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Good afternoon, everybody. Thanks for coming to the session on
"Modernizing India's Agriculture." We have a terrific panel here.
We have the Chief Minister of Haryana, Mr. Bhupiner Singh Hooda.
We've got the father of the Green Revolution in India and the Chairman of
the Swanimathan Research Foundation, Dr. M.S.
Swaminathan. We've got Ashok Gulati, who's the Director, Asia, for the International Food
Policy Research Institute. We've got Raj Jain who's the President
and CEO of Wal-Mart. We've got Chengal Reddy who's the
Co-Chairman of thee Indian Farmers & Industry Alliance.
We've got Jerry Steiner who's the Executive Vice President of the Monsanto
Company. And we've got Robert Nemmara Subbaraman,
who's the Managing Director and Chief Economist for Nomura in Hong Kong.
So for those of you in the room, I just want to briefly sort of set the stage by
giving you an introduction into India's agricultural sector.
You know India's agricultural sector has very ancient roots.
It goes back at least 10,000 years fed by two monsoon cycles, very fertile soil,
and international trading networks so it's an old phenomenon.
Today it accounts for about 17% of India's GDP, employs approximate5ly 52% of
the workforce according to the newest numbers.
The share of India's GDP, the percentage is steadily declining but it remains the
largest economic sector in terms of employment so it plays a crucial role in
socioeconomic development.
It ranks second in the world in terms of farm output and it is second in terms of
arable land next to the United States. It's made some amazing achievements thanks
to the Green Revolution and the White Revolution and in terms of dairy,
for instance, it has gone from being dairy-deficient to being the largest dairy
producer in the world.
So without further ado, one request I'd make of both the speakers as well as the
audience and I want to make this as interactive as possible, is to keep your
comments to a minimum because we have very limited time.
So I'm going to invite each of the speakers to speak for between three
and four minutes on the subject and touch on specifically the issue on how can you have
new investments technologies and policies to basically tackle an era of scarcity.
But first I'd like to invite the Chief Minister of Haryana to speak
and specifically, sir, I'd also like you to address the issue of - Haryana has made
enormous progress in the last 10 to 20 years.
Unfortunately the numbers, if you look at the numbers, the road is not as much in
agriculture as it has been across other sectors and what's more, the water table
of Haryana is fast depleting.
So if you could address those issues and also the larger issue -- that would be
great. Thank you.
All right. Mr. Chairman, distinguished participants,
ladies and gentlemen, it is my proud privilege to participate in India Economic
Summit being honored by World Economic Forum and Confederation of Indian
Industries. The organizers deserve appreciation of
holding this summit to provide market-based solution to problems of the
farmers. Agriculture continues to be the mainstay
of Indian economy. Although it accounts for about 17% of
nation's GDP, either the main source of livelihood for more than 50% of India's
population. Pandit Jawarlal Nehru in 1950 said
everything else can wait but not agriculture.
As we all know, the Green Revolution boosted agricultural production across the
country and accelerated the yield of major food and crops mainly berry and wheat in
Haryana, Punjab, and western... The country was transformed home from
a food-deficit nation to a food-sufficient nation.
We achieved food grain production of 233.19 million tons during 2008 and 2009.
Growth in food grain production of the country had either declined or stagnated
during the current decade. Increase in food grain production is not
keeping pace with the population growth. Call of serious concern to feed our ever
increasing population, that food grain production has to be doubled by 2040 with
consistent 2.5% annual growth. Hence, there is need for a second Green
Revolution. It can be achieved only through dynamic
approach, focused strategy, and application of new tools of science
and technology. Degradation of soil health,
fragmentation of land holdings, imbalance due to…, in adequate availability of quality seeds,
poor mechanization, depletion of water resources, knowledge gap and poor
dissemination of technology, etc. are mainly responsible for low
productivity in agriculture. There is a wide gap between realized
and realizable yield of various crops. The yield gap is as wide as 32% to 59% in
the case of wheat, 48% to 76% in rice, 65% to 83% in maize.
The yield gap is particularly very wide in… and they are generally to reduce the
yield gap in various crops across the country.
Seed multiplication and dissemination through appropriate training is the key to
future success in achieving higher seed displacement rate.
Seed village scheme should be implemented for accelerating the pace of quality seed
production. Treatment of certified seeds is of
paramount importance to improve crop productivity.
I would like to inform that Haryana has taken a major initiative in ensuring 100%
seed treatment of certified seeds of wheat in the state from roughly 2010 and 2011.
The entire towards treatment is being borne by the state government.
Other states can also take similar steps. Balanced use of fertilizers is another
important area which needs focused attention.
Integrated nutrient management needs to be… involving judicious use of chemical
fertilizers, bio-fertilizers, and locally available organic manure like farmyard
manure, berry compost, and green manure to maintain soil health and its productivity.
It is also necessary to promote soil testing to assess the nutrients… including
testing of secondary and micronutrients. For this the country needs adequate
infrastructure for soil and water testing laboratories.
Soil health guards are required to be issues to all the farmers to promote
balanced used of fertilizer, mobile soil testing means could be used to tap remote
areas for control of pests and disease integrity of pest management approach
emphasizing use of available pest control methods and techniques has to be
popularized. IPM has to be priority now at national
level through establishment of farmers' field schools.
There is a good scope to promote organic farming in some parts of the country.
Conventional practices are not suitable for growing crops organically.
A special technology package is required which can boost land preparation,
selection of variety, organic fertilization, biological control of
pests, diseases and weeds. Water management, as you are telling,
is an important issue to be tackled on priority.
Various interventions like promotion of micro-irrigation, underground pipeline
system, cultivation of… varieties of crops, and judicious use of available
water needs to be promoted in a big way. The promotion of farm mechanization
is very crucial as this would product dependence on labor and produce
efficiency. As a matter of fact, we need technology
vision on farm mechanization to overcome productivity barriers.
Availability of credit to farmers is an important factor for agricultural growth.
Easy availability of credit to farmers should be ensured.
Further credit should be made available to farmers at not more than 4% per annum
of interest. Minimum support price should be
administered effectively and efficiently and recommended by National Commission on
Farmers. The MSP should be 50% higher than the
actual cost of cultivation. The post-harvest losses of crop
production are causes of concern. The official annual estimate of
post-harvest crop losses… which is indeed alarming.
A massive effort for building modern… whereas post-harvest losses of full grain
is needed at national level. Immediate action is needed to build
required infrastructure for storage through public and private sector
investments. I would exalt the industry to come forward
to supplement efforts of government in this regard.
Annual agriculture growth cannot be achieved without investing in agriculture
research and development. Since the mid-‘90s private investment in
agriculture has stagnated while public investment has continued to decline.
A strong commitment is required on the part of the government of India to improve
the RNB scenario in agriculture. A national mission for sustainable
agriculture as a part of a national action plan on climate change should be set up to
address the impact of climate change on agricultural sector.
The said institutions should give focused attention on research and development to
adapt to climate change with specific reference to erratic behavior of monsoons,
temperature, and weather… observed in recent years.
Industry can play an important role in funding the Agricultural Research
Institution. In fact, there should be close linkage
between farms scientists and the industrial and business houses for speedy
technological innovations.
As of now, the interaction between farm, universities, and industry is inadequate.
The farm scientists-industry collaboration will be mutually beneficial
through rapid integration of new knowledge, experience, and technology.
Friends, I have shared with you some of my views on agricultural production.
As you maybe aware, the government of India has set up a working group on this
important subject and I happen to have that working group.
The Chief Minister of Punjab, Bejar, and West Bengal are members of the working
group. All these aspects were discussed in detail
in our meeting and we have finalized our report.
It will be submitted to the Prime Minister shortly.
The most tough issues are well known, solutions are also insight.
By and large, what is required is determination and commitment to implement
appropriate interventions. I'm quite confident that this summit will
go a long way in addressing the major challenges of the farm sector.
I once again complement our organizers for holding such an important summit.
I wish all success for the summit. Thank you.
Thank you Mr. Chief Minister. Professor Swaminathan, can I sort of frame
the question to you and ask you to speak a little bit about the food security issue.
We are going to see the population of India increasing and we've gone through
this mode once before where there really was a food security threat.
So can you sort of situate this within using that as sort of the paradigm to
think about. Thank you.
I think - may I first of all react to the food security question in the context of
modernization of agriculture that's the theme.
Let me also make one general comment. If you say anything about India and you
say the opposite of it, both will be true.
And our Chief Minister has made some comments… common problem.
All over the country, majority are small farmers and their major concerns are three.
One is the productivity - should it be improved so that market surplus,
surplus in the market is there, otherwise your productivity doesn't.
Profitability could improve the function of the prices, markets, and so on.
And thirdly, how do give the power in the economy of scale to small producers?
Management revolution, what they call the small farm management revolution.
So one is a management issue, the other is an economic issue, the third
is ecological issue. Unless all these - farm ecology and farm
economics go wrong, nothing else will go right.
And land is a shrinking resource, in its own state land price is so high, there's
a great temptation of people to quit farming and sell the land.
You get one hectare, …rupees and so on. But coming to the food security issue,
food security, we are now growing in India from a purely patronage to rights approach.
The last few years the right to information, the right to education,
the right to employment, the final list of those rights is the right to food.
Legislation is being developed but now you can't have a legal right to food
without producing enough to feed the public distribution system.
That is where the modernization of productivity comes.
The National Advisory Council headed by Minister Sonia Gandhi is now working on
a broad draft which will go to government and then to Parliament and so on.
Essentially it has four components. The very first component is called legal
entitlements. The legal entitlements will be based on
a life cycle approach, starting with the first thousand days, the child in womb as
well as two years more and so on, from birth to death, it's a legal entitlement
on a life cycle basis. Secondly, enabling provisions, unless I
can - drinking water, sanitation, irrigation, and so on - the whole series
of enabling factors. Thirdly, governance issues, how do you
really deliver the food to the people are entitled.
Fourthly infrastructure issues which is largely post-harvest technology.
There's a strong mismatch between production and post-harvest technology
including storage, processing, value addition, and so on.
So there are enormous opportunities here for both technology and management
and overall more investment will be needed in the farm sector.
When the food security bill of India comes, I think it will be the first of its
kind in the world and will start a new process of food as a basic human right.
Thank you. Robert, can I come to you.
Most of this debate is actually going to be around India.
Can you situate the modernization of the Indian agricultural sector and sort of
situate it in a global macro context?
What is you take on that? Sure.
I think as a starting point, there is good reason to believe now that the rise we've
been seeing in global food prices is structural and is going to continue for
several years. It's being driven by fundamental factors,
whether it's the rapid growth of incomes in emerging markets or the changing diets
of consumers in developing economies, water scarcity as was mentioned, and also
the tightening link between oil prices and food prices.
Now if you believe that this rise in global food prices is structural, I think
it has two very important implications for India and globally, but particularly for
India I think one important implication at the macro level is CPI inflation.
WPI inflation in India is among the highest in Asia and one of the biggest
reasons for that is food prices being so high.
There's a lot of discussion about the Reserve Bank of India having to raise
interest rates as a result but if this is a structural rise in food prices, the real
solution, the cracks of it, and the real way to deal with it is to modernize
agriculture and increase supply. So I think there is this little bit of
a disconnect between short term and long term.
Short term you might think you need to raise interest rates but long term to
solve this inflation problem involves fixing the supply side of agriculture.
And then the second implication I would say as was mentioned at the beginning,
if you think about India, we should be thinking big.
It's not just about bringing down inflation and improving rural living
standards, the fact is that India is the second biggest farm producer in the world,
it has the second largest amount of arable land, and yet it's -- out of total world
food exports it makes up only 2%. So I think this enormous scope for India
to become a food factory for the world, going forward, a huge opportunity for
India. So what I would like and for the audience
and also my fellow panelists to discuss going forward, is how can we partner
business with farmers going forward. We have fragmented farms in India which
is a structural issue but can we think about ways to get corporate more involved
with farmers, partnering contract farming and so forth because as working for Nomura
and seeing clients around the world, I think financial institutions, since this
global financial crisis, are very key to diversify their investments and want to
invest more in agriculture and it's just a matter of finding ways for them to channel
that investment.
Thanks. And there are several people on the panel
who can address that particular issue of the collaboration.
But before I go there, Ashok, can I bring you into the conversation?
Let's go back to the initial statistics that we were talking about which is the
rest of the Indian economy is growing furiously and agriculture is lagging
behind. So simply put, what ails India's
agriculture sector? And if you can also specifically touch on
the distortionary effects of subsidies in this country that would be great.
Well, as everyone knows, all our growth, 8% to 9%, very resounding success of India
in the global arena, but still poverty is not declining at a rate at which we would
like to, malnutrition is not declining at a rate we would like to, and I think the
cracks of that entire problem to a large extent lies in because we are able to get
the growth rate in agriculture to the promised targeted growth rate of 4% plus.
We are getting a 2-1/2%, less than 3% and that too enlarge volatility.
The last 25 years of global research on development processes has revealed that
one percentage growth in agriculture is at least two to three times more effective in
reducing poverty than the same growth coming from one agriculture sector.
World Development Report of 2008, it reviews the development experience of the
world over the last 25 years and this is the conclusion.
If we do not understand that, if you look at China which fired the whole reform
process from agriculture and then they went to industry and now they are going to
services, we have started the growth process from the services side entering
manufacturing and agriculture is still waiting for results.
So what ails Indian agriculture?
First the policy paradigm at present is not geared towards agriculture.
Second, you need to invest to rev up your agriculture.
Eight percent of the resources going to agriculture are going to subsidies:
free power, cheap fertilizer, cheap water which is damaging the environment,
which is not leading to efficient use of many of those resources and only 20% of the
resources go to investments. The marginal rates of return on a billion
dollars going through investment versus going through subsidies, the ratio is 1:10
- 1:8. Rural roads give you eight times,
nine times more return than free power, for example.
So this is the first major problem that the resource allocation, 20% should be
subsidy, 80% should be investment, it's the other way around.
Second, why should the private sector come and invest?
It needs incentives to invest. When you look at the incentive structure
within Indian agriculture and Indian agriculture, by the way, we should forget
just talking about farming. It is the entire value chain from farm to
folk. In fact, I would put it the other way
around -- in a liberalized economy it's the demand pull that is plate to plow.
You look at first how the tally is changing, how the complexion of
consumption is changing, how the retail is changing, how the processing is changing,
how the logistics have to change and then go to the farmer.
Otherwise, if it is a supply push which was the 1960s late and ‘70s and there was
a huge shortage, that's not the story today.
You need to align your supply structure3s to what the emerging demand is
and therefore go by the consumption pattern. Now we look at that the incentive
structures particularly grain sector are heavily loaded with garment intervention.
Late ‘60s, early ‘70s garment led the way and created an evolution.
You look at the White Revolution, it was cooperative-led, supported by the
government; you look at the last 10 years, any revolution in Indian agriculture
is coming from two crops, cotton and hybrid maize.
Cotton production doubled in six years, Bt cotton, we may agree, we may disagree,
the fact is it is both these revolutions are driven largely by the private sector.
We should read that. this is written on the wall that the
investments, whether it is by multinationals or others, one center alone
could send more than a billion dollars in RND, the whole RCG system, what we call
the consolidating group of international agriculture research from where I come
from, together is 500 to 600 million dollars so know where those investments
are taking place. But then the question is private sector,
when it comes up with new technologies and new revolutions, how much it shares with
the rest of the society, especially the bottom 30%, and that's a challenge, how to
make it inclusive rather than just growth-oriented, how to make the entire
process inclusive and that is where innovations are needed in Indian
agriculture. I'll leave it at that, thank you.
So that's a great segway to bring in Jerry into this conversation.
Jerry, I mean clearly productivity needs to go up and technology is going to play
a large part in that but you also have this issue that Ashok just raised at the very
bottom which is how do you ensure that technology benefits the vast numbers of
people out there rather than just a small number?
So from speaking from even a Monsanto perspective or a technology perspective,
do you want to come in on this? Sure.
Let me first speak on behalf of - there are 17 companies that have participated in
a new vision for agriculture as part of the World Economic Forum and have been
working on this along with knowledge partners and consultation with a number of
governments. I'm trying to plot this road map for what
it's going to take to meet the overall challenge of the mere doubling of food
production by 2050 more rapidly here. We talk about 2040 here in India and it
would be more rapid in a number of other countries around the world, do in an
environmentally sustainable manner. You've heard water being talked about.
Her we obviously don't have twice as much water to product twice as much food
and have it be a source of inclusive growth and getting to the bottom.
And I won't try to summarize a 50-page road map in two minutes but I'll just go
through kind of two beliefs that we all come through with this.
One is that the only solution which we believe is sustainable is to create
and maintain competitive market places. And there are some places where we're
there; there are other places we have to work at it.
The second is that we all have to come at this from a mindset that this vision
is very farmer-centric. The farmer, which often is a she, is the
main actor in this equation and we have to treat that person like an entrepreneurial
business person that they very are. I think way too often we underestimate
what the farmer is capable of. There clearly are places where there
is an information gap and I think that's part of this collaboration that we have to get
to. Competitive markets provide the incentive
for all of our 17 companies and a whole lot more to make the investments to be
part of that solution but it takes the right kind of thoughtful, and I suspect
sometimes unpopular, public policy to create that set of incentives for the
private investment and I think the public investment, because it's taxpayer money,
to create the kind of innovation that it's going to take to meet this enormous
challenge that is out there. Let me speak for a second about our
company. We are putting about a billion dollars
a year on the line in research and development and I think that the thing
about agriculture is you can't hop in and hop out, you need to sustain it because
all of this products take a decade from the time you discover them to the time
that they first get in the field and can actually make a difference.
So the first aspect of this is we have to have the incentives that allow people to
make those investments and earn a return from it and the pieces of public policy
that really matter there. The first piece on the inclusive part I
would offer is farmers have to have access to these technologies and I'm specifically
talking about biotechnology which is regulated and having a science-based
regulatory system that is predictable is really important to people that are
investing, especially the smaller companies here in India that are emerging,
is also really important to farmers so that they have access to it.
We talk about collaboration because that's the other piece of it.
We, as companies also, I think have a responsibility to think business as
unusual. I know our company here in India is an
example. I'm sure there are lots of other ones.
We've got six partnerships with state governments where we work with those
states in a model that is commercial.
It's subsidized and graduated over a number of years and the belief is that we
can work with these and help transfer some knowledge on how to give them a new choice
and that new choice is really an old choice, it's simply hybrid seed
technology, it's been available for 69/70/80 years in a bunch of places
and look at the right agronomic practices to help them move from four quintals an acre,
I know it's a mixed metric that I heard here, to 1.2 or 1.3 and it makes an
incredible difference, the doubling or tripling of income and I think we as
a private sector have to be more courageous about taking these on and taking them on
in some scale. We're now with six of them and reaching
a million farmers here in India so both innovation and collaboration I think are
going to be really important pieces of it. Talks about Bt cotton, I think it is
a fabulous example and I'll call it the other White Revolution here in India.
What's happened is total cotton production has doubled that's happened at a farmer
level, most importantly perhaps to the farmers that I talked to.
Their income has doubled and the income gain hasn't stopped with the farmer,
it's also transferred also to the farm labor who now gets paid per kilogram to pick the
cotton and can pick more cotton in the day than they could before and it goes
downstream to the sector. So I believe we need policy that
encourages more Bt cottons.
Thank you. Mr. Reddy, one of the key issues that
came up just now - well I mean a couple of issues - one is there is this tendency of
the elite, if you will, to treat the farmers something not as an entrepreneur
but as anything but an entrepreneur and as somebody who needs to be protected,
etc, etc. But also if you could touch on farmers'
access to markets and perhaps you are probably the best person to talk about the
cooperation and the collaborative models that can emerge potentially between
farmers and corporations and industry.
See it's obvious that in the last - since 1990 - when the Indian industry in service
sector has become a globally competitive. It didn't do it by itself - let's be
clear about it - there were the best technologies, be it IT technology,
chemical technology, automobile technology are all partners, not only partnership in
technology but investments, that's where you became globally competitive, it's not
that you brought it somewhere from …look at the great technological revolution of
our firs Green Revolution, it's all technologies, but our seeds,
our pesticides are something. The challenge today for the agriculture
sector is very simple. First is we have realized that government
has limitations and that they are withdrawing.
It's good, nothing wrong in that, we have seen in India our education system,
our health system are one of the best in the world… by Canadians and some Americans.
That's because in these two sectors we have the best technologies
and investments. Now my question to our… why not we develop
partnership with industry? What's wrong in that?
Who says that industry alone is exploiting -it's the thing like
exploitation by industry, politicians, or bureaucrats.
Every system has their own inherent limitations and difference and variations.
So what I suggest is it is possible by partnership to make Indian agriculture
highly competitive. The best example is our next door
neighbor China. Look at China, small farmers, less than
our India, and their own climactic condition is 50% not only to that of India
but they only have 50% days good whereas we have 360 days and we are excelling the
growth climactic advantages and the knowledgeable farmers of over here for
thousand years. But what is lacking is that we are very
evident that government has come to limitations.
For example our agriculture extension: processing, marketing.
In fact the very investment itself, we have our own banks, are able to highly
recover 30% to 40%. It is here I would say that there is need
for certain immediate actions by government which needs to be taken forward
both by industry and farmers. Some of them are three or four main
issues related to the market reforms which our own state government of India said for
six/seven years back, they have brought in APMC, some sort of accessing, anybody can
access. But then how many states have implemented
and why they are not implemented, a question that requires to be changed tool.
Our own land laws that belong to the quest to be modified, our own
administrative systems request to be modified.
And then the question ultimately is the farmers and poor men, we need to be
consulted, we need to be involved in planning and preparation.
Don't criticize if we are new. Let me tell you, how many of you know that
there is no culture in agriculture. Do you know that?
And then agriculture is not a culture any longer.
And then agriculture is an enterprise, it's a business.
I don't know how many of you say you as an expert… but I as a farmer's activitist
but India's agriculture is an entrepreneur activity, that is how to cope.
And lastly what I would appeal to the industry, whether…, you should learn to
work with farmers as partners. Are you willing to sit with them across
the table? You better do that because it's not
difficult even for the small farmers to be brought together.
So there is a wonderful concept across the country called atma.
It's where producer groups are being brought together, every state
is implementing, there's a planning commission, government of India
programs...
So my key word is getting access to technologies and investment through
partnership. I would say that should be the future for
the farmer elders to take it for. Raj, I think most people are well aware of
the logistical challenges with the Indian agricultural sector and perhaps you can
sort of walk us through what the back end challenges as well as the front end
challenges, whether that be logistics, marketing etc.
Sure. I just want to start with - the Honorable
Minister talked about the I'll gap in farming today and I just want to add one
more dimension to it which is the price value gap.
There are lots of reports being written about how much wastage takes place
post-harvest, those numbers may be wrong by 5/10/20%, whatever, there is still
a significant amount of wastage which happens in post-agriculture from the field.
And not much is being done about it, not much investment is being made in it and I
think one of the biggest and reasons and dimensions I want to provide at this stage
is I think it lacks the consumer focus because everything, like every industry
which develops, you have to start with the customer and the consumer.
One of the questions normally asked is "Why are we not investing enough in food
processing? There are so many tax incentives."
I mean the question to ask is "Is the Indian consumer even ready to consume
processed foods?" Maybe the answer is no, maybe the answer
is something which we don't know about and we need to first figure that out.
And then for companies to invest in that research and understanding and then bring
it back through the chain into food processing and into farming which will
require special varieties to be developed which will then be good for food
processing and then be put on the table. So there is a huge issue in understanding
the customer and what is required as a product and then what it means to farming
and there is no investment going into that largely because the incentive structures,
the APMC act we just talked about, in many cases even bars companies from directly
sourcing from farmers, let alone doing all kinds of contracts and other types of
farming. And plus access to consumer side on
retail, etc doesn't allow a lot at least a lot of multinationals to be able to talk
to the customers and make those investments.
So those are the bit issues and I'm a fond believer that in the short term,
medium term for sure, I think if we would just manage that aspect of our agriculture,
I think we could see a lot of equity in farming.
Long term we need to of course focus on sustainable farming, the issues we all
talked about real the technology, water, and resources.
So would it be fair to say then that - for instance, your inability to directly
access produce from the farmer drives up cost to consumers, drive down price for
producer? Oh, absolutely, there's a tax, APMC tax to
pay. In some states they've allowed us to go
and directly source from the farmers, you still have to pay the tax.
And what happens to that tax?
I don't know whether it gets invested or doesn't get invested, it gets lost in the
system. My plea would be a very simple thing - let
that tax be collected and let the private company who's procuring from the farmers
show that they have reinvested that in the farm.
It's possible to do that very transparently but the government will not
allow that. So it's a simple example but it's an
important example. Sure.
I mean just to touch on the food processing by the recent… study showed
that there was an opportunity, there was a $60 billion opportunity in the India food
processing sector alone and it could employ a substantial chunk of the Indian
agricultural workforce. Mr. Chief Minister, would you like to
respond to any of the points that have been raised?
Everybody has spoken, basic in India is issue that India's a country for both
producer as well as consumer. So that balance has to be kept because,
as my friend was saying about subsidy also, subsidy - what is happening in the
USA? Farmers - that agriculture is profiting,
making nothing. But in India, still, farmers are not for
profit-making so to sustain farmer and to sustain for agricultural production,
we have to keep the balance. You see supposing water - you were talking
- the basic problem of water, this has to be tackled.
If you go to Israel you can see that we - proper use of every drop of water -
actually in the future the real problem would be water.
It is not in India only, everywhere. You're talking about Haryana but that
is not the case, it is everywhere, depletion is there everywhere.
So these issues are to be tackled and balance has to be taken.
Subsidy we can't forego unless - how to make profitable business - unless
agriculture is a profitable business, industry would also go forward.
But apparently, yes we have got potential, it's only there are gaps that have to be
covered. And by 2014 our agricultural production
has to be doubled unless it won't match with the increase of population.
So these new strategies have to be formed for that whether it is in fertilizer,
whether it's the seed industry or fertilizer industry, the use of
fertilizers, and the technological help with industry can give.
Of course industry has earned, what about tractors, small tractors, so many
implements, a lot of scope for industry also so that we have to coordinate.
And actually there are gaps, there's no proper coordination between agriculture
universities and industry and business so that has to be taken into care.
If there is proper coordination between farm universities, industry, and business
then we can make - achieve our target and farmer - as a farmer I can say because I'm
a son of a famer - farming is still not profit-making in India, how to make people
- of course 60% of the population, that depends upon agriculture.
GDP may be very low, maybe 17% but still 60% of jobs are being provided by
agriculture so we in India, we cannot ignore it.
There are countries which are producers than there are many consumers.
But I don't agree with him about food processed food - if the food processing
is an item which has to be increase and the people adapt.
What about… and so junk food we can have and food processing.
Industry can come forward and food processing and seed and we could then
coordinate. Sure.
I mean that your point was not necessarily that subsidy's are bad but where are the
subsidies targeted at. I think what I heard from his was if you
use the subsidies to promote road networks and so on you would get much better
results for the farmer than you would if you give electricity subsidies.
Subsidy in what shape? Where is the subsidy?
Actually the direct subsidy for farmer, in some states of course.
…that is to make farmer sustainable to have something so that he may not loose
industry and agriculture. Swaminathan, he was telling that the land
has become very costly, one… per acre. That is not the case, that for
acquisition, that is our policy for acquisition.
…to what cost, it will be at the cost of loosing of land by a farmer, why should he
not get the proper price. So Ashok, either you of Professor
Swaminathan, would either of you like to comment on this?
Yeah, let me clarify what is the subsidy monster.
Indian agriculture on the whole is net taxed and not net subsidized.
There is one foot on the accelerator and another foot on the break, that is what
is happening in the policy arena. What does that mean?
We are subsidizing input rather through free power, free or subsidized fertilizer,
and this is channeled through other agencies, it's not going directly to the
farmer, so half of that actually goes away to other intermediaries and the system,
only half perhaps reaches the farmer. But then what do we do on the output
side? Output side we put controls on exports of
rice are put and so many - 5% levy on rice -- so we try to suppress the prices of
certain critical commodities because there are poor people in the country and we need
to procure for them. So when you net out the two, input side
subsidization and suppressing the output prices, the net result of the two - we
worked it out from 1965 to 2008/2009 and in 90% of the years, Indian agriculture
has been net taxed to the tune of about 20% so that is the reality.
The problem is that that's why it is not a very lucrative profitable business.
The problem is when you are giving free power, then it is leading to huge
inefficiency of the resource. The better way would be to get smart
subsidies, give them direct income support to the farmer, give them coupons through
which they can - so that you bypass the high cost of the fertilizer industry in
between all the issues of non-transparency and the like.
Direct subsidy - the real solution lies in direct subsidy.
Power subsidy, I tell you, free power is given in only one state, no other state
is providing free power. Supposing Haryana is not providing free
power to farmers except… also started charging, now again they've come back
again. Mr. Chief Minister, I think you make an
interesting point. You just agreed with him that direct
subsidies are a good idea so what prevents you from doing that?
What prevents you from -- No, no, because subsidy - let me take the
example of fertilizer, it goes to manufacturer, not to farmer, but there's
a certain gap which we are trying - we are recommending.
I told you our working group also feels that - we're farmers, I'm also thinking of
giving direct subsidy of power to a consumer, dual consumer so that I can fix
it and then "Look, I'll pay you 30,000 rupee per month for…
If you exceed then you have to give more charges."
That can be worked out, I don't see anything wrong and I agree that direct
subsidy is the problem because this is the missing link.
And actually the real solution would like in what is the difference between the cost
of production, what farmer gets,
the farmer price the farmer gets and at what it is sold in the market, a lot of gap.
Unless that is fixed 15% or 20% including everything, transportation or this
commission, that will be in the benefit of both farmers and consumers, producers
and consumer. Sure, MR. Reddy you wanted to comment.
Basically the problem in India is too many departments, too many ministries, too many
levels. You have this entire Ministry of Finance
which deals with credit, crop insurance industry, you have government of India
dealing with fertilizer price fixation subsidization, you have government again
fixing the minimum support price and procurement policies.
There is a big lot of confusion and you have the so called learned acts which are
dealt at the stage, center and... Unfortunately the reform process has
hardly tackled any of these so called administrate to legal and other forms.
Like for example, one simple thing I'll tell you, in India there is only one
institute of agriculture excellence that is here whereas if you look at… etc,
etc how many number of institutions are there? My own perception of things is we are not
- we as a farmer activist I believe - there is no possibility of my government
or my research institutions or our institutions solving the farmers'
problems, of small farmers improving the productivity or trying to solve
market-related issues. My observation is very simple, just adopt
to whatever liberalization policies you have for service and industry sector
and be done with it. The responsibility of government is very,
very limitations, I mean of course I leave it to populist schemes I can't talk about
that, we have responsibility 250 to 300 million people who are under BPL.
Just limit that and the rest of it start dealing directly because we are not able
to make progress in the last six years of the present government of India which
luckily, I mean the same Prime Minister who initiated it 20 years back, the moot
question is how could we in this great…, great country, achieve 18% growth in
agriculture but then a very, very bad and extremely unfortunate situation for
farmers of not even 1% growth… with the suicides, migration, and unbounded
mitigation and we are also not hopeful that in the near future things will really
change, I mean a very gloomy picture but then it can be solved, that's what my
assertion is. Thank you.
Professor Swaminathan, several people have mentioned the water issue.
I just want to hear your take on the water scarcity issue, the disappearing
aquafers, etc. Well first one word about the subsidy…
because I think the farmers' commission, we call it support, for example the US
farmers, much of the support goes into the… services, in other words
conservation farming and so on, it is not-trade…, it is not directly.
And so I think in India there's a large requirement for improving the entire
sector of farming, what Ashok Gulati said. The two other major areas which I think
are very important. One is recently when President Obama came
he talked about India being fortunate, being of a land of the youth, more than
40% of population is below the age of 30. Now the greatest challenge in agriculture
is how to retain, attract and retain youth in farming.
That can be done only if farming is technologically upgraded, it must be
intellectually satisfying, and economy rewarding - that's where the post-harvest
infrastructure. The other is the increasing feminization
of agriculture, if you go… more and more women - because men are all migrating
and on the family income there's a lot of - they go to the cities and so on, now we
don't have - we can talk about subsidy in that context saying if it's a woman-based
farming, you require a considerable degree of support system like… daycare centers,
many other supports. I won't call them subsidy but we are
giving so much of help in urban areas and we hardly do anything at all for the rural
families and therefore Indian agriculture will depend largely whether we are able to
attract and retain routine farming on the one hand, that means farming must be
technologically upgraded so they're interested but are they educated?
And secondly how to support woman farmers - the government of India for the first
time in the recent budget, Minister Pranab Mukherjee introduced a scheme called…
first time in recognition of women who are also farmers, formerly the… was not used,
that farmer meant only men, not a woman, so there a large number - you asked
something else, what was it? The water issue - on the water -
Water is going to be a very serious issue. There are two or three silver linings in
India. One is what we call the Mahatma Gandhi
National Rural Employment Guarantee Program which is the world's largest
social support program of employment guarantee, as I said.
Their major priority is watershed management, water harvesting, water saving
because enormous opportunities are there. Because our rainfall is very secure,
there are two monsoon, most of the rain come in 100 hours in a new year therefore
unless you harvest it and use it so that is going on very well.
Secondly increasing amount of what we use efficiently whether it's micro-irrigation,
deep irrigation, many of the Israeli methods and Californian methods are being
adopted. Thirdly, for the first time, there is
a move for more use of seawater because 97% of the world's water is seawater and how
are we using it? Because seawater can be converted into
fresh water through halophytes, through salt tolerant plants, so a large program
is being launched for seawater farming using salt-resistant varieties of crops
and so on. So the five sources of water: the ground
water, the rain water, the surface water, the rivers, and then the recycled water --
increasingly more and more industries are recycling their water - and finally the
seawater. All of them will have to be conjecturally
used. And the water security plan of course in
India is not easy because river systems are all - there are litigation, there are
conflicting interest of states and so on, although we say water should be managed on
a water basin basis, all the basins are in various kinds of dispute.
It's becoming emotionally sure to become an economic issue but I think if you put
your finer on very important area, we have to increase supply augmentation,
demand management, and use of new technologies. All the three will have to go together.
Follow up on what Swaminathan has said on the naturalization of water.
Every drop of water should be naturalized, that is the only solution.
After that you can… matters and whether it's deep irrigation we use or the surface
irrigation, flooding is useful or underground irrigation that can be there.
I'll just open to it to the audience so keep your questions there, I just have two
more questions. Robert, as an economist, clearly if you
wear that hat, there are too many people working in agriculture, and for the
efficiency to go up, the surplus labor pool needs to be absorbed elsewhere
and typically the model has been that would be absorbed in the manufacturing sector.
Do you want to comment on that?
That's typically the model for developing economies that you start off with - the
population is largest in the rural sector and you have a lot of surplus labor in
agriculture and then you modernize manufacturing and then services.
The interesting thing for India is it went from agriculture to services
and manufacturing has lagged behind. I think, going forward, we will see
urbanization continue and we will see a move towards the manufacturing share of
GDP rising over time. As I said earlier on, I think we have
this structural rise in food prices now and it might be that actually rather than
just thinking of manufacturing, a lot of the opportunities for India will be in
agriculture. That's a very, very good point to take
away. Jerry and Raj, I mean I want both of you
to comment on the partnership issue. Mr. Reddy pretty much asked corporations,
you need to speak to farmers. What's your view on that as heads of
fairly large - not fairly large - very large corporations?
I absolutely agree.
And I think we need to find the ways to do it.
Obviously it's economically challenging in a market place where you've got the
degree of fragmentation that we have. If we look at some of the partnerships
that we have - we've just done a review of a number of them today with project SHARE,
working with ISAP and they find ways to organize them in groups of 25 to 40 so
there are models to absolutely do this. I grew up on a farm myself and I suspect
that it's true everywhere around the world that farmers are very visual people,
they need to see whatever you're going to do and I think they actually need to do
whatever you're going to do before they can be expected to adopt any technology.
So technology is a key piece of the solution, these kinds of partnerships are
important. I would just offer one other observation
and that is this is a complicated topic and we can get wrapped around many
different things, the right way to do subsidies, a whole number of other things,
but I believe that the biggest challenge that we have as society which is doubling
production in the next 40 years globally - less than that - here is the biggest
opportunity for farmers and we just need to have, I think, a very outcome oriented
focus around this. How do we help farmers produce more using
resources far more efficiently? And if we just think about it through
that single lens, I think we're going to get along way.
Raj? Yes, briefly I'd just say I think, as I
said earlier, I think public-private partnership and farming with farmers
is something which would give immediate results in terms of reduction in the value
destruction outside the farm, in terms of taking technologies which are available in
labs through the land and helping the farmers realize better prices and better
yields. I think what the government needs to do
there is to quickly repeal some very archaic laws in the country which honestly
maybe in 50 years ago were relevant to protection of small farmers but today are
actually detriment to their growth. And if that be done then I think this
is something which can immediately be taken forward.
Perfect. Thank you.
I'll open the floor to questions. Please keep your questions as brief as
possible, no statements, just introduce yourself and the organization you work for
and ask the questions. That gentleman in the back raised his
hand first.
Mohammed Jafar from KDD. My question is to Mr. Reddy and to the
Chief Minister. The statistic you provided, 1% growth in
the agricultural sector as opposed to 8% growth in the Indian economy, caught my
attention. I was recently in Morocco where the
government of Morocco worked on Green Morocco Revolution as they call it.
There they have achieved growth of 30% and increased the income of the farmers
from $1000 to $3000 according to a record published by the forum recently.
When I spoke with the Undersecretary of the Ministry of Agriculture in Morocco,
he said they were inspired by India for what they have done.
The government worked actively with industry and with the farmers,
recognized that the small parcels of land, in order to create colonies of scale, to be put together.
The government there took a pro-active role in enabling this partnership to
happen. I appreciate that India is a very large
democracy and consensus building here is different than it would be in Morocco for
example. Can you please ask the question?
So the question is "Is it possible to cooperate with government and with
industry to achieve the sort of growth in India?
Perfect. What I'll do is I'll take three questions
at a time because we're running short of time and I plead with you, please keep
your questions really, really brief. Yes, sir.
…Very brief, subsidies, I was trying to square your position on subsidies.
I understand that you have different positions but what is the takeaway?
What is good subsidy? Where should it be?
What is it best -- Who are you addressing it to?
To whomever who wants.
Perhaps, Ashok, you can take that? Yes, sir.
…I'm a civil servant from Haryana. My first question to Mr.
Swaminathan: Sir you said that we should concentrate more on the green buck subsidy.
Sir, I'm given to understand that the amount of green buck subsidy that we have
allowed our economy... At the same time we find in the developed
world they not only continue green buck subsidy, red buck subsidy, yellow buck
subsidies are being given. The negotiation and the agreement on
agriculture started from... Not much progress has been made while we
are being asked to put up our market, reduce our subsidies.
Now in certain countries, the subsidy on two cows is much more than what we spend
on a human base, how is that we open up our agriculture sector if we don't put
restrictions on our import and export agricultural product?
We should not put a low tariff and... Sir, you're asking a trade-related question.
…it's a good point, Sir. But then we are being given the advices.
Agriculture is not a business for us, it's a matter of livelihood.
Who do we go to there? The second question is to Mr.
Steiner, Sir. Sir, you spoke about the genetic…,
bio technology, genetically modified food, etc.
We in India, we are a very large… manpower, we do understand bio technology
can do miracles for us but simultaneously we have one concern.
When the European Union need not to satisfy about the safety part of the…,
they are not willing to accept this food and not experienced enough,
they're certainly not. How many country of ours where there are
many people who are not literate, who don't have enough knowledge, we open up to
the… biotechnology where there are risks involved, where enough research and enough
documentation is not enough.
Perfect. Thank you.
I'll take one more question here and then go to the speakers.
…form SYNEX consulting and investment. There's a widespread belief that if we
permit free movement of agricultural commodities between states it will help
the farmer and the only person who will be unhappy about it is the middle man.
I would like Dr. Swaminathan's views and Mr. Reddy's views and also Your
Excellency, Chief Minister, what is the working group's view on this issue?
Okay, that's a whole suite of issues. Who would like to go first?
No, I think we'll get confused if we go take any more questions.
Who would like to go first?
I'll answer the biotech - Yeah, go ahead.
So thank you for the question on biotechnology.
And I think it is a really important point, how do we win public confidence in
biotech food. So I think the first point is that
biotech food has been now around for quite a while, almost 15 years, and it has been
used extremely widely globally and it ahs been approved by dozens of governments
and multiple agencies within those dozens of governments around the world and there
is not then a single documented case of a health issue.
So the actual record of safety is very, very clear.
Now I say that about biotech foods in general but in reality I'm talking about
this on a product by product basis because every product is reviewed and it stands on
its own merits. I think the issue of confidence in this
will only come, I believe personally, from government and because government is who
society looks for to ensure that there is a degree of safety that is out there and I
think this will take some time, we're just starting that process on food-based crops
here in India that is a more mature dialogue in many other places in the world
is extremely commonly used. But I do believe, maybe I'm just an
optimist right here, that the safety record of the technology and the inherent
technology itself, it's made up of proteins just like other food that we eat,
will come through over time.
Let me explain, I think it's time that we farmers must make it really clear.
You see biotechnology is India's trading biggest world's largest agriculture-based
countries. America, Canada, Brazil, Argentina,
China, and Australia, they are producing. And if you see two greatest examples,
the huge land holdings of 2000 hectares in America are using biotechnology
and smallest holding of China is using biotechnology for almost a decade
and more, you know where these problems come from.
As far as the co-called complaint of Europeans, there are two very critical
things which are not aware of even in European countries they are now producing
in Spain and other countries. The second thing is Europeans import
millions of tons of so-called cattle feed for their cows, buffalos, pigs, etc
and they produce this beef and chicken and other things and these Europeans, they eat
it, there is no case of any complaints. Next, there are 20 million Europeans,
they go to America every year and they eat handful - plenty of food left and right
center and they are not affected. The problem is here in India
biotechnology, with due respect to our Indian agricultural scientists and economy
and our administrators, so you have to file your own ICR institutions,
performance is limited for what reasons I'm not interested.
Secondly, whether it is possible for India to produce biotechnology, I have no
hope. And thirdly which Mr. Swaminathan said
whether a new innovative technology of using seawater, I don't think it is like
going to yield more. My feeling as a farmer is very simple.
I don't care where this cell comes from. It is available in the market.
I have - some of my friends are using it, I am using it, has anybody ever told
anybody that this cell can produce cancer. If it's so, the Chief Minister and me
and other panel members will be getting cancer tomorrow, the day after tomorrow,
maybe five or ten years from now but it is not prohibiting us from using this cellphone.
You see look at that pencil, after 100 years I've been writing with pencil,
it's still hard to do trail test. That is somebody says you have to go
and find 100% pencil, is it possible humanly. You see these apprehensions in India by
so called… by administrators and the scientific community is costing us the
farmers very highly. Look at China today, America today,
their efficiency levels of agriculture is unbelievable.
I have a note with me which shows that the Chinese agricultural technology uses 50%
compared to European Union and America using 80%, compared to my country of 5% to
10%. Now how am I to become competitive?
You today, the… you go to America, you are getting all awards from Harvard
and Cambridge, but what about us? If we are to get awards, where are we to
get it? So to find is very simple, we want
technologies per se, that's all, were having many problem there could be some
regulatory mechanism, maybe some countries accept, some countries may not accept,
but at the end of the day please understand that without science and technology, it
is practically impossible for us, the Indian small farmers, to become globally
competitive.
That's all I can say/ Jerry, this is clearly music to your ears
but let me move on to Ashok. Ashok, what's a good subsidy, what's a bad
subsidy, and who gets to decide?
We must understand two things. There are two objectives:
one is growth and efficiency questions, the other is equity questions.
Then you want the help the farmer as an equity concern.
Then use an instrument called income policy.
When you go for growth and efficiency, use an instrument called policy or trade
policy, these are the - if you try to achieve equity through price policy you
will mess up the economy and that had got Soviet Russia and literally they win.
So we must understand that these are the objectives, what are the right
instruments, and how do you use them. The best thing is use income policy,
directly give it to the farmer, maybe conditional cash transfers for whatever
user you want to give, and use your high tech today to reach the farmer,
bypassing all the intermediaries. Today what is happening in the fertilizer
industry for example? More than half the subsidy, so called,
which we see in the budget, fertilizer subsidy is not reaching the real farmer
because there are high costs of the industry and many of them are inflated in
a way or gold plating in more sophisticated language we call it..
So there are issues so why don't you reach the farmer directly?
You will get all the political mileage out of that, farmers will salute you
and you can remove poverty much quicker than going through the… road which really
remains elusive to the farmers. The obvious problem there, Ashok, is that
there are trend seekers in the system there.
But Mr. Chief Minister, some of the policy questions that were addressed, would you
like to - Well as far as they were saying, as far as
the free movement of agriculture commodity is concerned, there are no barriers here
in India. I can take my wheat anywhere if I like.
Even now future trading has started so that the farmer gets his due, that is the
- the weakness is there. Even we have participated by effort,
by operation, they have participated… in future trading also, we are a partner in
there, so that benefit passes on to farmers.
They get the due price, not the middle man only can get it.
Now we are heading towards that, that the farmers would get even the best price
whenever he likes to sell it. Professor Swaminathan, one of those
questions was addressed to you, would you like to answer that?
On the free movement? No, his question.
So it's the trade-related question.
I know, that is quite correct, that's what I said.
They are getting a lot of support.
So what do we do? Let me be specific… Excuse me Sir, you have already spoken.
I think Ashok Gulati has already explained but you know in the case of fertilizer,
the government has now introduced a new policy of nutrient-based subsidy
and product-based subsidy. As and when this is finalized that means
you'll have to give a soil health card to a family, they should know what nutrients
are deficient and so on. It may take a year or two before that
particular might turn out, then it will reach much more the farmer with other
choice so that balance fertilization becomes possible.
May I also say about one on the... The farmers commission we recommended what
we call a common market for India, we call it single market, Indian single market,
because we are not like European - we are not - different states are all part of the
union therefore the Indian single market we have given detailed calculations how we
can avoid a lot of harassment along the borders perhaps lying there for our many
days at many times, movement is restricted.
But as the Chief Minister said, we will have to ensure that the states are
compensated for any loss in terms of duty and so on.
But the Indian single market is the one which will benefit the farmers, which will
benefit the consumer and avoid harassment and may I say not in a lighter way,
also reduce ***/AIDS load because in places where people are staying for a long time
distract people. We have data that ***/AIDS is more prevalent.
Sure, Lisa, because we started late can we take a couple more questions?
Is that okay? Okay, I'll take three more questions,
one here.
Just a moment, I'll just ask him and then I'll take yours.
His question remains unanswered. You can answer it in the next round of
questions, just one second. Hi, my name is… from BCG.
My question is one of the things that one of the panelists really talked about in
detail was about the fragmented land holding.
one of - India's land holdings is extremely small, from what I understand
many of the technologies which actually yield result in higher yield productivity
is not possible because of land hold. Is that something which there needs to be
done something about from a policy perspective?
Who are you addressing that question to? This is to Mr. Hooda and Mr.
Swaminathan. Okay. And one thing, Sir, I was struck by
a comment in your speech, most of the issues are well known, solutions are also in
sight by and large, then why doesn't it actually - why doesn't change happen?
Okay, I'll take two more questions here.
I'm Prakash Indusha from the Indusha Group of Companies.
I have been very interested to see agriculture should be recognized as an
industry which in India has not yet been recognized.
I would like to ask the panel that what is the plan we could do then?
In the United States is today the largest democracy country which has the
agriculture, the prime industry, and they have developed tremendously and why not
India should follow the same plan of getting the know-how and the technology in
partnership in different plans and the government should encourage this program.
What do you think about it? What step we should take about it?
You are all genius people sitting on the panel.
And if a paper should be sent to the Prime Minister and to the government of India,
I'm sure they will be happy to get your thoughts and suggestions.
Thank you. And who would you like to address that to?
Anybody in particular? I don't know who would be the best person
to answer so I'm just asking a question to the panel.
Whoever is appropriate to answer.
I'll take one more -- there have been absolutely no question from this side of
the audience. Anybody here?
Oh, these are the shy ones. Anyone else wanted to ask a question?
This is strange that you're in India and there's not enough questions.
…This is under the $60 billion food processing opportunity.
I will have to make a statement before I ask the question.
If you can keep the statement really, really short.
One of the most successful parts of the food processing industry in India has been
gherkins which is mainly in south and that has been possible only because we don't
eat gherkins which has grown over the last 15 years.
Today we certainly face a huge challenge there because of the market situation but
my question is that today if we want to do anything else, whether tomatoes or
chilis or whatever else we eat here we can't do because of prices fluctuate,
we have no contract farming laws, the farmer's supreme, he's the World Bank,
and we can't take him to the court, if the price is high he sells it to the market,
he doesn't give us, so in that situation how on earth can we be a full producing
hub? Sure.
And for those of you in the room who don't know, …is one of the largest farm or
horticulture companies even in Africa and especially the east coast of Africa.
Well, Chief Minister Hooda, you can start with his question and then perhaps his
question. Well I think all the three questions are
more or less the same. And the answer is - one of the answers
is for public-private participation. It is already on the business of contract
farming. And it is not so that he said in contract
farming, in Haryana contract farming -- we're having contract farming for barley.
How many acres? More than 10,000 acres.
UB group, -- that is the contract farming.
So in contract farming also there needs to be… also, it is in your interest also,
we are interested, you can go for this fragmentation of land if you go and talk
to land owners you can go for contract farming and then provide the inputs
and all up to you what type of fertilizer, what type of crop do you want to have.
But only missing link is why is it not successful?
Not because what he said - because in contract farming farmers should be made
partner, should be partner in profiting also.
Although prices are fixed, he gets the same price, but even if the company, if it
gests more profit, partner in profit making also, then only we can succeed.
Perfect. Professor Swaminathan.
I think the very important question on how do you really give the power of scale to
small farmers - in the early years after independence Jamaharlal Nehru thought
cooperative farming could be done but that has not succeeded except in dairy industry
which has been successful for corporate dues and so on.
So there are a large number of other --- one was what the Chief Minister mentioned
about contract farming, you contract somebody for doing that.
In a way we can rise to some kind of social contract with the food conference
of India or the state corporations and the farmers because you have a minimum support
price and the government buys the grain and so on.
Now the other matters are farmer self-help groups, group farming,
farmers' companies, for example seed villages, pulses villages, many of them are
emerging, where the people are getting together and then farming - from sowing to
sale — you have all the aspects. We have - those who are interested,
we have one chapter in the National Commission Farmers' Report called "Farmers
of the 21st Century" the young farmers and small farmers because a small farm
is ideal for intensive farming. A small farmer is a euphemism for
a farmer who has no credit, who has no access to insurance, so only by overcoming
the problems of the small farmer you can reveal the potential for the small farm as
Japan and others have done so it's a very important issue now today in India,
both to young people as well as. Sure.
What we'll do is we'll - let's turn these into closing comments.
Robert, anything that you'd like to address in less than a minute?
Listening to all, it's fascinating for an economist's perspective.
I mean one thing I think hasn't been discussed and I think is interesting
is deregulating the organized retail food sector but the potential that can help.
If it's difficult to consolidate the farms, what about at the other end of the
spectrum, at the other end of the supply chain?
If you actually have more developed organized retail food sector could that
help food processing, could that help the backward linkages for transport
and storage, and could that open up the export sector for India?
Sure. Ashok, anything that you'd like to comment
on? There was a good question "Why can't we
make Indian agriculture very vibrant?" Three things need to fall in place.
First, the institutional set up which is called "the rules of the game"
need to change. In the value chain there are big players
and there are small pygmy holders. There is deficit of trust that needs to
be bred. But you need to create space for them to
operate and come closer. At present in most of the states,
more than half the states, you cannot do that legally.
As one product get the other, one state, one Chief Minister, that's a different
matter but the law doesn't let you go into that.
second, investments - investments are coming more from the private sector than
from the government. Three-fourths of the investment in
agriculture is coming from the private sector but the private sector doesn't have
enough space to make a new investment storage because there are storage limits.
Can you have free movement?
Honorable Chief Minister said yes but if there is a levy on rice in your state at
the rate of 75% where is the free movement left?
So they have to get to the government, so it's a contract with the government any
way. So you need to create space for
investments by the private sector in the whole value chain.
And to do all this you need to get the incentives right.
Incentives right does not mean only the prices getting right.
What we need to do is getting the markets right.
Markets in this country are getting strangulated by too much overbearing
controls by the government. I think you need to give them free space,
you need to give them free air to breath, and you will see the magic that is going
to happen in the 21st century. Jerry, any closing comments?
Millers, yes, so who's going to invest if you have a stocking limit?
Jerry any closing comments? I think it's been well summarized,
focus on helping farmers produce more, use resources better, they'll earn more
and this will work. Mr. Reddy, closing comments?
Bur very short please.
I can only say is industry willing to extend its helping hand and work as
a partner with farmer instead of you going to government so-called policy makers,
etc, etc which I don't want to elaborate. Are you willing to extend your hand to
farmers and join farmer's groups, producer groups?
We can solve the problem the shortest possible time. Raj.
Yeah, I think the answer to Mr. Reddy's challenge is yes, I think the industry
is willing to partner, I think what it requires is a change in some legislations
which are important and the understanding. I think I would just sum up by saying
it's an area where - just as somebody said - you have one foot on the accelerator,
one foot on the brake and sometimes you're caught whether you are moving forward,
sometimes you say you can move forward. So we need to take a wholistic approach,
change things. And I think industry will partner with farming.
I personally have a ton of questions left but time is my enemy.
Broadly speaking, in conclusion, it's always refreshing to hear that industry
and farmers are not enemies, that they're probably best of friends if they could
find a way to work together and also the point that Robert raised which is probably
at the sort of macro level that India could actually have a different part if
the structural piece is right, where India actually could become the food factory of
the world given all the conditions that work actually in favor of the country.
I thank this panel for a fantastic discussion and I thank you, the audience.
Thank you very much.