How to improve agricultural productivity
Investments in irrigation, combined with better-quality seeds, can dramatically improve returns to farming
Global attention has been devoted to water scarcity and its effect on Indian farmers. However, new analysis from Indian researchers suggests that far more good could come if irrigation were combined with seed improvement.
Tata Trusts and Copenhagen Consensus have commissioned new research by noted experts from India and around the world, looking at measures that would help Indian states respond to major challenges and improve their competitiveness, economic performance, and the well-being and prosperity of citizens. The new research focuses on establishing how much different policies would cost, and what they would achieve overall in economic, environmental and societal benefits.
Now, two new research papers add to the volume of evidence on how to boost agricultural performance. The first of these is by Dinesh Kumar, executive director of the Institute for Resource Analysis and Policy (Irap), Hyderabad. It examines policies that would reduce the effects of water scarcity in Rajasthan and Andhra Pradesh.
In Andhra Pradesh, the Rayalaseema region is hot and dry, with frequent droughts. Only about one-third of the crops are irrigated, and the rest are dependent on rain-fed cultivation, which is susceptible to the vagaries of the weather. Tanks are an important source of water for the rural economy, but—as in other areas—an explosion of well-irrigation has reduced the surface run-off into these tanks. The biggest victims are poor, small, marginal farmers, who depend on tanks for supplementary irrigation for their kharif crop.
There are major water transfer projects being implemented in Andhra Pradesh. This approach—moving surplus water into the tanks, so that they are full—ensures farmers can continue crop production when the tanks do not receive inflows. According to one estimate, the additional storage space available during a drought year is about 1,700 million cubic metres.
The annualized cost of the infrastructure and drainage required to fill the tanks is estimated to be about Rs4,500 per hectare, as well as another Rs2,000 for the annual operation and maintenance of the system. Assuming that the additional water will be used to irrigate around 65,000 hectares of paddy cultivated during winter, the overall annualized cost would be Rs43.2 crore.
Farmers, however, will earn more: The annual incremental net return is estimated to be about Rs9,000 per hectare. There would be further indirect benefits from energy savings because farmers wouldn’t need to pump groundwater, as well as from the incremental return from the increase in yield of wells and consequent expansion in the area served, and more intensive watering of irrigated crops. These benefits together add up to Rs15,000 per hectare per year, and the total annual benefits would be Rs159.2 crore.
This means that every rupee spent on the policy in Andhra Pradesh would generate benefits worth nearly four rupees. In Rajasthan, an analysis looking at the same approach but taking into account the specific conditions there, finds there would be benefits worth three rupees.
Kumar also examines state-specific policies: In Rajasthan, renovating the traditional water harvesting system would return three rupees for every rupee invested, while, in Andhra Pradesh, investment in drip irrigation and mulching of high-value crops would generate about five rupees.
These are all respectable returns. But new research by agricultural economist Surabhi Mittal, independent consultant and non-resident fellow, Tata-Cornell Institute for Agriculture & Nutrition (TCI), Technical Assistance and Research for Indian Nutrition & Agriculture (Tarina), suggests another approach may help farmers a lot more.
The researcher looks at various methods of improving farm productivity and farmer income. One of these aims to help solve the problem of the high cost and unavailability of labour through an increase in the level of mechanization by using custom hiring centres, using public-private partnerships. Another approach focuses on relying on information and communication technology (ICT) enabled extension services, which play a crucial role in supporting agricultural activities by taking research, technology and know-how to farmers to improve adoption. Third, the author looks at improving soil health; and, finally, considers improving the availability of certified seeds.
This last idea would generate powerful returns. In India, farm-saved seed from previous crops remains the most prominent source of seeds, year after year, accounting for nearly three-quarters of all seed usage. This means low crop productivity as optimal yield potential is a function of the quality of seeds used.
Although many improved varieties of seeds have been released for cultivation, their full impact has not been realized owing to poor adoption rates as well as poor seed replacement rates.
The solution to this challenge involves spending money on producing more quality seeds (for all the major crops in each state) and promoting these among farmers. The cost over five years adds up to around Rs400 crore in Andhra Pradesh and Rs584 crore in Rajasthan.
But this will lead to better crop yields, increased production, and higher incomes. After reviewing the best evidence, the researcher suggests that yield gains of 10% can reasonably be expected with improved seed replacement rates. Even with this highly conservative assumption, the investment has huge pay-offs: Every rupee spent will have benefits to Andhra Pradesh worth around 15 times the costs, and 20 times in Rajasthan.
Improving agricultural productivity is important in order to improve farmer incomes, and it requires increases in yield, better productivity through the efficient utilization of resources, reduction in crop losses, and ensuring that farmers receive fair prices for output.
The phenomenal benefits from focusing on improving access to seeds highlight the need to prioritize policies that will achieve the most for farmers.
Bjorn lomborg and Saleema Razvi are, respectively, president of the Copenhagen Consensus Center, and senior research adviser for India Consensus.
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