ICAR-NCAP Annual Report 2008-09

Abstract

The National Centre for Agricultural Economics and Policy Research (NCAP) continued its efforts towards achieving excellence in agricultural economics and policy research in the country. The research studies of the Centre have enormously helped the Council in participating in agricultural policy debates and decisions more vigorously. The Centre has 20 scientists (including one ICAR National Professor) and 15 other staff in the year 2008-09. The total expenditure of the Centre during the financial year 2008-09 was Rs. 517.37 lakh. A high-powered Research Advisory Committee guides the Centre on its research programmes, and a Management Committee administers the functioning of the Centre. Besides, a number of internal committees like budget committee, store purchase committee, publication committee, library committee, ARIS committee, consultancy processing committee, etc. facilitate the decentralised management of the Centre. Research studies which are topical in nature are conducted at the Centre under five broad themes, viz. technology policy, sustainable agricultural systems, markets and trade, institutional change, and agricultural growth and modelling. Each theme area is headed by a senior professional with the support of designated team of scientists. Research programmes within and across the themes are so designed as to accomplish the mandate of the Centre. During the year 2008-09, the Centre has conducted 35 research studies. Six consultancy projects have also been completed by the Centre during the year. The research achievements and a glimpse of activities undertaken during 2008-09 are reported below: In recent years, the role of agricultural technologies in agricultural productivity is questioned. Hence, the Centre has conducted several impact assessment studies. l Studies have shown that applications of improved technologies increased productivity manifold in various crops and species. Analysis has revealed that on an average, 19.8 per cent gains in wheat yield were attributed to improved technologies during 1999-00 to 2004-05. Technology led growth in livestock sector contributed to annual growth rate of 2.3 per cent during the period 1970-71 to 2003-04. Adoption of pen culture of fish in Bihar has shown that average Benefit Cost Ratio (B:C ratio) was 1.39. l Based on a study on research impact, it may be inferred that favourable pricing and research efforts have helped in promoting potato production in India level. At all-india level, one per cent increase in research expenditure on potato would increase the supply of potato production by one per cent, and one per cent increase in price of potato would increase the production by 0.68 per cent. With increasing feminisation of Indian agriculture, it was considered important to analyse the contribution of female folk in agriculture and impact of technologies on them. l The study on female participation in agriculture has revealed that over the period of past 20 years, female participation in entire agricultural sector has increased barring fisheries, maximum increase being in the livestock production and agricultural sector (12%). Hence, research investment in livestock production can provide them better opportunities in terms of income and employment. xvi NCAP Annual Report 2008-09 l In a study of impact of Integrated Pest Management (IPM) on women farmers, analysis showed that IPM in vegetable cultivation increases yield (12%) and reduces cost (16-20%). It caused positive impact on women farmers as female participation rate is more than double in vegetable cultivation (67.4%). The studies of the performance of production of important food commodities like wheat and potato suggest various measures needed to increase production. Another study identified the determinant of technical efficiency in milk production and suggested ways forward. l Study has shown that the recent negative growth rates in almost all crops across regions including wheat production is due to unfavourable policies. In case of potato, the negative growth in yield has been due to injudicious use of nutrients, erratic irrigation, poor seed replacement and wide fluctuations in temperature, causing diseases and frost during tuber setting. The Total Factor Productivity (TFP) led growth in food crops is necessary to meet the challenge of food security. l A study on technical efficiency in milk production explored the possibilities of productivity enhancement through improvement in technical efficiencies of the existing resources and technologies. It concluded that average dairy farmer could enhance milk production by 25 per cent with existing level of technology and resources. The technical efficiency has shown a scale-biasness against small farmers which suggests that small holders need special attention in terms of technological policy and institutional intervention. The quality deterioration of the resources is becoming a major constraint to agricultural development. Intensive cultivation practices in agriculture have posed severe stress on agricultural resources, resulting in degradation of soil and rapid consumption of finite resources. Therefore, the Centre has undertaken studies to suggest policy options for sustainability of agriculture. l A study on desertification in India examines the impact of desertification on food production, livelihood securities and human development indicators. The study concluded that in sample districts, cereal-based farming system is the most important livelihood strategy followed by livestock based systems. Also, due to sub-divisions of landholdings into tiny pieces, the livelihood strategy is undergoing a change towards cash crops and non-farm employment opportunities. l A study was conducted for evaluating the economic and ecological benefits and other impact of System of Rice Intensification (SRI) in Tamil Nadu. The findings showed that SRI gives higher returns and conserves water to the tune of 22-39 per cent over the normal practice. It provided higher production at lesser cost along with fulfilling economic as well as environmental criteria. Therefore, such innovative practices address the burning issues of productivity enhancement and conservation of precious resources in agriculture. l A study on valuation of crop biodiversity cautioned that the magnitude of genetic erosion of crop diversity is alarmingly high at national level. Loss of 95 per cent of local land races of rice in Andhra Pradesh, 10 per cent of local rice varieties in 10 years in north-eastern states and 12-73 per cent in past 15-20 years in Tripura was reported. The study advocated for an appropriate national policy for biodiversity conservation which is in tandem with economic and social development policies. Marketing of farm produce is a key activity in the agricultural value chain. Trade in agricultural commodities, both within and outside the border is rapidly gaining importance, especially with the onset of World Trade xvii NCAP Annual Report 2008-09 Organization (WTO) regime and various related developments. The Centre has recognised the importance of this prime area in time and initiated various studies on marketing and trade aspects of horticulture, livestock, fisheries, fertilisers and so on. l Adoption of food safety practices for milk production at farm level was observed to have significant positive relationship with herd size (0.93%) and milk price (0.3%). The effect of dairy cooperatives on the compliance of food safety measures is found to be positive. Greater sensitisation, awareness creation and upgradation of skills of the farmers were needed for improved compliance with food safety measures at farm level. l Analysis of marketing models of horticulture and fisheries in the WTO regime has revealed that a farmer is getting only one rupee out of every Rs. 3.50 paid by the consumer and the retailer is getting Rs. 0.75. The study also concluded that new models in fish retailing and private market models such as Reliance and Subhiksha are better than their traditional counterparts in terms of operating hours, price advantage to consumers, hygiene and consumer acceptance. l A study on growth, imbalances and subsidies in fertilisers shows that a decline in fertiliser use in India from 18.07 million tonnes to 16.79 million tonnes during 1999-00 to 2003-04, has caused slowdown in agricultural growth in India. Investments are needed to expand the fertiliser production capacity as dependence on imported fertiliser has exceeded 35 per cent of fertilisers used in the country. Fertiliser subsidy per hectare of net cultivated area ranges from Rs. 393 in Rajasthan to Rs. 3167 in Punjab. The study concluded that complete withdrawal of subsidies on fertilisers is likely to decrease foodgrain production by close to nine per cent. l A study to identify the determinants of export performance of livestock products revealed that India’s livestock export will increase by 0.21 per cent as a result of 1 per cent increase in the Gross Domestic Product (GDP) of the destination countries. GDP per capita of destination countries had negative influence on the export of dairy products from India. With one per cent increase in distance between India and the importing countries, India tends to decrease exports of dairy products, meat products and eggs by 0.74 per cent, 0.90 per cent and 0.28 per cent respectively. Trade policy index was found significant only for the aggregate exports of livestock products. The study concluded that strengthening of export supply capacity domestically holds the key for enhancing export of livestock products. l Integration of milk markets ensures consistent supplies to the consumers. Five major milk markets viz. Chennai, Delhi, Kanpur, Kolkata and Mumbai are co-integrated with long run equilibrium relationship. Chennai, Delhi and Kanpur are weakly exogenous to the system, implying the sensitibility of these markets to the policy shocks in the milk market. Share of fisheries sector in agriculture has been growing rapidly. The Centre has undertaken some studies on this important sector including supply, demand, trade and price integration. l Fish production in India has increased. It tripled from 2.44 million tonnes in 1980 to about 6.87 million tonnes in 2008. The studies revealed that domestic demand for fish under the baseline scenario is likely to grow at an annual rate of 2.5 per cent between 2000 and 2020. Regarding production, fresh fish output growth is projected slightly above three per cent. The highest growth of export is projected for shrimp (4.73%). xviii NCAP Annual Report 2008-09 l An analysis of spatial price integration and price transmission unveiled the complicated price transmission mechanism between various fish markets in the country and suggested necessity of price integration between the markets to address the supply side constraints. l Case studies on efficiency of marketing of different fish species concluded that information about marketing entrepreneurship of the trader and innovations in packing have ensured the trading of fish at best possible price. However, a study on fish and fishery products export highlighted that 47 cases of imports were refused by USA in 2007-08 due to lack of hygienic practices in packaging and processing. Considering the importance of emerging institutions in Indian agriculture, the Centre has conducted studies on institutional arrangements like contract farming, linkage of infrastructure with agricultural development, linkage of research with extension, farmers and markets, credit, insurance and institutions for fish marketing. l A study of agricultural supply chain in case of potato revealed that information flow among processors, retailers and consumers was satisfactory but very weak among the public R&D, extension system, producers and processors. This is because of lack of clearly defined areas of cooperation between them. It was also revealed that net returns of contract farmers were 19-24 per cent higher than that of the non-contract farmers. l The analysis of linkages between infrastructure and agricultural development indicates that transport, power, irrigation and research infrastructure affect the agricultural productivity in a significant manner. The cost benefit analysis of alternative infrastructure highlighted that the cost of providing and/or maintaining these infrastructures is high but benefits are multiple in nature and have multiplier effect including spillover benefits of other economic and social infrastructures. l Case studies like rural bio-resource complex and banana fibre extractor highlighted the importance of appropriate linkages among research-extension-farmer-markets. l A study on implications of debt waiver and debt relief scheme revealed that the : (i) social harmony between beneficiary and non-beneficiary farmers was not affected; (ii) due incentives are required for non-defaulters; (iii) crop loan recovery dropped; (iv) increasing tendency towards institutional loans was observed; and (v) one-time settlement scheme was not a success. l Study of the Rs. 5000/- credit incentive scheme of Government of Andhra Pradesh revealed that nondefaulters are not happy and felt that there should not be so much discrimination while benefits are being provided by the government to farmers. l A study on agricultural insurance revealed that weather-based crop insurance scheme is a unique product to provide insurance protection against losses in crop yield resulting from adverse weather perils. Weatherbased insurance policy has been sold to 5.39 lakh farmers in India till date. Important features of this scheme are : (i) low and flexible premium rates; (ii) minimising moral hazard; (iii) quicker settlement of claims; (iv) requirement of small administrative set-up; (v) moderate and affordable; and (vi) transparent and easily verifiable. l A study on fish marketing in India documented successful marketing models to draw lessons to provide enabling environment for upscaling and replication in similar socio-politico-economic settings. xix NCAP Annual Report 2008-09 Slow growth in agriculture during the past few years has led to a crisis in Indian agriculture. Accelerating the growth in agriculture is a major challenge before researchers and policymakers. The Centre has conducted several studies to analyse the growth performance of agriculture and livestock sector, global food and financial crises, trends in public and private investments, rural employment etc. l The main factors of escalation of food prices at the global level are : (i) increase in price of crude oil; (ii) supplies not keeping pace with demand; and (iii) diversion of grain for liquid biofuel. Long term trend analysis indicated high and rising prices in future over base period 2005 price. To deal with the harsh reality of high food prices and its effects on poverty, due attention is required towards agriculture sector. l India’s per capita income grew at an annual rate of 3.1 per cent during 1980-81 to 1991-92 and 3.8 per cent during 1992-93 to 2004-05. Study on growth performance of states, and convergence during this period revealed a clear evidence of rising regional disparities in India after initiation of economic reforms programme in 1991. The study concluded that in a dynamics scenario, income growth accelerated in middle income states, decelerated in most rich states and neither accelerated nor decelerated in poor states during 1980-81 to 2004-05. It was observed that in the poor states (Bihar, Orissa, Uttar Pradesh and Madhya Pradesh), employment pressure on agriculture continues to be very high, indicating the presence of disguised or under employment. The disguised unemployed rural populations have to be moved into other enterprises but they do not have necessary skills to be absorbed in current industries where limited jobs exist. Building secondary agro-industries in rural areas and creating job for the local people is the only way to address this burgeoning problem. l The implications of underlying trends in public and private investment on output growth were studied, and it revealed that decline in public investment did not cause any adverse impact on private investments. l An analysis of various patterns, trends and successes achieved in diversification towards horticulture since 1970-71 at national and state level, revealed that higher returns relative to other crop groups is the main underlying factor for the diversification towards horticulture. During 1980-81 to 2005-06, share of fruits and vegetables in total cropped area of the country increased from 2.8 to 4.9 per cent and in crops, output increased from 15.95 per cent to 25.61 per cent. There is some slowdown in productivity growth of all crop groups after 2000-01 but the change is negative for fruits and vegetables. The decline in productivity of fruits and vegetables needs to be addressed. l A study on factors affecting the growth of livestock sector shows that its growth can be accelerated by improving feed and quality and composition of livestock, veterinary facilities, output marketing and institutional interventions. In order to achieve targeted growth rate of six per cent in livestock output, progress in livestock infrastructure, institutional efforts and availability of livestock feed is required to be accelerated by 50 per cent. The economic backwardness of the North-East India is a national concern. More particularly, agricultural productivity is low and risky in North-Eastern Region. Therefore, it is important to identify future sources of growth in North-East India. It was concluded that the region needs to diversify agricultural activities and respond to changing structure of the economy. xx NCAP Annual Report 2008-09 The NCAP website available at http://www.ncap.res.in has been redesigned and regularly updated. Regular monitoring of our website users indicated that policy briefs, workshop proceedings and policy papers were the most referred publications during the year. The NCAP publications are now available in the PDF format and can be downloaded. The Agricultural Research Information System (ARIS) facility at the Centre has been equipped with 2 MBPS leased line from Education and Research Network (ERNET) to strengthen the existing e-mail and internet facilities to NCAP staff. The Centre has its independent mail server which is being used to its potential. As part of the dissemination of research output, policy advocacy and communication, the Centre and its staff has published five policy briefs, 32 journal articles, 25 book chapters/popular articles, and 6 research reports working papers during the current year. The Centre’s staff has been involved in a number of professional and policy interactions and projects. Ten workshops and several meetings at NCAP and outside are organised during the year. The Centre maintains close linkages with 41 national and 12 international organisations and involved in agricultural research, development and policy. Collaborative research project, seminars, workshops, publications and participation in policymaking bodies are the usual modes of policy interface which help improve the outreach activities of NCAP. These activities made greater impact and wider visibility of the Centre during the year.