban Ki-Moon said IPCC should have stronger scientific basis for making its predictions and recommended an overhaul of the position of Pachauri, the Chairman of IPCC. People of all walk of life make statements attributing weather aberrations to global warming forgetting the fact that When was the period in human history in which some person, in some location or other, wasnt feeling that some recent day, month or season has been very unusual in some dry, wet, hot, or cold?. The impact of unusual events of the same intensity is now felt more with population growth and with intensive urbanization. Therefore, the book looks at issues of agriculture in terms of quality & quantity of production and food security under climate change perspective. We can achieve the goal of meeting the healthy food needs of ever increasing population along with protecting the environment by organic farming under cooperative farming setup using farmers localized innovations under better water management practices. This also revitalizes animal husbandry component. The author termed such a system as 2nd green revolution agriculture technology green green revolution technology. The book analyzes the issue in this direction. The author acknowledges with thanks to those authors whose information was referred; and same material was repeated at some places to get clarity.
Introduction
The author presented a talk on Role of Climate Change on agriculture production, pricerise and food-nutrient security on All India Radio (National Network programme) recorded on 18th February 2011 and was broadcasted from Delhi on 11th March 2011 at 10 PM. The text of the talk as recorded is as follows: Currently widely discussed issue at national and international levels including United Nations and World Bank levels are food shortages and climate change. This was invariably attributed to global warming. On 15th February 2011 an official of United Nations Climate Change Ms. Figures suggested the need that nations must took aggressive action to reduce emissions causing global warming. If we unable to fully stabilize climate change, it will threaten where we can live, where and how we can grow food, and where we can find water. And thus will lead to falling agricultural production and higher food prices, leading to food insecurity. This is not a factual situation and thus misleads rulers and planners of nations of the developing world. Global warming is one component of climate change. The most important component of the climate change that affect agriculture, more particularly in developing world, is the systematic variations or cyclic patterns in precipitation that define floods and droughts including river floods. These are in built in nature. As a first step, thus this requires adaptive measures for which we must understand agro-climate of the zone along with systematic variations in precipitation. Indian Southwest Monsoon Rainfall present a 60 year cycle. The present above the average 30 year wet part started around 1987 and will continue up to around 2016 and there onwards below the average 30 year dry part commences. These in fact play vital role in agriculture. In India around 60% of the cultivated area is still at the mercy of Rain God. And as a result the risk is amplified by high input green revolution chemical inputs tailored technology plus genetically modified crops which are high water intensive mono crop system of agriculture. The rise in temperature as recorded is less than 0.5 degrees Celsius at Indian level as well at global level, however it is not clear how much is rural component and how much is the urban component in this. During 2007 & 2009 drought years in India the temperature was recorded higher by 0.7 to 0.9 degrees Celsius which is a part of wet and dry cycle in which global temperature vary between -0.3 to + 0.3 degrees Celsius for 60 year cycle. Traditional food is not only nutritious but also healthy food. Also, the traditional agriculture is environment friendly sustainable agriculture. The green revolution technology is unsustainable and non-environment friendly, unhealthy food. This works only when water is available. Therefore to achieve sustainable and healthy food we must shift to organic traditional farming with food crops that are nutritious. The hybrid rice or for that matter the genetically modified crops do not fit into this concept. Our progressive farmers all over India developed crop systems that out yield scientists yield. To achieve this, the governments must protect native cultivars of food crops that give better yields and with nutritious quality and must stop encouraging multinational companies technologies such as chemical inputs tailored crop varieties, more particularly Hybrids of paddy, maize, etc, and genetically modified crop varieties. This also affects pulses that contribute nutritious diet humans & animal. The seed act must reflect this fact and as well our research priorities must reflect this. We must ensure promotion of producing and marketing coarse-cereals suited to diverse zones of agro-climate. Government must not only include coarse cereals in Public Distribution System but also make mandatory to buy them by the consumer by linking that only if they purchase coarse cereals, rice & wheat will be sold under PDS.
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The spurt in global food prices is nothing to do with population, appetite, drought-floods, heat, and bio-fuels or for that matter to climate change de-facto global warming. We know that while food rots poor starve across India. This was highlighted by Supreme Court. Poor postharvesting mechanism along with poor storage & transport facilities nearly 50% of produce is wasted jointly at farmers level plus government storage level. That is, poor management is affecting the production. Illegal exports also contributing to price rise. All these are nothing to do with global warming. We must bring down water intensive crops, crop varieties, crop systems and implement better water management practices and promote crop diversity and seed diversity to ensure security at household level. There is a need to introduce alternate income generating activities such as food processing, animal husbandry, horticulture, etc, give incentives to sustainable farming systems and promote traditional nutrient rich crop varieties. Input subsidies must be given directly to farmers instead industry. Cooperative farming helps these processes. The Hindu special correspondent [5th February 2011 -- Coimbatore Edition] states that according to C. Rangarajan Chairman of the Economic Advisory Council to the Prime Minister Improve agriculture output to combat food price inflation. Unfortunately such people are still advising national policies without understanding ground realities. On this, the author commented as The food crisis now we are facing is not due to non-availability of food. We are producing more than what we require. Farmers are facing the problem of food storage, and as result millers/businessmen taking this as an advantage exporting illegally food grains and storing in their private godowns and creating artificial food shortages. Most unfortunately our rulers and advisors well aware of the fact but not taking steps to control these activities as they (the middlemen) invariably finance the elections. Even the Supreme Court ordered the government to distribute the food free to poor as large quantity of food is rotting in FCI godowns. Unfortunately, our Planning Commission is under the clutches of World Bank. This must be changed first. Secondly our agriculture system of chemical inputs tailored system must change to need based traditional system by providing input subsidy directly to farmers instead industry, thirdly the PDS system must implement a scheme that compulsorily includes millets to encourage dry-land farmers, which covers still 60% of the cultivated area, fourthly storage facilities at village level must be implemented so that the grain will not rot in rain due to lack of storage facility. Fortunately some of those presented above, which the author was advocating for the past more than a decade and included in his publications, find a place in 2011-2012 budget presentation by the Union Finance Minister on 28th February 2011. Also, UNEP-WMO proposed climate change stopgap concept in place of global warming carbon credit policy of IPCC Al Gore by taking in to account pollution that affect health and create greenhouse gases, which the author was advocating. Though the author doesnt claim the credit for these but it is a good sign. How these are going to be implemented under the volatile scenarios need to be seen!!! The farming farmer is masqued by mis-guided climate change policy of IPCC Al Gore in which World Bank, CGIAR, Oxfam form front runners of all powerful multinational companies of the West are pushing the governments and scientists/researchers to prioritize the research directions in this line. Some people under the disguise of farmers associations and federations are behind the illegal implementation of these groups policies on ground. Though some farmers are trying to take agriculture in the right direction but they are not getting the needed support. Even the national and international media advisors network are working overtime to propagate his masters voice. With the 1st Green Revolution Technology the major casualty is the health of
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life forms on the Earth. Humans are spending now more than 50% of their consumption on health care prior to 1st green revolution it is less than 1%. This is going to be further amplified by adding genetically modified seed technology. If we think practically, then we can act practically and thus reach the goal. If we think in air like Anna Hazare in the case of Lokpal Bill or IPCC Al Gore in the case of Global Warming with the objective of gaining popularity and get awards/rewards, then we can act in air and thus never reach the goal. Like the support Anna Hazare is getting, IPCC and Al Gore got it and through which they got Noble Prize. After this, at Copenhagen in December 2009 exposed the hollowness in their claims, some of them were withdrawn but the Noble Prize was not surrendered. With all these, ICAR that control the destiny of agriculture in India put before the Government the prophecy of MNCs. INCCA that claims control the destiny of climate change in India put before the Government the prophecy of IPCC Al Gore. As a result in the ICARs Vision 2030, the author did not see any vision except promoting the vision of MNCs to monopolize Indian agriculture research in general and Indian seed market in specific. This is quite obvious as the Agriculture Minister hails from the state where these MNCs are flourishing. ICARs Vision 2030 did not at least reflected what the Union Finance Minister presented in his budget for the year 2011-2012 on agriculture related issues as well the progressive farmers inventions. INCCA document in terms of climate change reflected the theoretical sensationalization exercise only that lead Indian Government nowhere. We must take note the fact that weather & climate a short of change must be differentiated from climate change a long term change that must be based on the observed trend and not model trend. Unfortunately our researchers are also following the footsteps of INCCA. The United Nations Food and Agriculture Organization said in a report Climate Change, Water and Food Security dated 9th June 2011 that: Climate change will make water less available to produce food crops in years to come. River runoff and aquifer recharges will decrease in the Mediterranean, the Americas, Australia and southern Africa, it said. Areas in Asia which depend on the melting of ice and mountain glaciers will also be affected, while areas with a lot of fluvial deltas are threatened by reduced water flow, increased salinity and rising sea levels. The report also predicted an acceleration of the hydrologic cycle of the planet because high temperatures will raise the evaporation rate of the soil and sea. The rain will increase in the tropics and at higher altitudes, but it will decreases in areas that already have dry and semi-dry characters and are located inland on the big continents. Because of this, there will be a higher frequency of droughts and flooding, which will lead to an increased use of ground water and limit the water available for agriculture even more. FAO report also infers that The loss of glaciers, which sustain about 40% of the watering at world level, will finally affect the amount of available water on the surface for watering in the main producer basins. The increase in temperature will prolong the growing season of crops in warmer regions, but reduce the harvest season elsewhere, adding to a higher rate of evaporation and a decrease in agricultural productivity. Rural communities and the food security of the urban population are threatened but the poor people in rural areas are the most vulnerable, and they could be affected in a disproportionate way. All these claims of UN agencies are heuristic in nature and not based on the ground realities but based on the model simulations of IPCC -- The same ritual was seen with INCCA report on India. This is evident from the fact that the same UN organization presents, in another report, bumper paddy/rice production in 2009-10 & 2010-11 464 million tons of rice [696 million tons of paddy], and expecting in 2011-12 expected 476 million tons of rice. Same is the
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case with rice and wheat production in India. Ahmadabad based institute under ISRO released to press that the latest satellite data showed that some of the Himalayan glaciers are retreating and some others are intact or expanding. It is same worldwide and as well with sea level rise. Now they are talking in terms of physical impact and natural variations, which were hither to attributed to global warming phenomena. At last a good sign!!! Also the UN Millennium Development Goals Report says that as many as 320 million people in India and China are expected to come out of extreme poverty in the next four years, while India's poverty rate is projected to drop to 22%. In Southern Asia, however, only India, where the poverty rate is projected to fall from 51% in 1990 to about 22% in 2015, is on track to cut poverty in half by the 2015 target date. National Advisory Council (NAC) released a National Food Security Bill, 2011 (July 2011). In this there are two important clauses that needs mention in this context, namely Right to Food Security Right to access of food security 4. Every person shall have physical, economic and social access, at all times, either directly or by means of financial purchases, to quantitatively and qualitatively adequate, sufficient and safe food, which ensures an active and healthy life; and Rate for priority households 24. The state government shall provide priority households whether rural or urban a minimum of 7 kg of food grains per person per month, at a price not exceeding Rs. 3 per kg for rice, Rs. 2 per kg for wheat and Rs. 1 per kg of millets at 2010-11 rates, which will not be revised upward for a minimum period of 10years from the date of notification of the Act. This is a false promise, under the present agriculture scenario clause 4 is impossible to meet and without specific limits for three grain types, clause 24 serve very little to achieve 4. Governments after 1st green revolution crops grown under heavy subsidy under irrigation were included in PDS again under subsidized scheme and made people to addict to unhealthy diet based on rice & wheat that lead even poor people suffering from new diseases, hitherto were with rich. This way the governments step-motherly policies affected the area under millets that provides healthy diet, which could not compete with subsidized rice & wheat in market. Thus poor stopped eating healthy millet food as it costs more than several times to that of rice & wheat under PDS. In some states like Andhra Pradesh used subsidized rice scheme in PDS to gain political power and wealth. This affected the animal husbandry component of agriculture. Officially Uttarkhand is an organic farming state. Government is giving chemical input kits free to create addiction and move away from organic farming. Different state governments are falling over each other in their haste to promote hybrid maize in the name of food security, though the taste is not good, cant digest easily, even the animal did not like fodder and as mono crop reduced the nutritious intercrops and with longer duration affecting the second crop of vegetables. Some of these are true with hybrid rice also. For seed and agrichemical companies, hybrid maize is a major market drive. Only 25% of maize is consumed as food, the rest goes into poultry and animal feed and for industrial use. Though our country is the largest producer of many kinds of millets, they are not as popular as it should be, given their health benefits. Unlike hybrid maize, the millet fodder favourite diet for cattle. Timely crop management is the mantra for success of agriculture in developing countries. The book discusses some of these issues to highlight the deficiencies, mis-conceptions and present the ways and means to achieve sustainable farming with no suicides by farming community. Under the present volatile scenario the present book looks at issues of agriculture in terms of production, price-rise and food security under climate change perspective.
Dr. S.J. Reddy
Chapter 1:
Agriculture issues
Agriculture technology
Role of Climate Change on agriculture production, price-rise and food-nutrient security is an important issue widely discussed in recent times in national and international media as well governments in their planning. However, all such discussions lack practicality verified with ground realities over different parts of the globe. Sometimes the same organization presents two different reports that counter each other. One such organization is Food and Agriculture Organization of United Nations [FAO]. The author put his opinion on some such discussions under several forums. Let us see some such issues and present some suggestions for future action by looking into Indian government agencies prophesying on such issues.
fertilizer. However, the yields were low but the quality of food was excellent & and thus provide healthy nutritious diet to people as well the fodder to animal. Timely crop management is the mantra for the success in this system of agriculture.
research station yield levels. Thus, science & technology, though indicates a media for sustainable development on short-term basis with disastrous consequences on environment became unsustainable proposition on long term basis and on the contrary the traditional technologies were found to be sustainable on long-term basis. Around 50% of production is going as waste as there are no sufficient storage facilities and timely transport facilities. That means, we are producing too much and wasting it at the cost of natural resources and energy. That means government talk on food security and thus showed more interest in pushing production but not storage and distribution to needy in time. This encouraged the politiciansbureaucrats-businessmen nexus to look at ways and means of hording and illegal export and thus raise the prices in the market with huge profits and thus create artificial inflation. Even in USA, the excess production is dumped in to sea to protect the farmers' interests. Thus, resources are wasted to that extent. The mono crop culture of 1st green revolution technology with new high yielding varieties grown under chemical inputs reduced the animal husbandry hither to play a prominent role at household food security as the fodder is not a good diet. While calculating the food production gains we rarely account this loss. In Andhra Pradesh, the traditional paddy under irrigation yielded 1300 kg/ha with the high yielding seed this increased by 500 kg/ha [that is total is 1800 kg/ha] and by adding chemical inputs the yield level rose by 2000 kg/ha [that is total is 3800 kg/ha] under the farmers fields. The research yield is 5000 to 6000 kg/ha but the present average yields of farmers field are 2600 2800 kg/ha. That is there is a large yield gap between research station and farmers fields. Till to date scientists havent tried to fix this gap. The main beneficiaries here are the chemical inputs manufacturers with huge government subsidies; illegal exporters. To monopolize seed industry under patent laws, MNCs introduced GM in to improved local crop varieties [Reddy, 2003]. To make it effective, the vast germplasm of native genetic resources of different crops were put in to their Gene Banks [Reddy 2000]. Now they are systematically dumping GM seeds on farmers with the tacit support from their PR groups. This has disastrous effect on farmers in developing countries, more particularly in India. This lead increased cost of production. This created boom in the sale of adulterated seed-fertilizers and thus it lead farmers' suicides. After seeing the phenomenal success, now, they are planning to monopolize even the paddy& maize seed business under the disguise of hybridization and genetically modification hither too was not in the MNCs clutches. The question we must ask those at the helm of affairs of Indian agriculture who got awards-rewards for providing free passage to the so called green revolution technology in to world agriculture and more particularly in to Indian agriculture is: Was the research station yields are real or exaggerated to convince government to provide free entry to that technology in to world agriculture? Or is it that heavy dose of chemical fertilizers use? Now this is also seen with genetically modified technology. The success of 1st green revolution was possible with irrigation, as the diffusion of technology was possible only through irrigation. The irrigation potential was created with huge government subsidy. Because of this the rain-fed agriculture has not recorded the success as that was recorded in irrigated agriculture. That means most of the subsidies have gone to irrigated agriculture. Thus, the gulf between the irrigated agriculture and rain-fed agriculture is increasing with the passing of time with cost of production going up and up. Thus, with the green revolution technology the major sufferers are the small and marginal rain-fed agriculture farmers as the cost of cultivation increasing day by day with income coming down. Farmers suicides are growing with cash crop farming 1st green revolution technology is mono crop technology and could not withstand vagaries of monsoon unlike traditional intercropping or mixed cropping systems along
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with crop rotation practice. In India around 60% of the cultivated land is still at the mercy of Rain God. With the high costs, the rain-fed agriculture became an uneconomical venture. Farmers started migrating to urban centres for greener pastures. This created another problem to governments in creating infrastructure facilities at huge cost in urban centres.
the subsidy benefits the target group(s), an argument often made while giving any farm subsidy. This paper examines trends in fertilizer subsidy and the issue of distribution of fertilizer subsidies between farmers and fertilizer industry, across regions/states, crops and different farm sizes. The study shows that fertilizer subsidy has increased significantly in the post-reforms period from Rs. 4389 crore in 1990-91 to Rs. 75849 crore in 2008-09. As a percentage of GDP, this represents an increase from 0.85 per cent in 1990-91 to 1.52 per cent in 2008-09. The study shows that fertilizer subsidy is more concentrated in few states, namely, Uttar Pradesh, Andhra Pradesh, Maharashtra, Madhya Pradesh, and Punjab. Inter-state disparity in fertilizer subsidy distribution is still high though it has declined over the years. Rice is the most heavily subsidized crop followed by wheat, sugarcane and cotton. These four crops account for about two-third of total fertilizer subsidy. The study highlights the existence of fair degree of equity in distribution of fertilizer subsidy among farm sizes. The small and marginal farmers have a larger share in fertilizer subsidy in comparison to their share in cultivated area. A reduction in fertilizer subsidy is, therefore, likely to have adverse impact on farm production and income of small and marginal farmers as they do not benefit from higher output prices but do benefit from lower input prices. This paper justifies the fertilizer subsidies and questions the rationale for direct transfer of subsidy to farmers. The total subsidies [food & fertilizer] have increased from Rs. 12,158 crore in 1990-91 to Rs. 1,29,243 crore in 2008-09, an increase by 10.6 times and as a percentage of GDP, the total subsidies represent an increase from 0.85% in 1990-91 to 1.52% in 2008-09; The fertilizer subsidy has increased from Rs. 4,389 crore in 1990-91 to Rs. 75,849 crore in 2008-09 representing an increase of over 17 times and the fertilizer subsidy in India as percentage of the GDP varied from 0.47 in 2002-03 to 1.52 percent in 2008-09; The total food subsidy has jumped to Rs. 43,627 crore in 2008-09 from 2,450 crores in 1990-91, about 18-fold increase in less than two decades in absolute terms. But if one looks at the percentage of GDP, then the burden of food subsidies in India is much less than that of many other developing countries. The food subsidy in India as percentage of the GDP has varied from 0.41 in 1992-93 to 1.02 in 2002-03, and on an average remained at 0.66 percent over the last 19 years. During the nineties (1990-91 to 2000-01), fertilizer subsidy accounted for about 47% of the total subsidies and share of food subsidy was 35.1%. In the 2000s (2001-02 to 2008-09), food subsidy became dominant, accounting for 49.1% of the total subsidy while fertilizer subsidy accounted for 39.5%. However, during the last three years, fertilizer subsidy has taken the largest share and accounted for 58.7% of total subsidies in 2008-09. There is a debate about whether the fertilizer subsidy benefits the farmers or the fertilizer industry. Furthermore, the benefits of fertilizer subsidy are heavily tilted to large farmers growing water-intensive crops like rice, sugarcane, wheat, cotton, in a handful of states. It also states that the share of farmer in the fertilizer subsidy increased from 24.54% in the triennium average ending (TE) 1983-84 to 75.62% in TE 1995-96 with an average share of 67.5% for the period 1981-82 to 2000-01 and the rest goes to the fertilizer industry. These estimates of share of fertilizer subsidy going to farmers and/or industry have been computed by comparing subsidy estimates through import parity price and farm gate prices of fertilizers with the amount of subsidy given in the Central Government budget. Some of the recent policy announcements like the intention of the government to move to a system of direct transfer of subsidy to the farmer are based on such findings which are based on unrealistic assumptions. For example the study
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assumes that Indias entry into the world fertilizer market as an importer would not affect world prices and world fertilizer markets are perfectly competitive. However, both the assumptions are not valid. Direct Transfer of Subsidy to Farmers: With a shift from the earlier cost-plus based approach to import parity pricing (IPP), the Indian fertilizer industry has been exposed to the world competition and only efficient units would survive in the brave world of trade liberalization and globalization. Since the basic notion of about one-third of subsidy going to fertilizer industry does not hold true, the policy of direct transfer of subsidy to farmers is neither desirable nor practically implementable. It would be difficult to ensure that direct transfer of subsidy to millions of farmers is actually used by farmers for only buying fertilizer and there are no leakages in transfer of subsidy. If the subsidy is not used for fertilizer, it might adversely affect agricultural production in the country. Under the changed scenario, it is advisable to route the subsidies through the existing mechanism which is easy to monitor as well as ensure usage of fertilizers by all categories of farmers. Therefore, direct transfer of subsidy to farmers is not a right policy decision. However, a new nutrient-based pricing policy instead of product pricing regime for fertilizers is a welcome step as it would ensure balanced application of nutrients and growth of fertilizer industry. Fertilizer Equity Issues: Understanding who benefits from fertilizer subsidies is important not only to determine the fairness of policy, but also to determine how policy changes farmers behavior. There is a general view in policy and academic circles that benefits of fertilizer subsidy are cornered by powerful interest groups, the subsidies are concentrated geographically, they are concentrated on relatively few crops, and they are concentrated on relatively few producers. Therefore there is a need to examine fertilizer subsidy distribution patterns to assess whether the policy benefits all regions and categories of farmers. Pattern of Fertilizer Consumption by Farm Size: The share of small and marginal farmers (< 2.0 ha) in total operational holdings increased from 77.4% in 1991-92 to 82.2% in 2001-02 while the share of large holdings (> 10 ha) declined marginally from 1.6% to 1.2%. Medium and large holdings (with holding size of > 4 ha) with a share of 6.8% used just over onefourth of total fertilizer consumed in the country in 2001-02. In contrast, the small and marginal farmers, which constituted about 82% of total holdings, consumed 52% of total fertilizers. The share of small and marginal farmers in total operational holdings increased by 4.8% between 1991-92 and 2001-02 but their share in total fertilizer use increased by over 10.0%. However, if we compared the relative shares of different farm size groups in total operational area and fertilizer use, the scenario is completely changed. In 2001-02, small and marginal farmers accounted for 42.6% of area operated but accounted for 52.0% of total fertilizer consumption in the country. On the other hand medium and large farmers, which accounted for over one-third of operational area, consumed 25.9% of total fertilizer used in the country in 2001-02. In 2001-02, over 77% of the gross cropped area was fertilized on marginal holdings while nearly 50% of the area was fertilized on large farms. An inverse relationship between farm size and proportion of fertilized area to gross cropped area was witnessed during all the years. The intensity of fertilizer use was significantly higher on small and marginal farms compared to large farms. The average fertilizer consumption per hectare of gross cropped area was the highest (126.2 kg) on marginal holdings and the lowest on large farms (55.9 kg) in 2001-02. Similar trend was observed during 1991-92 and 1995-96. Moreover there has been a significant increase in fertilizer intensity on all farm size holdings during the period 1991-92 and 2001-02. However,
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the increase was the largest (74.8%) on marginal farms (from 72.2 kg/ha in 1991-92 to 126.2 kg/ha in 2001-02), followed by small holdings (53.7%) and the lowest (21.4%) on large farms. At state-level, almost a similar trend of inverse relationship between farm size and intensity of fertilizer use was observed. The only exception was the state of Punjab, where large farms showed marginally higher fertilizer use intensity (169.9 kg/ha) compared with small (164.3 kg/ha) and marginal farms (163.3 kg/ha) in 2001-02. Average fertilizer consumption was the highest in Punjab, followed by Kerala (152 kg/ha), Tamil Nadu (148.6 kg/ha), Haryana (130.7 kg/ha) and the lowest in Madhya Pradesh (30 kg/ha). State-wise Distribution of Fertilizer Subsidies: Since data on state-wise fertilizer subsidies is not available, an indirect method was used to compute state level subsidies. Such estimates suggest that more than half of total fertilizer subsidy is cornered by top five states, namely, Uttar Pradesh, Andhra Pradesh, Maharashtra, Madhya Pradesh and Punjab. Most of these states grow fertilizer-intensive crops such as rice, wheat, cotton and sugarcane. The share of these five states in 1992-93 was about 60%, which declined to 55.8% in 1999-00 and further to 54.5% in 2007-08. Other major beneficiary states were Gujarat, Karnataka, West Bengal, Bihar Haryana and Tamil Nadu. Their share in total subsidy has increased from 31.7% in 199293 to 36.4% in 2007-08. The share of less developed states like Rajasthan, Orissa, Assam, Jammu and Kashmir and Himachal Pradesh was low and they accounted for only 6.7% of total subsidy in 1992-93, which increased to about 7.9% in 1999-00 and was the same in 2007-08. The share of major fertilizer consuming states like Uttar Pradesh, Punjab, Haryana and Tamil Nadu has declined during the last one and half decade, while the share of agriculturally less developed states like Madhya Pradesh, Gujarat, Bihar, Rajasthan and Orissa has increased. Looking at absolute shares of states in total fertilizer subsidy in not a good indicator because there are large variations in total cropped area among various states. Therefore, it would be appropriate to examine inter-state equity in terms of average subsidy per hectare of cropped area. Punjab, Andhra Pradesh, Haryana, Tamil Nadu, West Bengal and Uttar Pradesh are the main beneficiaries of fertilizer subsidy on per hectare basis. In these states, fertilizer consumption per hectare is significantly higher than the national average. Out of 17 states included in the present analysis, 10 states had less than national average during 1992-93 and 1999-00 and this number fell to 8 in 2007-08. States like Maharashtra, Jammu & Kashmir, Kerala, Madhya Pradesh, Assam, Himachal Pradesh, Orissa and Rajasthan had less than national average subsidy (Rs. 2083/ha) in 2007-08. The per hectare subsidy in Punjab (Rs. 3924) was more than four times compared with states like Orissa (Rs. 824) and Rajasthan (Rs. 894). The average subsidy on per hectare basis more than doubled between 1992-93 and 1999-00 (from Rs. 331/ha to Rs. 703/ha) and almost tripled between 1999-00 and 2007-08 primarily due to increase in world prices of fertilizers and feed-stocks and intermediates. The above discussion reveals that there is a high degree of concentration of fertilizer subsidies in few states but over time the inequalities in distribution of subsidy among states have declined sharply. The coefficient of variation in the share of states in total fertilizer subsidy has declined from 96.5 percent in 1992-93 to 82.1 percent in 1999-00 and further to 76.7% in 200708. The coefficient of variation in per hectare fertilizer subsidy at state level is substantially lower and has declined more sharply from 79.3% in 1992-93 to 51.9% in 2007-08. This has happened due to improvement in rural infrastructure, irrigation facilities, coverage of area under high yielding variety seeds, easy access to fertilizers, affordable prices, and shift in crop pattern towards fertilizer intensive crops in some of these less developed states during the last decade.
Dr. S.J. Reddy
The benefits of fertilizer subsidy are not restricted to only resource-rich states but have spread to other states. Irrigated vs un-irrigated areas: It is worth mentioning that benefits of fertilizer subsidy have spread to un-irrigated areas. On un-irrigated lands the share of area treated with fertilizers has increased from 41% in 1996-97 to 53.5% in 2001-02, while this share is substantially higher in irrigated areas (91.6% in 2001-02). Likewise, the share of un-irrigated areas in total fertilizer use has also increased from 26 percent in 1996-97 to 30.7% in 2001-02. Per hectare fertilizer use on un-irrigated lands has increased by about 42.0% between 1996-97 and 2001-02 (35.8 kg/ha to 50.9 kg/ha). In case of irrigated areas, intensity of fertilizer use is significantly higher compared with un-irrigated area but has increased at a lower rate (13.1%) between 1996-97 and 2001-02. It is quite evident from the above discussion that benefits of fertilizer subsidy are not restricted to only resource-rich areas but have spread to other areas as well. The inequity in distribution of fertilizer subsidy among states is still large but has declined over time. Distribution of Subsidy across Crops: The concentration of subsidies in 2001-02 across agricultural crops in the country is evident. Rice and wheat are the major users of fertilizer subsidy accounting for over half of the total subsidy. Rice is the biggest beneficiary of fertilizer subsidy receiving 32.2% fertilizer subsidy in 2001-02. Wheat was next, with a 20.3% share of fertilizer subsidy, followed by sugarcane (6.3%). Cotton is another fertilizer intensive crop which accounted for 5.9% of total fertilizer subsidy. Coarse cereals receive a small share of fertilizers subsidy. The farmers growing fertilizer intensive crops like paddy, wheat, sugarcane and cotton are the major beneficiaries of subsidy. So there is a high degree of concentration of fertilizer subsidies in terms of crops as four crops consume nearly two-third of total fertilizer subsidy. Distribution of Fertilizer Subsidy across Farm Sizes: Fertilizer subsidies are generally criticized because they are perceived to be far from universally distributed and concentrated on relatively few producers, mainly large farmers. In order to assess whether subsidy policy benefits only large farmers or all categories of farmers, subsidy distribution patterns across different farm size groups were analyzed. We computed fertilizer subsidy on per hectare basis as well as share of different farm size groups in total subsidy. There is an inverse relationship between farm size and average subsidy per hectare. Per hectare subsidy on marginal farms was more than double compared with large farms. The average subsidy was the highest (Rs. 916.2/ha) on marginal farms and the lowest on large farms (Rs. 405.8/ha). The share of marginal farmers in total fertilizer subsidy in 2001-02 was the highest (28.3%), followed by small farms (23.0%) and the lowest on large farms (6.3%). The share of small, marginal and semi-medium farms has increased between 1996-97 and 2001-02 while the share of medium and large farms has declined. The results clearly show that fertilizer subsidy is distributed more equitably among different farm sizes compared with crop-wise and state-wise distribution of fertilizer subsidy. The AuthorsComments on the above : The author was one of the few advocating giving input subsidies to farmers directly instead of giving it to the industry based on his experience with the agriculture systems functioning in India and more particularly in Andhra Pradesh. This was part of his submissions to Honble Prime Minister as well Planning Commission on few occasions. Point 1: Theoretical vs practical: There is vast difference between theoretical and practical exercises. Unfortunately, IIM being a prestigious institution also relied heavily on
Dr. S.J. Reddy
theoretical exercise like all others in drawing their inconsistent conclusions. The authors relied heavily on the statistics published by government departments and some deduced from the air. Everybody knows how reliable are our statistical data sets compiled by government agencies!!! As professors from the prestigious institute instead relying entirely upon such data sets, should have substantiated with some field studies carried out independently at least in one state. Then this report should have carried some credibility. Let me give an example from my own experience. As an expert of Food & Agricultural Organization (FAO/UN) in Mozambique, I presented food aid requirement for different provinces in Mozambique based on my model before a committee headed by Prime Minister, which was attended by Ambassadors of all developed countries, Resident Representatives of UNDP & FAO. They were happy with my report but suggested that I should go around the country and verify the results with ground realities, for which they gave me a twin engine jet aircraft as there was no way to go by road roads were mined --. I made the trip and released the final report, which was released to press by the President of the country without any additions or deletions. Comments on issues raised in the working paper: In the working paper, as I understand, there are five issues, namely: Who are the beneficiaries? Has it been distributed uniformly? How much of what is paid out actually finds its way into the pocket of the farmer, and how much is siphoned away by the input companies -- The paper shows that general perception that about one-third of fertilizer subsidy goes to fertilizer industry is misleading The proposed policy of direct transfer of fertilizer subsidy to farmers is misconceived and inappropriate and its adverse effects outweigh the perceived benefits of it Adverse impacts on Production vs income Point 2: Issues vs lapses: The authors state that Agricultural subsidies that encourage production and productivity have been widely criticized because of the cost of subsidies and they are perceived to be far from uniformly distributed. This is a flawed statement. The criticism was not against agricultural subsidies per-se but on the contrary asking the government to increase such subsidies by fighting at WTO meetings to go on par with developed nations. Yes, the criticism is on not distributed uniformly. This is clearly evident from the data presented by the authors itself. There is no dispute as far as on fertilizer subsidy; but the question is whether the fertilizer subsidy given to fertilizer industry directly or direct transfer of fertilizer subsidy to farmers instead to fertilizer companies provide equitable distribution is the basic question that emerges from the few of the above issues. The authors havent made any attempt to justify the statement questioning the rationale for direct transfer of subsidy to farmers!!! From their presentation, it is clear that there is a clear cut disparity in fertilizer subsidy distribution among regions, among crops and among farmers (dry land to wet land; small to large farm holdings): The study shows that fertilizer subsidy is more concentrated in few states, namely, Uttar Pradesh (17.5% of share of subsidy on fertilizer during 2007-08), Andhra Pradesh (11.3%), Maharashtra (10.2%), Madhya Pradesh (7.8%), Punjab (7.7%) and Gujarat (7.0%). The authors state that Inter-state disparity in fertilizer subsidy distribution is still high though it has declined over the years;
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The study also shows that Rice is the most heavily subsidized crop (32.2%) followed by wheat (20.3%), sugarcane (6.3%), cotton (5.9%) and groundnut (3.0%). These crops account for more than two-third of total fertilizer subsidy by this, the authors also agreed that there is inter-crop disparity in fertilizer subsidy; The study highlights the existence of fair degree of equity in distribution of fertilizer subsidy among farm sizes based on pure statistics. The small and marginal farmers have a larger share in fertilizer subsidy in comparison to their share in cultivated area. 1. From the report, it is clear that there was a large gap between production and consumption during 2003-04 to 2007-08. The report also presents a steep rise in fertilizer subsidy component after 2007-08 while the fertilizer subsidy as percent of total subsidies fall steeply during 2000 to 2003 as imports were bottom low (though prices were low) and there onwards started steep increase. It looks that with the increased imports and reduced local production has given rise to in excess production over consumption. These disparities go with political parties ruling the nation at that time. During NDA time encouraged indigenous production and during Congress regime gave equal importance to indigenous production & imports. These actions are primarily related to politics of gambling to serve the vested interests. 2. In 2001-02, around 82.2% farm holdings have less than 5 acres and 6.8% farm holdings have more than 10 acres. The former group constituted 42.6% and 34.6% share in gross cropped area, respectively. However, the % share in total fertilizer consumption presents to high in the former case (52.0%) compared to the later group (25.9%). This was arrived basically because of faulty fertilizer consumption per ha figures. In fact, here it was not separated irrigated area and un-irrigated area consumption pattern -- though it was presented average kg/ha under irrigation (145.7 ha) and un-irrigated (50.9 kg/ha). These figures need substantiation with ground realities. For example: Nearly 25 to 30% of fertilizers supposed to be distributed to farmers changes hands illegally through official-political-industry channels however, with this rich farmers are not affected but all this go under small and marginal farmers binami lists; The area cultivated in a given year based on planned and actual change the figures of fertilizer under different groups manipulation; Farmers, more particularly dry land farmers collect the subsidized inputs (fertilizers, seeds, etc) sell to other needy farmers in the neigbourhood or outside the state for profit. This is more in dry years. This is not accounted, which goes under small and marginal farmers list; This year in Andhra Pradesh, with kharif rains failing as well large part did not get canal water and yet they collected fertilizers majority of them are not even started cultivation and yet claiming crop failure and thus subsidized inputs to Rabi crop, etc. These are the some of the issues that must go into while accounting the real fertilizer use under irrigation and non-irrigation agriculture on the one hand and small and rich farmers on the other hand. Government statistics do not account all these aberrations as the state government officials give manipulated figures to balance in and out of fertilizers; Whether the subsidy siphoned to industry or not, in addition, primarily relates to answering two basic questions, namely (i) on what basis the quantum of subsidy to industry is arrived? And (ii) how the fertilizer prizes are fixed by the industry? This in fact relates to bureaucratic-politico-industry nexus in sharing the subsidy component!!! We have seen in Figure 6 --. The authors have not accounted this component too. Like
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this, there are several such issues. If one goes into field, then only they know such loop holes in the government statistical data on which we derive conclusions that affect our economy and environment. Point 3: Irrigated vs un-irrigated: With the green revolution technology, a large gap has been created between dry land and wet land agriculture on the one hand and dry land and wet land crops on the other hand. For example: Irrigated agriculture: Irrigation facilities are provided with huge cost; Credits through government agencies are easily available; Subsidized inputs are provided; The produce is procured by FCI/government; Highly subsidized rice & wheat are included in PDS system that changed the food habits of the population and thereby introduced new health hazards; Through illegal export of rice minting thousands of crores by vested groups; All these encouraged growing rice after rice under highly subsidized fertilizer inputs; Fertilizer inputs introduced air, water, soils & food pollution. Un-irrigated agriculture: Crops are grown at the mercy of Rain God that vary with season to season, year to year, location to location, etc; Credits from government agencies is very difficult & thus mostly procured through private money lenders at exorbitant interests that result farmers suicides; Majority of them use organic inputs like farmyard manure which does not carry any subsidy and yet farmers suicides are rarely seen; The produce are not procured by FCI/government; The produce are not included in PDS system leave alone subsidized sale under PDS system, though it is a healthy food; That mean, highly subsidized crops are getting all encouragements but no such encouragement was given to less subsidized crops grown primarily under un-irrigated condition; Point 4: Fertilizer vs trader: In India as well in Andhra Pradesh even after six decades of Independence around 60% of the cropped area is still at the mercy of Rain God and only around 40% of the cultivated area receives irrigation. In Andhra Pradesh, only 50% of the irrigated area depends upon canal irrigation from dams and the rest depends upon lift irrigation (wells & bore wells) and tanks which again primarily depends upon rainfall in any given year. In Andhra Pradesh, the drought risk varies between 0 to 60% of the years in different zones. The risk is further amplified by chemical inputs use and planting hazard in dry land agriculture. With this, the farmers rarely use chemical inputs but use traditional inputs and unfortunately such farmers never get government subsidies. By providing input subsidies to farmers directly, help overcoming the major ills faced by farmers and there by easily replace chemical inputs by organic inputs that provide healthy food. This also eradicates the share in fertilizer subsidy hither to be enjoyed by politico-bureaucrat-industry nexus. During 2008-09 crop years, Andhra Pradesh produced bumper production, the highest so far, more particularly paddy/rice. With this neither farmer nor the government or the consumer benefited but the trader benefited through illegal export of rice to outside India and outside Andhra Pradesh all this money entered into market as black money and helped price rises in all sectors. As a result the prices of the rice in the open market doubled and thus break the back of
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Dr. Sazzala Jeevananda Reddy is an Agrometeorologist got post-graduation in Geophysics & Applied Statistics with advanced training in Meteorology & Oceanography. Dr. Reddy got his Ph. D. in Agricultural Meteorology from the The Australian National University, Canberra. Dr. Reddy has a wide experience in the field of agrometeorology and agroclimatology while working in several national and international institutions/organizations within and outside India. Dr. Reddy served Food and Agriculture Organization [FAO] as Expert & World Meteorological Organization [WMO] as Chief Technical Advisor. Dr. Reddy authored 2 books, first of its kind (i) Agroclimatic/ Agrometeorological Techniques: As applicable to dry-land agriculture in developing countries in 1993 & (ii) Vastu: A Practical Guide in English and Vastuvyamoham: Bramalu-vasthavalu in Telugu in 1997. Dr. Reddy Co-Edited a book entitled Advanced Technologies in METEOROLOGY, Tata McGraw-Hill Publ. Comp. Ltd., New Delhi (1999). Dr. Reddy also published two other books on climate change (2008 & 2010). Other books of Dr. Reddy are Andhra Pradesh Agriculture: Scenario of the last four decades in 2000 and Agriculture & Environment in 2007; and contributed articles to few books. Dr. Reddy published more than 500 scientific articles and also contributed more than 150 popular articles and several opinions on online articles. Dr. Reddy is a life Member of Indian Meteorological Society-AP Chapter (IMS), Fellow of Andhra Pradesh Akademy of Sciences, Core Committee member of Energy Conservation Mission (ECM), formerly Honry Secretary of SPEQL and General Secretary of FBH and presently Convenor Forum for a Sustainable Environment. Formerly member of Task Force Committee & Consent for Establishment Committee of APPCB, and co-opted member of Local Area Environment Committee of Supreme Court Monitoring Committee on hazardous waste management.
Dr. S.J. Reddy