Indian Food Crisis
started by PseudoIntellectual 4 mnths agoFlat
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Excellent topic. Thanks for posting the article
SWOT analysis of Indian Agriculture. Comments welcome.
Strengths
s1) Highest proportion of Arable Land among countries in the world.
For example I remember China to be around 17% and India comes at a higher number atleast 30-40%.
s2) Lots of cheap and hardworking manpower
s3) Many native crops which has world markets (Basmati, Mango etc..)
s4) This is very important (Patient set of folks who are willing to accept fate and do not rebel
and do not give up)
s5) Regions with varying climate zones
s6) Number of agricultural universities
s7) Has (as of now) perennial rivers
Weaknesses
w1) Almost the Lowest Yield in the world in major crops like Rice/Wheat
w2) Lack of logistics for food preservation. According to one estimates
almost 30% of the fruits & vegetables produced in India is wasted. Extremely high
by international standards.
w3) Most farmers are illiterate, (however this is changing) and exploited by Middle men
and get only a fraction of the final sale price.
w4) No expertise in food processing. This is essential for higher returns to farmers.
w5) No institutional support for food processing and distribution
w6) Poor infrastructure for food distribution and transport to end markets
w7) Weak marketing by government and no nodal agency to identify export markets,
co-ordinate production , market food & boost exports, like MITI
of Japan.
w8) Heavy use of fertilizers
w9) Late to the Game on food exports and is not the incumbent in any of the markets. For example
Brazil exports $50 billion in food. Ecuador probably exports more Banana than India, even
though Indian Banana is more tasty.
w10) Virtually no information is supplied to farmers about the state of the market for
crop planning and risk management for the market vagaries
w11) Weak policy on seed production and lack of national seed bank for contigencies
like US. I do not know whether India is a member of the International seed bank
being setup in Norway at the height of 500 feet.
w12) Over-utilization of soil
w13) Unable to realize volumes of scale, due to lack of mechanized farming
w14) No steady resources for water throughout the year. This means crop rotation
is tough. Lack of reservoirs.
w15) Agricultural universities work in silos and do not network well. There is
no national mission to improve yield.
w16) As exemplified in Punjab, very little effort towards risk prediction and risk
mitigation. Only contingency strategy. This is not proactive
w17) NO effort to attack markets which other countries already have
w18) Relies mostly on internal market, resulting in lower revenue realizations
for farmers
w19) No scientific crop insurance policies, which will price in risk.
w20) Lack of Actuaries in agriculture
w21) Government policies protect a few rich farmers more than the farmers
with smaller landholdings
w22) Poor management of pests and crop diseases. No government support here.
w23) Still have not adopted drip irrigation and other modern methods of watering
in a big way
w24) Farmers slow to move away from staple crops to new high value cash crops
(Almond etc..)
w25) Not much forest cover left to get more land.
w26) NO nationwide facilities for phyto-sanitary conditions check of food production.
This is essential for exports.
w27) Erratic power supply.
w28) In many places, water distribution is controlled by local goons, who favour
some farmers and cripple water supply to other farmers with smaller landholdings.
Opportunities
o1) Huge hungry populations around, making a good market for food products
o2) Size of Indian Retail market, still (despite opposition from Commies') interests
international food processing experts to invest in India
and eventually the facilities developed can be used for exports
o3) Organic revolution means we can still crack open closed markets, by turning organic.
o4) Huge growing internal population means that even if we do not have
export markets, there is a ready demand. This justifies further investments
o5) Corporates are lending a hand in the move towards modern methods
of food production and food processing. ITC's E-Kiosk , Bharti and Reliance Retail
o6) Global warming means CO2 is more, This is good for plants to grow.
o7) Enterprenuers are doing well. Sula wines in Maharashtra and Strawberry production
in Northeast.
Threats
t1) No Comprehensive water management policy. This means unpredictable output &
heavily dependent on rains. Rains can fail.
t2) Heavy use of Chemical fertilizers, can backfire resulting to pollution of land, rendering
it useless.
t3) Export markets are being aggressively targetted by China/Brazil and India
is loosing out.
t4) Internal food consumption needs will leave very little for exports and thus farmers
will be stuck at lower realizations. In face of inflation
government will introduce price controls, causing lower revenues for farmers
and losses in some cases.
t5) Many governments are moving away from free power for farmers concept, causing
input cost increase for farmers.
t6) Government move to WTO means even the little subsidies are going to be phased out.
t7) In the medium term, glaciers will melt and rivers will dry up.
t8) In the next few years, weather can make it worse for many crops, especially
more heat due to Global warming, can make some places inhospitable for certain
types of crops.
t9) More factories means, more poisonous gases and the heavy gases
settle near the surface of earth, causing damage to plants/crops
t10) New varieties of bests and crop diseases can cause lower seed production and a cycle
of further lower yields
t12) INDIA CAN TURN INTO A NET FOOD IMPORTER due to internal demand and lower production.
t13) Heavy use of ground water, leads to lowered water table, causing water shortage
without scientific methods to replenish ground water. However these involve lots
of money and government has to step in.
t14) National electricity generation has not kept up with demand. This can cripple
farm production growth.
t15) Land acquisition for SEZ can reduce existing fertile land.
SWOT analysis of Indian Agriculture. Comments welcome.
Strengths
s1) Highest proportion of Arable Land among countries in the world.
For example I remember China to be around 17% and India comes at a higher number atleast 30-40%.
s2) Lots of cheap and hardworking manpower
s3) Many native crops which has world markets (Basmati, Mango etc..)
s4) This is very important (Patient set of folks who are willing to accept fate and do not rebel
and do not give up)
s5) Regions with varying climate zones
s6) Number of agricultural universities
s7) Has (as of now) perennial rivers
Weaknesses
w1) Almost the Lowest Yield in the world in major crops like Rice/Wheat
w2) Lack of logistics for food preservation. According to one estimates
almost 30% of the fruits & vegetables produced in India is wasted. Extremely high
by international standards.
w3) Most farmers are illiterate, (however this is changing) and exploited by Middle men
and get only a fraction of the final sale price.
w4) No expertise in food processing. This is essential for higher returns to farmers.
w5) No institutional support for food processing and distribution
w6) Poor infrastructure for food distribution and transport to end markets
w7) Weak marketing by government and no nodal agency to identify export markets,
co-ordinate production , market food & boost exports, like MITI
of Japan.
w8) Heavy use of fertilizers
w9) Late to the Game on food exports and is not the incumbent in any of the markets. For example
Brazil exports $50 billion in food. Ecuador probably exports more Banana than India, even
though Indian Banana is more tasty.
w10) Virtually no information is supplied to farmers about the state of the market for
crop planning and risk management for the market vagaries
w11) Weak policy on seed production and lack of national seed bank for contigencies
like US. I do not know whether India is a member of the International seed bank
being setup in Norway at the height of 500 feet.
w12) Over-utilization of soil
w13) Unable to realize volumes of scale, due to lack of mechanized farming
w14) No steady resources for water throughout the year. This means crop rotation
is tough. Lack of reservoirs.
w15) Agricultural universities work in silos and do not network well. There is
no national mission to improve yield.
w16) As exemplified in Punjab, very little effort towards risk prediction and risk
mitigation. Only contingency strategy. This is not proactive
w17) NO effort to attack markets which other countries already have
w18) Relies mostly on internal market, resulting in lower revenue realizations
for farmers
w19) No scientific crop insurance policies, which will price in risk.
w20) Lack of Actuaries in agriculture
w21) Government policies protect a few rich farmers more than the farmers
with smaller landholdings
w22) Poor management of pests and crop diseases. No government support here.
w23) Still have not adopted drip irrigation and other modern methods of watering
in a big way
w24) Farmers slow to move away from staple crops to new high value cash crops
(Almond etc..)
w25) Not much forest cover left to get more land.
w26) NO nationwide facilities for phyto-sanitary conditions check of food production.
This is essential for exports.
w27) Erratic power supply.
w28) In many places, water distribution is controlled by local goons, who favour
some farmers and cripple water supply to other farmers with smaller landholdings.
Opportunities
o1) Huge hungry populations around, making a good market for food products
o2) Size of Indian Retail market, still (despite opposition from Commies') interests
international food processing experts to invest in India
and eventually the facilities developed can be used for exports
o3) Organic revolution means we can still crack open closed markets, by turning organic.
o4) Huge growing internal population means that even if we do not have
export markets, there is a ready demand. This justifies further investments
o5) Corporates are lending a hand in the move towards modern methods
of food production and food processing. ITC's E-Kiosk , Bharti and Reliance Retail
o6) Global warming means CO2 is more, This is good for plants to grow.
o7) Enterprenuers are doing well. Sula wines in Maharashtra and Strawberry production
in Northeast.
Threats
t1) No Comprehensive water management policy. This means unpredictable output &
heavily dependent on rains. Rains can fail.
t2) Heavy use of Chemical fertilizers, can backfire resulting to pollution of land, rendering
it useless.
t3) Export markets are being aggressively targetted by China/Brazil and India
is loosing out.
t4) Internal food consumption needs will leave very little for exports and thus farmers
will be stuck at lower realizations. In face of inflation
government will introduce price controls, causing lower revenues for farmers
and losses in some cases.
t5) Many governments are moving away from free power for farmers concept, causing
input cost increase for farmers.
t6) Government move to WTO means even the little subsidies are going to be phased out.
t7) In the medium term, glaciers will melt and rivers will dry up.
t8) In the next few years, weather can make it worse for many crops, especially
more heat due to Global warming, can make some places inhospitable for certain
types of crops.
t9) More factories means, more poisonous gases and the heavy gases
settle near the surface of earth, causing damage to plants/crops
t10) New varieties of bests and crop diseases can cause lower seed production and a cycle
of further lower yields
t12) INDIA CAN TURN INTO A NET FOOD IMPORTER due to internal demand and lower production.
t13) Heavy use of ground water, leads to lowered water table, causing water shortage
without scientific methods to replenish ground water. However these involve lots
of money and government has to step in.
t14) National electricity generation has not kept up with demand. This can cripple
farm production growth.
t15) Land acquisition for SEZ can reduce existing fertile land.
In terms of public policy, here is an interesting quote:
There is also considerable resentment over the fact that the price of wheat that the government imports is often twice as high as the minimum price the government pay its own farmers for domestically grown wheat.
If Indian farmers were free to sell wheat at prevailing prices, they would make twice as much money as they make now with the government's "support price". The support price mechanism was designed to help ensure a minimum price for foodgrains and such, but it is in effect acting as a maximum price a farmer can get. So something is not working here. If a farmer gets more money for raising a certain crop, he has an incentive to grow more of that crop; that is how the market balances demand and supply in the long run. My hypothesis is that the government is interfering in that dynamic, by keeping imports out and having a low support price, the price paid by the consumers for wheat can be maintained at artificially low levels. This amounts to two things: a "cheap" subsidy provided to consumers, and reduced incentives for farmers. The right way to provide such a subsidy, of course, would be to buy at prevailing international market rates and subsidize the difference between that the price that poor people now pay for wheat.
There is also considerable resentment over the fact that the price of wheat that the government imports is often twice as high as the minimum price the government pay its own farmers for domestically grown wheat.
If Indian farmers were free to sell wheat at prevailing prices, they would make twice as much money as they make now with the government's "support price". The support price mechanism was designed to help ensure a minimum price for foodgrains and such, but it is in effect acting as a maximum price a farmer can get. So something is not working here. If a farmer gets more money for raising a certain crop, he has an incentive to grow more of that crop; that is how the market balances demand and supply in the long run. My hypothesis is that the government is interfering in that dynamic, by keeping imports out and having a low support price, the price paid by the consumers for wheat can be maintained at artificially low levels. This amounts to two things: a "cheap" subsidy provided to consumers, and reduced incentives for farmers. The right way to provide such a subsidy, of course, would be to buy at prevailing international market rates and subsidize the difference between that the price that poor people now pay for wheat.
It is evident that minumum support doesnt do much for the farmers. Middlemen always make most of the money in this deal. I think doing something that enables small farmers to sell their production directly would be beneficial to everybody. Govt has to take less from it's pocket.
Glad glut: Wheat at the Khanna mandi, Punjab
Highlights:
Higher food grain prices led farmers to increase acerage, use fallow land.
Higher use of certified seeds, and fertilizers.
Favourable weather. Monsoon to be good this year also.
The timing was perfect. Facing acute pressure from the opposition, owing to rising food prices, the Government announced a record harvest of crops for the year ending June 2008. The irony is, Union Agriculture Minister Sharad Pawar, talked about the likelyhood of India having to import wheat for a third consecutive year to improve its food grain stock. In fact the Government had already issued a tender to take positions in the global market for Possible imports later this year. And a day later these import plans were scrapped, thanks to the third estimate of food grain production for agriculture year 2007-2008 (July -June). The latter numbers are impressive. A total crop estimate of 227.32 million is up by 4.4. % from the final tally of the previous year. It is a staggering 7.34 % jump over the third estimates of the previous year ... As India is a major consumer of food grains, the announcement has ripple effect, cooling global markets. "Government procurement of food grains is moving faster than anticipated. It shows the market is supporting this rise in food production."
"Expectations are that this year the government agencies will be able to procure 17 million tonnes of wheat for buffer stocks, as against of 15 million tonnes. To be sure, a clearer picture of the food grain and total agriculture production will emerge only in July, the month that receives maximum monsoon rains....
http://www.outlookindia.com/full.asp?fodname=20080512&fname=Foodgrain+%28F%29&sid=1
Rajaputhran.
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