ICAR-NIAP Annual Report 2004-05

Abstract

National Centre for Agricultural Economics and Policy Research (NCAP) was established in 1991 by the Indian Council of Agricultural Research to strengthen policy research in agriculture. The mandate of NCAP includes; conducting policy research, strengthening research and teaching in agricultural economics and enhancing ICAR participation in policy dialogue and decision. The Centre has 17 scientists, including one National Professor, one National Fellow and one Principal Scientist on deputation to IFPRI, Washington D.C., USA. The total grant received by NCAP during the year was Rs. 307.75 lakh from ICAR and Rs. 73.91 lakh from other sources. The total expenditure during the year was Rs. 381.66 lakh. • The Centre is guided by a Research Advisory Committee (RAC), chaired by an eminent agricultural economist, Prof. V. Rajagopalan. The members are: Dr G. K. Chadha (VC, JNU), Prof. Abhijit Sen (Member, Planning Commission, GOI), Dr. G. S. Ram (Former Chief Economic Advisor, Ministry of Labour, GOI), Dr. I. J. Singh (Former Dean, CCSHAU, Hisar), Dr. D. K. Marothia (Professor and Head, Department of Agricultural Economics, IGKVV, Raipur), Dr. J. P. Mishra (ADG, ICAR) and Dr. Mruthyunjaya (Director, NCAP). Two representatives from the farming community, Shri D.S. Ananth, and Prof. Ram Pravesh Singh, are the other members of RAC. • The functioning of the Centre is supervised by a Management Committee (MC) which is constituted and mandated by ICAR under the chairmanship of the Director. A number of other internal committees facilitate decentralized management of the Centre s activities. • The Centre continued its efforts towards achieving excellence in the area of agricultural economics and policy research. The research achievements of the Centre are described under five themes: Technology Policy, Sustainable Agricultural Systems, Markets and Trade, Institutional Change, and Agricultural Growth and Modeling. • There were 25 ongoing projects in the Centre in the year 2004-05. The Centre undertook seven consultancy projects during the year. The Centre has maintained and increased linkages with many institutions in India and abroad. The Centre has organized several workshops, trainings and seminars covering topical areas such as Bio-informatics, assessing costs and commercial worth of agricultural technologies, quantitative methodologies for agricultural policy research, rural innovations etc. Technology policy research covered agricultural R&D, seed sector, intellectual property rights, resource use efficiency, agricultural diversification and food security issues. • There has been an increasing trend for privatization of Indian seed industry. A significant proportion of farmers irrespective of farm size purchase seeds from commercial sources for quality consideration. There have also been increasing instances of partnerships and contractual arrangements between the seed agencies and research institutions. • Considering the low labour absorption capacity of the farm economy, generation of gainful employment in non-farm sector in the rural areas is essential for poverty alleviation. Development of livestock, horticulture and fishery sectors and emphasis on agro-processing would generate Executive Summary Annual Report, 2004-2005 ix NCAP Annual Report 2004-2005 NATIONAL CENTRE FOR AGRICULTURAL ECONOMICS AND POLICY RESEARCH x employment opportunities in rural areas through direct absorption of labour as well as strengthening of non-farm sector by fostering backward and forward linkages. Besides, concerted efforts should be made to equip and empower rural poor, particularly women, by upgrading their skills, and providing access to credit and technologies. • The Indian agricultural R&D is still dominated by public organizations, but private R&D is now expanding rapidly. The analysis of public-private partnership in agricultural R&D advocated that collaboration between public-private institutions could complement each other s role. Both the sectors should develop mutual trust and confidence and learn from the experience. In particular, the public sector should take lead in transfer of technologies, and wherever necessary provide capacity building at the grass root level for technology adaptation. • An analysis of resource allocation for agricultural research in National Agricultural Research System (NARS) revealed that about 95 percent of the scientists are in the public sector. Out of this, SAUs account for more than 56 percent. It was also observed that ICAR scientists are more research focused as compared to those in other institutions. Further, agricultural research in the country is dominated by crop sector. However, over the last decade or so the ICAR has been placing more emphasis on livestock and fisheries research. The private sector relatively paid less attention to livestock and fisheries research. A normative allocation profile by incorporating criteria like efficiency, equity, sustainability, trade and value addition suggests marginal readjustments where to add incremental resources and where to consolidate. This exercise would be helpful in improving the information base for decision making process. • A study of Indian oilseeds sector revealed the existence of technical inefficiencies in oilseed production to the tune of 25 to 40 percent. At the processing unit level, the inefficiencies were observed on an average at about 20 to 30 percent. Providing quality seeds in time, improving farmer's education and adoption of technical know-how need due attention to raise technical efficiencies in oilseeds production. For improving efficiencies at processing level, efforts should be made to improve machines for oilseeds crushing and regular supply of raw materials through institutional/contractual arrangements. • The technological interventions and crop diversification in tribal, backward and hilly areas improved consumption of food items and bridged the consumption gap with respect to recommended dietary allowances (RDA). It also helped in augmenting income and generating employment. • Livestock production is gradually getting intensified in India. The intensification would create opportunities for producers especially smallholders to enhance their income, however, in urban areas it would cause some adverse implications in terms of environmental pollution and deterioration in civic amenities. The current productivity of Indian livestock is low, suggesting considerable scope for productivity-led intensification with less stress on natural resources. Therefore, future growth in livestock production must come from productivity increases rather through increase in numbers. • High value agriculture is likely to emerge as an important source of agricultural growth and it is expected to be more equitable as the smallholders have a greater tendency to diversify. Nevertheless, high value agriculture may come under stress for want of adequate technology, infrastructure and policy support. High value agriculture has greater production and market risks, and there is clearly a need to provide a cushion to producers against these risks. Mitigating NCAP Annual Report 2004-2005 NATIONAL CENTRE FOR AGRICULTURAL ECONOMICS AND POLICY RESEARCH xi production risks would require improved technologies, quality inputs, insurance mechanisms and increasing participation of financial institutions, which hitherto have a thin spread and are not easily accessible to producers especially the smallholders. • The study on technical efficiency in shrimp farming and freshwater aquaculture suggested that there was considerable scope to raise shrimp/fish production at existing level of input use and technology. Nevertheless, there were considerable differences in technical efficiency across farms. Large differences in productivity and efficiency across farms as well as states call for exchange of expertise and experience to improve and strengthen the aquaculture activity. The study suggested for evolving support system for small farmers, making leasing policy tenant friendly and developing appropriate and comprehensive extension and research strategies. • The contribution made by technological change in the development of fisheries sector in India was found to be substantial and it had considerable impact on the social welfare of both producers as well as consumers. The internal rate of return to investment in fisheries research and development would be in the range of 42 to 55 per cent under different TFP scenarios. Sustainable Agricultural Systems research gave thrust on impact of zero-tillage technology, IPM, spatial and temporal variations in agricultural productivity impacts, sustainability status and dimensions of agro-ecological regions. • Adoption of zero-tillage technology in wheat has been found to be economically as well as environmentally beneficial in Indo-Gangetic Plain areas of Punjab, Haryana, Uttaranchal, Uttar Pradesh and Bihar. Reduced cost of land preparation and less use of groundwater would save 33 litres of diesel per hectare, which if translated in terms of reduced CO2 emission will be equivalent to 88 kg per hectare. Thus, expected spread of zero-tillage technology to 3 million hectares by 2010 would bring in substantial economic as well as environmental benefits in the region. • Economic benefits of integrated pest management (IPM) covering cabbage, tomato, pigeon pea, cotton, groundnut and chickpea have been quantified. The adoption of IPM technology could save the operational cost by Rs. 259 per hectare and increase the crop yield by 267 kg per hectare. Net incremental benefit due to IPM has been estimated at Rs. 4272 per hectare. • The agricultural R&D in India over the past decades has boosted the productivity levels of several crops across districts. However, the states like Madhya Pradesh, Bihar and Orissa have been found lagging behind in the rice productivity growth. Even in the case of advanced states like Tamil Nadu, Andhra Pradesh and Punjab, the efficiency differential ranges from 2.5 to 4.3. Such efficiency gaps existing at farm level even in advanced states point towards the potential for targeting productivity growth with efficiency. • Sustainable agricultural development has to balance the future production growth in diverse agro ecological regions without degrading the natural resource base. The analysis of sustainable livelihood security indices revealed that out of 52 agro-ecological sub-regions (AESRs), 10 AESRs have shown declining status of sustainability and 11 AESRs have improved their sustainability levels while the rest have maintained status quo during the 1990s. Market and trade studies focused on reforms in agricultural markets, institutions, WTO related issues, trade liberalization impacts and food safety measures. • An evaluation of functioning of agricultural markets showed that markets for large number of commodities are competitive in the segment where agro-commercial firms are involved in NCAP Annual Report 2004-2005 NATIONAL CENTRE FOR AGRICULTURAL ECONOMICS AND POLICY RESEARCH xii transactions with other agro-commercial firms. Markets are less competitive where business firms are dealing with consumers and producers. This is reflected in collusive behaviour of the buyers and imperfections at retail level. In order to provide more competition at retail level and to benefit consumers and producers, innovative marketing mechanisms like Apni Mandi and Producers Sale Counters in consumer centers should be promoted. • Growth in fisheries export was significantly affected by degree of competitiveness, level of global export of fisheries, and trade liberalization. World demand for fisheries exports contributed about 71 percent growth in fisheries exports from India. The trade liberalization emerged as the second most important determinant and boosted growth in fisheries export by about 24 per cent. Export of fisheries from India in future would be largely determined by the consistent compliance with food safety measures. Steps should be taken to devise appropriate institutional mechanisms to bring scattered small producers and processors under a network so that they can effectively participate in the emerging processing procedure to reap the benefits of expanding global fish trade. • The reforms in major areas of agriculture marketing at country level need to be in tune with requirement of WTO. Some marketing institutions have initiated reforms and are moving towards commercialization using information technologies. The process of reforms in these marketing institutions, however, is slow and limited in coverage. Therefore, the reform canvas has to be widened and pace has to be accelerated. The studies under institutional change touched upon the issues of agricultural research, food security and agricultural biotechnology, ICT based initiatives in public, private and NGOs, extension policies and success & failures of community organizations. • Evaluation of ICT-based initiatives revealed subtle differences in implementing ICTs projects among public and private sector institutions and NGOs. Each initiative is a unique model in the application of ICTs to agriculture and has merits and constraints of its own. • Some private companies initiated one-stop farm solution centers in different parts of the country. An evaluation of this initiative concluded that private extension intiatives were both a useful and viable alternative to public services for medium and large scale farmers but discriminated against the poor. • The analysis of national extension policy in selected Asian countries revealed that the existing culture of extension organizations might prevent the emergence of learning based approaches to reinvent extension. Changing these cultures are yet the biggest challenge to reinvent extension in Asia. Under the area of agricultural growth and modeling studies were focused on agricultural growth during the reforms, capital formation, contract farming. • The growth rate analysis showed that initial years of reforms were somewhat favourable for agricultural growth but post WTO period witnessed sharp decline in growth rate of almost all commodity groups. The current growth rates are too low to achieve the goal of 4 percent growth in output as envisaged in the national agricultural policy. • AgGDP is affected by both capital formation as well as subsidies, besides terms of trade. Instant return to one rupee spent in subsidy is much higher than that in the public sector capital formation. NCAP Annual Report 2004-2005 NATIONAL CENTRE FOR AGRICULTURAL ECONOMICS AND POLICY RESEARCH xiii However, long term return from capital formation is more than double the return from subsidies. Diverting one per cent resources from subsidies to public investment raises output by more than two percent. Therefore, diverting resources from subsidies to public sector capital formation is highly desirable to ensure growth of AgGDP. • Analysis of contract farming in poultry in India showed that contract production was more efficient than production by independent growers and contract growers gain substantially even though their returns are not much different from what is received by independent growers. The study suggested that contract farming was a useful institutional arrangement for the supply of credit, insurance and technology to farmers. • The website for NCAP, http://www.ncap.res.in has been redesigned and updated. It has linkages with two NATP-Mission Mode Projects namely, PME and INARIS. The Centre s publications are now available in downloadable PDF file. The website for Networking of Social Scientists, http://www.agrieconet.nic.in earlier created by this Centre is facilitating research information exchange, resource sharing and optimization of the response time for addressing methodology related problems. • The ARIS at the center is equipped with 128 KBPS Leased Line from ERNET to cater to the email and Internet requirement of the researchers and the administration. To utilize the full potential of ERNET, the Centre has now got its independent mail server configured. • The Centre has brought out one Policy Brief, one Workshop Proceedings, and a PME Note during the year under report. Twenty research papers have been published in reputed journals by the scientists. A considerable number of papers have also been presented by the scientists of the Centre in different national and international workshops, seminars, conferences etc. • The Centre had several distinguished visitors from the USA, the UK, SAARC countries, Netherlands, Australia, Japan etc., besides many dignitaries from government, public, private, and non-governmental organizations in India.