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BW Businessworld

Misplaced Agenda

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 The recent experience of rising food prices and division of global opinion on environmental issues will seriously influence the agenda for future growth of agriculture world over. Countries such as India, which have very high population density but depleting natural resources, will have to plan carefully for sustainable food supplies for their human as well as animal population.

India is far from having a secure food supply for various reasons. Stagnant productivity and lack of credible and timely knowledge and credit transfer to food producers, that is, the farmers, have created a serious problem, which cannot be solved overnight. A major investment plan and innovative policy reforms will be required. 
Depending On Imports
These are testing times that will show whether our policymakers are more concerned about protecting their own power centres and vested interests or are they serious about national food security. The quantum of food import will be a clear and objective parameter to judge. 
By 2012, will India be a net food importer or a net food exporter? I think, a net food importer, which is a dangerous situation to be in. It is a very real possibility that all the revenues earned from the export of goods and services will be consumed in importing food from the world market. And the situation will further deteriorate with time.
Policy planners need to take stock of the situation. They have to seriously consider the implications of depending on imports for national food security on India’s domestic strategic interests as well as on our international policies including our existing stand on many controversial issues such as nuclear treaties, subsidies, climate change agreement negotiations and others.
Keeping It Within
Fifty one per cent of India’s population depends on agriculture but the sector forms only 21 per cent of the GDP. What is more dismal is that the total outlay for agriculture in the 11th Five-Year Plan is only 2.6 per cent. Agro-processing forms only 2 per cent of the total agricultural output (see ‘Agriculture: Poor Numbers’). So, the ground reality clearly  indicates that the political system may talk about agriculture, but when it comes to contributing towards its development and ensuring food security, there are serious and dangerous gaps. 
In an era of outsourcing, it appears that many policy planners believe food security can also be ‘outsourced’ to other countries such as the US, China, or even the world market, without realising the serious implications that such a measure would have towards national interest. If outsourcing of food security was a viable option with no political and strategic implications, why are countries that preach liberalisation of the agriculture sector to India not adopting it themselves? Why are member countries of the Organisation for Economic Co-operation and Development (OECD) pumping huge funds in the form of subsidies to protect their food production and agriculture interest? There must be some strategic reasons behind spending so much time and resources in sustaining their agriculture systems. Have we understood their game plans and learnt from them?
Stalled World Trade Organization (WTO) negotiations in 2008 and the recently concluded climate change summit in Copenhagen clearly indicate that developed countries have their own, and not global, interest at heart. The moral of the story is that India has to protect its own food security and agriculture interests. If our policymakers are aware of this, then why is agriculture in such a bad state?
A lot of serious thinking and comprehensive planning is required to ensure food security (see ‘Nutrition Base’). In fact, the crucial human development index paints a very sorry picture of food and nutrition security in India. On many parameters we are lower than Africa. There is a systemic failure in agriculture planning, and very often policies are influenced by urban biases and industrial lobbies. In this process, crucial time is lost in the name of liberalisation, globalisation and growth of free markets.
Dangerous Liaisons
A serious shortfall in India’s food production and availability could lead to a political backlash, which may force policymakers into taking emergency measures that could ensure food availability, but at a price. 
Unrestricted food imports to control price rise: Food imports without proper quarantine checks will introduce a large number of new forms and types of infections and diseases into India, which could affect domestic food production. Further, to control these infections and diseases, farmers would need to use new types of pesticides, which may be patented and expensive. This will result in an increase in the the overall cost of food production, one of the effects of which would be a decrease in India’s competitiveness as a low-cost food producer.
Another ramification could be that exports would suffer as many countries will put quarantine restrictions on Indian foods exports. Our recent experiences with swine flu and bird flu should be kept in mind when we permit any import without due quarantine checks.
A ripple impact could be that India’s negotiating power at WTO and other international forums would weaken.  
Large-scale import of seed technologies: It is essential that new crop and food production-related technologies are introduced. But it is imperative that international companies are not allowed to gain a monopoly in the seed sector, by either discouraging local research or by buying out local seed production companies. It is possible that under the name of patents they will dictate who will sell where and what. 
India’s whole food security could land into the hands of few patent holders. 
An associated threat would be that the parent countries of these companies may restrict the kind of technology the companies can introduce in India in order to protect their own commercial interests in the world market. Will the US, for instance, allow India to replace it in maize, soybean, cotton or wheat trade in the world market? 
China has very clearly restricted the role of seed technology providers when they operate in Chinese territory. It is important to note China’s agriculture productivity is almost two to three times that of India. It sensed the danger and challenges ahead. India needs to do the same.
Biological threats: Just as an economy can be paralysed by injecting fake currency into it, a deliberate introduction of infections and diseases into India’s agricultural and food production systems can destabilise Indian economy. Are we going to prepare against  bioterrorism threats to our food production system or are we going to wait till they take place? 
Another threat comes in the shape of biotic stress on plants because of viruses, insects and pests — one of the reasons for poor yield in India is infected seeds. 
Do we have plans in place to control such new biological threats? The biggest challenge is that once a biological infection is introduced, restricting its spread is very difficult as it is virtually impossible to sanitise the whole country. Anything, including animals, birds, water bodies, trucks, people, etc., can carry the infection from one part of the country to another.
After critically studying the current agriculture policy environment at the levels of both the central and state government, and looking at the budgetary allocations, one can conclude that in India, agriculture is a political and not an economic activity. Livestock, fisheries, forestry are just side-shows for various state governments without any serious livelihood implications. 
One of the biggest challenges for Indian agriculture policy reforms will be to provide alternate options to farmers to  enhance their bargaining power. This will include alternate sources of inputs, information, credit, and also alternate sources of marketing, other than agricultural produce marketing committees (APMCs) and Food Corporation of India, for better realisation of their efforts, in line with retail prices. 
What is the road map to become a developed nation with such a large hungry population? What is the difference between democracy and a failed democracy for 35 per cent of India’s hungry and undernourished population? These are just some of the questions that need urgent answers. If some say that we have the answers, then what is the reason behind the fall in agriculture’s growth rate?
I will be very happy if our political, executive and business leaders in India prove me wrong, because that means India will gain. 
The author is managing director of ARPL Agribusiness Knowledge Services, advisor, Centre for Food Security & Sustainable Agribusinesses
bweditor at abp dot in
(This story was published in Businessworld Issue Dated 11-01-2010)

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