Agricultural Development
for
Reducing Poverty in India
Policy Forum
Organized by IFPRI and ADB
at the
Asian Development Bank, Manila
9-10 August 2007
Dr. P.K. Mishra
Secretary to Government of India
Department of Agriculture & Cooperation
Ministry of Agriculture
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
54.88 in 1973-74 to 26.10 in 1999-2000 and 21.80 in 200405*
However, the number of poor was 321 m. in 1973-74 and
302/238 m. in 2004-05.
% of poor people increased from 45 to 64 during 1960-68,
then declined to 34 by 1990, further increased to 37 by 1994.
Since then it has a declining trend**
*Planning Commission
**FAO, 2007
Some Aspects of Rural Poverty in India: 1999-2000
Incidence
of
poverty
highest
among
rural
households engaged as
agricultural
labourers
followed
by
nonagricultural labourers in all
States
Head count ratio of poverty in rural
Self-employed agricultural areas by household type
households have relatively Self-employed
Labour
Others All
Agri
Non-Agri
Agri
Non-Agri
less poverty compared to
self-employed
in
non- 20.09 23.82 39.83 27.52 15.07 26.78
agricultural operations
Landless
and
marginal
Head count ratio by land size
farmers are among the <1.01 ha. 1.01-2.00 ha. 2.01-4.00 ha. >4.00 ha. All
30.03
22.59
17.32
10.62 26.78
poorest
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
9
8
7
5.5
%
6
5
5.5
5.0
5.8
5.8
3.4
4
4.8
3.6
3
2
7.6
6.8
3.0
2.8
2.5
2.3
1
IVth Plan
Vth Plan
VIth Plan
VIIth Plan
VIIIth Plan
IXth Plan
Xth Plan
Annual Growth Rate of Agriculture GDP
Annual Growth of Overall GDP
Linear (Annual Growth Rate of Agriculture GDP)
Growth Rates of GDP and Decline in the
incidence of Rural Poverty(%)
Growth Rates of GDP and Decline in the Incidence of Poverty - Rural (%)
Average Growth Rates (%)
Period
1960-61 to 1967-68
1967-68 to 1977-78
1977-78 to 1989-90
1989-90 to 1993-94
1993-94 to 1999-2000
1999-2000 to 2004-05
Agri GDP
2.29
4.49
3.43
3.48
3.41
2.50
Total
GDP
3.81
4.22
5.38
4.04
6.40
6.91
Chage in Poverty
Incidence
Per Capita
Absolute Compound
Incme
1.32
18.27 4.95
1.91
-13.07 -2.27
3.12
-16.3
-3.19
1.62
3.0 2.12
4.44
-10.1 -6.12
5.09
-5.4 -4.33
• 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
100
Production
In Million Tns
80
2.13
70
1.9
1.74
60
50
2
Yield
Tns/Ha
1.5
1.34
40
1
30
Area
20
In Million Ha
0.5
10
0
0
1980-81
1990-91
2000-01
2006-07
Tns/ Ha
Million Tns / Million Hectares
90
2.5
Trends of Area, Production and Yield of Wheat
80
2.7
Yield
Tns/Ha
2.7
2.5
2.3
60
2
50
40
1.6
Area
Production
In Million Ha
1.5
In Million Tns
30
1
20
0.5
10
0
0
1980-81
1990-91
2000-01
2006-07
Tns / Ha
Million Tns / Million Hectares
70
3
Trends of Area, Production and Yield of Pulses
30
0.57
25
Tns/Ha
0.62
0.6
0.54
0.5
0.47
Area
20
0.4
In Million Ha
0.3
15
0.2
10
Production
0.1
In Million Tns
5
0
1980-81
1990-91
2000-01
2006-07
Tns / Ha
Million Tns / Million Hectares
0.7
Yield
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
Crop
Rice
Wheat
Maize
Gram
Arhar
Groundnut
Rapeseed &
Mustard
Soyabean
Crop Productivity Range in India(Tonnes/Hectare) *
India
Highest
Lowest
World
(Highest)
3.69 (Punjab)
4.21 (Punjab)
3.44 (Andhra Pradesh)
1.08 (Andhra Pradesh)
1.18 (Bihar)
2.23 (Gujarat)
1.00 (Madhya Pradesh)
1.78 (Bihar)
1.39 (Uttar Pradesh)
0.58 (Maharashtra)
0.37 (Karnataka)
0.58 (Karnataka)
8-10
10
10
2
2
3.5
1.56 (Haryana)
0.52 (Assam)
3.6
1.57 (Andhra Pradesh)
1.13 (Madhya Pradesh)
* In Major Producing States
Factors required to be addressed
A. Soil Health and Nutrient Management
C. Seed Management
B. Water Management
D. Farm Mechanization
2.8
11th 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 - 11th Plan
GDP Share % Proposed Gr. Rate
% per annum
Crops
Foodgrains 26
Oilseeds 7
Other crops 15
Horticulture
Livestocks
Fisheries
Forestry/logging
Total
48
2.70
2.3
4.0
3.0
19
25
5.0%
6.0%
4
6.0%
4
100
0.0%
4.10%
•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
Growth Drivers
Animal Husbandry and Dairy
Fisheries
Institutional Support
 Extension
 Credit
 Marketing and Post- harvest Management
 Risk Management
 Price Support System
•
•
•
Linking farmers to market
Focus on low-productivity but high potential districts
Improve Farmers’ Income
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
processing
structure
for
sustainable
production
Issues of MSP, Market Intervention and procurement
Diversification vs. Food Security
&
Key Areas for the Days Ahead
• Agricultural Research
• Extension and technology transfer
• Diversification and food security
• Post-harvest management and supply chain
• Managing agricultural risks: yield and price
• Rural non-farm sector
• Appropriate Policy design and implementation