FIGHTING AGAINST THE MONSOON-BY IRRIGATION WAY

FIGHTING AGAINST THE MONSOON-BY IRRIGATION WAY

Water, as an input to agriculture, is critical for sustaining the food security. India faces the daunting task of increasing its food grain production by over 50 per cent in the next two decades. Increasing competition for water in agriculture, industry, domestic and environment uses is already manifested in inter- and intra-sector, basin, state, district and village level conflicts.

These will escalate further as India's annual per capita water availability goes below water scarce threshold level of 1700 cubic meter within the next two decades. In six of the country's 20 major river basins (with less than 1000 cubic meter of annual per capita availability), water resources are under stress and depleting. By the year 2025, five more basins will become water scarce and by 2050, only three basins in India will remain water sufficient. Supply expansion, to meet expanding needs, is constrained by availability and rising economic and environmental costs associated with its development and use. The status of irrigation infrastructure and prospects for its sustainability, both physical and financial, for future water-food security is the issue under focus.

Irrigation Infrastructure

Existing status

Irrigation has traditionally helped Indian agriculture to grow. But, the last decade witnessed a slowing down of increase in irrigation potential resulting in a slowdown of agriculture growth to a mere 2.6 per cent in 2006-07. Till March 2007, the anticipated irrigation potential created was of about 102.77 million hectares but the utilisation was only for 87.23 million hectares. This meant that still over 30 per cent of India’s agriculture land is dependent on rainwater for crop survival. Himanshu Thakkar of South Asia Network of Dams, Rivers and People, says the government’s irrigation policy has failed with growth rate of irrigated land falling from 4.23 per cent in 1970s to less than 1.5 per cent in the first decade of this century despite spending about one lakh crore for the sector in the 10th plan.

Since 1950, India has made direct public investment of Rs 88100 crore in providing major, medium and minor irrigation infrastructure with an irrigation potential of 91 MHa. India Water Vision, 2025 estimated the gross water demand for multiple uses to double in 25 years from now with corresponding investment needs of Rs 20000 crore per year. As of now, India's irrigation infrastructure is expanding by 1.8 Mha of irrigation potential with a public outlay of Rs 7000 crore per annum. Current annual expansion is one-third less than the maximum growth achieved in the past. Deceleration in irrigation potential created through major and medium schemes started during 1980s as a consequence of declining real government expenditure on this sector.

Amidst competition from non-agricultural uses in households, industry and environment, supply of irrigation will have to keep pace with the targeted annual agricultural growth rate of over 4% in the Tenth Five Year Plan. To achieve this growth rate, irrigation sector should grow by at least 5% per annum, given 1% growth in rainfed sector, Demand-supply management in water sector and efficiency in its every use is critical for providing sustainable water-food security to the country.

More importantly, existing and expanding irrigation infrastructure has to be physically and financially sustained for improving their efficiency. Yet concerns are emerging on the physical condition of the irrigation infrastructure created so far.

Vicious cycle

India's irrigation sector is caught in a vicious cycle. Inadequate funding for O&M over years has resulted in the neglect of maintenance and upkeep of the irrigation system leading to deterioration in the quality of irrigation service. Physically, the irrigation and drainage system is not able to receive and deliver the planned quantity of water matching with the demand pattern. Poor irrigation service, often not matching with the crop water requirements over space and time, results in low productivity of crops and income to the irrigators. Resultant dissatisfaction coupled with weak institutional linkage leads to under assessment of demand for water rates as well as low recovery of whatever is assessed. Progressive fall in the cost recovery increases revenue deficit causing adverse impact on O&M funding for maintenance works.

Vicious cycle of India's irrigation sector

Deferred maintenance of surface irrigation infrastructure over years has led to further deterioration of its physical service. This is witnessed by stagnating or falling irrigation coverage affecting agricultural growth in several regions. Surely, with future expansion in food production growth critically depending on the performance of irrigation sector, what is happening to the physical status of existing and expanding irrigation infrastructure does not augur well for India's future food security and agriculture performance.

Targets

Under the Irrigation Component of Bharat Nirman, the target of creation of additional irrigation potential of 1 crore hectare in 4 years (2005-06 to 2008-09) is planned to be met largely through expeditious completion of identified ongoing major and medium irrigation projects. Irrigation potential of 42 lakh hectare is planned to be created by expeditiously completing such ongoing major and medium projects.

There is a definite gap between irrigation potential created and the potential utilized. Under Bharat Nirman it is planned to restore and utilize irrigation potential of 10 lakh hectare through implementation of extension, renovation and modernization of schemes alongwith command area development and water management practices. There are considerable areas in the country with unutilized ground water resources. Irrigation potential of 28 lakh hectare is planned to be created through ground water development. The remaining target for creation of irrigation potential of 10 lakh hectare is planned to be created by way of minor irrigation schemes using surface flow. 10 lakh hectare of irrigation potential is also planned by way of repair, renovation and restoration of water bodies and extension, renovation and modernization of minor irrigation schemes. But the targets met at the Oct 2008 last year are very discouraging, which puts down the figure to 29.783 thousand ha only.

Assistance provided under AIBP

A Central loan assistance of Rs 36,417 crore under the Accelerated Irrigation Benefit Programme (AIBP) has been provided for 267 major and medium irrigation projects and 9,874 minor irrigation schemes since the introduction of the programme in 1996. According to the latest figures in April this year, the country had created an additional potential of 4,932 million hectares of land through major and medium irrigation projects and a potential of 271 million hectares through surface minor irrigation schemes upto March 2008. The provision for the AIBP in the 2009-10 was Rs 8,700 crore with Rs 7,000 crore allocation coming from the Planning Commission.

The total grants released for various AIBP schemes for 2008-09 was Rs 7,598 crore. The AIBP was launched in 1996-97 for providing loan assistance to the states for completing unfinished major and medium irrigation projects who were in advanced stage of completion and create additional irrigation potential in the country. Those who had received benefits included many north-eastern states, hilly states of Sikkim, Uttaranchal and Jammu and Kashmir, Himachal Pradesh and the infamous drought districts of Orrisa -- Koraput-Bolangir and Kalahandi (KBK). The AIBP has now changed its guidelines to benefit drought prone tribal areas of Maharashtra, Karnataka, Andhra Pradesh, Kerala and projects in the states where irrigation was below national average could be included with the Government funding 38 of the 65 major and medium irrigation projects in the relief package for agrarian distressed districts of these states.

Budget and its implications

Irrigation is sine qua non for agricultural growth but the Central Budget’s total provision for development of water resources is Rs 1003 crores only. About 40 million hectares of land is unutilised in the country precisely because there is no proper conservation and management of the rain water. Total allocation for what is known as National Programme for Comprehensive Land Resources Management is Rs 360 crores only in the current year’s budget. If rain water could be harvested large part of such land can be put to some productive use. Watershed development holds the key to development of such areas which is equally labour intensive. It may be noted that most of the so-called drought prone area in the country has higher rainfall than Punjab or Haryana which are the granaries of India. It is the inability to harness rainwater that explains low productivity in rainfed areas. But the budgetary outlay in the current year for watershed development is a measly Rs 1773 crores only. The Budget papers mention that it will cost about Rs 12,000 to develop one hectare.

It has now been decided to include watershed development programme under National Rural Employment Guarantee Programme and allocation for the same has been raised from Rs 16,000 crores in 2008-09 to Rs 30,100 crores in 2009-10. This is welcome but given the enormity of the problem of conservation, regeneration and augmentation of natural resources and of providing employment to roughly 80 lakh persons who are being added to the rural labour force every year investment on such activities will have to be raised manifold if in has to make any impact on the situation.

Conclusion

The recent failure of monsoon has an alarming effect on our food grain production thereby on Indian economy. So creation of extra water potential is of utmost importance. Not only creation but the judicious use of existing facilities is also very important.

By

Parag Rastogi

PGPABM II

MANAGE

Tractor Industry and Farmers Facing Serious Problem

Rural economy is the back bone of the Indian Economy. In case we could equip the farmers with farm mechanization tools like tractor and implements, the agricultural production will increase tremendously and if the farmers are financially well off, a lot of additional demand for consumer durables like TVs, refrigerators, ACs, washing machines including motor cycles, cars and multi-utility vehicles can be generated which will ultimately help to neutralize this general slowdown in the industry to a great extent unlike other sectors reeling under the shadow of slowdown, there continues to be normal demand for tractors.
The curbs on financing by banks and financial institutions have not prevented the domestic tractor industry - the segment most heavily dependent on financing - from treading on the growth path. This is at a time when most other segments like passenger car and commercial vehicles have been under pressure constrained largely by the tight availability of finance and mounting commodity prices which compelled automobile companies for subsequent price hikes of their models. Tractor companies are registering a healthy growth despite public sector banks going tough in approving tractor loans due to good monsoon and high farm commodity prices. But due to limited availability of retail finance in the industry and the farmers are suffering. Since banks have withdrew their offerings most of the tractor companies who have their own financing arms like Mahindra has, they charge higher interest rates. Though they don’t ask for land mortgage, only the vehicle is kept as collateral, farmers have no other option.
The various obstacles like the slowdown of financing from the banking especially the public sector banks has been the most important factor for the declining trends in the industry despite good monsoon this year. Private / Micro Financiers are taking cues from PSU Banks. SBI withdrew the ‘blanket-ban circular’ – but no real respite on the ground. Decision making has become centralized leading to inordinate delays. In some areas, lending filter now is as high as 10-15 acres whereas average landholding in India is hardly 4 to 5 acres per family. The budget for agriculture is consumed by financial institutions by lending money for non-productive purposes such as warehouses etc. whereas the farm mechanization suffers. In case there are a larger number of NPAs in a particular area, the credit facilities for the whole district is stopped by the lead banks, the total number of defaulters is hardly 5% of the population of the area, but the remaining 95% are also punished for no fault of theirs. For winning the confidence of the farmers’ banks should have farmer-friendly attitude while sanctioning loans for farm mechanization tools like tractors and implements; a particular portion of the budget for agricultural loan should be reserved for farm mechanization tools only.
As per an expert assessment by Agriculture Today research team, 8% of the total agriculture budget will serve the purpose. Bringing back lending norms to 4 acres as market value of agricultural lands has shot up significantly in the recent past. They suggest restoring margin money requirement to 15%. , reduce interest rates for lending to farm mechanization at par with other auto sector. De-centralize sanctioning authority to branch level as before. Factor in income from commercial usage of farm tractors as lending criterion. Provide more liberal floor finance to dealers of tractors and farm implements. Re-visit SBI customer credit scoring model - should be made more liberal. SBI should take the lead in sanctioning more tractor loans on realistic norms to improve the comfort level of farmers, for other PSUs to follow.
Parag Rastogi
PGPABM-1ST Year
2008-10
MANAGE

Agricultural research - rests in peace

Need is the mother of invention, the quote is necessarily true in every aspect of human life. But it seems that India has forgotten the quote. The ever increasing pressure of growing population, shrinking land, depleting natural resources and decreasing productivity has called for continuous research in agriculture. But according to the data available trends seem to be reversing. While the global food crisis is expanding, the research expenditures are not up to it. According to the government of India’s Economic Survey, the rate of growth in India’s food production is 1.2% a year, significantly less than the population growth rate of 1.9%. The creation of additional irrigation potential in Indian agriculture was 3% a year in the 1990s. It has declined to 1.8% in 2007. 

If we consider the productivity of wheat in India, it was 2.71 tonnes per hectare in 2002. It fell a few notches to 2.63 tonnes per hectare in 2007. India’s productivity in rice was 3.14 tonnes per hectare in 2002. This has moved up marginally to 3.18 tonnes per hectare in 2007. The productivity of wheat in America has inched down from 2.7 tonnes per hectare in 2002 to 2.6 tonnes per hectare in 2007. Even Brazil’s sugarcane productivity has merely climbed up from 70 to 71.10 tonnes per hectare in the same five year span.  India’s average rice yield today is 2.9 tonnes per hectare. By comparison, China’s average rice yield, at 6.3 tonnes per hectare, is more than double that of India. South Korea has achieved an even higher rice yield, i.e., 6.8 tonnes per hectare. 

The reason, as noted agriculture scientist M.S. Swaminathan says, is that “the lab-to-land (technology) transfer has gradually eroded”.

A 2007 report on the impact of science and technology on Indian agriculture by the Chennai-based M.S. Swaminathan Research Foundation said, “There has been no breakthrough in technology in the 1990s even to sustain the growth levels of the earlier decade.”  Currently, public expenditure on research and extension together stands at well below one per cent of GDP in agriculture.

Agricultural research has contributed significantly to improvement in productivity and, with the marginal internal rate of return on research and investment, is still very rewarding. According to an Asian Development Bank report written by C. Ramasamy and K.N. Selvaraj of Tamil Nadu Agricultural University, in Coimbatore. “A 10% increase in public sector expenditure on agricultural R&D (research and development) would induce agricultural growth by 2.4% at constant prices, and overall welfare by 3.8%”.

Still, there is severe under-investment in agricultural R&D, which has fallen from 20% of all research funded by New Delhi in 1960-80 to under 12% in early 2000s, The government, on its part, hasn’t quite walked the talk of agriculture renaissance: agriculture and allied activities’ share in the 11th Plan outlay at 3.7% is down from 4.9% in the ninth and 3.9% in the 10th Plan. Experts say it’s impossible to achieve the 4% growth rate target of the 11th Plan. The rate of growth in agricultural productivity is alarming, just about 2%, which is marginally above the population growth. With almost two years of the current Plan over, achieving 4% growth is impossible. According to Swaminathan, the production target of even the 10th Plan has not been achieved.

 

The changing challenge for Indian agricultural research

• Productivity growth must now extend to greater variety of crops, farming sectors (horticulture, livestock, fisheries, forestry) and ecologies/regions. It is particularly important to focus on areas which were bypassed during the green revolution period and where the livelihoods of the vast majority of poor, particularly women are directly or indirectly linked to farming.

• Agricultural practices and technologies that we generate and promote do not adversely impact our natural resources base. Our past strategies aimed at gains in the short run have led to serious and widespread problem of resources degradation in both irrigated and rainfed ecologies, with grave consequences for sustained productivity and overall ecology. Declining soil quality, deteriorating water resources, loss in bio-diversity have all become a serious limitation in achieving enhanced productivity.

• In view of increasing trade liberalization and emerging WTO regimes, it is important that agricultural production systems become more efficient and competitive.

• A serious consideration is given to understand and think of ways to respond to issues of climate change, which are already impacting agriculture in a variety of ways.

 

It is apparent that the demands on agricultural research are becoming more complex. While the need and concerns of enhancing productivity to meet the needs of the increasing population continue, there are additional concerns which relate to poverty alleviation, equity and sustainability issues. There is increasing pressure for agricultural research not only to result in increased yields, but also to ensure that the benefits of research accrue to the largest recipient groups and that the quality of natural resources base is maintained and improved.

 

 

 

By

 Parag Rastogi

PGPABM I

2008-10