Nature, Extent, Causes and Issues in Agricultural Distress

Nature, Extent, Causes and Issues in Agricultural Distress

Foundation Day Seminar National Bank for Agriculture and Rural Development (NABARD)

Mumbai, India 12 July 2015 Link to Paper

Srijit Mishra

http://works.bepress.com/srijit_mishra/109/

Presentation Format

• Introduction/Motivation

• Twin Dimensions of Crisis/Distress

– Agricultural and Agrarian

• Farmers’ Suicides: Interrelated factors

– Demand and Supply side

• Data, Debate, and Livelihood

– Transfer of technology vs Knowledge-centric

• Concluding Remarks

12 July 2015 Srijit Mishra, NABARD Foundation Day Seminar 2

Source: IMD 12 July 2015 3 Srijit Mishra, NABARD Foundation Day Seminar

http://www.imdpune.gov.in/mons_monitor/mm_index.html

Two Dimensions of Crisis

• Agrarian (Livelihood) Crisis

Distribution

Farmer (also agr labourer)

Threatening livelihood of all those dependent on agriculture

[Displacement of people]

• Agricultural (Developmental) Crisis

Production

Farm

Inappropriate designing of programmes and inadequate allocation of resources

[Displacement of ideology]

12 July 2015 4

Source: GoI (2007), Reddy and Mishra (2009), and Mishra and Reddy (2011)

Srijit Mishra, NABARD Foundation Day Seminar

Average Annual Growth Rate of Indices

Periods Foodgrains Non-foodgrains All crops

A P Y A P Y A P Y

1981-2 to 1993-4† -0.48 2.45 2.54 1.60 3.24 1.71 0.08 2.80 2.19

1993-4 to 2007-8‡ 0.02 1.11 1.28 0.90 2.24 1.20 0.33 2.16 1.89

1993-4 to 2004-5‡ -0.26 0.03 0.53 0.71 -0.03 -0.97 0.05 0.35 0.35

2007-8 to 2013-4§ 0.65 2.38 1.79 2.21 3.29 1.22 1.45 2.86 1.52

Source: RBI (2014b) Note: †, ‡, and § indicate triennium ending 1981-2, 1993-4 and 2007-8, respectively. A, P and Y denote area, production and yield, respectively.

12 July 2015 5 Srijit Mishra, NABARD Foundation Day Seminar

Average Annual Growth Rate of Index of Agricultural Production, Maj Crops

Periods Rice Wht C. Cer Puls G.nut S.sm R n M Co.tn Ru.br

1981–2 to

1993–4† 2.84 3.59 -1.44 -0.43 -1.70 -1.48 4.93 1.00 8.33

1993–4 to

2004–5‡ -0.33 0.94 -0.42 -1.20 -6.89 -1.57 0.11 2.02 4.41

2007–8 to

2013–4§ 1.34 3.15 -0.59 4.04 -7.37 -3.91 4.31 4.25 1.76

Source: RBI (2014b) Note: †, ‡, and § indicate triennium ending 1981-2, 1993-4 and 2007-8, respectively.


Growth Rate (2004-05 prices)

Period Total GDP Agr & Allied GDP

2007–08 9.3 5.8

2008–09 6.7 0.1

2009–10 8.6 0.8

2010–11 8.9 8.6

2011–12 6.7 5.0

2012–13 4.5 1.4

2013–14 4.7 4.7

Source: GoI (2015b)


8

Risk Mitigation: Different Scenarios Scenario Year Input Output Net Retu Cons CumSav

Tradi-

tional

1 1.0 3.0 2.0 1.3 0.7

2 1.0 3.0 2.0 1.3 1.4

3 1.0 3.0 2.0 1.3 2.1

4 1.0 0.0 -1.0 1.1 0.0

Input

Intensive

1 3.0 6.0 3.0 1.8 1.2

2 3.0 6.0 3.0 1.8 2.4

3 3.0 6.0 3.0 1.8 3.6

4 3.0 0.0 -3.0 0.6 0.0

Sustain-

able

1 1.5 4.5 3.0 1.5 1.5

2 1.5 4.5 3.0 1.5 3.0

3 1.5 4.5 3.0 1.5 4.5

4 1.5 0.0 -1.5 1.2 1.8

12 July 2015

Source: Mishra (2014c)


Research & Extension and Investment

Items TE 1981/2-

1992/3

TE 1993/4-

2004/5

TE 2005/6-

2009/10

Research and education 4.25 6.28 9.00

Extension 6.15 0.93 5.14

12 July 2015 9

Items TE 1981/2-

1993/4

TE 1993/4-

2004/5

TE 2005/6-

2010/1

Investment, agriculture 2.23 6.43 8.52

Public Investment, agriculture -4.46 2.25 12.50

Source: Dev, Mishra and Pandey (2014)


Share of Institutional Flow of Agricultural Credit By Source

Year Coop RRBs SCBs All

1975–76 74.5 0.1 25.4 100.0

1983–84 57.8 5.2 37.1 100.0

1993–94 61.3 5.9 32.7 100.0

2003–04 30.9 8.7 60.3 100.0

2013–14 16.9 11.6 71.5 100.0

12 July 2015 10

Source: GOI (2007) and NABARD (personal communication)


Month-wise Credit Disbursement by Formal Institutions

Month 2007–08 2008–09

April 3.17 2.79

May 4.98 2.85

June 11.13 5.61

July 6.99 6.69

August 8.68 5.98

September 4.73 8.67

October 7.48 5.69

November 6.95 6.96

December 9.79 11.01

January 4.11 10.21

February 7.60 10.45

March 24.39 23.09

All 100.00 100.00

12 July 2015 11

Source: GOI (2009) Srijit Mishra, NABARD Foundation Day Seminar

Credit/Area and Accounts/Holdings

Year Share of credit disbursed to

share of area operated

Share of borrowal accounts (No) to

share of operational holdings (No)

Marginal Small Other Marginal Small Other

1981–82 2.41 1.24 0.72 0.90 1.28 1.01

1991–92 1.84 1.33 0.71 0.72 1.77 1.19

2002–03 0.96 1.25 0.93 0.49 2.79 3.25

2012–13† 1.11 1.30 0.78 0.54 3.28 3.09

12 July 2015 12

Source: NSSO (c.1993, 2014b) and RBI (2014b) † Credit data for 2011-12 (latest available)


Share of Income and Employment

Period

Share of Agriculture & Allied

in GDP, 2004–05 prices,

(%age change)

Share of Agriculture & Allied

in Employment, UPSS,

(%age change)

1972–73 38.6 73.9

1993–94 28.2 (10.4) 63.9 (10.0)

1999–00 23.2 (5.0) 60.2 (3.7)

2004–05 19.0 (4.2) 56.5 (3.7)

2009–10 14.6 (4.4) 53.2 (3.3)

2011–12 14.4 (0.2) 48.9 (4.3)

12 July 2015 13

Sources:: RBI (2014b), GoI (2007), and NSSO (2011, 2014a)


Per capita per day Income and Consumption

12 July 2015 14

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

< 0.01 0.01-0.4 0.41-1 1.01-2 2.01-4 4.01-10 10 + All sizes

Inco

me

/Co

nsu

mp

tio

n i

n R

up

ee

s

Farm sizes in hectares, ha

Income ConsumptionSource: NSSO (2014c)


Expense as proportion of Net Returns

Farm size 2002–03 2012–13

< 0.01 67.2 155.6

0.01–0.4 75.2 80.3

0.41–1 76.5 65.6

1.01–2 74.3 61.8

2.01–4 71.9 65.2

4.01–10 80.7 63.3

10 + 88.1 68.9

All sizes 76.3 65.4

12 July 2015 15

Source: Satyasai (2015)


Food Insecurity, 2011-12

Region Calorie poor Protein poor Fat poor

Rural 62.04 33.62 29.13

Urban 58.90 40.03 10.58

Total 61.06 35.62 23.35

12 July 2015 16

Source: Preliminary estimate as part of an ongoing work with L Hari


Risk and Vulnerability

Issues Demand Supply

Output,

Price,

Income

Yield risk: weather, power,

pests, spurious inputs; Not

profitable; Poor returns

Increased price volatility; subsidies in

US/EU; low tariff; MSP not always

functional; Futures-virtual

Input Supplier-induce-demand;

Deskilling; Increasing costs

– tragedy of commons

Poor link - research and extension;

unregulated private suppliers;

Inadequate pub investment

Credit Formal – not timely;

repayment difficult

yield/price shocks; System

draws farmers into credit;

Consumerism

Decline in branches; decline in

agricultural/net bank credit (direct);

Increasing reliance on informal

sources at higher interest burden

Other Dominance of lender/input

dealer; higher family size;

lack of social support

Interlinked markets; Non-farm option

is limited; Pub health response

(farmers); Pesticide avalability

17 12 July 2015

Source: Mishra (2008)


Suicide rates: how to normalise

• Farmer population or farm population (the latter includes agricultural labourers)

– Contextualising from Australia/Europe/North America - Peter Mayer (2010) Establet (2012)

• Farmer population or operational holdings

– Ignoring land partitioning - (Plewis 2014)

• Non-farmer population (use workers only)

– Inappropriate classifications

18 12 July 2015 Srijit Mishra, NABARD Foundation Day Seminar

Difference in suicide rates (farmers over non-farmers), females and males, India, 1995-2012

-6

-4

-2

0

2

4

6

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Diffe

rence in s

uic

ide r

ate

s

(farm

ers

over

non

-farm

ers

)

Females Males

19 12 July 2015

Source: Mishra (2014b)


20

SMR for AP & Maharashtra

Maharashtra 1995-2012 Andhra Pradesh 1995-2012

10

20

30

40

50

60

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Suic

ide

Mo

rtal

ity

Rat

e

Male Farmer Male Non-farmer

10

20

30

40

50

60

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Suic

ide

Mo

rtal

ity

Rat

e


12 July 2015

Source: Mishra (2014b) Srijit Mishra, NABARD Foundation Day Seminar

21

SMR for Chhattisgarh & Karnataka

Karnataka 1995-2012 Chhattisgarh 2001-2012

0

10

20

30

40

50

60

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Suic

ide

Mo

rtal

ity

Rat

e


20

30

40

50

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Suic

ide

Mo

rtal

ity

Rat

e


Source: Mishra (2014b) 12 July 2015 Srijit Mishra, NABARD Foundation Day Seminar

Suicides data: grey areas

0.0

5.0

10.0

15.0

20.0

25.0

30.0

1995-97 1998-00 2001-03 2004-06 2007-09 2010-12

Self-employed Others Others

22

Source: Mishra (2014b)

12 July 2015 Srijit Mishra, NABARD Foundation Day Seminar

Debate shifts for/against a technology

• Bt cotton was expected to control only bollworms and it succeeded in doing just that”

Kranthi, Bt Cotton Q&A (2012)

• “…A success story for the environment and local welfare”

Finnish Institute of Biotechnology (VIB, 2012)

• “False hype and failed promises … crisis continues with crop failure and suicides”

Coalition for a GM-Free India (2012)

• Bt cotton and suicides: an assessment (suicides is long term - link with Bt is neither necessary nor sufficient, indirectly linked through Bt costs and indebtedness).

Gruère and Sengupta (2011)

23 12 July 2015 Srijit Mishra, NABARD Foundation Day Seminar

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Rainfed agriculture: inclusive, sustainable and food secure

Transfer of Technology

Knowledge-centric

TINA MAE

12 July 2015

Source: Mishra, Ravindra and Hesse (2013)


MAE vs TINA

Multiple Alternatives Exist (MAE) There is No Alternative (TINA)

Bottom-up (provider of knowledge work in tandem with user)

Top-down (provider of technology is superior to user)

Context-specific – requires an understanding of system dynamics

Crop-specific – involves inputs/technology application to enhance production

Emphasis on risk reduction Emphasis on efficiency (output/unit input)

Extensive involves marginal land spread over larger areas

Input-intensive in areas with better soils and with access to water through irrigation

Integration of mixed and multiple crops with livestock

Specialization that espouses mono-cropping

Production is dependent on commons Production in owner-operated lands

12 July 2015 25

Source: Mishra (2014a), Mishra, Ravindra and Hesse (2013)


Concluding Remarks

• Persistence of Distress – Agricultural: low growth, increasing vulnerability,

delinked R&E, concerns of credit

– Agrarian: declining share of pie, low farm inome, food insecurity

• Farmers’ suicides: Interrelated factors – Output (income and yield), input, credit, others

– Need for appropriate reporting and measurement

– Livelihood issues are important

– Multiple alternatives exist (MAE)


Comments and Questions

Email: [email protected]

Link to Paper


mailto:[email protected]

http://works.bepress.com/srijit_mishra/109/

Nature, Extent, Causes and Issues in Agricultural Distress

Economy & Finance

Transcript of Nature, Extent, Causes and Issues in Agricultural Distress