Annual Report

Abstract

The National Centre for Agricultural Economics and Policy Research (NCAP) is making persistent efforts to sustain excellence in agricultural economics and policy research in the country. The Centre serves as a policy think tank and helps the ICAR through credible research to actively participate in policy debates and decisions and in monitoring and interpreting the research impacts at various levels. The Centre sensitises policy planners in the country and ICAR about the emerging changes and concerns related to agriculture and farmers. Besides helping ICAR, the Centre also provides policy inputs to several other public sector organisations, Departments, Ministries and various state governments. The Centre had 18 scientists and 16 other staff in the year 2011-12. The total expenditure of the Centre, including externally funded projects, during the year was Rs 734 lakh. A Research Advisory Committee chaired by Prof. V S Vyas, a distinguished economist and member, Prime Minister’s Economic Advisory Council, guides the Centre in its research programmes, and a Management Committee guides its overall functioning. Besides, a number of committees (mandated by ICAR and internal) facilitate decentralised management of the Centre. Research is conducted at the Centre under five broad themes, viz. technology policy, sustainable agricultural systems, markets and trade, institutional change and agricultural growth and modelling. During the year 2011-12, the Centre undertook 15 research projects and completed four consultancy research studies. It has not only maintained but also increased the linkages and collaborations with many institutions in India and abroad. Besides, it organised a number of workshops, trainings, brainstorming sessions and policy discussions. A brief account of research and other activities undertaken by the Centre during 2011-12 is given below. ● A study on proposed Seeds Bill 2011 has shown that in quality seed production, participation of the public sector has increased faster than of the private sector in recent years. Increased supply of quality seed has been an important factor for acceleration in agricultural growth after 2004-05. Still, there is a large mismatch between availability and requirement of good quality seeds, not only of hybrids, but of self-pollinated crops also. Prolonged indecisiveness in enacting this important piece of legislation is impinging on the technology spread in agriculture. ● Research on compliance with food safety standards in milk production in the states of Bihar, Punjab and Uttar Pradesh has shown significant variations in the adoption intensity of food safety practices. The cost of compliance with food safety measures is found to be Re 0.50/litre, but it contributes to better price realisation. EXECUTIVE SUMMARY xvi ● A study conducted to assess the economic impact of foot-and-mouth disease in Andhra Pradesh has revealed an average per farm benefit of about Rs 22,300 on account the Control Programme (CP). ● The visioning exercise in dairy sector has estimated the total economic demand for milk by 2021 under normal, high and low growth scenarios as 132 million tonnes, 140 million tonnes and 123 million tonnes, respectively. ● The visioning exercise for hill agriculture, based on experience of Himachal Pradesh, has pointed to a less cereal-oriented future farming scenario. The yield gaps in different fruits have been estimated to be in the range of 4-117 q/ha and their addressal would help in attaining higher farm profitability. In the context of impending climate change and climate variability, protected and conservation agriculture would gain currency in the future. ● Quantification of the impact of Bt cotton adoption in India has revealed a benefit of approximately Rs 220 billion. Eighty-five per cent of it accrues to producers and the rest to the private sector seed companies and marketing firms. Statewise, the highest benefits were recorded in Maharashtra, followed by Gujarat. ● With the introduction of Bt hybrids, more than 90 per cent of cotton area in India has gone under hybrids in all the states. In India, the private seed companies have promoted Bt cotton following the route of hybrid so that they can extract surpluses through sale of hybrid seeds every year. The total hybridisation inadvertently renders the farmers’ rights infructuous, as the seeds cannot be used for further cultivation. As a consequence, the varietal composition, fibre composition and cost of cultivation have undergone a sea change. In this context, the public sector institutions can capitalise the comparative advantage in producing openpollinated Bt cotton varieties. ● Watershed Development Programmes (WDPs) have attained, at least partly, the immediate goals of rain water harvesting and increasing crop productivity; the larger goals are yet to be achieved. ● A new project has been initiated to assess the impacts of climate change on agriculture as well as to identify adaptation strategies and options for its mainstreaming with larger developmental pathways, with the funding support of National Initiatives on Climate Resilient Agriculture (NICRA). ● The study on awareness of conservation agriculture among the farmers of Mewat district of Haryana has revealed the existence of a wide gap between the technologies available at the research level and knowledge about them at the farmers’ level. ● A comprehensive sustainability indicator has been constructed based on the Driving Force - Pressure - States - Impact - Response (DPSIR) framework by taking into consideration the ecological, economic and social dimensions of agricultural sustainability. The sustainability indicator has revealed that the states of Jammu & Kashmir and Himachal Pradesh remained at first and second places, respectively during the period 1990-91 to 2007-08. The association between economic and ecological sustainability indicators has tended towards a negative direction, and the magnitude has become stronger over the years. ● At national level, the overall growth in application of NPK has been 4.15 per cent per year during the period 1991-92 to 2010- xvii 11. Over the years, fertiliser-use in the country has moved in favour of P and K. ● NCAP has developed two outlook modelsone for grains and the other for oilseedsunder a dynamic as well as spatial partial equilibrium modelling framework, incorporating a system of simultaneous equations for effectively depicting the linkages between various economic variables corresponding to the food balance sheet of major foodgrains in India. The Outlook Model for Grains focuses on three major staple foodgrains of India, viz. rice, wheat and maize, along with their interrelations with other complementary and substitute crops. The Outlook Model for Oilseeds developed with a similar scope and applications, focuses on major oilseeds, viz. rapeseed & mustard, groundnut and soybean, as the primary commodities. ● A study on market integration and price transmission in rice and wheat in India has shown that the transmission from international prices to farm gate prices is asymmetric and the short-run shocks in international prices do not have a significant influence on the domestic prices at any level of wheat supply chain. Effective intervention by the Government in rice and wheat markets, and insulation of domestic fertilizer prices from increase in international prices of crude oil and fertilizer are the major reasons for this. ● The study on export performance of meat from India has shown an increase in domestic production (from 2.6 million tonnes in 1980 to 6.3 million tonnes in 2010) and export of meat. Buffalo meat is the most competitive meat produced in India. The major factors that may drive the Indian meat export are identified as adjusting our export strategy in tune with the international prices, increasing competitiveness of Indian meat industry, increasing the domestic meat production and greater compliance with the sanitary and phyto-sanitory measures. The export demand for small ruminant meat was ruling high and leading to faster growth in export as compared to growth in production. ● The agricultural productivity of marginal and small holdings has been found to be much higher than the average productivity for allsize categories, but they are weak in terms of generating adequate income and sustaining livelihood. Despite high productivity, tiny holdings (below 0.8 hectare) do not generate enough income to keep farm family out of poverty. The fertilizer-use per unit of area, irrigation intensity, cropping intensity and area coverage under high-yielding varieties decline with increase in farm size. The inverse relationship between farm size and productivity has become stronger with time. ● On an average, MGNREG Scheme has provided employment to the tune of 18 per cent of the total employment of the beneficiary households. The share of the Scheme in total employment was more in agriculturally backward area (25%) than in the developed area (14%). ● The role of banks has been and will continue to be critical for scaling-up of crop insurance, since their outreach and penetration in the rural hinterlands cannot be matched by any alternative channel for delivery of subsidydriven crop insurance. ● A design of insurance product for potato has been developed in collaboration with Agriculture Insurance Company of India Limited (AICL) and Punjab Agricultural University (PAU), taking into consideration the perceptions of farmers of Punjab. xviii ● Once the distributional distortions are negated, the coverage of Kisan Credit Cards (KCCs), a major vehicle for delivering institutional credit to the agriculture sector, is reduced by one-third to reach 48 per cent at national level. ● The study conducted to examine the effectiveness of SHGs in agriculture in Andhra Pradesh and Kerala has revealed that SHGs are most effective in resource mobilisation, followed by capacity building, providing access to extension services and technology adoption. Group effectiveness is least in marketing aspects of agricultural commodities. ● Female participation in agriculture has been found declining at the national level over a period of 15 years ending 2009-10; however, the rate of decline is higher in the Eastern India (Bihar, Jharkhand and Odisha) than at national level. ● The agricultural sector in the country has witnessed wide variations in growth performance during different phases of technology and policy. Technology-led growth tempo of early green revolution phase was sustained during the period of wider dissemination of technology (1975-76 to 1988- 89), but the subsequent period witnessed the growth becoming broad-based with diversification of production towards horticultural and cash crops. The post-reforms period experienced a visible deceleration of growth in most of the major crops due to a significant diversion of resources away from agriculture which continued up to the year, 2004-05. A sharp recovery has been realised since then, due to a conscious hike in public and private investments and a substantial improvement in terms of trade in favour of agricultural sector. ● A study undertaken to analyse the impact of agricultural productivity, rural literacy, and real rural wages on rural poverty has revealed a significant depressing effect of all the three variables on rural poverty; the highest effect being exerted by agricultural NSDP per rural population. ● The Centre conducted a Summer School on “Decision Support System in Agriculture using Economic Tools” and two trainings on “Quantitative Techniques for Agriculture Policy Analysis” and “Developing Agricultural Commodity Outlook Models for Policy Analysis”. NCAP also provided training on “Core Issues in Agriculture” to the probationers of Indian Economic Service (IES). Besides, the Centre conducted several theme/project-wise trainings, interaction meetings, workshops, etc. which helped in capacity building of the project partners. ● As part of the dissemination of research output, the Centre published two Policy Briefs and one Policy Paper during the year under report. The staff of the Centre published more than 35 research papers in leading journals of national and international repute and contributed 13 book chapters/ popular articles. The scientists of the Centre were involved in a number of professional and policy interactions and projects. The website of NCAP (www.ncap.res.in) was regularly updated and all the publications of the Centre were uploaded on the website. During the period under report, reviewing of the Centre for the period 2006-2010 was also carried out by the Quinquennial Review Team (QRT) with Dr S S Acharya as Chair. The Team assessed the overall performance of the Centre in terms of achieving the mandates as well as on institutional management. Out of the three xix mandates, the performance of the Centre in respect of two mandates, viz. policy oriented research and enhancing ICAR’s participation in policy discussions was rated ‘Outstanding’ by the QRT. The performance in capacity building was less than expectations, but was assessed as ‘Above average and Good’. Considering all the three mandates together, the score of NCAP was 9.13 out of 10. Based on the recommendations made by the QRT, the General Body of ICAR has approved to raise the Centre to the level of an Institute. The major infrastructural development during the period was construction of a record-cum-exhibition room.