Revealing Trends in Investment in Ag Research & Extension

Cross-posted from the FSP India website written by Jaspreet Aulakh

Photo Credit: Flickr (P. Casier/CGIAR)
Photo Credit: Flickr (P. Casier/CGIAR)

In an article published in European Journal of Development Research, “Public Investment in Agricultural Research and Extension in India,” Pramod Kumar Joshi, Praduman Kumar, and Shinoj Parappurathu examine the spatial and temporal dimensions of agricultural research and extension (R&E) investments with emphasis on returns on investment in major states in India. The article concluded that investments in R&E should increase to meet the future growth challenges in the Indian agriculture sector.

The authors map the temporal and spatial changes in investment in R&E with emphasis on returns to investment in major states of India. They track past patterns of public spending on Research & Development (R&D) in terms of efficiency and explore variation in public spending on R&D across states.  They also estimate the returns to R&D spending and test if the states that spend more achieve higher Total Factor Productivity growth (TFP). TFP growth is estimated using factors such as research and extension stock created over the years, infrastructure and the quality of natural resources, which is later used to calculate Value of Marginal Product (VMP) and the Internal Rate of Return (IRR).

Interesting trends surfaced from the data. R&E increased not only in absolute terms but also as a share of GDP and the Green Revolution has been due to effective R&E investment. The R&E system of India has played a significant role in changing country’s status from food-importing to food-secure in relatively short time. The investment in agricultural research, which was equivalent to 0.30 percent of total GDP in agriculture in 1980/1981, increased to 0.52 percent in 1990/1991 and 0.77 percent in 2010/2011.

The share of research in total R&E investment increased from 65 to 82 percent from the period of 1961-1970 to 2001-2010, but the share of extension declined from 35 percent to 18 percent. This illustrates that research and extension did not follow parallel trends in the spending over time. This can have important policy implications, as lower relative allocations to extension could retard the flow of new knowledge from labs to field and the returns accrued from higher research investment could be underutilized.

Another important inference from the study was that relative shares to priority sub-sectors of agricultural and allied sectors has shifted considerably over time. Investments in R&E in the crop sector and fisheries have increased while investments in R&E for the livestock sector have decreased. The investment in soil and water R&E has remained unpredictable. In addition, different states’ shares of aggregate R&E have been reduced while the central government’s share has increased over the past decade.

The study also reveals that investment in extension has considerably reduced over the years, and the gap between research and extension investment has been widening as well. The intensity of investment in R&E (i.e., total investment per unit cropped area/population) varies considerably across Indian states, with a difference of 1:20 between the lowest-intensity of investment and high intensity of investment.  High disparity in TFP and wide variations in VMP and IRR have been observed across different states and the actual returns on these investments depend on TFP and growth.  For example, while Himachal Pradesh, Haryana and Assam have had high investment intensity, this has not translated to higher productivity.  In conclusion, it is important to identify the agriculture areas which are important for future investments in R&E and this should be strategically directed and balanced among different agricultural sectors so that growth is not compromised in the future.

Options and Strategies for Reviving Nepal’s Agriculture

Participants at the policy dialogue
Participants at the policy dialogue

In April 2015, Nepal experienced a catastrophic earthquake of 7.6 magnitude, followed by more than 300 aftershocks causing about 9000 casualties and 22,300 injuries. The earthquake not only made a significant impact on the country’s immediate food and nutritional security situation, but caused damage during the harvest season for wheat and maize, with a likely resulting loss in food stocks.

In Kathmandu earlier this month, the Ministry of Agricultural Development (MoAD) and the International Food Policy Research Institute (IFPRI) organized a one day dialogue on the Effects of Natural Disasters on Agriculture Sector in Nepal: Options and Strategies for its Revival.The aim of the dialogue was to deliberate on the nature and pattern of the impact of natural disasters on agriculture-based livelihood, the evidence and experiences of responding to loss of livelihood, and lessons that Nepal could learn while striving to chart out the pathways to its recovery.

Participants included policymakers, donors, researchers, and representatives from corporations, the farming community, civil society, and development organizations from Nepal and India.

The discussion brought forth a number of key outcomes:

Livelihood loss in the agriculture sector emanates from the loss of productive assets (such as land and livestock), farm infrastructures (such as roads, irrigation and storage structures), inputs (such as seeds), and markets (for output and inputs).

  • Re-linking farmers, especially those who are illiterate, unskilled and immobile, with markets is crucial for the revival strategy.
  • Employment guarantee schemes could be useful for immediate food security as well as for market revival, providing cash in hand in the short run.  The revival strategy should also address the issue of labor shortage by promoting agri-mechanization.  For long-term impact, due consideration should be given to improving the terms of trade in agriculture.
  • Natural disasters have a significant impact on agriculture, given the nature of its technicality, demography, and vulnerability. Agriculture sector-specific disaster management policy and guidelines are needed.
  • Institutions and civil service must make efforts to work together. Capacity and accountability are important tor institutions to be effective. At the local level, it is important to mobilize community based organizations, particularly in the absence of elected representatives in the local government bodies.

This dialogue is third in the series of ongoing policy dialogues on food and agriculture organized by IFPRI under the Policy Reform Initiative Project (PRIP) in Nepal. Past dialogues in the series are (a) Public Expenditure in Agriculture (February 06, 2015) and  (b) Potential Effects of India's Budget 2015-16 on Nepalese Agriculture and Policy Implications for Nepal (April 01, 2015).

 

Pulses: Supply Side Dynamics

Cross-posted from the FSP India website written by Rachel Kohn

Pulses: Source (flickr) Adam Jones
Pulses: Source (flickr) Adam Jones

India is both the largest producer and consumer of pulses in the world, with production and consumption preferences within the country varying by region. In terms of cultivation, for example, the country had 72 percent of the total global area of pigeon peas, 68 percent of the global area of chickpeas, and around 37 percent of the global area of lentils in 2012  (according to FAOSTAT), which accounted for 61, 68, and 20 percent (respectively) of global production. Meanwhile, since the Green Revolution in the 1960s, the reduction in the variability of paddy and wheat yields coupled with no comparable change for pulses led to diversion of land from pulses to those crops.  There is a persistent supply-demand gap when it comes to pulses. Resource-rich farmers tend to grow crops like paddy, wheat, cotton, and sunflower, while pulses continue to be produced mostly by small-scale and marginal farmers under rainfed conditions. A recent IFPRI Discussion Paper by Kalimuthu Inbasekar, Devesh Roy, and P. K. Joshi, “Supply-side dynamics of chickpeas and pigeon peas in India,” examines the evolution of pulses in India between 1950 and 2011 and provides insight into how policy can support the industry for pulses.

Mapping out the dynamics of chickpea and pigeon peas over time, across states (grouped into six zones based on geographical location), and within states at the district level (for a number of states), the authors were able to place these areas into specific groups and evaluate the movement in pulses in response to changes such as the Green Revolution, the economic reforms of 1991, and the trade spikes since 2000.  They also tested econometrically for factors affecting area allocated to pulses relative to competing crops using fixed-effects estimation.  They take advantage of state and year fixed effects as well as  including time-specific rainfall.  The empirical model focuses on conditions such as rain dependence, technological improvements like mechanization, and economic availability of labor.  The outcome variable measures intensity of pulses cultivation relative to the competing crops.

Previous studies found that as infrastructure developed and incomes rose, the country’s move to liberalize imports in pulses had a significant effect on pulses production and enforced the geographical decoupling of production and consumption of pulses in India.  At the same time, the yields in pulses were not increasing due to a lack of high-yielding and short-duration varieties and competition.  The authors note that the availability of infrastructure and inputs has hurt the pulses sector but mainly through the allocation of less land to pulses as increased mechanization and irrigation lead to the conversion of these lands to other remunerative crops.

The authors also found that pulses-producing districts were characterized by rainfed conditions, absence of irrigation, and absence of alternative profitable crops. “Pulses predominantly cultivated in the marginal and rainfed region under resource-starved conditions need an entirely different approach to increasing area, production, and productivity,” write the authors. As such, while it is important to address problems of rainfed areas, policymakers must ensure they will not lead to displacement of pulses from these regions as they are key to India’s pulses production.

Read More

Role of Import on Price of Pigeon Pea in India

Raising the Pulse Profit

Risk-Management Increases Resilience in the Face of Drought

Cross-posted from the FSP India website written by Jaspreet Aulakh

Nalanda District, Bihar Source (Flickr): Divya Pandey, IFPRI
Nalanda District, Bihar
Source (Flickr): Divya Pandey, IFPRI

Shocks of any form can be have a more pronounced effect in the developing countries like India where half of the population is engaged in agriculture, and the occurrence of droughts can deplete of productive assets, aggravate food insecurity, and entrench people further into poverty. During a drought year, studies show income falls by an estimated 25-60 percent while the per capita poverty rate rises by 12-33 percent.  In a new study to be published in October 2015, Pratap S. Birthal, Digvijay S. Negi, Md. Tajuddin Khan and Shaily Agarwal argue that drastic shifts in the drought management strategy from crisis management to risk management has improved the resiliency of Indian agriculture. Using rice, a water-intensive crop, to test risk-tolerance, the authors find a small decline (2.5 percent) in rice production in 2009-2010 over the previous level despite the rainfall deficit of more than 20 percent. They attribute this resilience to improvements in water management, technological advances in crop breeding, as well as the development of infrastructure and institutions engaged in delivery of advisory services, information, and inputs.

Read more

Best Practices in Food and Livelihood Security in India

Cross-posted from the FSP India website written by Jaspreet Aulakh

Delegates at the CSD-IFPRI workshop, New Delhi
Delegates at the CSD-IFPRI workshop, New Delhi

A recent conference organized jointly by the Council for Social Development (CSD) and the International Food Policy Research Institute (IFPRI) explored research gaps on food and livelihood security and existing models that could be used for successful change.

To ignore current food security issues facing India can be likened to a doctor refusing to perform surgery because the future will offer better methods, said Muchkund Dubey of the CSD.

The conference was held 14 July at the India International Centre in New Delhi, and brought together members of government and the private sector to discuss models and processes that are scalable as well as their applicability in particular situations.  The discussion also centered on topics associated with existing practices that demand more research.

Four technical sessions covered best practices related to the Public Distribution System (PDS), the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), food security and self-help groups, and civil society organisations. The conference closed with a panel discussion on “Learning Lessons for Up-Scaling Best Practices.”

There was unanimous consensus on the definitions of best practices, food security, and livelihood security: best practices (BPs) in agriculture were defined as norms which help rural agricultural systems to self-sustain, ensuring food as well as livelihood security; food security should incorporate food availability, food access, food safety, and food nutrition; and livelihood security means income generation for the rural and urban population.

Several points were highlighted during the course of the conference. First, each state in India varies greatly in terms of socioeconomic makeup and politics, which makes the cross-implementation and upscaling of best practices based on case studies alone difficult. Second, the government and political system can make a huge difference in creating success stories. Third, the use of information technology in management of any agricultural system is necessary for creating a success story. Capacity building and diversification within agricultural systems is also necessary to protect them from shocks.

During the final discussion, Former Secretary to the Government of India Alok Sinha noted that Indian agriculture has reached a plateau; half of the population is engaged in agriculture, but it contributes to only 2-3 percent of the country’s GDP. Small projects scattered over India cannot represent the country as a whole, he said, and PDS needs to become a transparent public system where the beneficiaries know their rights. Since Minimum Support Price (MSP) and PDS are closely interlinked, the cash transfer policy can adversely affect MSP and PDS and should therefore be tested before implementation. Digital tracking is also important for procurement to end in PDS.

Agriculture impacts a large percentage of the Indian population—47 percent of the population was employed in agriculture and related activity in 2012, according to the World Bank-- and civil society has an important role serving the rural poor.

For additional coverage and lessons-learned from the conference, check out our blogs on:

Civil Society Organizations in India-- how they make a difference

Growing together, gaining together-- case studies of self-help groups

 

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